Insurance Dispute Lawyer Blog

Toxic chinese drywall that was installed in many Louisiana homes has been discovered to emit sulfur, methane, and other toxins. The drywall is thought to be responsible for homeowner's health problems and a variety of damage to household appliances. Just recently, a federal judge in New Orleans awarded several homeowners $2.6 million against Chinese drywall manufacturer Taishan Gypsum Co. However, collecting this judgment may prove difficult. If you considering litigation as an option to obtaining the money you need to repair the damage Chinese drywall has caused your home, you are not alone.

While Chinese Law Makes Collecting Judgments Against Toxic Drywall Manufacturer Difficult, there are Options for Homeowners

According to Gordon Gao , a partner in a Beijing firm, it is often very difficult to collect judgments against Chinese companies that were awarded to plaintiffs in US courts.

"'In general, collecting on a U.S. judgment [in China] is difficult if not impossible,' says Gordon Gao ... Chinese law, he explains, only permits the enforcement of foreign judgments through bilateral treaties. But China doesn't actually have any such treaties with other countries."

This means that US courts do not have the power to reach across our nation's boundaries and force Chinese companies to pay out the damages awarded to US plaintiffs in US courts. However, there are options for New Orleans homeowners hoping to collect from Chinese companies. It is possible that plaintiff's attorneys can try to have ships carrying Taishan Gypsum Co. products seized. Doing so would allow the courts to decide if the ships may be claimed for their value and sold in order for the plaintiffs to collect their judgments. The ships must be located in US waters at the time of seizure.

If You Installed Tainted Drywall In Your Home, You May Be Able to Sue the Manufacturer for Breach of Implied Warranty or Negligence

Even if you do not have a written warranty from the drywall manufacturer, you may still be able to establish a breach of the implied warranty of "Merchantability."

Implied Warranty of Merchantability

The Uniform Commercial Code provides that any sales contract that involves a merchant/seller implies a warranty of merchantability without the need for an express contractual agreement. However, in order for this theory to apply, a seller must not have disclaimed it in a written sales contract.

In order to be "merchantable" good must meet several requirements including that the goods must be fit for the ordinary purpose for which such goods are used. Therefore, if you have bought tainted drywall, you may have a case against the manufacturer under a theory of "Implied Warranty of Merchantability." The drywall you purchase should be "fit" for the purpose of installing in a building. Drywall that exposes occupants of the building to toxins would likely fail to meet this standard.

All the same, it is important to note that the Implied Warranty of Merchantability does not guarantee that the goods must be of the highest quality. Instead, the goods must be of a high enough quality to make them suitable for the purpose for which they were designed. In order to bring a lawsuit, the defect in the good must be a result of a manufacturing flaw, a design defect, or fail to give adequate warnings. Thus, if the toxins in the drywall originated due to an error or negligence on the part of the Chinese manufacturer, you may be able to show a breach of this implied warranty.

Negligence

Generally, a seller can be held liable for negligence if the seller's product is defective and can be reasonably expected to cause substantial harm to any foreseeable product users. In order to establish a claim for negligence, you must be able to show that the Chinese drywall seller owed a specific duty to you, that the seller breached that duty, that there is a causal connection between the sellers conduct and the injury, and that you suffered damage or injury from the breach.

Under products liability law, a seller has the duty to provide a reasonably safe product in design and manufacture. Thus, the sale of toxic drywall that must be removed from a home due to health concerns likely establishes a breach of this duty to provide a "reasonably safe product." In addition, if you establish that the defendant's sale of the defective drywall has caused you damage. Damage may include things such as negative health effects from exposure to the drywall's toxins, money expended to replace the drywall, and potentially costs associated with finding housing during drywall replacement.

Continue reading " Shreveport Homeowners with Chinese Drywall Have Options for Collecting Judgments " »

In a sign of progress for those homeowners who have found themselves buried under the burden of defective Chinese drywall installed in their home, recent court rulings have shown a lot of hope. The federal judge in charge of consolidating and creating a general premise for rulings involving the faulty imported wallboard, Judge Eldon Fallon, has found in favor of homeowners in a variety of locales. This is a marked improvement of where those who own affected property found themselves for the past years that the faulty material has been a problem and demonstrates that hope may be around the corner.

The Herald Tribune reports the ruling has yielded a quality judgment for the plaintiffs

A couple affected by the drywall - Tatum and Charlene Hernandez of Mandeville, La. - are entitled to $164,000, plus attorneys' fees and court costs.That money includes about $5,400 to pay the Hernandez family for damaged personal property and close to $20,000 to pay for somewhere to live while the repairs are made.

This ruling is progress for the homeowners and provides a roadmap for recovery that begins to approach the problems that the imported wallboard have provided. The article goes further to detail the ruling, stating

U.S. District Court Judge Eldon E. Fallon, who is overseeing the massive combined Chinese drywall litigation in New Orleans, ruled that:

A couple affected by the drywall - Tatum and Charlene Hernandez of Mandeville, La. - are entitled to $164,000, plus attorneys' fees and court costs. That money includes about $5,400 to pay the Hernandez family for damaged personal property and close to $20,000 to pay for somewhere to live while the repairs are made.

Their house is to be gutted down to the studs - replacing all drywall.

Ductwork, the entire electrical system, all copper and silver components and the heating-and-cooling system are to be replaced.

All damaged appliances and consumer electronics are to be replaced as well.

Fallon's decision on the Hernandez home, and his earlier findings on a Virginia case, may set a standard that could help thousands of other homeowners, including many in the Sarasota area and elsewhere in Florida.

This ruling seems to make a clear indication that defective property is the key element of this case and provides those affected a variety of assistance. That the ruling goes so far as to cover appliances and electronics means that the judgment covers almost everything that property owners could hope for in the matter.

What does not appear to be clear is the elements of personal damage and the effects the faulty wallboard has had on the health of those living in the homes. The basis of product defects is complicated and can be better understood through our sister blog's section detailing Product defect, located here. In general, product defects deal with three major issues: manufacturing defects, dealing with product imperfection occurring during the manufacturing process; design defects, dealing with product design; failure to warn, or marketing defects, deals with a failure to warn users of product problems or non-obvious dangers.

While Fallon holds a lot of control over the proceedings, the rulings will likely be appealed. What's important is that the trial, to this point, has indicated positive things for those wishing to prosecute the distributors and manufacturers that have brought Chinese drywall into the homes of many. An experienced attorney is essential when dealing with matters such as this and hiring the right one is crucial for getting the judgment you deserve.

Toxic Chinese drywall that was installed in many Orleans Parish homes has been discovered to emit sulfur, methane, and other toxins. The drywall is thought to be responsible for homeowner's health problems and damage to household appliances. If you have been forced from your home due to toxic Chinese drywall and are now suffering to repair the damage while balancing your mortgage costs and rent payments, you are not alone.

Three Senators Fighting to Obtain Mortgage Break for Chinese Drywall Victims
Just recently, three U.S. senators attempted to enter into negotiations with Fannie Mae and Freddie Mac in order to obtain 6 months of mortgage relief to homeowners fighting the damage of Chinese drywall in there homes. One of these senators was Mary Landrieu, a democrat from Louisiana. Landrieu was joined in this effort by Bill Nelson, a Florida senator. The senators state that the 6 month grace period will help "folks struggling to keep their heads above water" . The U.S. Consumer Products Safety Commission has receieved more than 3,000 allegations of toxic Chinese drywall. Just weeks ago, a similar plan was approved by Fannie Mae to help out Virginia home owners.

Louisiana Bill Addresses Victim's Concerns with Home Insurance Cancellations
On April 22, 2010, a proposal for a bill to help victims of Chinese drywall was introduced in the Louisiana Senate. The bill was introduced by Julie Quinn, and would bar home insurers from cancelling, refusing to renew, or increasing premiums or deductibles due to toxic Chinese drywall at a home. Quinn has received dozens of complaints from homeowners who say they are going to lose home insurance because they filed a claim related to the drywall. In addition, some homeowners are suffering added financial burdens from the drywall because they are afraid of reporting it to their insurer. See the full article by clicking here.

Ways to Help Lower Your Mortgage Payments in Response to added Expense of Chinese Drywall Damage

Temporary Interest Rate Reduction
If you don't have the option of waiting for Freddie Mac or Fannie Mae to provide you with mortgage relief, you still have options available to you. A temporary interest rate reduction may help you stay afloat long enough to avoid foreclosure. A temporary interest rate reduction can help individuals who are facinging financial problems that are likely temporary in nature, but who cannot provide full payments for a foreseeable time period. A temporary interest rate reduction can reduce your interest rates to market rate, or some cases, below market rate. Fannie Mae, may be willing to lower the rate to 3% in some instances.

Loan Modification of Securitized Loans & Special Plans
Most mortgage securities are issued by or guaranteed by Ginnie Mae, Fannie Mae, or Freddie Mac. Both Fannie Mae and Freddie Mac's servicing guidelines permit loan modifications.

Treasury Secretary Paulson, along with the mortgage industry, created "Hope Now," a voluntary program that helps consumers who have securitized subprime adjustable rate mortgages to avoid foreclosure by temporarily freezing their interest rate at the initial level. This plan has a clear procedure for processing loan modifications for those people who are up-to-date on their loan payments but are in danger of defaulting after the initial interest rate resets. These homeowners may be given a limited modification under which their interest rate will remain the same for a give period, often 5 years.

Treasury Secretary Paulson also implemented "Project Lifeline" for more dire cases. This program gives eligible participants a 30 day delay in foreclosure proceedings. In order to qualify, you must be at least 90 days late on payment and no more than 30 days from a scheduled foreclosure sale.

Addressing Orleans Parish Homeowner Credit Concerns
If you are deciding what path to take in regards to your toxic drywall problem and are concerned about impacting your credit, this information may help you. While you may not want a foreclosure avoidance plan of any type on your credit, these plans have been shown to be better than having a complete forclosure on your credit history. A foreclosure avoidance plan at least shows that you are attempting to make an effort to repay your mortgage.

Continue reading " Financial Assistance Emerges in Chinese Drywall Disaster " »

In a sign that indicates positive news for those looking to the stock market in the wake of the Chinese drywall problem, Travelers Insurance has shown limited exposure to the faulty import market. According to the Nasdaq news line, the company has only seen a little over 50 claims tied to the toxic wallboard.

The site reports

Travelers Cos. (TRV), the insurer of businesses, homes and cars, said Friday its customers have reported 52 claims tied to faulty drywall manufactured in China.

The insurer said it has no direct liability exposure to the companies that made the drywall, and no general liability policies on 37 of the 38 major public residential contractors in the U.S. Both the makers of the drywall and the contractors have faced a flood of lawsuits over the defective product. The 52 claims to date aren't considered significant, Travelers said in a slideshow prepared for a conference call with analysts and investors.

While this might not seem too significant for homeowners, the fact that such a major company is not facing problems means less pressure on the government by those with big pockets on the matter. While one would believe the government would work for the greater interest, the less money being spent to face the issue is better. What's more, this would also imply that less people have been harmed. By this, any less suffering is better.

The complexities in Chinese drywall are numerous and vary widely. As seen in our section dedicated to the matter, a variety of defenses are being utilized by the distributors and manufacturers of the faulty product. It is important for those affected to contact experts in a variety of fields, be it medical or legal, in order to move forward in what is becoming quite a confusing and difficult issue.

Should you see damage to a variety of appliances or problems with the health of any residents in your home, do not wait in contacting specialists in the matter. Our attorneys would happily discuss your rights with you while helping you handle any matters dealing with this issue. Time is of the essence in matters not only dealing with the health of those who might be living in a home with Chinese drywall installed but also because of time limits that exist with litigation.

In what appears to be a promising development for those who have found themselves the victim of Chinese drywall installed in their home, the government has taken steps to insure that insurers will back their policy holders. As the faulty imported wallboard has been a serious problem for many, insurance companies have begun dropping those with policies to limit their coverage requirements in the event of a suit or claim. Doing so has left many concerned on what will develop if the providers are left to their own interests.

By dropping those who may have Chinese drywall in their homes, insurance companies limit their liability in a way that mirrors their approach to storm damage and the like. In the wake of Hurricane Katrina, many insurance companies claimed that, instead of wind damage, the damage incurred by homes was the result of flood damage. The problem with this was that far too many homeowners possessed wind coverage but not flood coverage and thus were facing little to no payment from their insurance company. This is the same plight faced by those whose polices have been threatened by their providers in the wake of this drywall matter.

The Associated Press reports

A prohibition against insurance companies dropping coverage for homes or businesses that contain corrosive, Chinese-made drywall advanced Wednesday in the Louisiana Senate.

The bill by Sen. Julie Quinn, R-Metairie, would bar property insurers from canceling, refusing to renew, or increasing premiums or deductibles because of Chinese drywall at a property.

People who rebuilt their south Louisiana homes after Hurricane Katrina claim the imported drywall emits sulfur, methane and other chemical compounds that have ruined homes and appliances and harmed residents' health. The contaminated wallboard is costly to replace.

Quinn said she's received dozens of complaints from homeowners who say they will lose their insurance because they filed a claim related to Chinese drywall or who are afraid to report their drywall problems to insurers for fear they will be dropped by the company. She didn't, however, have specific numbers of homeowners who have lost coverage or faced a threat that they will lose coverage.

The acts of government officials to protect homeowners in this matter is important. The cooperation that is going on right now seems to support developments that will help those concerned and affected by the problematic materials that make up their walls and the structure of their homes. The problem with Chinese drywall is it is not only a faulty construction material but also taints appliances, not to mention causing health defects.

Product defect is an intricate issue that requires careful analysis not only for the judges involved but also the attorneys prosecuting the matter. While those affected by the toxic import might feel tying the problems incurred by its use is obvious, the courts have a series of procedures that require careful analysis and expert testimony to successfully win the case.

Should you suspect that you have Chinese drywall in your home, it is important for you to contact a legal expert as soon as you have contacted your builder or contractor to inquire about the materials used. A medical expert may be required as well given the health problems that have been described by those with the faulty wallboard in their home. Contacting an attorney will allow you the freedom to prosecute the matter while getting experts to inspect your residence and find all of the problems that the Chinese drywall may have caused.

For more information on product defects, click here or contact our offices as soon as you can. To read more about Chinese drywall, click here.

For those Louisiana residents, whether you live in Lake Charles, Shreveport, Baton Rouge, New Orleans, Kentwood or any other of the great cities across this state, looking for more information on their possible personal injury claim, check out our blog dedicated to these legal matters:

Louisiana Personal Injury Blog

This blog discusses the legal issues relating to Admiralty/Maritime law, Animal/Dog Bites, Car Accidents, Chemical/Industrial Spills, the intricacies of Expert Testimony, Insurance Disputes, employee rights under the Jones Act, Legal Duty, Civil Lawsuits, Criminal prosecution, Medical Malpractice, Mesothelioma/Asbestos, Motorcycle Injury, Negligence, Offshore Accidents, Product Defects, Chinese Drywall, Strict Liability, Workers' Compensation and Wrongful Death. All of these issues are crucial to citizens rights and residents of Louisiana.

To better understand the complexity of the law, contacting an attorney is crucial. However, to get a better understanding of the general issues, we hope this resource is invaluable. Feel free to browse this legal resource dealing with a variety of harms or damages you may have suffered in order to understand how your issue matches up with the law.

If you would like to speak with an attorney, check out our contact information. We represent Louisiana residents across the state and would be happy to discuss with you how to move forward with your unfortunate circumstances.

Dow Chemical, who experienced a chemical leak at their facility in Hahnville last summer, has reportedly had another incident at one of their Southeast Louisiana facilities. Breaking news from WWL reports

Officials in St. Charles Parish report a chemical leak at a facility in Norco.

It has crews evacuating some homes, closing 2 schools and shutting down roads.

Scott Whelchel is the emergency operation director for St. Charles Parish.

"We got a call this morning from Dow Chemical who actually has a unit within the Shell facility on the eastbank of our parish, and they had a unit that had a malfunction," he told WWL First News. "What we are dealing with is a pool of the product within that unit. What will happen is that as it comes into contact with humidity, it will release a cloud of hydrogen chloride."

Whelchel says the chemical that leaked is titanium tetrachloride.

As of now the incident appears to be under control. However, such chemical leaks are extremely dangerous and have been drawing the ire of environmental groups across the state and Gulf Coast for their frequency and possible harm to the public and surrounding plants, waterways and animals.

More information will be posted on this blog as it becomes available. For more information on our firm's work with the Hahnville leak, check our section on the matter here or look at our articles relating to the incident on our blog here.

The enormous need to rebuild houses after Hurricane Katrina and the end of the housing boom caused American homebuilders and companies to search for cheaper alternative materials to build houses with. The simplest and cheapest solution to this problem for these homeowners was to purchase imported drywall from China. That plan seemed great at the time, until homeowners complained about headaches and respiratory problems along with corroded electrical wiring, appliance outages, rotting walls and damage to personal belongings. An estimated 4,000 to 7,000 Louisiana households have been affected by this problem; however, only 800 Louisiana residents have reported these problems to the Louisiana Recovery Authority. Overall, 3,700 individuals across the nation have reported problems to the CPSC. Many residents are facing large medical and rebuilding fees and are not sure what to do.

Chinese drywall contains significantly higher levels of strontium and sulfur compared to most drywall manufactured in America. It was commonly used as a cheap substitute to American drywall for builders looking to cut costs and expenses. The corrosive problems that have been associated with Chinese drywall are fairly new. American researchers have been conducting several scientific studies for the past year to try and isolate the problem, and finally released the results of that study on April 2nd for Congressional officials and for civil litigation purposes. However, the problems for homeowners who have Chinese drywall in their house go much deeper than that. Those that have filed insurance claims have almost all been denied based on policy exclusions for latent defects or pollution in materials. Other homeowners who have chosen to go the legal route have been told that the 1996 tort reform legislation will likely prevent them from making a full financial recovery because the manufacturers of the defective goods are overseas.

Before 1996, a consumer in Louisiana could pursue a claim against a company and receive full compensation of damage from that company, even if the company was only liable for a small portion of the consumer's injuries. Applying the old Louisiana law to the situation here, a homeowner who was affected by the Chinese drywall situation would sue the party that installed their drywall. That party, in turn, would then sue companies up the chain until the biggest pockets were reached.

Then, in 1996 the Louisiana Legislature passed one of the nation's most aggressive tort reform acts in an attempt to improve Louisiana's business climate as promised by newly elected Governor Mike Foster. The new system of tort reform was a very pro-defendant, pro-corporate change in the law and only forced defendants to pay damages for the portion of fault that was assigned to them. That is exactly where the problem lies with the current Chinese drywall fiasco.

Under the law today, if a homeowner decides to sue the builder of his/her house who used the defective material and a court determines that the manufacturers are responsible for 90 percent, the American companies are only liable to pay 10 percent of the damages award. The other 90 percent would have to come from the Chinese company. However, American courts do not have the jurisdiction to force those companies to attend trial or pay damages allotted to them. Thus, you may ask, what are homeowners in Louisiana and across the nation to do?

Some lawyers have decided to pursue claims against the homebuilders who have chosen to substitute American drywall for the cheaper substitute through the Louisiana New Home Warranty Act; others have decided to file suits against the suppliers who handled the drywall, hoping to get a high percentage of contributory damages awarded against the supplier and not the manufacturer.

The best chance for victims in Louisiana to be compensated may be under a state law that allows victims to take "direct action" against the insurers of these companies that harmed them. This appears to be the only legal way homeowners can force the insurers to take some responsibility, and might even cause these companies to seek damages up the line like the pre-1996 days. This tactic turned out great for New Orleans attorneys in 1997 when they pursued claims against insurers when the Chinese-owned Brightfield ship slammed into the Riverwalk.

Currently, Congress is considering a law that would require foreign companies to participate in litigation if they sell products in the United States. That law is pending still and is not something Louisiana residents can rely on for immediate assistance and relief. The fact that these manufacturers are outside the realm of U.S. product liability law poses a minor problem. However, attorneys for some homeowners in Louisiana and around the nation are finally breaking through and have found some success.

This past Friday, April 9th, U.S. District Court Judge Eldon Fallon of the Eastern District of Louisiana ordered a Chinese manufacturer to pay seven Virginia families a total of $2.6 million for damages to their homes attributed to drywall problems. This was the first judicial ruling on a Chinese drywall case and is very important for future litigation because the Judge ordered that homeowners be made completely whole for the damages resulting from the defective drywall. Judge Fallon specifically stated that this included repairs to wiring, heating and air conditioning, floors, closets, kitchen cabinets and other fixtures ruined by the drywall.

This decision is great news to thousands of homeowners around the country, as it offers them some peace of mind while they await help from the CPSC, Congress, and other creative solutions from their attorneys. Should you believe you have Chinese drywall in your home, contact an attorney immediately.