Insurance Dispute Lawyer Blog

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Regular posting will resume in 2012! Have a happy, and SAFE, holiday season!

When one is successful on a claim against an insurance company the payment of the claim is expected to be prompt. Any delay in payment could result in the court imposing a penalty against the insurance company. In most, if not all, cases this penalty takes the form of court costs and attorney's fees. But if an insurance company challenges a policy claim in court, and then loses, does that time when payment was refused constitute delay? The answer to this question is 'it depends.'

In Louisiana Bag Co. v. Audubon Indemnity Co., the court held that if an insurer errs in interpreting its own insurance contract, then the insurance company will be held liable for the delay in payment resulting from the trial. This delay justifies the incurrence of penalties for attorney's fees. If, however, the policy dispute revolves around facts rather than contract interpretation, then the "timely payment" provision is stayed during the trial. This was the situation of Maxley v. Universal Casualty Co. where Maxley's car insurance policy through Casualty covered loss from both theft and fire. When Maxley's car was stolen and set on fire, he filed for his claim. However, Maxley had left his car unlocked with the key in it. The policy through Casualty had an exception that nullified any claim if there was no evidence of forcible entry. The issue went to court with Casualty claiming it owed nothing under the policy because the theft was not through a forcible entry, and Maxley contesting payment was due under the fire provision of the policy rather than the theft. Maxley, in essence, argued that the exclusion provision for no evidence of forced entry was irrelevant because his car would have been recovered if it had not been for the fire.

The court found for Maxley, who then sought attorney's fees for Casualty's failure to make timely payment. The Third Court of Appeal upheld the denial of Maxley's claim, stating that Maxley's reliance on Louisiana Bag was misplaced. While Louisiana Bag relied on policy interpretation, Maxley's case relied on a true disputation of the facts. It would be senseless to require the insurance company to pay the claim only to the have the claim payment rescinded if the facts were found in favor of the insurance company. This finding upholds efficiency in the industry as it is easier to withhold payment until truly due than it is to always make payment, then try to recoup it if made erroneously.

When going to court over a contested policy claim, it is important read through your policy contract. If, according to the policy, it is unambiguous that you are entitled to payment, then attorney's fees may also be charged against the insurance company for failing to pay in a timely manner. However, most insurance claims that wind up in court do so because there are questions of material fact relating to the policy. So ask yourself: is the insurance company contesting what happened to the item covered, or how the policy covers it?

The above question is simply a starting point in determining whether or not payment has been erroneously withheld. Insurance claims are complicated and require the expertise of a licensed, practicing attorney. If you have any questions regarding your insurance claim, contact the Berniard Law Firm.

When litigation involves multiple parties, all of which are big national or international organizations, there is a higher likelihood that something is going to end up in the litigation process. The unfortunate nature of insurance coverage is that companies will try to find little nuances to try to argue their case, or will add little nuances to make any future case more difficult for opposing parties. One party to a contractual agreement may cite to these nuances to find a loophole to escape from any potential liability and, subsequently, leave someone who believed they had full coverage with nothing. Despite these loophole efforts, a court can still look at the realities of the circumstances and come to real life conclusions to the exclusion of the argument of either party. This is true in the case of Federal Insurance Company v. New Hampshire Insurance Company, when the court ultimately looked at the reality of a contractual agreement and decided that no matter what the terms of the contract were, the whole contract was in regard to a personal injury case.

Our previous blog post discussed this case but a brief summary is as follows:
The case began when Wayne Robinson was unfortunately hurt by an explosion at a chemical plant. The explosion occurred because there were certain chemicals used by the plant that reacted with each other to cause the explosion. One of the defendants in Mr. Robinson's case was Thomas and Betts Corporation (hereinafter T&B). T&B allegedly manufactured a product that contributed to the explosion that caused Mr. Robinson's injuries. T&B had liability insurance from both New Hampshire Insurance Co., which was the primary insurance provider, and Federal Insurance Co., which was the secondary, or excess insurance provider. Ultimately, Mr. Robinson settled with T&B.

The interest of discussing policy nuances hinges upon the terms of the agreement were between T&B and Mr. Robinson. In that agreement, T&B would give Mr. Robinson $5 million for bodily injuries and an additional $1.2 million for a potential breach of contract claim another plaintiff may have had against Mr. Robinson. In fact, by settling with T&B, Mr. Robinson was breaching his agreement with the plaintiff company. After Mr. Robinson reached his agreement with T&B the other plaintiff sued Mr. Robinson for breach of contract. This breach of contract was supposed to be covered by his settlement agreement with T&B. However, soon after the settlement, Mr. Robinson received a letter from New Hampshire Co., T&B's primary insurer, that it was going to cover his $5 million settlement, but would not cover his $1.2 million settlement because it was for a breach of contract and therefore, outside the scope of its policy covering T&B.

As a separate issue, the court discussed whether the New Hampshire policy covered contractual agreements. However, it came to the conclusion that the use of the phrase "legally obligated to pay" rendered the policy to cover tortious actions. However, the court went on to explain that the entire settlement between T&B and Mr. Robinson did in fact relate to and cover the bodily injury claim. The settlement could only cover the bodily injury claim because the only action for which T&B was liable to Mr. Robinson was the bodily injury. Therefore, the settlement could not be for any breach of contract claim.

The $1.2 million settlement was a by-product of T&B inducing Mr. Robinson to settle his bodily injury claim against T&B. The court held that even though this separate amount is categorized as reimbursement for a breach of contract claim, it is still within the bodily injury claim because the settlement was made in consideration for the bodily injury claim. Therefore, because the bodily injury claim was covered by the New Hampshire policy, New Hampshire was liable for the entire settlement. Mr. Robinson received money from Federal, T&B's secondary insurer, therefore Federal stepped into T&B's shoes in its claim for reimbursement from New Hampshire. Therefore, New Hampshire owed Federal the money it paid to Mr. Robinson.

Even in cases where a contract defines things in a certain manner or when the law defines different terms, the realities of a contract are the ultimate facts that define a contract. Although, the New Hampshire policy only covered tortious actions and even though the settlement between Mr. Robinson and T&B defined two different amounts, one for bodily injury and the other for a breach of contract, the reality was that both amounts were in consideration for the bodily injury claim and therefore the reality was that New Hampshire owed the entire amount as per its policy with T&B.

Continue reading "Nuances of Insurance Policies Crucial When Pursuing Coverage" »

The terms in a contractual agreement between parties can have the effect of changing entire meanings of contracts. This is especially true in more complex litigation and more complex business agreements. If a business agreement requires the participation of multiple partners or parties, an ambiguously defined contract can have the effect of increasing the amount of litigation which will occur every time there is a legal dispute between any or all of the parties. The clear practical effect of writing clear-cut and well defined contracts is that, in the long run, there will be less of a chance that any dispute will require a long, drawn-out litigation process which has the effect of draining the wallets of all the parties involved.

This is most important where one or more of the parties is a single individual with limited resources, and in some situations, is represented by smaller firms that have much less financial resources compared to bigger business entities with more resources and financing at their disposal. As a legal practice, any person that becomes part of a contractual agreement should clearly define any type of ambiguous terminology in an effort to save the agreement from getting the definitional application of common law or practice. Never is this more necessary than when an individual is pushed up against an insurance agency that holds their financial future in their hands. The importance of defining a contract can be clearly seen in the case of Federal Insurance Company v. New Hampshire Insurance Co.

Both Federal and New Hampshire insurance companies became involved in litigation because they both insured Thomas and Betts Corporation (hereinafter T&B). T&B made a product which contributed to an explosion at an aluminum processing plant in Gramercy, Louisiana, leaving employee Wayne Robinson with injuries. Ultimately, Mr. Robinson sued T&B, which had liability insurance from both Federal and New Hampshire. Thus, when the suit began, Federal and New Hampshire's policies kicked into effect. New Hampshire was the "first insurer" for T&B. Federal, on the other hand, was T&B's second layer excess insurer. On the eve of the trial, Mr. Robinson came to an agreement with T&B which had the effect of potentially extinguishing the law suit. T&B was going to pay Mr. Robinson $5 million dollars in damages for his unfortunate bodily injuries, and an additional $1.2 million in consideration for a potential breach of contract claim by another plaintiff company against Mr. Robinson. Subsequent to this settlement, New Hampshire notified Mr. Robinson that it was going to pay him the $5 million, but that it would not pay him the $1.2 million promised by T&B. When Mr. Robinson then received a letter from the plaintiff company, he sent the notice to Federal to show the demand made of him. Federal ended up giving Mr. Robinson $990,000 for the potential breach of contract claim against Mr. Robinson. The pertinent part of the agreement between T&B and Mr. Robinson is as follows:

"Thomas and Betts and Its Insurers agree to hold harmless, indemnify and defend Wayne Robins, et al, The Fields law Firm and Cleo Fields for any amount owed to AXA, Kaisers Subrogated Property Reinsurers, Caleb Didriksen and the Didriksen Law Firm, not to exceed 1.2 million dollars."

Eventually, Federal sought the $990,000 from New Hampshire arguing that the amount should have been given to Mr. Robinson as part of T&B's policy with New Hampshire. New Hampshire argued that this amount was not within T&B's policy with it. The pertinent part of T&B's policy with New Hampshire was that New Hampshire, "becomes legally obligated to pay by reason of liability imposed by law or assumed by [T&B] under an Insured Contract because of Bodily Injury." This seems simple enough, however there was no definition of "legally obligated to pay." In the world of contracts, the contracting parties have the ability to define things in any manner they see fit. These definitions should, however, be included in the contract itself in the index of terms. When a contract does not define any of the material terms, the terms should be filled in by the court. In this case, the court decided that since the phrase was not defined, it should be filled in with what was commonly used in Louisiana. It Louisiana, it was well settled that the use of the phrase was for damages arising out of tortious actions and not from a contractual obligation. Therefore, on the face of the assertion, Federal would be out of luck because it sought money from New Hampshire for money it gave Mr. Robinson due to a breach of contract. Even though the court sided with Federal for other reasons, Federal would have been dealt a strict blow because it did not read the policy between T&B and New Hampshire clearly enough to see that the term was not defined.

Therefore, before taking any action any party should clearly read any existing agreement between relevant parties and should make sure any contract it signs has clearly defined terms that will not lead to unnecessary litigation which will only serve to drain resources.

Continue reading "The Importance of Defining Terms in a Contract" »

As previously discussed in Part I, the case of Charles Ebinger, et ux. v. Venus Construction Corporation, et al. focuses on the time period in which a claim for damages can be brought against a contractor and the time period in which a contractor may bring an indemnifying action against a subcontractor. This Part, however, focuses on the Louisiana Supreme Court's reasoning as to how it interpreted the applicable statute of limitations.

The Ebingers moved into their newly built home in April of 1997. On October 9, 2003, the Ebingers filed suit against Venus Construction alleging defects in the home's foundation had caused cracks in the drywall, tile, brick walls, and floor. Venus Construction filed its indemnity claim on September 22, 2006 against the engineer and subcontractor that supplied the foundation.

First the Court determined when the cause of action arose. The Court determined that "regardless of the length of the peremptive period, it [the peremptive period] began when the owners took possession of the house or filed an acceptance of the work." In this case, a certificate of occupancy issued on April 22, 1997, and therefore, that is when the peremptive period began. At the time the Ebingers moved into their home, the original statute was in place and thus the Ebingers would have ten (10) years to file a claim.

Second, the Louisiana Supreme Court looked at the language of the statutes to determine whether the superseding statutes were written to act retroactively or have prospective application. Though the peremptive period was ten years at the time the statute of limitations began to run, the legislature amended the governing statute in 1999, substituting 'seven' for 'ten' years as the peremptive period. Further, this Act stated "the provisions of this Act shall have prospective application only and shall apply to contracts entered into on or after the effective date of this Act." Thus, at this time, the Ebingers would still have a valid claim through the original ten year peremptive period because the amended statute had only prospective applicability, not retroactive applicability, as specifically written in the Act by the legislature. Next, the Court looked at the second revision of the Act in 2003 which substitute 'five' for 'seven' years and did not maintain the 'prospective application' language. The Court states that the legislature's actions in drafting a law are knowing and intentional, and thus, if the legislature meant for the 'prospective application' language to continue, then the legislature would have included it in the Act. However, because the legislature did not, the Court's interpretation is that the 2003 Amendment supersedes the original statute and makes the peremptive period five years, even for those causes of action that arose back when the ten and seven year periods were applicable.

Third, the Court examines Constitutional rights to Due Process and determines that the statute of limitations is a procedural law and as long as it does not disturb a vested legal right, a right that at the moment may be expressed, then the statute of limitations (peremptive period) may be applied retroactively. In the end, the Ebingers' claim is not perempted even though it was filed two months after the 2003 Amendment because the Ebingers' right to sue had vested the moment they attained the certificate of occupancy. However, as for Venus Construction, "the mere expectancy of a future benefit," for Venus Construction in this case the right to file a claim for indemnification, "does not constitute a vested right." Therefore, Venus Construction's right to file a claim for indemnification did not vest until a judgment was entered against Venus Construction, and thus the peremptive period has run for Venus Construction to file a claim for indemnification against the subcontractor.

Continue reading "Keeping Up with Your Louisiana Home's Construction Defects (Part II) - Understanding Statutes " »

Being able to be involved in the design and building of a new home can be an exciting experience. But there is nothing more special than seeing the home's construction completed and fully furnished. After all of this, there can be nothing more upsetting than the discovery that the new home has building defects. Imagine settling in and noticing some part of the home's structure misshapen or cracking at the seams of walls or floors, or perhaps even a foundation or structural supports that have improperly settled or misplaced. The focus of Charles Ebinger, et ux. v. Venus Construction Corporation, et al. focuses on the time period in which a claim for these damages can be brought against a contractor and the time period in which a contractor may bring an indemnifying action against a subcontractor.

The crux of this follows what happens from the time that the building has completed through when litigation is brought against the contractor, and in the event the contractor is found liable, then the indemnification proceeding the contractor would most likely bring against any subcontractor who may be at fault for the imperfect work. However, this is complicated by taking into account the statute of limitations that exists to bring about such a suit. And this is further complicated when taking into account the revisions of the statute of limitations by the legislature.

In short, and to be clear, 'to indemnify' means to compensate for damages or losses sustained and to pay for expenses incurred through the litigation. Thus, in the event that a contractor, one who oversees and employs the various subcontractors for a specific job, is found to be liable for damage that exists in a specific construction unit, then, if it is through no fault of the contractor, but is the fault of one of the subcontractors and his or her oversight of his or her unit and specific job, then the contractor may seek to have his or her losses, in this case through litigation and a damages award against the contractor, paid by, or reimbursed by, the subcontractor.

A statute of limitations is a specific statute enacted by the legislature that basically states when it is too far away in the future of when an event originally happened to seek legal recourse. Usually, the statute of limitations begins to run when the complainant knew or should have known of the event or damages, as is often seen in torts cases. In this case, as will be later discussed in more detail, the statute of limitations until peremption began at ten (10) years and over the course of two revisions, became five (5) years.

Peremption, which is a large focus of this case, is the extinguishment of the right to bring a cause of action against another. Peremption is synonymous with a statute of limitations in that both, in this case, would prevent either the homeowner from bringing an action for damages against a contractor, or the contractor from bringing an action for indemnification against a subcontractor. Reading this, one may ask, why wouldn't the homeowner just bring a suit for damages against the subcontractor. There are two answers to this question, neither requiring an in depth discussion:

A. The contractor is the one hired to perform the job. In this case, that job is to build a house. In turn, however, because the contractor is usually unable to perform all the necessary duties, the contractor hires subcontractors to perform the separate duties (foundation, carpentry, electrical, plumbing, etc.). Thus, it is the contractor who has a contract with the homeowner while the subcontractor has a contract with the contractor.

B. Because the homeowner has a contract with the contractor and not the subcontractor, the party who may in fact be the cause of the damage, a party may bring an action against the contractor for any construction defects because the Law allows the contractor to, in turn, bring a suit for indemnification against the subcontractor who may in fact be at fault for the defect or damage.

Now that the background information has been laid down and described, it is time to turn to the legal issue of when is a cause of action perempted when the statute of limitations has been revised twice. For this discussion, please continue on to Part II. If, however, instead more information or legal services are required at this moment please contact the Berniard Law Firm for further information or legal services.

In a prior post, we reviewed the Johnson v. Louisiana Farm Bureau Casualty Insurance Co. case. The case concerned the undelivered notice from Farm Bureau to Janice Johnson that the company would not renew her homeowner's insurance policy. The case centered around the state law that requires notice of the intent not to renew:

"An insurer that has issued a policy of homeowner's insurance shall not fail to renew the policy unless it has mailed or delivered to the named insured, at the address shown in the policy, written notice of its intention not to renew. The notice of nonrenewal shall be mailed or delivered at least thirty days before the expiration date of the policy." La. R.S. 22:1335, formerly La.R.S. 22:636.6.

In the Johnson case, the Third Circuit interpreted the "mailing or delivery" requirement to mean that the notice must actually be received by the homeowner. During the trial, the jury found that Farm Bureau had properly mailed the notice. But Johnson's testimony that she always opened every piece of mail she received (except for bank statements) convinced the jury that she had not, in fact, received Farm Bureau's letter. Since the Third Circuit regarded the conclusion about delivery to be a matter of "the credibility of the witnesses," and could not find "manifest error in the jury’s credibility determination nor in their determination that the notice of non-renewal was not delivered," it affirmed the trial court's award of damages to Johnson.

Farm Bureau appealed this decision, which so happened to contrast directly with a recent decision from the Fourth Circuit. The Fourth Circuit case, which featured very similar facts, reached the following conclusion:

"[t]he mailing of a notice of nonrenewal to the insured’s address, as listed on the policy, at least thirty days before the expiration of the policy satisfies the burden placed upon the insurer." Collins v. State Farm (La.App. 4 Cir. 1/26/11).

The Louisiana Supreme Court sided with the Fourth Circuit, finding that "the key is that the statute requires only mailing, not proof of receipt." Because "the plain language of the statute requires only that such notice be mailed," in the court's view "any evidence of non-delivery is relevant only as far as it is evidence of non-mailing or improper mailing." The court determined that the jury's fact-finding duty extended no farther than determining that Farm Bureau had properly mailed the notice, which was "all that [Farm Bureau] was required to do under [the statute] in order to give notice of nonrenewal of [Johnson's] insurance policy." Accordingly, the Supreme Court reversed the Third Circuit and declared that "Farm Bureau did not provide homeowner’s coverage to [Johnson] at the time of the loss." As a result, Johnson was denied the $296,500 payment she expected from Farm Bureau.

The purpose of the nonrenewal notice is to provide an insured homeowner sufficient time to obtain new insurance with another company before the existing policy expires. While the law placed a specific burden on insurance companies to send such a notice, customers in Louisiana are now clearly warned that the failed delivery of a properly mailed notice will not obligate an insurer to extend coverage, even if the consequences are catastrophic to the homeowner.

Continue reading "Louisiana Supreme Court Settles Circuit Dispute Over Insurance Policy Renewal Issue " »

Class actions are a common and popular legal tool for cases involving a large group of people who share the same grievance against a defendant. Specifically, the plaintiffs have to have a real and actual interest in order to join a class action. An issue may arise however, if a plaintiff's interest is called into question. In particular, whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted against a defendant. Essentially, the plaintiff's have to share the same type of complaint and injury in order to form a proper class action. Many times, defendants will allege that the class action was improperly certified (allowed) in order to invalidate any complaints against them.

In a recent Second Circuit Court of Appeal Case in Louisiana, the court explored the certification of a class action in order to determine whether or not it was proper. The facts of the case include the plaintiff, representing a class of individuals, who all share a grievance against a funeral home, owners of the funeral home, and numerous banks. The gist of their complaint is that the funeral home sold prepaid funeral expenses to the plaintiffs and other putative class members. The owner of the funeral home then deposited their payments into certificates of deposit (COD) with one or more of the banks named as defendants. The bulk of COD's were under names which included the Funeral Home, followed by either "payable on death," or "for the benefit of" followed by the name of the individual whose prepaid funeral funds were being held on deposit. The issue became that without presentation of a death certificate as required by Louisiana statute, the law governing prepaid funeral services, and in breach of the banks' contracts, namely, the certificates of deposit, the funeral home was allowed by the banks to withdraw the funds which they converted and appropriated for their own use. The plaintiffs argue that by accepting the deposits, the defendant banks became commonly liable with the funeral home. Yet, the appellate court is charged with the responsibility to determine whether the class action should be certified, despite the fact the trial court denied the class's certification.

A class action must have certain definite characteristics. First, the class must be so large as to make individual suits impractical. Second, there must be a legal or factual claim in common between all the plaintiffs involved. Third, the claims or defenses must be typical of the plaintiffs or defendants. Fourth, the representative parties must adequately protect the interest of the class. Further, in many cases, the party seeking certification of a class must also show that common issues between the class and the defendants will predominate the proceedings, as opposed to individual fact-specific conflicts between class members and the defendants and that the class action, instead of individual litigation, is a superior vehicle for resolution of the disputes at hand. Here, the class certification, the plaintiffs sought to certify a class defined as "all individuals from whom the funeral home appropriated and converted funds collected by them for prepayment of funeral expenses." Additionally, the motion asserted common questions of law and fact including:

1. whether the funeral home appropriated and converted funds of the class members in violation of La. R.S. 37:861; 2. whether the defendant banks released the class members' funds in violation of La. R.S. 37:861 and the banks' contracts; and 3. whether the defendant banks released funds belonging to the class members without obtaining death certificates.

The trial court denied the plaintiff's motion for certification of a class action as a result of a weighing and balancing determination. The trial court found that the plaintiff's did not satisfy the class action requirements, stating that the evidence was insufficient to show that the class was so numerous and geographically dispersed that joinder would be impracticable, that the class representatives would adequately represent the putative class members, or that their claims are typical of those of the putative class members. Essentially, the trial court felt that each claim was too individual, and that it would be difficult to consolidate the claims and form one basic legal grievance against the defendant funeral home. The appellate court analyzed each of the trial court findings in order to determine whether or not the plaintiffs actually had a class action, concluding that they indeed did not have a proper class action.

The appellate court concluded after exploring all of the factors that the plaintiffs failed to fulfill all of the requirements to have a proper class action. Specifically, the plaintiffs never alleged a relationship with the banks involved with the funeral home. Absent any connection of dealings with the banks, the plaintiffs do not have a real and actual interest in a suit against the banks. Only those persons whose prepaid funeral funds had been deposited by the funeral home with a specific bank would have a real and actual interest in a suit against such bank. Further, the appellate court denies class certification based on the plaintiffs argument that a plaintiff may have standing to sue a defendant with whom he has had no business contact or dealing, if the defendant's conduct is part of a conspiracy. Yet, no conspiracy was alleged among the defendants named in the action. In conclusion, the appellate court, as did the trial court, found that the plaintiffs did not belong to the class of persons to whom the law grants the cause of action asserted against the banks in the suit. Thus, the class action was denied. Class actions are a great tool for many cases, however, they must be properly formed and fulfill all of the legal requirements in order to move forward.

In Oakdale, Louisiana, on March 8th, 2000, a pressurized tank owned by Arizona Chemical Co., Inc., containing a heat transfer fluid over-heated. The tank had a safety shut off valve which failed, resulting in the short-term release of chemical vapor into the air. The vapor, containing biphenyl and phenyl oxide, drifted toward the home of a nearby resident, Ms. Edna Miller. The release was short lived and was contained within 30 minutes but caused very real damages. Edna and Bruce Miller sued Arizona Chemical Co, Inc., for personal injuries following the chemical release. As a result, Edna Miler was awarded $12,5000 in damages. However, Bruce Miller's claim was denied as a verdict in favor of Arizona Chemical was issued.

Both parties appealed the decisions in the Third Circuit Court of Appeals. The Court of Appeals affirmed Edna Miller's award for $12,500 and refused to award her additional damages. Bruce Miller's claim on appeal was also denied, and he was awarded no damages. Edna Miller was awarded damages while her son Bruce was not because he could not meet his burden of proof to show that the chemical release caused him any harm.

At the time of the exposure Edna was inside her home. Her son Bruce was at work, as a groundskeeper at a nearby high school. Mr. Miller left work to check on his mother when he heard about the chemical release. He found Edna outside on the lawn, nauseous, and about to leave the area. He helped her into her car and she drove away. Bruce Miler stayed on the property for several minutes, went in the house, had a glass of water and washed his face. He said his eyes and throat were burning and he felt shortness of breath.

Later that day Mrs. Miller visited the emergency room with heart palpitations, shortness of breath and nausea. She was released when she no longer had symptoms from the chemical release. Arizona Chemical company paid her medical bill and the bills of four other people that day who complained of symptoms related to the chemical release. Mr. Miller did not seek medical attention that day. He stated that five hours after the exposure he developed a rash on his hands. This rash was later found to be caused by his taking Celebrex and by his long time smoking habit, not from the chemical release. He has suffered skin rashes many times before in his life.

In order to recover damages for personal injury the injured party must prove that the other party was the primary, if not only, cause of the injury. Mr. Miller's treating family practitioner testified that his breathing problems, rashes, and other symptoms were related to the chemical exposure. However, the physician did not know until the day of trial what chemical the Millers were exposed to, nor the type of ailments that particular substance could cause. The doctor said that the timing of the chemical release and Mr. Miller's symptoms were what led him to that conclusion. The Defendant presented opinions of expert toxicologists who testified that Mr. Miller’s continuing symptoms could not have been caused by the brief transient exposure to the chemical vapor on March 8, 2000. Because Mr. Miller could not show that the cause of his symptoms was due to the chemical release, the Court of Appeals affirmed that he was not entitled to damages from Arizona Chemical Co., Inc.

Showing that an action by one party caused injury to someone can be complicated. The inured party must prove that their injury was caused by the other party and that the injury caused them some harm. In this case Mrs. Miller suffered some harm, but not harm requiring compensation more than the $12,500 the court said. Mr. Miller was not able to meet his burden of proof showing that the chemical release was the cause of his injuries and thus failed at his claim.

If you have suffered an injury due to chemical release or some other action of another party, you may be entitled to damages if you can meet the proper burden of proof. Whether or not a party has met their burden of proof is a question for the judge or jury and is essential to receiving compensation for personal injury. If you or someone you know has suffered an injury due to another party, an experienced attorney can help you determine if you may be able to meet the burden of proof to be awarded damages by the court.

Continue reading "Chemical Release Ruling a Helpful Guide for Recent Spills/Leaks" »

In a recent decision, a Palm Beach County, Florida, judge ruled that because homebuilders did not manufacture the defective drywall that eventually caused damage to homes, and because they were not within the “chain of distribution,” they could not be held strictly liable for the alleged defects. Strict liability would make it easier for a potential victim to recover money from the homebuilder because the victim would not have to prove that the homebuilder had been negligent in any way. The victim would merely have to show that a product standard was not met along the supply line that led to their injury.

In this case, the homeowner, Marlene Bennett, sued the homebuilder under several theories: 1) breach of contract, 2) tort law, and 3) private nuisance law. The plaintiff asserted damages against the homebuilder, installer, supplier, and manufacturer of the drywall for installing faulty materials, economic losses for declines in home values, and personal losses for the alleged nuisance caused by the drywall emitting fumes. All of these claims, and defendants, are designed to cover the wide spectrum of expenses and responsibilities that can develop as a result of this caustic material being installed and slowly ruining a family home.

Upon going to trial, the case hit its first roadbump when the judge did not let the private nuisance claim go forward. Usually, nuisance law claims are used when someone is unreasonably interfering with the private property rights of another. The judge analyzed Florida law and decided that nuisance law usually had to do with things tied to the land itself, not parts of the house like drywall. The plaintiff may still be able to claim under a breach of contract claim (for breach of implied warranty or other claim) but because there are so many parties involved from the manufacture of the drywall to its installation, it is difficult for plaintiffs to recover damages.

It is important, however, to note that this is only one case, and was in a Florida court, not a Louisiana court. It has not yet been adopted by other judges or upheld by higher courts, and the case law is still developing in this area. It is possible that a Louisiana court could decide the case completely differently. The proper attorney with the most thorough understanding of product liability and insurance dispute (like those at our firm) will use legal theories and tools like this to navigate the judicial process.

In addition to this case, there are a number of ongoing legal efforts in the courts right now in Louisiana, Virginia, California, and Florida dealing with the issue of whether builders can be held liable for defective drywall. Much of the drywall involved in the litigation was manufactured during a specific period of time in China and believed to cause damage to electrical wiring and fire safety equipment.There has been a settlement in federal court involving Knauf Plasterboard Tianjin, which produced one-fifth of the defective drywall, recently settled in federal court to help pay to fix the damage their defective drywall caused. Homeowners may choose to have their homes repaired or to sue for money damages and do the work themselves.

Our firm has made steady progress within the courts and continues to take on clients looking to receive the damages they deserve due to this defective wallboard. If you are a homeowner with defective drywall that is emitting fumes, lowering your home value, or other damage, we may be able to help you.

Continue reading "Chinese Drywall Claims Continue as Thousands Still Face Problems" »

For thousands of homeowners, an unwelcome companion lives with them every day, without their consent and sometimes without their knowledge. This unwelcome housemate is known as Chinese drywall. This dangerous defective material was utilized in a multitude of homes between 2001 to 2007, when it was imported from China. The drywall has created an unhealthy and dangerous atmosphere for homeowners, who have to deal with not only symptoms of failing health, but also their actual possessions showing evidence of exposure to Chinese drywall. One couple in particular describe the chain of events that led them to the discovery that they were living in hazardous circumstances as a result of the Chinese drywall being used in the construction of their dream home.

Chinese drywall is not the type of danger that is instantly apparent; rather, it is hidden in the home, being that it is sheet rock which is later covered and painted over. However, this hidden hazard releases toxic fumes into the air which causes health effects as well as deterioration in objects exposed to such toxins. According to the U.S. Consumer Product Safety Commission, "the drywall releases hydrogen sulfide and possibly other gases causing corrosion of wiring and appliance and possible health problems." A couple who detail their experience with the defective, hazardous material, stated that their first inclination that something was seriously wrong was when they had to replace their air conditioning compressor and coils twice, within a three month time span. Upon speaking with their friends and neighbors, they discovered that numerous homeowners in the area had to replace their air conditioning compressor and coils often as well, which is not normal for such equipment. The trauma continued when the couple described smelling rotten egg in their home on a daily basis, to such an extent that when they left their home, co-workers and friends would mention that the couple themselves smelled like rotten egg. As further indication of the danger that lurked in their home, the silver jewelry and dishware turned black after sitting out for a mere week and half. Pretty soon, friends, relatives, and neighbors stopped coming to their home, the smell was too much to handle and the couple was at a loss of what to do. Hiring a home inspector to come help them discover the root of their problems, the inspector discovered their house was built with Chinese drywall. Scared and unsure of what their options were, the couple turned to legal guidance and support for answers.

Lawsuits have been filed against the Chinese drywall manufacturer, Knauf Drywall, and the distributor, Interior/Exterior Building Supply. In fact, to date, over 5,000 cases have been filed in a multi-district litigation in Louisiana under federal Judge Eldon Fallon. These lawsuits were pressed by those looking to recover the money it would cost to replace their drywall with a safer version. Since this process involves major construction, the costs are high and these people rightfully felt like they should not have to pay for unknowingly being exposed to contaminants by the manufacturer.

The health risks are extremely important to understand and take into consideration. According to Dr. Patricia Williams, a University of New Orleans toxicologists, "highly toxic compounds have been found in Chinese drywall and prolonged exposure to these compounds can cause serious problems. Strontium sulfide may be dangerous to developing children; affecting bone growth. Chronic exposure to these gases may affect the central nervous system (including visual and sensory changes), cardiovascular system, eyes, kidney, liver and skin." These risk cannot be ignored, thus, seeking legal advice to understand all of the issues involved is strongly advised.

Chinese drywall is a hazardous material that thousands of homeowners have had to live with for years. Throughout this time period they were constantly barraged with toxic fumes which affected their health, lives, and enjoyment of their homes. Legally, homeowners have an action against the manufacturer and distributor of such a defective product and should seek legal advice as soon as possible. Homeowners need to understand how Chinese drywall impacts their health and environment. Monthly status calls are available for homeowners to listen to, that detail settlement discussions as well as liability issues. Homeowners are encouraged to listen in and can call the conference call number at: 1800.260.0702, with the access code 183730. The next scheduled status meeting will be January 20, 2011. Homeowners are strongly advised to seek legal support to protect their rights; if you live in a home with Chinese drywall, contact an attorney immediately.

Continue reading "Chinese Drywall Still a Major Issue Throughout Gulf Coast" »

Thousands of families have recently been displaced by cheap Chinese drywall which, after being installed, begins to rot and emit a sulfur-like smell so pungent that the homeowners can't stay inside. Worse yet, the price of removing it is almost prohibitively high, turning new homes into tear-downs. The problematic drywall was imported following an increase in drywall demand as a result of Hurricane Katrina. The families affected by this product are now bringing tort claims against the drywall's manufacturers in China.

The modern law of torts has had an interesting and bizarre history. Looking at the beginning, one would never guess things would end up the way they are. In the Middle Ages, torts were negotiated between the victim's family and the tortfeasor's family. Punishments were figured out mostly along guidelines set by the king and by local custom. The owner of the Chinese drywall would have called up the manufacturer and demanded the CEO's head. The company would have offered something less and the two parties would negotiate something mutually satisfactory, in the hopes that they would not start a feud.

Some of the earliest written English "laws" involved torts and comes from King Alfred, who wrote a book of "Dooms" around the year 900, in the hopes of making some guidelines to make negotiation easier. The Dooms of Alfred included a 120 shilling fine for stealing a nun. Half the fine was supposed to be paid to the king and half to the bishop. Another of Alfred's Dooms said that if two men were cutting down a tree, and the tree fell on one of them, the dead man's widow got to keep the wood. A third levied a fine for knocking out someone's eye but noted that only one third of that fine would be due if the eye was blinded but remained in the head.

The next big development in the law of torts came in the 1150s, with the advent of the writ system. Writs were designed to prevent self help and offered access to the Royal Courts, where juries could award tailored damages based on their own assessment of the case, rather than a negotiation between the parties. The writ of trespass eventually became the mother of all modern torts, as its language was slowly stretched to cover new causes of action and get more and more people into court.

By 1610, the writ of trespass has been stretched to cover everything from wrongful eviction to assault to private nuisance. It was a writ of trespass which started William Aldred's famous case (credited with being the root of all environmental law), in which he claimed that his neighbor's stinky pig sty deprived him of his property. The Court said that Alfred's neighbor had "no right to maintain a structure upon his own land, which, by reason of disgusting smells, loud or unusual noises, thick smoke, noxious vapors, the jarring of machinery, or the unwarrantable collection of flies, renders the occupancy of adjoining property dangerous, intolerable, or even uncomfortable to its tenants."

What does this have to do with Chinese drywall? Nothing- but that's the point. Modern torts are worlds apart from their medieval forebearers. The reasoning of Alfred's Case, however, is alive and well. It is being employed today, four hundred years later, in cases about Chinese drywall in Louisiana. As unintuative as it seems at first, a pig sty that makes property worthless is no different from smelly Chinese drywall that makes property worthless. The plaintiffs could practically cite to Alfred's Case and say "ipso facto, we win."

Of course, the Chinese drywall manufacturers are none too excited about being bound by laws which were derived by thousands of years ago from across the globe. In fact, they're claiming that American courts have no jurisdiction over them because they are Chinese companies. Unfortunately for them, that's completely untrue. Even if the Chinese government were selling the drywall in its sovereign capacity, American courts would have jurisdiction.

If you fear that you have Chinese drywall, contacting an attorney and a doctor is essential. There are a wide variety of ailments that those with the unwanted material are now experiencing and calling a lawyer is the only way that many will be able to receive the compensation and fixed building elements they deserve.

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.

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.

The first bellwether case for Chinese drywall litigation began yesterday. The case is important because of the potential precedent for culpability it will establish for Chinese manufacturers and importers over the faulty wallboard brought into the country in the wake of a variety of hurricanes and home development. While more than 2,000 families have claims pending on this issue, the effects may even be more far-reaching.

News Inferno reports

The first bellwether trial names Knauf Gips and Knauf Plasterboard Tianjin Co. as lead defendants. The lawsuit was filed on behalf of Tatum and Charlene Hernandez of Mandeville, Louisiana. The case is being heard by Judge Fallon without a jury.

The Hernandez family claims that their 1,688-square-foot home was ruined by 180 boards of defective Chinese drywall. Since moving into the home in 2006, members of the family have suffered from headaches and respiratory problems. Their insurer has denied their homeowners’ claim and the builder hasn’t offered any help. The family remains in the home because they can’t afford to pay both rent and mortgage.

While defendant Knauf acknowledges that its drywall was defective, the company disputes the amount of money the Hernandez family is seeking for remediation. According to a report in Business Week, all parties in the suit agree on the need for removing and replacing drywall, moldings, carpets, a granite countertop and electrical switches and outlets. Other claims, such as wiring, appliances and personal property and the cost of repairs are in dispute.

There is not a lot of more information on this item that has not been covered by our blog in the Chinese Drywall section. Until Judge Fallon determines the scope and manner in which these companies will handle the damage caused by this toxic wallboard, attorneys on both sides of this issue will look intently on this issue.

This blog will be updated as more information becomes available.