Recently in Chinese Drywall legal news is Judge Eldon Fallon’s goal to try the first Chinese Drywall case by the end of 2009.   While I applaud Judge Fallon for his ambition, and do believe that the issues are time-sensitive and should be litigated quickly and aggressively, I think the promise is an empty one.

Trying a Chinese Drywall class action case in 6 months is frankly impossible, and homeowners should not let this news get their hopes up.

A class action specialist in Florida, Ervin Gonzalez, was quoted in an article about Judge Fallon’s intentions saying the following:

Fast-tracking is an understatement. It’s a rocket docket. And he means business.   He wants the first case tried by the end of the year, and he wants an inspection of every home. He wants to be able to get to the bottom of the problem.

Here’s the obvious problem:  He can’t get to the bottom of the problem in the next 5 or 6 months.

The problem is complicated, and the science is in its infancy.   Leading scientist are unsure of whether the problem can be remediated, or whether full replacement of sheetrock is required.   Leading scientist are also unsure about what is actually causing the problem, and whether even replacement of the contaminated sheetrock will be enough to solve the problems.

This is not to mention some serious legal hurdles:  (1) Discovery; (2) Getting all the Defendants on the same page; (3) Identifying all the Defendants; (4) Dragging foreign manufacturers into Judge Fallon’s court.

Judge Fallon’s recent statement is sensational news, but it is false hope for the homeowners, builders and suppliers who are struggling to resolve their Chinese Drywall problems.   The only thing that has happened in his court is the allocation of attorneys fees and attorney leadership – which has nothing to do with the substantive matters.

Deadlines to file suit against builders, subcontractors and insurers are ticking away.  Homeowners, Builders and Subcontractors are all affected by these deadlines, and it’s important that they all make their claims as immediately as possible to avoid the expiration of these claims.

There are problems with class action litigation as it relates to Chinese Drywall damages.  Judge Fallon’s impossible 6-month deadline only underlines those problems.

On July 31, 2009, Wolfe Law Group’s Scott Wolfe and Doug Reiser will co-present at Half Moon Seminar’s Chinese Drywall Conference in New Orleans, Louisiana.   The program is titled “Chinese Drywall Problems and Litigation.“  Attorneys, contractors, engineers and architects can all obtain CLE credit for attending the program [register here].

Wolfe & Reiser will co-present during the program’s middle segment, “Exploring the Current Status of Chinese Drywall Claims and Litigation.”

Be sure to attend the program on July 31st in New Orleans.   To get ready, or in case you can’t make it, below is the slide presentation we’ll use during the presentation.

Wolfe Law Group’s own Scott Wolfe, Jr. provides the leading quote in a recent article from HousingZone.com:   Homeowners Increasing Suing Local Builders.   Scott gave this quote to the publication:

The best and quickest way to get the drywall out is to go after the builder, who ultimately has to live up to his warranty.   If the consumer tinkers with class-action lawsuits that can drag out for months, their warranties start to expire, and their chances of getting something from the builder are slimmer.

If we’ve said it once on this blog, we’ve said it a thousand times (here, here, here, here and here).

While class action suits have their purpose, it presents real challenges to homeowners who are interested in getting the Chinese Drywall out of their property.

The class action suits have their warts, and homeowners may find a better remedy by filing a direct action against their builders, suppliers and insurers.

With every day that passes, however, deadlines are drawing closer.    The one year deadline for insurance claims and torts.  The 3-4 year deadline with claims in redhibition.   And the 1, 2 or 5 year deadlines associated with construction warranty claims.

The worst news about the deadlines being that many, if not most of the statutory periods begin when the drywall was delivered or installed…and not when the homeowner learned of the problem.

All was quiet with regard to individual lawsuits against builders and suppliers, but recent news reports indicate that the remedy is gaining some steam.

The article from HousingZone.com is not alone.  The Times Picayune recently reported that homeowners are more frequently suing builders, and Baton Rouge’s Advocate had the same analysis.

Could an avalanche of Homeowner v. Builder suits be on the horizon?

If you’re interested in learning more about bringing a suit against your builder, or your construction company is interested in bringing suit its suppliers and insurers, contact Wolfe Law Group today.

Chinese Drywall was the subject of conversation last week on the Legal Talk Network’s Lawyer2Laywer podcast.   The podcast, hosted by J. Craig Williams discussed “both sides of Chinese drywall litigation, the effects of Chinese drywall, the mounting lawsuits and what the future holds for the affected residents.”

Our own Scott Wolfe Jr. took part in the program, along with John Mullen, Sr. from the firm Nelson, Levine de Luca & Horst.

You can listen to the Podcast at the Laywer2Lawyer website here.  Or, download the MP3.

Or, listen to it by clicking on the below this link:

Chinese Drywall Litigation on Lawyer2Lawyer

Last week, the Wall Street Journal reported that powerhouse builder Lennar Corp. has identified 400 homes in Florida with Chinese Drywall, and has set aside $39.8 million to repair the homes.

This is an enormous amount of money, and it should be a wake-up call to builders and homeowners who have yet to clash over the Chinese Drywall saga.

Would Lennar Co. really spend $39.8 million to repair a problem that wasn’t its fault?  Or of which it didn’t have liability?

The answer is obvious, and here is the wake-up call.   To homeowners:  Seek remedy from your builders.   To builders:  Prepare to be sued.

Indeed, time is continuing to tick without an onslaught of suits between builders and homeowners, but one has to believe that this is only a matter of time.  Time, however, is on neither party’s side.

Homeowners are facing steadfast deadlines in any warranty claims made, or claims in redhibiation.   If they wish to seek damages from any insurer (theirs or the home builders), they are likely facing quickly approaching deadlines.

Builders have deadlines themselves.   Once they are sued by homeowners, builders will necessarily turn to their insurance companies and suppliers for reimbursement or indemnity.   These suits also have impending statutes of limitations, and questions will loom as to whether the builder successfully mitigated its damages.

Lennar Corp. has been a leader among builders from the get-go on the Chinese Drywall problem.

As Chinese Drywall reports became widespread, Lennar Corp. had already begun examining the problem, replacing faulty drywall, relocating residents, and asserting claims against its subcontractors, suppliers and insurance policies.

Lennar Corp. has a lot of liability in this Chinese Drywall crisis, but in the end, they will likely have a lot of protection.   That is due to their foresight and good management of the situtation.

Can the same be said for your company?

This Wednesday, Scott Wolfe will join the Legal Talk Network to discuss the effects of Chinese Drywall and the status of Chinese Drywall litigation.

The Chinese Drywall episode is on the network’s Lawyer2Lawyer program, hosted by Bob Ambrogi and J. Craig Williams.

Episodes are published as “podcasts” and can be played at the Legal Talk Network website, or you can download the podcast through iTunes.

The website describes the upcoming podcast as follows:

Chinese drywall, which has been used to rebuild New Orleans’ homes damaged in Hurricane Katrina, is allegedly damaging residents’ property as well as their health. Bob Ambrogi and J. Craig Williams will take a look at the effects of Chinese drywall, the mounting lawsuits and what the future holds for the affected residents. Guest(s): Attorney Scott Wolfe, Jr. & TBA

Read more here.

The Chinese Drywall saga and how it relates to builders shook up a bit in Virginia this week when the Chesapeake Board of Building Code Appeals ordered a developer to remove Chinese Drywall from a hotel that was days from opening.

While not an order from a Virginia court, the board’s action demonstrates that builders and developers may actually be committing code violations and breaching their duties to the construction project by installing Chinese Drywall – whether they’re aware of it, or not.

Aside from what this order says about builder exposure, what is perhaps more interesting here is that Chinese Drywall is still being used on construction projects in the U.S., as this  project was just nearing completion.

Developer Dilip Patel said the order will delay the hotel’s opening by at least six months.

Here are some of the legal questions this situation will present for the parties:

• Whether or not there is a liquidated damages clause, is this excusable delay?  Or will Patel be liable for delay damages?
• Is this going to be a change order, or will the developer be forced to swallow the added expense?
• If the drywall was given the time to cause damage, it’s possible that Patel would have a claim against his insurer.    But what now?   No damage, no claim?

The Virginia board’s order is going to delay this project for six months and certainly cost more than one hundred thousand dollars.

It’s an outstanding order made upon the developer to remove materials that [individually] showed zero problems.  Indeed, the science is not yet clear about whether the drywall itself is always cause for concern, or whether only a segment of the imported drywall is problematic.  The science is further lacking in attributing the initiating cause for contamination to the drywall itself, or some sort of interaction with the drywall and its surrounding climate.

As far as the science was concerned, the board’s chairman, Stephens Johnson, stated that he didn’t “think [the developer] gave us enough data or information to override the codes or our concern for public health.”

We don’t have the board’s proceedings here at the Chinese Drywall Blog, and don’t know exactly what science and evidence was considered.   Nevertheless, the order is a stirring demonstration of how builders and developers are exposed to liability in the Chinese Drywall crisis.

Perhaps another call to individual land owners to seek remedy from their home builders, and not class actions?

For builders, let’s hope not.   For homeowners…we’ll see.

On the Chinese Drywall Blog, we’ve frequently  forecasted that homeowners will begin bringing suit directly against their builders for Chinese Drywall recovery.

This morning, the New Orleans Times Picayune reported that this is beginning to happen.

The article, titled Homeowners saddled with tainted Chinese Drywall are increasingly suing local builders for damages, suggests that “Louisiana home builders have increasingly become targets of litigation.”   And the article profiles a Covington, Louisiana homeowner, Eric Carter, who sued his homebuilder Sunrise Homes.

Over the next few days here on the Chinese Drywall Blog, we will specifically analyze builder liability for Chinese Drywall claims, reviewing the relevant aspects of the New Home Warranty Act and other general builder warranties.

Remember also that Wolfe Law Group’s Scott Wolfe and Doug Reiser will be presenting at a Chinese Drywall seminar in New Orleans, LA on July 31, 2009.  The seminar is for attorneys, builders, engineers, homeowners and anyone else affected or interested in the crisis.   Read more about the seminar, and how to attend, here.

In the meantime, here are a few posts from our blog reviewing builders’ exposure to imported drywall claims, and explaining the differences between class action litigation and ordinary litigation:

• Builders Starting To Tango with Chinese Drywall Claims
• Builders World Apart on Chinese Drywall
• 3 Reasons Why Class Actions are Bad for Homeowners
• Are Builders Getting a Free Pass on Chinese Drywall Claims?  Should They?

Wolfe Law Group, a construction law firm with offices in New Orleans, Louisiana and Seattle, Washington, is now offering services to homeowners with defective drywall who are interested in bringing a direct claim against their builder or supplier for recovery.

Recently, we’ve written on this blog about why class action litigation may not be the most direct and beneficial course of action for homeowners with Chinese Drywall.

Homeowners have contract and warranty claims directly against their builders and the builder’s insurer, which may produce tangible recovery much quicker than a prolonged and complex class action proceeding.

Wolfe Law Group is now offering services to homeowners who are interested in presenting these claims against their insurers and/or builders.  For more information on this practice area and the associated fees, please click here to visit wolfelaw.com’s page on the same.

A seminar on the Chinese Drywall crisis will be held in New Orleans, Louisiana, this July 31, 2009.   The seminar is being billed as “a practical, one-day seminar for attorneys, engineers, architects and contractors,” and will examine a host of topics related to Chinese Drywall claims including:

• The damages and health effects caused by defective drywall;
• The status of Chinese Drywall lawsuits in Louisiana and elsewhere;
• Option of pursuing damages through a class or individual action;
• Proposed Legislative solutions;
• Exploration of liability among manufacturers, builders, suppliers, and others.

Wolfe Law Group’s Scott Wolfe and Douglas Reiser are co-presenting at the seminar’s second segment on the matter of “Exploring the Current Status of Chinese Drywall Claims and Litigation.”

Scott Wolfe is sticking around to the seminar’s third segment where he will co-present with the Berniard Law Firm’s Jeffrey Berniard on the matter of “Exploring Potential Liability for Damages Caused by Chinese Drywall Problems.”

Learning credits are available for participating professionals, including 5.0 approved CLE hours for attorneys in the states of Louisiana, Alabama, Mississippi and Texas.

More information can be found at the Half Moon Seminars website promoting the seminar here or by downloading the brochure here.