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Chinese Drywall

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A Florida court ruling provides some relief for home builders regarding the use of defective Chinese drywall. In Marlene Bennett v. Centerline Homes, Inc., et al., No. 2009-CA-014458, Fla. Cir., 15th Judicial Cir., Palm Beach Co. (a consolidation of a number of separate lawsuits), the court issued two rulings that limit home builders’ liability for injury or damage caused by defective drywall. First, the court ruled that home builders would not be held strictly liable for the alleged defects in the same way manufacturers and distributors of defective products can be held responsible for damages. This ruling prevents homeowners from establishing liability on the part of the builder merely by showing that a defect exists, and the defect caused damages. Rather, it requires demonstrating another legal basis for liability, such as builder negligence. Second, the court held that the economic loss rule prevents homeowners from filing tort claims that exceed the contractual remedies for economic loss, which will restrict homeowners’ recovery for economic damages (e.g., reduction in market value) to the terms spelled out in the home-purchase contract. It remains to be seen whether the decision, handed down November 10, 2010, will be adopted by other courts hearing cases pertaining to the use of defective drywall.

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