As feared, recent reports confirm that Chinese Drywall was imported and installed throughout homes in Louisiana. According to WWLTV.com, as much as 60 millions pounds of contaminated drywall may have been unloaded at Louisiana docks – which, unfortunately, is enough to build 7,000 homes.
As the region grows concerned about how the situation may displace and effect homeowners and property owners, there are other victims: The contractors and suppliers.
Ultimately, its local contractors and suppliers who unloaded the Chinese Drywall and installed them into homes and businesses across the state. As complaints and lawsuits surface, these local business could be facing long, expensive legal battles.
The Chinese Drywall situation is mature news in Florida, and so Louisiana victims (homeowners and contractors alike) can look to the experience in that state for an understanding of what’s to come.
The Naple Daily News reported just a few weeks ago that there is no quick fix for Chinese Drywall problems, and addressed how the situation is affecting builders and suppliers:
Mark Boyle and Geoffrey Gentile of Boyle & Gentile advised builders in the audience of steps to take should customers contact them with a claim of Chinese drywall.
They should put their insurance companies, all of them dating back several years, on notice so they can be involved in the process, Boyle said.
Gentile added that builders should get their documents together, such as contracts, master agreements with subcontractors, insurance policies, warranties and builders risk policies to understand their involvement.
They also can review warranty calls to see if any homes they built have had recurring problems indicative of Chinese drywall, including air conditioning unit failures.
“Everyone thinks about fault,” Boyle said. “No contractor in this community knew or had any reason to believe there was anything wrong with this drywall.”
But the law isn’t just about fault, he said. If your product is defective, you’re responsible.
The advice is good.
For construction companies and suppliers who has encountered Chinese Drywall, it’s only a matter of time before a complaint affects your business.
The expense for your company will be two-fold:
- You may have the expense of fulfilling your warranty to the homeowner, which could mean extensive property repairs; and
- You may have legal expenses associated with the property owner’s health concerns, loss of use of the property, and more.
What do you do?
As mentioned in the Naples Daily News article, businesses should quickly report the exposure to their insurance carriers (all of them), work with the property owner to "mitigate its damages," have the property inspected and tested to confirm the suspicion, and retain counsel to discuss its rights.
Wolfe Law Group has recently launched a new practice area related specifically to Chinese Drywall defense, where the firm can help advise contractors, subcontractors and suppliers on how to best protect themselves in light of the Chinese Drywall contamination problem, and if necessary, defend them in suit.
In some instances, it may be prudent for your company to file suits against your suppliers and installers. Lennar Co. did exactly this in Florida as reported by Builder Online when they sued 8 drywall suppliers and 12 installers, charging them with breach of contract and breach of express and implied warranties.
The long and short of the matter is this: Chinese Drywall is here in Louisiana to stay, and if your business was involved with the supply or installation of the materials, you’ll likely encounter related legal and economic challenges.
Businesses should be aware of the problem and prepare to limit its exposure as best as possible
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