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In the nation’s first Chinese drywall jury trial, a Florida family forced out of their home by foul odors and toxic fumes has been awarded $2.47 million.

A six-person jury in state court in Miami last week found Miami-based Banner Supply liable on the grounds of negligence, public nuisance and violation of Florida’s Deceptive and Unfair Trade Practices Act.

Banner was found 55 percent responsible. Under Florida law, non-defendants in the case were also apportioned responsibility: Chinese drywall manufacturer Knauf Plasterboard Company was found 35 percent at fault, and a Chinese exporter and a Miami importer, were each held 5 percent responsible.

Attorney Ervin Gonzalez, who represented Coconut Grove, Fla. home owners Armin and Lisa Gore Seifart, said that he believes Banner will be 100 percent responsible for the $2.47 million in damages.

“Under strict liability, they’re going to be responsible for the entire amount,” he said.

Gonzalez said that the trial is a bellwether for about 1,000 lawsuits in the Florida courts, as well as 5,000 suits filed in federal court that have been consolidated in multi-district litigation in the U.S. District Court for the Eastern District of Louisiana.

Gonzalez is a member of the plaintiffs’ leadership committees for both the Florida and federal litigation.

The verdict, Gonzalez said, “sets a precedent for what can be expected against distributors that have knowledge of this drywall and failed to warn people about the problems.”

Homeowners claim that their homes smell like rotten eggs because of sulfide emissions which have corroded metal surfaces and caused injuries like headaches, bloody noses and respiratory problems.

The jury of four women and two men deliberated for 12 hours following a two-week trial before unanimously awarding the Seifarts $494,443 for remediation costs; $9,984 for replacement costs for personal property; $169,268 for temporary housing costs and moving expenses; $20,775 for cleaning costs; $3,320 for additional utilities costs; $920 for storage costs; $6,651 for additional interest on credit cards; $1.7 million for loss of enjoyment; and $60,000 for diminution of the value of their house.

Todd Ehrenreich, the lead defense lawyer for Banner Supply, said he intends to file post-trial motions to overturn or reduce the verdict. The company is also considering options for appeal, he said.

Ehrenreich contended that the Seifarts were not entitled to damages for “loss of enjoyment” of their home.

“It’s a property damage case. It opens the flood gates, which I don’t think the court intended,” he said. “Would you extend [damages for loss of enjoyment] to a car?”

Gonzalez defended the verdict: “It shows that a jury can understand this is not just a property damage case. This is a case about the destruction of a home. The loss of enjoyment of a home is completely different from the loss of enjoyment of a car.”

Confidentiality agreement cited

Gonzalez said a key to the verdict was a confidentiality agreement Banner signed with the Chinese manufacturer in December 2006 to keep concerns about drywall odors secret.

Under the agreement, Knauf pledged to provide Banner Supply with thousands of pieces of U.S.-made drywall, and to pay the company $7,300 a month to store its Chinese drywall.

Banner agreed to keep the arrangement confidential and not make any statements to the media, corporations or individuals “regarding any perceived or actual smell or health risks” related to Knauf’s boards.

Ehrenreich argued that the Seifarts’ drywall problems “had nothing to do” with the confidentiality agreement. He noted that the couple didn’t complain about the drywall in their house until February 2009, nearly two and a half years after it was installed.

But Gonzalez said the revelation about Banner’s secret deal helped convince jurors that the company was negligent.

“I proved they had actual knowledge and covered it up,” he said.

In his closing argument, Gonzalez told jurors, “This was a case about a Chinese drywall coverup, and the defendant had a big secret they had been hiding for four years, and finally the light was going to shine on their secret.

“Judgment day is here,” he said.

Expert witnesses for the plaintiffs included engineers, a chemist, a realtor and an appraiser, who talked about the extent of the damage and the loss of value to the house.

Gonzalez said his next drywall trial is scheduled for September in Florida.

The odors and fumes emitted by the defective drywall have been blamed for corroding plumbing and electrical components and causing health hazards for homeowners.

The case was the first Chinese drywall claim to go before a jury. In April, Judge Edon Fallon, who is overseeing the MDL in New Orleans awarded $2.6 million after a bench trial to seven Virginia homeowners, finding drywall manufacturer Taishan Gypsum Co. liable for damage.  He also ordered manufacturer KPT to pay $164,000 to a Louisiana couple for repairs to their house.

Two settlements announced

Meanwhile, in New Orleans, two federal lawsuits filed against Chinese drywall manufacturer Knauf have been settled. The suits were brought by Paul Clement and Celeste Schexnaydre, who own a home near New Orleans, and John Campbell, who owns 21 contaminated apartments in Slidell, La.

The agreements were reached following a June 18 conference in the chambers of Fallon, according to Andrew Lemmon, a principal at The Lemmon Law Firm in Hahnville, La., who represented Clement and Schexnaydre.

Knauf agreed to pay to remediate and test the material on a Metairie, La. home owned by Clement and Schexnaydre, whose case was scheduled for trial this week.

“The contractor is going to give an estimate to completely gut the house and rebuild it,” said Lemmon, who estimated the cost at $200,000.

Knauf also agreed to pay at least $25,000 to store the couple’s furniture and pay for an apartment rental while their home is rebuilt, plus give them at least $15,000 to replace damaged appliances and personal property. Knauf is also paying their attorney fees.

Hugh “Skip” Lambert, a principal at Lambert & Nelson in New Orleans and the attorney for Campbell, said that Knauf agreed to pay Campbell and Slidell Property Management for lost rental income and to replace and test the drywall in one apartment.

Knauf also agreed to negotiate about remediation for additional apartments and to have disputes resolved by a court-appointed mediator.

Plaintiffs’ attorneys: Ervin Amanda Gonzalez and Patrick Montoya of Colson, Hicks, Eidson in Miami.

Defense attorneys: Todd Ehrenreich and Peter Spillis, of Weinberg Wheeler in Miami; Jeffrey Backman, Robert Schwartz and Rachel Coe of Adorno & Yoss in Fort Lauderdale, Fla.; Michael Peterson of Peterson & Espino in Miami.

The case: Seifart v. Banner Supply Co.; June 18, 11th Judicial Circuit Court, Miami; Judge Joseph Farina.

Questions or comments can be directed to the writer at: nora.tooher@lawyersusaonline.com

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