How One Builder is Handling Chinese Drywall Problems
Lennar Co. used Chinese Drywall in the construction of some of its Florida homes. Now that the drywall is earmarked contaminated, and causing problems across the country, the nationwide builder has dealt with the problem with a one-two punch.
First, it is working to rebuild the affected homes. That’s right, rebuild them. According to press releases, Lennar Company is removing and replacing contaminated drywall, and even paying the relocation expenses for customers while they are out of the home.
Second, to protect itself from future legal liability and to recover the expenses of its first move (above), it has filed suit against its suppliers and installers for the damages caused to them.
This proactive approach is perhaps one of the most aggressive responses to the Chinese Drywall situation from builders or suppliers. And, arguably, it may be the best approach a company with Chinese Drywall exposure can take.
Lennar’s approach seemingly has the following positive affects for its company:
- By repairing the contaminated homes, Lennar has fulfilled any of its warranty obligations;
- The pro-active approach resulted in positive press for the company’;
- By filing a lawsuit against its suppliers and installers, Lennar preserved its legal rights against those parties (read the 105 page complaint here);
- Lennar has proof that it mitigated its damages after exposure to contamination liability. The mitigation efforts will pay off in Lennar’s claims against its insurers, suppliers and installers.
- Lennar has homeowners whose homes are repaired sign waivers to limit the company’s future exposure.
Of course, Lennar’s efforts are not without its critics.
InjuryBoard.com reported that some homeowners regret signing Lennar’s waiver because they were not completely compensated for damages. Further, in response to Lennar’s suit against Knauf, the supplier released a statement complaining that it only supplied approximately 20% of the drywall at controversy – yet is the only company sued.
The Chinese Drywall situation is clearly a bad situation…and any company involved must simply perform damage control. Lennar Company is one of the first to aggressively protect themselves – legally, publicly, and practically. It serves as a very fair example of how some companies involved with the contamination may approach the controversy.
As part of Lennar’s PR campaign, they recently spoke out about their response to finding Chinese Drywall contamination. The video is reproduced below.
6 users responded in this post
[...] Published on April 21, 2009 by Scott Wolfe Jr The shoe has dropped for one builder who has been working hard to avoid entanglement in the Chinese Drywall defective drywall class actions. According to reports all over the [...]
[...] the builder will be well-served to take a page out of the Lennar Co. defense book, and file suit against its supplier, installer and the drywall [...]
[...] Perhaps your company can launch an aggressive action against its manufactures and suppliers (like Lennar Co. did). Perhaps your insurance company should be paying for the damages and your counsel (soon to be [...]
[...] Be cautious of the Pollution Exclusion clause in CGL policies, but review the actions taken by Lennar Co. in the face of Chinese Drywall claims as an example of how to proceed aggressively for a builder [...]
[...] – is perhaps the most prominent builder caught installing Chinese Drywall. They have done all of the above with respect to Chinese Drywall claims received, and have even offered to replace any defective drywall and compensate customers for time [...]
[...] the builder will be well-served to take a page out of the Lennar Co. defense book, and file suit against its supplier, installer and the drywall [...]
