A Florida jury awarded $2.4M to a couple whose home was severely damaged by defective Chinese Drywall sold by Banner Supply. CVN webcast Seifart v. Banner Supply live.
In his closing argument, plaintiff attorney Ervin Gonzales told the jury,
"This is actually a very sad case, because it's a case about a Chinese Drywall cover-up. And the reason it's a sad case is because this is a case where a lot of damage occurred, and could have all been prevented. And it could have been prevented by one company, that's sitting right here: Banner. They had the last chance, the last opportunity, to prevent the damage. And instead, they chose to do the right thing, not for consumers, not for homeowners, not for general contractors, not for developers, but for themselves. Because it was good for their business. So the decided to keep their secret, about their knowledge of the defect of the Chinese Drywall, to themselves. To themselves, for years. It's always been in the dark. And when does the light shine through on the truth? As a result of this lawsuit."
Gonzalez requested economic damages of $705,359, approximately $3.2M for loss of enjoyment ($100K per month from March 2008 to February 2011), and diminution of value or "stigma" damages of $200K, because the fact that the house had endured remediation for defective drywall would have to be disclosed to any future buyer. According to Gonzalez, if a purchaser had to choose between two identical houses, one of which had previously had Chinese drywall, the buyer could be expected to prefer the house that had never had Chinese drywall.
Defense attorney Todd Ehrenreich argued that Banner had behaved responsibly. Banner acted responsibly in obtaining the Chinese drywall because no other drywall sources were available, and its supplier, Knauf, was reputable. In fact, Banner did not even know that its drywall had been sourced from China until after the product arrived. Nonetheless, Banner had reason to believe that the Chinese drywall met U.S. standards.
Moreover, said Ehrenreich, complaints about a "funky smell" came from just five homes out of 2700 in south Florida, which had received Banner boards -- perhaps 500 boards out of 1.89M boards sold --
"I don't have a calculator, but I guaranty you it's less than one percent of one percent...Folks, literally, piece by piece pulling out this board, nobody in the warehouse is saying anything that there's a smell, no drywaller is saying there's a smell, no new homeowner is coming in saying there's a smell, nobody in the industry is saying there's a smell, but five houses."
Ehrenreich argued that Knauf was only willing to provide replacement boards if Banner signed a confidential settlement agreement providing that the Knauf boards were not defective and agreeing not to sue Knauf. According to Ehrenreich, Banner would never have given up its rights if they had known that the board was in fact defective. It was Knauf that hid the truth, said Ehrenreich.
Because the defect in the drywall was latent, hidden, and undetectable, Banner did not know about the defect until years later, said Ehrenreich, and there is nothing else that Banner could have done.
Ehrenreich said loss of enjoyment damages should not be awarded because the Seifarts had lived in a similar or better house within two miles of their original house. Further, there should be no stigma losses awarded, argued Ehrenreich, because the house would have been demonstrably fully repaired.
The jury found that in favor of the plaintiff on theories of strict liability, negligence, Deceptive & Unfair Trade Practices, and private nuisance.
The jury allocated liability as follows: Banner Supply: 55%; Knopf Plasterboard: 35%; La Suprema Enterprise (a drywall importer): 5%, Rothschild International (a drywall exporter): 5%.
The jury awarded damages of $2.465M, including $494K in remediation costs, $169K in temporary housing and moving costs, $1.7M in loss of enjoyment, and $60K in "stigma" damage to the value of the home.
CVN webcast the Seifart Chinese Drywall trial live.
