The Virginian-Pilot
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Another piece of Chinese drywall litigation has been resolved with a settlement between a builder and two insurance companies involving tainted drywall at 74 local homes.
Dragas Management Corp. of Virginia Beach settled a federal lawsuit with insurance carriers Hanover and Citizens, according to a court order dismissing the case filed Monday. The terms were not disclosed.
Between 2003 and 2006, Dragas built homes at The Hampshires at Greenbrier in Chesapeake and at Cromwell Park at Salem in Virginia Beach. Dragas subcontracted the drywall work to the Norfolk company Porter-Blaine Corp.
Porter-Blaine had purchased the tainted drywall from the Chinese company Taishan Gypsum. Taishan had flooded the U.S. construction market with $8.5 million worth of tainted drywall, according to court filings. Tens of thousands of homes along the East and Gulf coasts received the product.
Once installed, the drywall began emitting toxic fumes and rotten-egg-like odors. Silver and copper pipes and instruments began to corrode, and appliances began to fail. Residents in these homes also began having respiratory problems and skin and eye irritation. Lawsuits, including this one, ensued.
Under Dragas' contract with Porter-Blaine, any disputes from the jobs were to be resolved through arbitration. Porter-Blaine turned to its insurance carriers, Hanover and Citizens, to pay.
The arbitrator ordered the insurance companies to pay Dragas $4.9 million in damages, but Dragas had to sue the insurers to force the payment. Dragas had claimed that it spent $5 million to tear out the poisoned drywall and replace it.
Dragas' attorney, W. Edgar Spivey, declined to comment other than to say the settlement terms were confidential. Richmond attorney Thomas S. Garrett, who represented the insurance companies, also declined to comment.
Dragas also was involved in a lawsuit with its own insurance carrier over this drywall. That case was recently dismissed from federal court but could be brought back in state court.
There is a related class-action suit filed by hundreds of homeowners, including some locally, pending in the Eastern District of Louisiana federal court against Taishan and another Chinese drywall producer.
Tim McGlone, 757-446-2343, tim.mcglone@pilotonline.com
Source: http://hamptonroads.com/2013/01/builder-insurance-firms-settle-drywall-dispute
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