Lennar Homes is suing the manufacturers, suppliers, and installers of Chinese-made drywall that it says is corroding copper air-conditioning coils and plumbing pipes in homes the company built in Florida during the housing boom.
In a lawsuit filed late Friday in Miami-Dade County Circuit Court, Lennar claimed it has scientific proof that the drywall installed in a "small percentage of Lennar homes in Florida" is the culprit behind prematurely failing HVAC coils as well as other copper components.
Lennar has been working to remedy the situation, in some cases removing and replacing the drywall and relocating homeowners during the process. Now it is looking to recoup those costs, as well as the costs to repair whatever other damage may be lurking in the houses, by suing the companies that made, distributed, and installed the drywall in Lennar homes.
The Miami-based company is suing the drywall's manufacturers, German corporation Knauf Gips, as well as its Chinese subsidiary Knauf Plasterboard (Tianjin), accusing the companies of product liability and negligence.
"The manufacturers either knew or should have known that this drywall was defective and not appropriate for use in homes," said Mark Sustana, general counsel for Lennar, in a written statement. "Lennar is acting promptly to correct the problem in the homes we delivered. Lennar, as a customer, expects the same from its manufacturers, suppliers, and subcontractors. Unfortunately, they have refused to take responsibility for their defective product, leaving us no other option but to seek redress in a court of law."
Knauf responded to the lawsuit by saying that it has been working to find solutions to the problems homeowners are having and that the lawsuit is an "unneeded distraction" from that task.
"The company will not be a scapegoat for home builders who would seek a quick and convenient bailout based on false claims," Knauf said in a prepared statement. "The company intends to vigorously defend its good name and reputation."
Knauf also said it is the only manufacturer who has been actively working with Lennar and other builders to find solutions to the problems, even though the company "only accounts for approximately 20% of the Chinese plasterboard imported into the United States during this time period, the end of 2005 through the beginning of 2007."
Knauf also said that Lennar has only made it aware of odor and copper issues in nine homes. "Five of those homes had another manufactuer's plasterboard in them, not KPT's," the company said. "KPT plasterboard was in four homes, and one of those was mixed with another manufacturer's plasterboard."
Lennar didn't stop at suing manufacturers. It also sued eight drywall suppliers and 12 installers, charging them with breach of contract and breach of express and implied warranty.
"This suit seeks unspecified damages for the harm done to Lennar's reputation and good name," Lennar's statement said. "It also seeks damages for the costs to investigate the problem, to replace the defective drywall, and to provide alternative housing to homeowners while the repairs are being made."
After receiving an unusual number of complaints about HVAC coils that were failing prematurely, Lennar hired ENVIRON International to investigate the cause.
"Lennar's expert consultants determined that the unreasonably defective drywall, because of its defective nature, appears to be interacting with other conditions and elements, causing damage to other property within the affected homes, including, but not limited to, HVAC coils, certain electrical and plumbing components, and other affective materials and items. This corrosion and damage is observable as a black surface accumulation," the lawsuit alleged.
ENVIRON was able to recreate the conditions in the homes by putting samples of the drywall and clean copper plumbing in a sealed chamber together.
"After just four weeks in the test chamber, the copper plumbing pipe had the same observable black surface accumulation as the other property in the affected homes," the lawsuit said. After several additional weeks, the experts used an electron microscope to inspect the pipe, confirming that it was corroded and pitted in the same way the pipes in the homes were.
Since the drywall was also blamed for emitting an unpleasant sulfuric odor, the company also conducted air quality tests in approximately 100 homes where sulfur was being emitted by the drywall. The tests showed low levels of sulfur emissions, but they were well below any levels that would pose health or safety risks to the homes' inhabitants.
The problems with the corrosive drywall are not limited to Lennar-built homes. Other home builders in Florida were using the same drywall suppliers and installers. WCI Communities has reported that it used some of the tainted drywall in its homes, and media reports have said that homes built by Taylor Morrison have also had complaints related to corrosion and odors.
The Lennar lawsuit was limited to Florida, where most of the documented complaints have been made. It's not clear yet where else this drywall might have been used and why the complaints, so far, have been concentrated in the Sunshine State.