Chinese Drywall Problems Were Previously Known

Miami Supplier Knew of Chinese Drywall Problems

The Miami Herald (Miami, FL)
By Nirvi Shah
May 19, 2010

A Miami drywall distributor knew it had supplied problematic wallboard to homebuilders four years ago, according to a confidential agreement it signed with a major Chinese drywall manufacturer.

When the distributor turned to the manufacturer with complaints from builders, the Chinese company replaced Banner Supply's inventory of Chinese-made drywall with American-made products. But Miami-based Banner Supply never said anything about the complaints to the government or customers who didn't complain, information that could have prevented thousands of other homeowners from getting into the expensive, smelly predicaments they now face.

Next month, several lawsuits against Banner are scheduled to go to trial in Miami-Dade Circuit Court, the first to be heard in Florida. One attorney who is representing homeowners is pushing the courts to unseal agreements Banner made in 2007 but still won't talk about.

"These documents should be made public," Miami attorney Victor Diaz said. "They are of enormous public interest."

Diaz's case could bring to light efforts of manufacturers and distributors to keep the information from homeowners and government agencies, a disclosure that could have reduced the legion of complaints about imported drywall. Sulfur compounds emitted from the wallboard are blamed for corroding appliances, pervasive odors and breathing troubles.

Possible remedies include gutting the house; many insurance companies will not cover those costs, leaving affected homeowners to turn to the courts.

U.S. government agencies have confirmed that defective drywall emissions corrode appliances, ruin wiring and other metals, but tests for health problems are ongoing. In federal court in Louisiana, where cases against drywall manufacturers are being heard, one Chinese drywall maker, Knauf Plasterboard Tianjin, has said its drywall is defective and unfit for its intended purpose.

The company, the only Chinese company responding to U.S. court proceedings, settled out of court with builder Beazer Homes this week, offering to pay to remediate homes in two developments in southwest Florida constructed with KPT drywall.

Although KPT would not provide the agreement signed with Banner, the company told The Miami Herald it replaced about 2.2 million square feet of Banner's drywall supply in 2007, after the company -- one of the state's largest drywall suppliers -- contacted them about odor complaints and concerns about emissions from the wallboard in late 2006. An average home uses 9,000 to 10,000 square feet of drywall, according to the Gypsum Association, meaning Banner's replaced product could be enough for more than 230 homes.

Earlier in 2006, a toxicology company from Little Rock, Ark., hired by KPT tested the drywall and found that it emitted sulfur-containing compounds at higher concentrations than found naturally in the air, but the findings weren't seen as being severe enough to ignite a public health concern.

While some foreign manufacturers have reported health- or life-threatening defects with their products to the U.S. government, they aren't required to, said Scott Wolfson, spokesman for the Consumer Product Safety Commission.

But anyone else in the chain -- American importers, distributors like Banner and so on -- must disclose problems.

"That reporting obligation becomes effective when you have a violation of a safety standard -- information that the product could or does pose a substantial product hazard or that a consumer would face an unreasonable risk of injury from the product," Wolfson said.

But it's not clear exactly what Banner knew. The company's general manager referred calls to an attorney who did not return phone calls.

In a statement this week to The Miami Herald, KPT spokesman Don Hayden said that "because there was no basis for any health or safety concern, we did not contact the CPSC or any other government agency. When issues were later raised about impact to other components of the house [such as appliances] in the summer and fall of 2008, we participated in investigations by both state and federal agencies."

One couple Diaz represents, Jason and Melissa Harrell, moved early last year after the smell at their Homestead house became overwhelming and nothing they did calmed the respiratory problems their children were experiencing.

"Jason and Melissa Harrell didn't buy until January 2008," Diaz said. "I'm sure they would have liked to have had the same information Banner had, even if it was unconfirmed, if builders and installers were saying 'We do not want this drywall.'"

Miami attorney Ervin Gonzalez, who also represents a number of homeowners, said Banner had an obligation to take the testing further and tell someone about builders' concerns.

"You would expect a respectable company to protect their customers and their customers' customers," said Gonzalez, whose clients Armin and Lisa Seifart are also scheduled to have their case heard next month. "They kept the matter to themselves. That's wrong. It's disturbing."

http://www.miamiherald.com/2010/05/19/1637587/miami-supplier-knew-of-chinese.html