HOUSING

Miami judge rules against Chinese drywall maker

 

Taishan had no U.S. operations, and so argued it should be shielded from U.S. courts. A Miami judge disagreed, citing Taishan’s efforts to sell in Florida during the construction boom.

dhanks@MiamiHerald.com

After working hard to sell drywall in Florida, a Chinese exporter now must also fend off allegations of defective materials in Florida courts.

That was the conclusion of a Miami-Dade Circuit Court judge who ruled against Chinese drywall maker Taishan, which claimed it was too far removed from Florida’s construction industry to be sued over defects.

The decision could open up a new front in the long-running battle by homeowners and contractors to collect damages over plasterboard they claim smells foul, eats up wiring and generally leaves a building uninhabitable.

The case hinged on the legal complexities brought on by global trade. Taishan argued it operated in China alone, and that liability for defects rests with companies further down the supply chain. Lennar, the home-building giant based in Miami-Dade that installed Taishan drywall in hundreds of homes, sued the Chinese company, demanding it take responsibility for the faulty product.

Judge Joseph Farina sided with Lennar, citing Taishan’s efforts during Florida’s housing boom to sell its product in the U.S. market. The company sent samples to U.S. dealers, hosted Florida construction executives for tours of Taishan’s plants in China and customized some drywall materials to be imprinted with a Tampa phone number for one Florida distributor.

“Taishan actively courted the Florida market,’’ Judge Farina wrote in a decision issued Friday. He also ruled that a company most directly involved in selling Taishan drywall was in fact an arm of Taishan itself. It was Farina’s last ruling before retiring from the bench on Friday.

If upheld, the ruling would amount to a small victory in a much larger legal fight involving builders across the country and Chinese drywall manufacturers. Already, a Taishan competitor, Knauf Plasterboard Tianjin, has agreed to a minimum $200 million settlement over its drywall in U.S. homes — a deal plaintiff lawyers say could eventually be worth $1 billion.

Taishan faces a federal class-action suit in New Orleans. Should the judge in that case reach the same conclusion as Farina, it would have national consequences.

“We expect this ruling will set a favorable precedent for other homebuilders and victims across the country,” said Hilarie Bass, the Greenberg Traurig lawyer representing Lennar. .

In all, about 4,500 homes in Florida and other Gulf states are suspected of being contaminated with defective Chinese drywall, which contains high levels of sulfur that can cause corrosion on wiring and duct work.

Lennar has not said how much money it wants from Taishan, but the builder has set aside $82 million to cover warranty claims related to Chinese drywall complaints. In filings with the SEC, Lennar said about 1,000 of its homes built in 2006 and 2007 had defective Chinese drywall in them. Bass said only a portion of the Lennar drywall came from Taishan but that the Chinese company is believed to be responsible for about 60 percent of the suspect drywall installed in homes throughout the country.

Taishan’s U.S. attorneys could not be reached for comment Tuesday afternoon.

Read more Breaking News stories from the Miami Herald

  • Education

    In Miami-Dade schools, testing doesn’t end

    The Miami-Dade School Board approved its exam calendar Wednesday, in the midst of growing backlash against the amount and importance of testing in Florida.

  •  
Rio’s Tom Jobim International Airport sports new signage.

    Airports

    A new operator readies Rio de Janeiro’s airport for 2016 Olympics

    A partnership of Singapore’s Changi Airports International and Odebrecht, which also has played a big role at MIA, is now running Rio’s international airport.

  • CAMPAIGN 2014 | Analysis

    Governor candidates stump on Labor Day

    Rick Scott in some respects makes it easy on journalists. If a reporter misses something he says in an interview, maybe even spaces out for a moment, it doesn’t really matter because Scott is certain to say the same thing again. And again. And again.

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category