Chinese Drywall

Understanding Class Action Lawsuits in Louisiana

Published on: June 16, 2011 | By Berniard Law Firm

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:

Chemical Release Ruling a Helpful Guide for Recent Spills/Leaks

Published on: April 1, 2011 | By Berniard Law Firm

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.

Chinese Drywall Claims Continue as Thousands Still Face Problems

Published on: March 25, 2011 | By Berniard Law Firm

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.

Chinese Drywall Still a Major Issue Throughout Gulf Coast

Published on: February 6, 2011 | By Berniard Law Firm

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.

Chinese Drywall a Danger Requiring Immediate Attention

Published on: November 6, 2010 | By Berniard Law Firm

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.

Shreveport Homeowners with Chinese Drywall Have Options for Collecting Judgments

Published on: April 30, 2010 | By Berniard Law Firm

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.

Homeowners Win Chinese Drywall Lawsuit

Published on: April 28, 2010 | By Berniard Law Firm

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.

Financial Assistance Emerges in Chinese Drywall Disaster

Published on: April 25, 2010 | By Berniard Law Firm

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.

Travelers Insurance Shows Limited Exposure to Chinese Drywall, Others Not So Lucky

Published on: April 24, 2010 | By Berniard Law Firm

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.

Legislators Working to Protect Homeowners with Chinese Drywall

Published on: April 23, 2010 | By Berniard Law Firm

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