$2.6m Default Judgment for Chinese Drywall Plaintiffs

$2.6m Default Judgment for Chinese Drywall Plaintiffs

NEW ORLEANS - (Mealey's) The judge overseeing the federal Chinese drywall multidistrict litigation awarded seven Virginia families more than $2.6 million in damages April 8 against a manufacturer that has already been held in default; the judge made no mention, however, of how the judgment might be implemented (Michelle Germano, et al. v. Taishan Gypsum Co. Ltd., et al., No. 2:09cv06687, E.D. La.; See March 2010, Page 5).

Michelle Germano is among seven Virginia homeowners and their families who sued drywall manufacturer Taishan Gypsum Co. Ltd. as well as importer and distributor Venture Supply Inc. and others in a putative class action in the U.S. District Court for the Eastern District of Virginia. The plaintiffs sought relief on behalf of a class of "[a]ll owners and residents of residential homes in the Commonwealth of Virginia containing defective drywall manufactured, sold, distributed, and/or supplied by Taishan Gypsum Co. Ltd. and/or Venture Supply Inc."

The case was transferred by the Judicial Panel on Multidistrict Litigation to the Eastern District of Louisiana for consolidation into the Chinese drywall MDL for coordinated pretrial proceedings under Judge Eldon E. Fallon. In November, Judge Fallon entered a default judgment in favor of the plaintiffs against Taishan Gypsum, which never answered the complaint or filed any responsive pleading.

In February, Judge Fallon presided over default proceedings against Taishan Gypsum, hearing testimony from both the plaintiffs and a number of experts who examined the homes and gave estimates of the cost of removing and replacing damaged building materials, appliances and personal items. The plaintiffs argued that affected homes must be stripped of drywall and wiring and essentially rebuilt.

This morning, Judge Fallon released his findings of fact and conclusions of law, in which he determined that "[t]he evidence supports the conclusion that the appropriate remediation for the Plaintiff-intervenor homes includes the removal of all drywall, all electrical wiring, the entire HVAC system, and many other items such as appliances, carpet, cabinetry, trim work and flooring." The judge presented scientific, economic and practical reasons justifying each of his conclusions.

Judge Fallon specifically found that in homes that contain only some Chinese drywall, all drywall must nevertheless be removed.

In addition, Judge Fallon said, the plaintiffs' homes will need to be cleaned with a HEPA vacuum, wet-wiped or power-washed and allowed to air out once they are remediated. After remediation, an independent, qualified engineering company should certify that the homes are safe for occupation, something that the judge noted is important for insurance, resale potential and peace of mind for the present occupants.

Averaging two independent quotes from reputable local Virginia contractors, Judge Fallon fixed the cost of repairing affected homes at an average of $86 per square foot. He estimated that the plaintiffs will be out of their homes for four to six months during remediation.

Aggregating the amounts of damages proven by all seven plaintiff families, Judge Fallon went on to award monetary damages against Taishan Gypsum in the amount of $2,609,129.99. Absent from the decision, however, was any mention of how the plaintiffs might go about collecting the damages awarded.

[Editor's Note: Full coverage will be in the May issue of Mealey's Litigation Report: Construction Defects. In the meantime, the findings of fact and conclusions of law are available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Document #09-100507-011Z. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

Download the document now:

Lexis.com - Document #09-100507-011Z

Mealeysonline.com - Document #09-100507-011Z

For more information, call editor Gerald C. Matics at 610-205-1131, or e-mail him at gerald.matics@lexisnexis.com.