Wednesday, September 14, 2011

Hamlet Estates at St. James: Chinese Drywall Lawsuit Revelations

Photo of under-construction home in the Hamlet Estates at
St. James Subdivision November 2007— "Incentives, to Fight the Doldrums" New York Times

Hamlet Estates at St. James Defective Drywall Lawsuit

In 2006 the St. James Development Corp [ Holiday Organization]contracted with Long Island Wallpaper Inc. to provide drywall for a model home located at 5 Hamlet Woods Drive. Three years later, September 2009, this sales model was the subject of a defective Chinese drywall lawsuit. The plaintiff, St. James Development Corporation, alleged that the drywall was defective in that the product was emitting corrosive sulfide gases. Since the 5 Hamlet Woods model [lot 8] was and remains company-owned,  it is not known whether other commissioned structures built in the same time frame had similar problematic drywall. A property search indicates that 5 Hamlet Woods Drive is now an empty lot.

The drywall at issue was imported by Venture Supply, Inc. a Norfolk,Va firm. In June 2009, the company ceased operations.

Venture Supply Inc.
From March 2006 to December 2008, Venture Supply sold 100,000 sheets of suspect Chinese drywall to various residential development companies. Some of the product was used in homes in the Hampshires at Greenbriar and Cromwell Park at Salem subdivisions.

The U. S. District Court Eastern District of Virginia Norfolk Division, found the following on July 2011 re the harmful effects of the drywall:
In total, seventy-four (74) of the homes, sixty-eight (68) at The Hampshires and six (6) at Cromwell Park, had Chinese drywall installed in them. The Chinese drywall was defective and contained levels of elemental sulfur approximately three hundred seventy-five (375) times greater than representative samples of domestic drywall. As a result, it caused property damage to the homes where it was installed by corroding HVAC coils, damaging wiring, tarnishing or corroding metal objects, and causing a bad odor. The source of the corrosion, pitting, tarnishing, and blackening of the electronics and metal components was reduced sulfur gases.3
It has been determined that some units in The Harbor Walk condominium project also contained drywall supplied by Venture Supply.  Sam Porter, president of Venture Supply and Blaine-Porter, told the media that he had destroyed 50,000 sheets of his remaining Chinese drywall inventory.

Contaminated Drywall Real Estate Database

An undetermined number of homes throughout the U. S. [built or remodeled from 2001-2009/ Consumer Product Safety Commission established time-line] contain drywall contaminated with sulfur. The CPSC has received defective drywall complaints from homeowners in 42 states, the District of Columbia, American Samoa and Puerto Rico.

The ProPublica/Sarasota Herald-Tribune interactive Chinese drywall database [December 2010] shows approximately 7,000 residences containing this defective product, whereas the CPSC reports fewer than 3,500. Some experts believe that more than 100,000 homes were built with off-gassing drywall.

Defective Chinese Drywall Homeowner Complaint

Watch the full episode. See more Need To Know.

 Defective Georgia Pacific Drywall Homeowner Complaint

Sulfur-emitting drywall was originally considered a Chinese product defect but there is evidence that U. S.-manufactured drywall also contains likewise destructive properties. In spite of  homeowner complaints re domestic-made drywall, the CPSC closed its investigation in April 2011

Independent research sponsored by CBS News in 2009 found the following domestic vs foreign-made drywall aberrations:
As expected, the contaminated Chinese samples gave off high levels of sulfur gases. But all but one of the U.S. samples emitted sulfur gases, as well - not at levels as high as the defective Chinese product, but unexpected. Perhaps more surprising, "There were some American products that we tested that had higher emission than some of the new Chinese products that we tested."
Defective Drywall Financial Risks

Most homeowners policies will not cover damage caused by product defects, i.e. off-gassing drywall. The costs to remediate said structures start at $100,000.

Florida does not levy property tax on sulfur-contaminated homes as these structures are considered worthless.

Defective Drywall Health Risks

Breathing sulfur-contaminated air causes pulmonary dysfunction. Property owners living in this environment, sometimes for years, were not aware of the cause of their medical complaints until the media opened its Chinese drywall investigation.

The noxious gas released by drywall adulterated with sulfur elevates health risks for the most vulnerable: children, seniors and those with impaired immune systems. Even though the Consumer Product Safety Commission found no drywall link in the Fort Bragg infant fatalities, questions remain.

North Carolina Defective Chinese Drywall

There is evidence that 18 million pounds of Chinese drywall has entered North Carolina ports since 2006.

North Carolina home builders linked to imported drywall are: Lennar Homes with developments in greater Raleigh and Charlotte; Ryland Homes with developments in greater Charlotte; Standard Pacific Homes with developments in greater Raleigh and Charlotte; and  Stafford Custom Homes with homes in greater Raleigh, Carthage, Southern Pines, Aberdeen and Lillington.

Lennar, Ryland, Standard Pacific and Stafford are named as defendants in the Omnibus Defective Drywall Class Action lawsuit.

Lennar, LLC  v. KNAUF GIPS KG et al 

Lennar became an interested party in the defective Chinese drywall issue because a number of company-built homes contained costly to remediate off-gassing drywall. As noted by the plaintiff's lawyers, "Lennar stands alongside its homeowners as victims of Manufacturers, Suppliers and Installers, who unfortunately allowed this defective drywall to be manufactured, supplied  and installed in the Affected Homes."

When the lawsuit was filed in January 2009, Lennar officials knew from environmental tests that sulfur was the cause of the corrosion.

Lennar, LLC listed many foreign and domestic parties as defendants in its defective Chinese drywall lawsuit. One was Independent Builders Supply Association Inc., a North Carolina firm.

Stafford Custom Homes

In April 2009, the Flanigans, owners of a Stafford Custom Home in the Valleyfield subdivision,  filed a lawsuit alleging that their residence,  purchased in 2004, contains sulfur-emitting drywall. The Flanigan home is located at 112 Stone Barn Circle, Holly Springs, NC 27540 and according to property records was built in 2001.

Federal Drywall Contamination Cases Terminated

The question of why this hazardous product was allowed to enter the residential marketplace will likely have no satisfactory answer since the Consumer Product Safety Commission has closed its investigations.

Courts adjudicating the defective drywall cases are finding for the injured parties but it is unlikely that the levied financial penalties, if paid, will cover the costs of restoring the thousands of damaged properties to habitable conditions. Part of the expense to be borne by defendants is certification by an independent party that the remediated structure is free of sulfur contaminants. The costs, established by court ruling, are $10,000.