Product liability cases can be complicated. Once a defective product has caused damage to a number of people, it can be difficult for the responsible businesses to come up with the finances to cover the necessary repairs.

This past September we wrote about defective drywall, manufactured in China. In our last post on the topic, a Broward County circuit judge entered a ruling that allowed close to 2,000 Florida homeowners to opt out of a proposed federal settlement worth $55 million and instead file individual lawsuits.

The homeowners had sued Florida distributor Banner Supply Co. Because it is estimated that it will cost more than $100,000 per home to complete the necessary repairs, the concern was that the homeowners would not receive enough money to make repairs possible.

Last month the Florida lawsuit regarding the Chinese drywall had two developments.

First, because Banner threatened to file for bankruptcy should Florida homeowners opt out of the federal settlement, the owners of the company have been named in a lawsuit. The lawsuit filed by a woman and her mother claims that the owners had an agreement with Knauf Plasterboard Tianjin, a manufacturer of the defective drywall. The lawsuit alleges that Banner would later receive drywall that was not defective if they did not disclose their knowledge of the defective drywall. The women allege this was negligent and violated the Florida Deceptive and Unfair Trade Practices Act. They are seeking damages for their losses stemming from the negligence.

For its part, Banner maintains it was not aware of the problem. It has filed a lawsuit against Knauf, claiming it lied regarding the fitness of the product.

The second development is that a Miami-Dade Circuit Court Judge has decided that homeowners filing lawsuits in Miami-Dade are able to include a claim for punitive damages from Knauf. This is a major development as claims for punitive damages are not often sought from corporations.

We will continue to monitor the situation and post updates as they become available.

Source: South Florida Business Journal, "Chinese drywall litigation takes new turn," Susan R. Miller, Oct. 26, 2011