Knauf Plasterboard Tianjin (KPT), one manufacturer of high sulfur-emitting Chinese drywall that has caused problems with corrosion of metals in homes, has settled a lawsuit brought against it by Beazer Homes USA.
"In an effort to assist with Chinese drywall remediation efforts, KPT has reached a joint settlement with Beazer Homes that used KPT drywall to construct some of its homes in Florida," said Don Hayden, principal of Baker & McKenzie, which is representing KPT, in a prepared statement.
No details about the settlement terms have been released.
Beazer executives would not comment on a settlement. The company's most recent quarterly filing with the U.S. Securities and Exchange Commission said the company found tainted drywall in less than 50 of its homes built in Southwest Florida. Its remediation that began last fall involves ripping out all the drywall as well as electrical systems and other components that might have been corroded by the sulfuric gases.
Beazer isn't the only builder KPT is negotiating with on settlements. Knauff's attorney's release said it has been "seeking a reasonable solution to repair homes built with KPT drywall" with other builders as well in recent weeks.
"The settlement with Beazer is part of KPT's efforts to get this issue behind them and move forward," the release stated. "It shows that a solution is possible when there is agreement on reasonable repair costs."
The settlement follows two recent rulings by federal judge Eldon Fallon, who is hearing hundreds of faulty drywall lawsuits from across the country in his New Orleans courtroom. Fallon has ordered Knauf not only to pay for the replacement of drywall but for the costs of replacing electrical systems as well as some plumbing fixtures, heating and air-conditioning units, and appliances.
Knauff's attorney Kerry Miller told the Wall Street Journal that Knauf is considering appealing Fallon's ruling. Knauf has contended that removing the drywall and scrubbing corrosion off the home's metal parts should be enough to fix the problem.
"Judge Fallon told [Knauf] in no uncertain terms by entering a judgment that you, Knauf, are liable, and here's what you're liable for, here's what's necessary to fix these homes, and it wasn't vague in the slightest," said Allison Grant, a Boca Raton, Fla.-based attorney who specializes in Chinese drywall cases and whose own home was built with defective drywall.
Grant said it makes sense that Knauf would attempt to settle claims with builders who have already resolved their home buyers' drywall issues and whose buyers have already signed releases from further claims. "It's just paying them back for whatever their out-of-pocket expenses are."
But making the builders whole solves only one piece of the problem, said Grant. There are other home owners whose builders have done nothing to help remediate their drywall problems.
"It's a very small piece, but it's positive because at least for my clients it means Knauf is willing to do something," Grant said.