Builders Getting a Break from Some Chinese Drywall Liability

Last week a Florida court ruling relieved some of the liability that home builders are facing in the Chinese drywall debacle.

Judge Glenn Kelly of the 15^th Judicial Circuit in Palm Beach County, Florida ruled that home builders did not manufacture the problem drywall and were not within the supply chain, and therefore could not be held “strictly liable” for the alleged defects in the product.

Many speculate that the decision could be used as a template for other judges litigating similar cases involving Chinese drywall, but it is unclear whether the decision will affect the high profile multi-district litigation currently being conducted in Louisiana.

The decision obviously pleases the building industry, but plaintiffs’ attorneys disagree with the ruling.

While many decisions concerning Chinese drywall litigation have already been reached there is still much debate on how the bulk of the suits will be decided, and exactly what responsibilities home builders will have in those decisions.

For several years, builders have feared expensive lawsuits and court settlements over a product largely purchased and installed by subcontractors. Some, have even paid to fix the homes themselves. Lennar Corp., one of the biggest builders in Florida, set aside $80.7 million to cover drywall claims from nearly 900 homeowners. It hopes to be reimbursed by insurers and others.

Last month one of the largest suppliers of problem Chinese drywall, Knauf Plasterboard Tianjin, agreed to remediate 300 homes in four states. If this “pilot program” is successful it could serve to lay the groundwork for the resolution of thousands of additional Chinese drywall lawsuits that have been filed throughout the nation.