Insurance Dispute Lawyer Blog

Filed in late December of 2009, a trust representing a homebuilder that used Chinese drywall in its construction efforts has sued insurers for coverage of homeowners with the faulty wallboard. The company, WCI communities, is looking for financial assistance with the rebuilding effort necessary for those whose homes contain the toxic material. The Bloomberg News reports

A trust for WCI Communities Inc., the Florida homebuilder that emerged from bankruptcy last year, sued 14 insurers to enforce more than $200 million of coverage for settlements over houses with defective Chinese drywall.

Insurers including units of American International Group Inc. and Zurich Financial Services AG must help repay more than 700 WCI customers whose homes were built with defective drywall from China between 2006 and 2008, Robert Horkovich, the trust’s lawyer, said today in a phone interview.

Promising news emerged at the end of 2009 that provides some hope for those homeowners with Chinese drywall in 2010. The United States government, in an effort to provide local assistance for those who have unfortunately been struck with the toxic wallboard, allows for funding to be used to help with the removal and replacement of the drywall. This to say the least, is extremely helpful and an important development on this issue.

The Times-Picayune reports

The U.S. Department of Housing and Urban Development cleared the way Tuesday for the Louisiana Recovery Authority and local governments to use Community Development Block Grant funds to help people with toxic drywall in their homes.

The Palm Beach Post reports

The U.S. Department of Housing and Urban Development will soon issue guidelines on how homeowners with defective drywall can apply for federal money, according to a letter sent to U.S. Sen. Bill Nelson of Florida.

Department secretary Shaun Donovan had previously suggested during a trip to Florida that homeowners may be able to find funding under the Community Development Block Grant program.

Albeit a small step forward in the pursuit of relief for residents of Louisiana, news emerging out of last week shows that local government is doing what it can to help victims of Chinese drywall. Reducing the costs of repair efforts, the Mandeville City Council has stepped up to provide a small amount of assistance. What’s more, the manner in which the Council is helping is an innovative step that might be replicated across the state.

Suzanne Le Breton of the St. Tammany News reports

The City Council approved a measure Thursday night that would give individuals who make repairs after finding tainted drywall in their homes a break on their permit fees.

The Associated Press has a short news piece that demonstrates again how the Chinese drywall issue has affected people of all types and economic backgrounds. Reporting on a lawsuit filed against drywall manufacturer Knauf, the article notes that Saints head coach Sean Payton has been named lead plaintiff in a suit with over 2,000 party members. The article notes:

New Orleans Saints head coach Sean Payton is one of about 2,100 plaintiffs in a class-action lawsuit against a Chinese manufacturer of drywall blamed for damaging homes and sickening residents.

Payton is listed as the lead plaintiff in a suit filed [December 9th] in federal court in New Orleans against Knauf Plasterboard Tainjin Co. Numerous lawsuits have been filed over the drywall.

In an effort to have victims of Chinese drywall contact the state and notify them of the toxic wallboard in their home, the Louisiana Recovery Authority has initiated a hotline specifically dedicated to the problem. The hotline, set up to help the state get a better idea of just how many people are being affected by Chinese drywall, is part of a national effort across 32 states to find out how many people have been affected. Paul Rainwater, executive director of the Recovery Authority, said the Consumer Product Safety Commission has urged states to get residents active in an effort to get official counts regarding the problem.

The Times-Picayune reports

“We will use the data we gather on homes to continue to make the case for direct federal aid to homeowners, including the possibility of using existing disaster programs for temporary housing and rebuilding assistance,” Rainwater said.

The Miami Herald reports that the originally announced total of 100,000 homes facing problems because of Chinese drywall may be overstated. While consumer groups contest this, the news that the number may be less is a mix of good and bad. Though it would be nice to think that far less families are facing the plight of this imported wallboard, that the number might be overstated could mean that it is more of an uphill battle to prove the toxic problem.

The Herald’s article notes

Now some are questioning if that figure — and the scope of the drywall problem itself — is exaggerated.