UPDATE: CVN has been informed that the trial is continued to a date not yet determined.

Harrell v. South Kendall Construction, The nation’s first Chinese Drywall class action jury trial, begins Monday in Miami, Florida, and will be webcast live by CVN. Last June, a jury awarded $2.5M to a Florida couple in Seifart v. Banner Supply, the first Chinese Drywall case tried to a jury.

The Harrell trial will involve approximately 80 homeowners, many of whom were forced out of their homes by corrosive, hydrogen sulfide gas emitted by defective drywall imported from China. Repair estimates have run into the hundreds of thousands of dollars for individual homes, and many Chinese Drywall homes have been foreclosed on.

Watch CVN’s live, gavel-to-gavel webcast of the Harrell Chinese Drywall trial, starting Monday September 27.

A Florida jury awarded $2.4M to a couple whose home was severely damaged by defective Chinese Drywall sold by Banner Supply. CVN webcast Seifart v. Banner Supply live.

In his closing argument, plaintiff attorney Ervin Gonzales told the jury,

“This is actually a very sad case, because it’s a case about a Chinese Drywall cover-up. And the reason it’s a sad case is because this is a case where a lot of damage occurred, and could have all been prevented. And it could have been prevented by one company, that’s sitting right here: Banner. They had the last chance, the last opportunity, to prevent the damage.  And instead, they chose to do the right thing, not for consumers, not for homeowners, not for general contractors, not for developers, but for themselves. Because it was good for their business. So the decided to keep their secret, about their knowledge of the defect of the Chinese Drywall, to themselves. To themselves, for years. It’s always been in the dark. And when does the light shine through on the truth? As a result of this lawsuit.”

Gonzalez requested economic damages of $705,359, approximately $3.2M for loss of enjoyment ($100K per month from March 2008 to February 2011), and diminution of value or “stigma” damages of $200K, because the fact that the house had endured remediation for defective drywall would have to be disclosed to any future buyer. According to Gonzalez, if a purchaser had to choose between two identical houses, one of which had previously had Chinese drywall, the buyer could be expected to prefer the house that had never had Chinese drywall.

Defense attorney Todd Ehrenreich argued that Banner had behaved responsibly. Banner acted responsibly in obtaining the Chinese drywall because no other drywall sources were available, and its supplier, Knauf, was reputable. In fact, Banner did not even know that its drywall had been sourced from China until after the product arrived. Nonetheless, Banner had reason to believe that the Chinese drywall met U.S. standards.

Moreover, said Ehrenreich, complaints about a “funky smell” came from just five homes out of 2700 in south Florida, which had received Banner boards — perhaps 500 boards out of 1.89M boards sold –

“I don’t have a calculator, but I guaranty you it’s less than one percent of one percent…Folks, literally, piece by piece pulling out this board, nobody in the warehouse is saying anything that there’s a smell, no drywaller is saying there’s a smell, no new homeowner is coming in saying there’s a smell, nobody in the industry is saying there’s a smell, but five houses.”

Ehrenreich argued that Knauf was only willing to provide replacement boards if Banner signed a confidential settlement agreement providing that the Knauf boards were not defective and agreeing not to sue Knauf. According to Ehrenreich, Banner would never have given up its rights if they had known that the board was in fact defective. It was Knauf that hid the truth, said Ehrenreich.

Because the defect in the drywall was latent, hidden, and undetectable, Banner did not know about the defect until years later, said Ehrenreich, and there is nothing else that Banner could have done.

Ehrenreich said loss of enjoyment damages should not be awarded because the Seifarts had lived in a similar or better house within two miles of their original house. Further, there should be no stigma losses awarded, argued Ehrenreich, because the house would have been demonstrably fully repaired.

The jury found that in favor of the plaintiff on theories of strict liability, negligence, Deceptive & Unfair Trade Practices, and private nuisance.

The jury allocated liability as follows: Banner Supply: 55%; Knopf Plasterboard: 35%; La Suprema Enterprise (a drywall importer): 5%, Rothschild International (a drywall exporter): 5%.

The jury awarded damages of $2.465M, including $494K in remediation costs, $169K in temporary housing and moving costs, $1.7M in loss of enjoyment, and $60K in “stigma” damage to the value of the home.

CVN webcast the Seifart Chinese Drywall trial live.

CVN’s webcast of Seifart v. Banner Supply, the nation’s first Chinese Drywall jury trial, began Tuesday in Miami.

Plaintiff attorney Ervin Gonzalez, of Colson, Hicks, Eidsen, described the damage caused by the defective Chinese drywall that Banner supplied to the Seifarts’ builder. According to Gonzalez, anything that was copper or silver, or other some other metals, would first get dark spots, and eventually start to fail.  Corroded wires would result in a fire hazard. Corroded refrigerators could cause the release of Freon, which was a health risk.

After playing animated depictions of corrosion, Gonzalez showed photos of damage to the Seifarts’ home. “Black. Should be copper-colored. Corroded. Brand new appliance. A cancer spreading through the house, and damaging, destroying their home.”

Gonzalez recited the scope of the damage: electrical wires, air conditioner, hot water heater, microwave. “Same story, over and over again. This is all throughout their home…Even the shower heads start getting damaged, even though they are brand new…Their dream home turned into a nightmare.”

The Seifarts paid $492K to complete the repairs. Gonzalez argued that Banner should have issued a recall, or complied with federal reporting requirements, or stopped selling the drywall, but instead, said Gonzalez, Banner took care of their own skin, and let the consumers take care of themselves.  ”They could have been a hero,” said Gonzalez, “Instead, they covered it up.”

Defense attorney Peter Spillis, of Weinberg Wheeler, told the jury that Banner had behaved responsibly. Banner was not trying to cut corners by selling cheaper drywall — in fact, Banner had paid a premium for the defective drywall. 

Further, said Spillis, Banner was not slow in recognizing the defect. Banner had had no prior experience with this kind of drywall defect, and there had been very few complaints compared to the very large quantity of drywall that Banner had sold. Further, Banner responsibly followed up to try to understand then problem, and then rang the alarm bell with its suppliers.

Spillis said that Banner admitted that the drywall was defective, and wanted the jury to compensate the Seifarts for the cost of fixing their home, and for other associated damages. But there was no cover-up.

Watch CVN’s webcast of the first Chinese Drywall Jury Trial (Seifart v. Knauf Gips and Banner).

The nation’s first Chinese Drywall jury trial, Seifart v. Banner Supply, is set to begin next week, and will be webcast live by CVN.

Drywall manufactured in China allegedly emitted toxic, corrosive, bad-smelling hydrogen sulfide gas that could damage appliances, and sicken homeowners.

Armin and Lisa Seifart’s drywall was purchased from Banner Supply. Banner, in turn, got the drywall from Knauf in China. Chinese drywall was used to meet the increased demand for construction supplies after Hurricane Katrina.

According to the plaintiff, Banner knew that it had supplied defective drywall to builders, but failed to disclose the problems.

Chinese drywall lawsuits involving thousands of claimants are being tried in New Orleans federal court. A Florida class action Chinese Drywall trial, Harrell v. South Kendall Construction, may go to trial in Miami this summer.

CVN is providing a live webcast of the Seifart Chinese Drywall Trial.