State judge allows Florida Chinese drywall claimants to opt out

Alejandro de los Rios Sep. 12, 2011, 11:29am

A Broward County District Judge has issued an order allowing Florida residents with claims in the multidistrict litigation surrounding Chinese drywall to opt out of a $53 million settlement and pursue claims in state court.

Judge Charles Green's order states, "the supplemental orders conditionally certifying class, and the federal court's provision for related procedures, the stay order is no longer a bar to any Plaintiff who seeks relief outside of the [multidistrict litigation] in a State Court."

In June, U.S. District Judge Eldon Fallon gave preliminary approval to a proposed $54.5 million settlement that would dismiss the approximately 3,000 claims brought against Banner Supply Co. in Miami and its insurers.

The plaintiffs claim that the Chinese drywall they bought and installed in their homes was defective, made from toxic chemicals and led to corroding pipes and a 'rotten egg' smell in their homes.

Fallon is overseeing the massive multidistrict litigation (MDL) brought on by more than 10,000 claims against Chinese drywall manufactures and distributors. The case is taking place in U.S. District Court for the Easter District of Louisiana.

Only the claims against Banner would be dismissed if the settlement were to be approved. There are still thousands of cases from across the Gulf Coast pending in Fallon's court.

One group of claimants had already announced that they would be opting out of the federal settlement.

In a press release issued July 14, the Florida firm of Roberts & Durkee cited two Miami-Dade homeowners and states that the settlement has received "vociferous opposition from some of the 3,000 Floridians affected" by Chinese drywall.

The plaintiffs opting out of the settlement "believe they each only stand to receive approximately $5,000 and will be left holding the bag for toxic homes rendered unlivable by the contaminated drywall," the press release states.

In May, Fallon approved a settlement between Chinese drywall distributor Interior/Exterior Supply and its insurers.

In a statement, plaintiff lawyer Russ Herman confirmed that this "is the first Chinese drywall settlement with a major supplier."

Arch Insurance and Liberty Mutual Fire Insurance are the Interior/Exterior primary insurers and have agreed to pay $4 million for the claims.

The settlement states that plaintiffs have been assigned the right to pursue up to $72 million in additional insurance coverage from North River Insurance Co.

Last year, Louisiana Attorney General Buddy Caldwell stated that 1.1 million sheets of Chinese drywall distributed by Interior/Exterior were installed in homes undergoing repairs following hurricanes Katrina and Rita.

In October 2010, Fallon oversaw and enacted an order in which Knauf paid to repair 300 homes that were affected by Chinese drywall.

Federal MDL 2:09-md-02047

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