Lennar files suit over Chinese drywall

Miami-based Lennar Homes has filed a lawsuit against manufacturers and sellers of Chinese drywall, including Knauf Plasterboard, Taishan Gypsum and Florida-based Banner Supply Co.

The suit alleges that Knauf and Taishan sold “defective gypsum” drywall that was installed in homes built by Lennar, which “caused substantial damage” to Lennar in Florida.

The suit was filed in Miami-Dade Circuit Court by attorneys with the Miami office of Greenberg Traurig.

Mark Sustana, general counsel for Lennar, said in a written statement that Lennar took responsibility for the problems drywall caused in its homes. He said the company expects Knauf and others to do the same.

“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,” he said.

Lennar’s complaint also charges 12 installers with breach of contract and breach of express and implied warranty.

The suit seeks unspecified damages for alleged harm done to Lennar’s reputation. It also seeks damages for the costs to investigate the problem, replace the drywall and provide housing while repairs are made.

The lawsuit states the drywall problems came to Lennar’s attention because of complaints about failures of heating/air conditioning coils in a small number of its communities in Florida.

Lennar’s statement emphasized it did not directly purchase the drywall from China, did not specify at any time that Chinese drywall be used as a substitute for domestic product and did not bargain for a discount or “any other financial benefit from the use of Chinese drywall.”

On Jan. 21, Lennar said it has identified about 80 homes in Southwest Florida that are believed to have been built using Chinese drywall and was paying to fix the problems in those homes.

Lennar has acknowledged finding the problem drywall in two homes in Miami-Dade County, but it did not provide exact locations.

The drywall emits sulfur gases linked to complaints about rotten-egg odors, health concerns and corrosion in metal and air conditioners.

The homes were built in 2005 and 2006, during the real estate boom.

The company said independent subcontractors installed the drywall in some homes and that Lennar did not know it was being used.

Another builder in Miami-Dade County, South Kendall Construction, two weeks ago acknowledged the problem drywall was found in its Keys Gate subdivision in Homestead.

In a statement, Knauf said it has hired toxicologists that found no human health concerns associated with the drywall. It said it would “vigorously” defend itself against the suit. Attempts to reach Taishan have not been successful.

Lennar, the nation’s second-largest homebuilder, said it set up a special task force to address homeowners’ concerns and fix the problem.

http://www.bizjournals.com/southflorida/stories/2009/02/02/daily32.html