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Chinese Drywall - 2.5 Million Dollar Verdict Rendered in First Chinese Drywall Jury Trial

June 16, 2010 — Original article in For Immediate Release

As reported in the June 16, 2010 edition of FOR IMMEDIATE RELEASE (FIR) a Miami jury rendered the first U.S. jury verdict in the case of Armin G. Seifart & Lisa M. Gore-Seifart et. al. v. Knauf Gips K G et. al., in the amount of $2.5 million in damages and expenses this past Friday, blaming odors and corrosion problems on defective Chinese drywall.

Armin and Lisa Seifart sued Miami-based Banner Supply after the drywall that the company provided corroded copper pipes and fixtures, ruined their air conditioner and other appliances and made their home smell.

This case, the first jury trial in the country over Chinese drywall, could set precedent for other lawsuits. Banner has been sued in dozens of cases as have other drywall companies and businesses in the drywall supply chain. The case led to the discovery of a 2007 agreement Banner signed with the drywall manufacturer, Knauf Plasterboard Tianjin, to replace 2.3 million square feet of Chinese wallboard with domestic product. But in turn, Banner only replaced Chinese drywall it had supplied to select builders and installers who had complained about a smell.

During the trial, plaintiff attorney Ervin Gonzalez said repeatedly that Banner could have prevented a legion of homes from being affected by drywall had they gone public with complaints years ago.

Banner had conceded the drywall was defective, but the company only wanted to pay for actual expenses the Seifarts incurred, not for negligence or any stigma the home will carry. Banner attorney Todd Ehrenreich said the company, which has been devastated by the recession and has its reputation tarnished because of Chinese drywall, is still considering its next move. “We are a bit disappointed. We will weigh all of our rights, including our appellate rights,” he said.

The Seifarts didn’t move into their home until more than a year after the confidential agreement was signed and their builder and drywall installer were never told about others’ complaints about the product. They moved out less than a year later.

At the insistence of Banner, the jury was asked to assign blame to Banner as well as drywall manufacturer Knauf Plasterboard Tianjin, importer La Suprema and China-based exporter Rothchilt International, although only Banner was a defendant in the suit. The jury assigned 55 percent of the fault to Banner, 35 percent to KPT and 5 percent each to the importers and exporters. By some interpretations, that could mean Banner is responsible for only $1.3 million of the award. Gonzalez believes Banner will have to pay the full amount -- plus attorneys fees and court costs.

The award was a little more than half of the $4.4 million Gonzalez had asked a jury to award the family. That included $100,000 a month from the time they moved into the house until the time they can move back in after repairs nearly three years plus $200,000 for the loss in value to their home because of the stigma it could carry and $705,000 in expenses repaid for repairs, renting another home during the repairs, maintaining both houses and replacing some of the Seifarts’ belongings.

Still, the award is the largest for one home in a Chinese drywall case to date. A federal judge in Louisiana awarded $2.6 million to seven Virginia homeowners, finding drywall manufacturer Taishan Gypsum Co. liable for damage, but that company has not participated in U.S. court proceedings, leaving the ruling’s effect in limbo. Judge Eldon Fallon also ruled that manufacturer KPT pay $164,000 to a Louisiana couple for repairs to their house.

Chinese Drywall - 2.5 Million Dollar Verdict Rendered in First Chinese Drywall Jury Trial