Originally posted 2012-08-24 11:36:29.
Here at Construction Law Musings, we’ve discussed the Dragas line of cases relating to Chinese Drywall. In those cases (for more, just plug in the word “Dragas” into the search field to the right of this post), the Court analyzed the insurance implications of remedial measures relating to Chinese Drywall. In sum, the Court admonished the contractors to make sure that they followed the terms of their insurance contracts and essentially denied coverage to a contractor that acted proactively to fix some of the issues with the drywall.
In a new case out of the Suffolk Circuit Court, Seeman v. Oxfordshire LLC, the Court analyzed a different aspect of these types of claims. Among the claims that the Suffolk County, Virginia Circuit Court analyzed in its opinion were claims under the Virgina Consumer Protection Act and claims for tort against the realty company and the drywall supplier. Both of these parties to the case demurred (a/k/a filed motions to dismiss) and the court sustained these demurrers to several of the counts on substantive grounds.
On the VCPA claim, the Court determined that, as enacted when the drywall was installed, the VCPA did not apply to the Seemans’ drywall issues. Firstly, the Court said, the VCPA was amended in 2011 to specifically address this type of issue, but that the statute did not contain the language that would apply when the Seemans’ home was built in 2007 (Ask yourself: Since the problem is mostly dealt with now, will the new language ever apply?). Secondly, the Court stated that the realtor was not in the business of selling drywall and therefore the VCPA did not apply. Finally, and in regard to the supplier of the drywall, the Court stated that, because the supplier did not sell directly to the consumers, its sale was a commercial and not a consumer transaction.
After reading Musings for a while, you probably have some idea where the negligence and other tort claims in the Seemans’ Complaint are headed. The Court dismissed these claims based upon the “economic loss rule” that is so dear to my heart. The Court followed this long standing rule in Virginia and stated that the contract determines the duties of the parties in this construction matter and that the Seemans were seeking purely economic damages. The Virginia Court then went on to say that because the Seemans did not have a contract with the supplier, they could not go after the supplier for these damages.
In short (and for other reasons outlined in Judge Delk’s opinion), the Seemans were out of luck in trying to get at the realtor or the drywall material supplier for their drywall damages. Of course, I recommend that you read the opinion in full and draw your own conclusions. If you think that I’m wrong in this short analysis, please let me know your thoughts.
Of course, this is a trial court opinion in a case that continues. However, if this trend continues, Virginia homeowners and builders may have serious issues attempting to recover for any economic damages caused by Chinese Drywall. Homeowners and builders alike should consult with an experienced construction attorney in Virginia to get advice on how to navigate the legal minefield of potential missteps relating to Chinese Drywall claims in Virginia.
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There will never be a satisfactory legal remedy for those unfortunate homeowners affected by Chinese drywall. Two simple reasons for this…
1. Wrong victim group–Middle class white people (No media interest or political clout.)
2. Wrong ultimate defendant—the Chinese government. Every other party along the way was also a victim–to some extent.
The only possible solution is for the Feds to force the mortgage holders to re-do the loans, extending the terms, and building in the remediation costs. Failing that, all affected homeowners should simply default on their mortgages. At this point, the concept of “credit rating” is completely meaningless anyway. Ask anyone with a high rating how difficult it is to get a loan or re-fi.
Thanks for checking in Michael
Ultimately, the affected homeowners will never recover from reactive drywall. The cost for “adequate” demolition and micro-cleaning are astronomical. Especially in this economy when most have lost over $100K in value to the home before you add Chinese drywall to the top. Filter Scientific Coatings produces Interceptor which effectively controls odor and corrosion without demolition and comes with a lifetime transferable warranty. The cost starts at $6.50 a square foot (floor space) and is complete in less than a week. Typically, the installation is complete in fewer than 4 days for an average size home. Homeowners that are faced with this hurdle can afford this warranted solution without having to vacate their homes for 90 days to the tune of $30 to $80 per square foot to demolish the home. We have successfully remediated home from Florida to Texas. Virginia is the only major reactive drywall market place we have yet to occupy.