Florida Jury Awards $2.4 Million in First Chinese Drywall Trial

A Florida couple who fled their dream home because of foul-smelling, ruinous Chinese drywall was awarded $2.4 million in damages last Friday in America’s first jury trial over the defective wallboard that could have legal ramifications for thousands of similar cases.

The six-person jury ruled that Armin and Lisa Seifart should receive more than just the costs of gutting and renovating their home: they were also awarded damages for loss of enjoyment of the $1.6 million house and for the drywall stigma that might reduce its resale value.

The defendant, drywall distributor Banner Supply Co., is named in thousands of other U.S. lawsuits. Attorneys in those cases, as well as many others pending nationwide against other companies, will look to the Seifart damage award as a guide for what kinds of damages they seek.

Defective, sulfur-emitting Chinese drywall has been linked to possible health problems along with a noxious odor, corrosion of wiring, plumbing, computers, plumbing and jewelry. Most of the problems have arisen in Florida, Virginia, Mississippi, Alabama and Louisiana in homes built during the housing boom and some damaged during the busy 2005 hurricane season.

The Seifarts, who have two young sons, left their five-bedroom home in Miami’s Coconut Grove neighborhood last year so it could be gutted and renovated. Their attorney, Ervin Gonzalez, said the couple was not told of problems with the Chinese drywall in March 2008 when they moved in.

“Their dream home turned into a nightmare,” Gonzalez said.

The Seifarts accused Banner of concealing knowledge it had as early as 2006 that Chinese drywall was defective, including recommendations from manufacturer Knauf Plasterboard Tianjian that the wallboards should not be used. Many of those details emerged in this trial after a confidential agreement between Banner and Knauf was unsealed.

“It was important to send a message to companies that they should do the right thing when the health of the public is at stake,” said Armin Seifart after the verdict.

“I feel that justice was done,” added Lisa Seifart.

Banner attorney Todd Ehrenreich said an appeal would be considered.

“We’re very disappointed in the verdict,” he said.

During the trial, Banner acknowledged bearing some responsibility but fought against paying the Seifarts more than their direct expenses. Company attorneys said the drywall problem in 2006 was limited to a handful of homes in Florida out of some 2,700 built and that it took time for the extent of the damage to become clear.

“That defect was hidden, latent and undetectable,” said Ehrenreich in closing arguments. “It doesn’t rear its ugly head until sometimes years later.”

The jury found that Banner was 55 percent liable for the Seifarts’ problems and that Knauf and two related entities bore the rest of the responsibility. That could reduce the Seifarts’ ultimate payout because Knauf was not a defendant in their case, but Gonzalez said he will push to have Banner pay the full $2.4 million.

The Miami case follows a Louisiana federal judge’s decision in April to award $2.6 million in damages to seven families in Virginia for bad Chinese drywall. In that case, the Chinese entities who were sued never responded in U.S. court, leaving in limbo how the damages might be collected.

The Consumer Product Safety Commission has recommended removing any tainted drywall and affected wiring, fire alarm systems and gas pipes.