Judge Rules on Chinese Drywall Case
New Orleans federal judge finds for drywall victims
By Aaron Kessler
Herald-Tribune (Sarasota, FL)
April 27, 2010
A federal judge has issued his verdict in the first contested Chinese drywall trial, known as the Hernandez case.
The verdict, by U.S. District Court Judge Eldon E. Fallon -- who is overseeing the massive combined Chinese drywall litigation in New Orleans - awards $164,000 plus attorneys' fees and court costs to Mandeville, La. couple Tatum and Charlene Hernandez. The decision calls for their house to be largely gutted down to the studs - replacing all drywall, ductwork, the entire electrical system, all copper and silver components, the HVAC system and all damaged appliances and consumer electronics.
As part of the judgment, Fallon ordered that Chinese manufacturer Knauf Plasterboard Tianjin Co. Ltd must pay the Hernandez family for about $5,400 for damaged personal property, as well as close to $20,000 for alternative living arrangements.
The decision today comes on the heels of Fallon's previous ruling April 8 awarding $2.6 million to seven Virginia homeowners and the comprehensive remediation ordered for the Hernandez home echoes Fallon's previous ruling that only stringent remediation standards would suffice to solve the problem -- involving largely gutting the homes of all drywall and other components such as wiring, pipes, electronics and appliances.
The Hernandez case, argued in mid-March in a bench trial before Fallon, marked the first contested case over Chinese drywall, with plaintiffs' attorneys squaring off against lawyers for Knauf Plasterboard Tianjin Co. Ltd, known as KPT.
The weeklong proceedings focused almost solely on the scope and cost of remediation needed to repair Hernandez home.
Plaintiffs called for largely gutting the tainted Hernandez home to the tune of close to $200,000, while KPT's experts claimed that wiring, plumbing, air-conditioning and other components could remain and that it should only cost $58,000 to fix the house.
Subsequent to the March trial, on April 2, the U.S. Consumer Product Safety commission issued guidance calling for removal of all drywall and components such as the entire electrical system, gas lines and smoke detection systems that it said represented a potential life safety risk.
On April 8, Fallon issued his own ruling in the previous Virginia case against Taishan Gypsum Co. Ltd.
The decision against Chinese government-owned Taishan was the first monetary judgment leveled against a Chinese drywall manufacturer since the tainted wallboard crisis first came to light, but it left serious hurdles to be overcome to collect a judgment from Taishan, which was absent from the proceedings and did not offer a defense.
With the second ruling today in the Hernandez case, however, Fallon has now issued a judgment against KPT, a company that fully participated in the proceedings against it and offered a vigorous defense of its positions in court.
However, on Tuesday, KPT attorney and the defense liaison counsel, Kerry Miller, said that participating in the trial did not necessarily obligate the company to pay the judgment.
"We'll have to evaluate the rights we have and the legal recourse," Miller said. "We have retrial rights, appellate rights and so on, and we'll have to evaluate those."
KPT has also been at work in recent weeks trying to reach out-of-court settlements with several builders.