Chinese dry wall still in litigation

At age 70 and on a fixed income, Delores Bailey mops floors three hours a night at a school to pay the homeowners’ and flood insurance on her home in Violet. The extra money secures a home that smells of rotten eggs and suffers from electrical problems.

Hurricane Katrina’s floodwaters in 2005 engulfed the home Bailey shares with her son and grandson.

The house was rebuilt, but Bailey noticed a strange odor as soon as she opened the front door. Then the air conditioner started failing, the microwave broke, the electrical outlets stopped working and the pipes corroded.

Bailey got a likely diagnosis for the problems: Chinese drywall, a problematic product that entered the U.S. to address supply shortages that sprang up after back-to-back hurricanes helped spark a building boom.

Some brands of Chinese drywall are known to contain metals and minerals such as sulfur and iron. In humid climates, the drywall sometimes will emit sulfur gases and corrode copper and other metal surfaces.

The corrosion can damage electrical wiring, plumbing systems, air conditioners and other appliances.

New Orleans Saints football coach Sean Payton’s home contained Chinese drywall.

Bailey is convinced her home does too. The house that Tommy and Mona Burke built in Hammond had the name of the Chinese manufacturer stamped on the drywall.

Many homeowners, like the Burkes, received financial relief that allowed them to gut their homes and rebuild.

Others, like Bailey, are awaiting the conclusion of a court battle with a Chinese company that contends the U.S. cannot enforce judgments against it.

The Burkes are back in their home, but they wonder if they will get reimbursement for the TVs, computers and other electronics they said the drywall destroyed.

Meanwhile, the state Attorney General’s Office hired a Colorado lawyer to lead legal efforts seeking “damages for losses associated with state income, sales and property tax issues and otherwise any negative impact on state revenues.”

The state is fighting to move the case to state court.

The state’s accumulated $4.5 million in legal bills, with the Denver branch of the Seattle law firm Perkins Coie billing $3.4 million so far.

Knauf Plasterboard Tianjin Co. and Taishan Gypsum were the biggest manufacturers of Chinese drywall, which was installed in thousands of homes across the Gulf Coast.

Tommy and Mona Burke bought a home in Hammond after losing their St. Bernard Parish home during Hurricane Katrina. Mona Burke said problems quickly arose.

Their 6-year-old dog, Mickey, developed breathing problems and suddenly died. The silver drawer pulls on their bedroom furniture pitted.

Electrical problems developed. The air conditioner broke multiple times.

After watching a story on the news about problems with Chinese drywall, Tommy Burke climbed into his home’s attic and began pulling out the insulation. He saw the name “Knauf” stamped on the drywall.

Relief for homeowners began arriving in 2010, when U.S. District Judge Eldon Fallon awarded money to a Louisiana family whose home contained Chinese drywall manufactured by Knauf.

New Orleans attorney Russ Herman said settlement talks already had started and accelerated after Fallon’s judgment.

A pilot program, the details of which took roughly a year to work out, remediated some homes. Eventually, several funds were created for homeowners who had Knauf or a combination of Knauf and another manufacturer’s drywall in their homes. Knauf monied the largest fund.

Thousands of claimants could end up divvying up $1.1 billion.

Claimants are not responsible for legal fees.

“It’s a good result. These settlements amount to a billion, one hundred dollars, and these homeowners won’t have to pay for lawyers,” Herman said.

Taishan drywall is believed to be in 4,000 to 6,000 homes in Virginia, Florida, Alabama, Mississippi, Louisiana, Texas and California. Herman said Taishan did not show up for a trial that resulted in Fallon awarding more than $2 million to seven Virginia families.

He said Taishan maintains it is not bound to pay judgments handed down by U.S. courts.

Taishan did file appeals, which are scheduled to be heard Oct. 9 by the U.S. 5th Circuit Court of Appeals in New Orleans.

Bailey said she is eager for resolution on her Violet home.

She said Katrina dealt her enough of a blow.

“I feel very bad because I’m 70 years old and after you go through all the changes, they give us this sheetrock. We have to sit here and suffer,” she said.

At the Burkes’ home in Hammond, an unusable 60-inch plasma TV sits in the garage. They calculate that the drywall destroyed $10,000 in televisions, Direct TV receivers, surround-sound systems and computers.

Knauf established a $30 million fund for non-homebuilding losses, such as health issues. The Burkes are waiting to see if they will receive money from that fund for their electronics.

Mona Burke said no amount of money can bring back their dog, who died in their daughter’s arms. The Burkes are left wondering if Chinese drywall is to blame for the dog’s sudden death.

“What can they really give me that’s going to compensate for that? Nothing,” Mona Burke said.