Banner Supply Co. of Miami has agreed to pay Florida homeowners $54.5 million to repair homes damaged because of tainted drywall that it had sold to builders, plaintiffs' attorneys announced Tuesday.

The commitment comes as part of a settlement of a class-action lawsuit involving the sale of drywall from China that contained so much sulfur it damaged new homes' electrical equipment, corroded pipes, created foul smells, and led to residents' health problems.

The settlement agreement, revealed in a federal court Tuesday, covers roughly 2,000 to 3,000 homes in Florida and must be approved by a federal judge in New Orleans before payouts can occur, the Miami Herald reported today. the newspaper also quoted Tuesday's court filing as saying that that Banner’s insurers will provide the $54.5 million, which equals the total amount available to Banner Supply for drywall-related insurance claims.

The Fort Myers, Fla., News-Press reported today that Banner issued a statement declaring in part: "Our business has thrived for over 58 years because our customers have trusted us. We are settling this matter to bring a resolution for our customers and to allow the homeowners to fix their homes. We regret that this could not have been achieved sooner, but Banner recognizes that prolonged litigation would not have accomplished this goal."

The tainted drywall was among 7 million sheets that was imported from China between 2000 and 2009, according to the Consumer Product Safety Commission ( story here). Much of the suspect material came in following Hurricanes Rita and Katrina, when homebuilding nationwide was at a peak and the disasters created extra demand for drywall from outside the United States. Homes in hot, humid states such as Florida and Louisiana appear to have been most damanged by the tainted drywall.

According to a list compiled by ProPublica and the Sarasota Herald Tribune and published Dec. 15, at least 95 companies have been implicated as distributors in lawsuits filed against Chinese manufacturers accused of being the source of tainted drywall. Banner Supply tops the list, while others on it include such ProSales 100 companies as L&W Supply, ProBuild, Stock Building Supply, and 84 Lumber ( story here).

"This is a substantial development in Chinese drywall litigation as it enables Florida homeowners to get some relief from their ongoing Chinese drywall issues." Ervin Gonzalez, a Miami-based attorney for plaintiffs in the case, said in a statement issued by the law firm of Herman, Herman, Katz & Cotlar, one of the lead plaintiffs in the drywall cases. The statement also quoted the plaintiffs' New Orleans attorney, Russ Herman, as saying that attorneys for the plaintiffs "continue to engage in negotiations with other responsible parties and [they] expect other settlement developments within the next 60 days. This is an ongoing process to secure complete relief for affected homeowners."

The News-Press said Knauf Plasterboard Tianjin has begun a pilot program in a separate settlement to fix about 300 homes built with its drywall. Banner paid a settlement of about $2 million to 79 homeowners in a class-action lawsuit in October, and lost a $2.5 million judgment to a Coconut Grove couple last June, the Miami Herald said.

While seemingly substantial, the $54.5 million works out to between $18,000 and $24,000 for each of the 2,000 to 3,000 homes--all located south of Orlando, Fla.--that are covered in the settlement. Some estimates put the cost of repairing a damaged home at nearly $100,000. And attorneys in the class-action cases say they believe 60,000 to 100,000 homes were built using tainted drywall.

Craig Webb is editor of ProSales magazine.

Learn more about markets featured in this article: Miami, FL, Bradenton, FL, Orlando, FL.