Palm Beach County complex settles drywall dispute for $24 million

May 6, 2013

The following article was published in the Palm Beach Post on May 3, 2013: 

Boynton complex settles drywall dispute for $24 million

By Jane Musgrave

Four years after they began worrying that the walls of their condominiums were making them sick, relief is in sight for residents of Villa Lago Renaissance Commons in Boynton Beach.

A federal judge in New Orleans has given preliminary approval to a $24 million settlement that would pay for crews to remove the Chinese drywall from the 328 units in the complex that is part of the sprawling shopping and entertainment area on Gateway Boulevard and Congress Avenue.

Residents would also each get about $11,500 to pay for temporary housing and incidentals while their units are being remodeled, said Palm Beach Gardens attorney Gregg Weiss, who helped negotiate the settlement with the drywall manufacturer, supplier, construction company, insurers and others.

While settlements have been approved in other class-action lawsuits against Chinese drywall manufacturers, the one with Villa Lago is believed to be the first that involves a multi-unit complex, Weiss said. Other settlements, worth an estimated $1 billion, affected single family homeowners, including some in Palm Beach County, he said.

The drywall disaster is blamed, in part, on Hurricanes Katrina and Rita in 2005. The massive rebuilding, combined with the brisk construction that preceded the collapse of the housing bubble, created a critical shortage of drywall. So, distributors and suppliers reached overseas.

Shortly after their new homes were completed, residents began complaining of foul smells that gave them headaches. At the same time, they discovered that air conditioners, refrigerators and other appliances stopped working.

Investigations revealed that the imported drywall emitted sulfurous gases that not only smelled like rotten eggs but also corroded cooper pipes. Villa Lago was built from 2007 to 2009, when hundreds of millions of square feet of Chinese drywall flooded into the United States.

The roughly 10,000 claims that were ultimately filed nationwide were sent to U.S. District Judge Edward Fallon in New Orleans to handle. Fallon gave Villa Lago residents until July 8 to contest the settlement. He will conduct a hearing in August to decide whether to finalize the agreement. Once he does, work can begin, Weiss said

RCR Holdings Inc., which developer James Comparato formed to develop Villa Lago, still owns 130 of the units, according to court papers. Of the remaining 198 units, 67 are owned by people who didn’t join the lawsuit.

Read the original article here: