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Lowe’s Ups Drywall Settlement to $100,000 Per Victim, Closing Gap With Lawyer Payouts

| October 30, 2010

Drywall improvement warehouse. (J. Star)

Joaquin Sapien and Aaron Kessler
ProPublica and Sarasota Herald-Tribune

Lowe’s Companies Inc. has dramatically increased the amount of money it is prepared to offer customers whose health or homes were harmed by defective drywall they bought from its stores. Those customers are now eligible for up to $100,000 in cash, instead of the maximum $4,500 in cash and gift cards that was previously agreed upon in a class action lawsuit that is being negotiated in a Georgia state court.

Lowe’s latest offer, filed on Thursday, comes just over two months after ProPublica and the Sarasota Herald-Tribune reported that the settlement originally offered by the nation’s No. 2 home improvement chain provided big payouts to the plaintiff’s attorneys but relatively small amounts of cash and gift cards to drywall victims.

The earlier settlement set aside $6.5 million for victims and $2.1 million for the attorneys who negotiated the agreement. Under the newly amended settlement, which was negotiated by a separate team of attorneys, Lowe’s has set aside an additional $2.25 million for the victims. The original attorneys will still get $2.1 million in fees. The new attorneys will receive a separate fee based on how many $100,000-claims Lowe’s eventually pays.

“This proposed amendment strongly enhances the potential benefits to Lowe’s customers,” said Gregg Weiss, an attorney who helped negotiate the deal on behalf of his client, Chris Brucker, a corrections officer who bought drywall from Lowe’s in 2006 to build his three-bedroom home in Arcadia, Fla.

Lowe’s spokeswoman Chris Ahearn said that she couldn’t discuss the settlement because it hasn’t been finalized. Judge Bobby Peters is expected to hear arguments for and against the settlement at a fairness hearing next month.

Under the original settlement, Lowe’s drywall customers were eligible for a maximum of $2,500 in cash and a $2,000 gift card if they had a receipt or a credit card statement showing they had bought drywall at Lowe’s. In order to qualify for the cash and gift card, they had to prove through an “independent third party” that they had more than $2,000 of damage to their home or more than $2,000 in medical bills.

Under the new agreement, Lowe’s customers can receive $100,000 in cash if they provide an estimate from an independent contractor showing that they will or already have suffered at least $4,500 worth of property damage — or if they have at least $4,500 worth of medical bills from symptoms related to bad drywall.

The earlier settlement also included two other levels of compensation that remain unchanged: a $50 gift card for customers who had no proof of purchase but said they bought drywall from Lowe’s, and a $250 gift card for Lowe’s customers who had proof of purchase but no documentation that they suffered any damages.

Public interest attorneys and consumer advocates criticized the original settlement for a variety of reasons, including the hefty attorneys’ fees.

“The ProPublica and Herald-Tribune stories brought to the attention of Lowe’s concerns with the settlement, which I believe they have corrected in the amended settlement agreement,” said Robert Gary, another attorney representing Brucker.

Like thousands of homeowners around the country, Brucker learned that his drywall was defective after his air conditioner failed in 2007 and he began doing research about appliance failures. Malfunctioning air conditioners have become a tell-tale sign of defective drywall, which releases sulfur gases that can corrode electrical wiring and trigger respiratory problems, nosebleeds, irritated eyes and migraines.

The U.S. Consumer Product Safety Commission says the only way to repair homes with defective drywall is to remove and replace the drywall and electrical wiring. The CPSC has received complaints from more than 3,600 homeowners about defective drywall.

Brucker said he is grateful to Lowe’s and his attorneys for getting him some financial relief — but he also said the settlement won’t cover the cost of repairing his home.

He estimates that it’s going to be “somewhere around the $200,000 mark to gut it and re-do it. Plus there are other expenses of living elsewhere during the construction. It’s nowhere near enough to make me whole again. But it’s a start, and you got to start somewhere.”

Most of the drywall that has caused problems was imported from China. But Brucker’s drywall was made by National Gypsum, based in Charlotte, N.C. He is also suing National Gypsum.

“From our standpoint this is the first acknowledgement of any problems related to American drywall anywhere,” Gary said. “Lowe’s has told me that they didn’t sell any Chinese drywall, so as far as we know this settlement is going to pertain solely to American board.”

National Gypsum did not respond to a request for comment in time for publication.

Despite Lowe’s assurances that it sold only American drywall, the proposed settlement in that case has touched a nerve with attorneys in the multi-district litigation in New Orleans federal court, which is focused strictly on Chinese drywall.

Plaintiffs’ attorneys involved in that case asked U.S. District Court Judge Eldon E. Fallon to block the original Lowe’s settlement, arguing that it “interferes with and erodes” the federal litigation and Fallon’s authority to deal with the wide scope of the drywall problem. Fallon has scheduled a hearing on the matter for next week.

Patrick Pendley, one of the plaintiffs’ attorneys who negotiated the original Lowe’s settlement in the Georgia case, argued in court filings that it is “a defective domestic-drywall case which will affect a minuscule number of Chinese drywall claims in the MDL against a single defendant — Lowe’s.” He said there could be “thousands of non-Chinese drywall claims” against Lowe’s that would be blocked if Fallon squashed the settlement.

Lowe’s attorney, Francis V. Liantonio, Jr., challenged Fallon’s power to block the settlement, stating in court documents that the federal court “has no jurisdiction to review the Georgia court’s orders.”

Russ Herman, the lead counsel for the plaintiffs in the federal case, told ProPublica and the Herald-Tribune that his clients will continue to oppose the Lowe’s agreement as long as it appears to include Chinese drywall.

“There’s one way to cure this situation: just take the word 2018Chinese’ drywall out of that settlement,” Herman said. “If Lowe’s is going to contend under oath that they sold no Chinese drywall, then there’s no reason they should be forcing Chinese drywall homeowners to release their claims against the company.”

Herman said his clients aren’t convinced that Lowe’s didn’t sell Chinese drywall. He said his team of attorneys is investigating whether Lowe’s bought drywall from Interior-Exterior Building Supply, one of the Louisiana-based suppliers at the center of the Chinese drywall case.

“As far as I’m concerned either they [Lowe’s] are telling the truth or they’re not. If they’re telling the truth, then eliminate Chinese drywall from your settlement,” Herman said.

Are you dealing with tainted drywall? Is it causing health problems, or damage to your home? If so, ProPublica wants to hear your story

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5 Responses for “Lowe’s Ups Drywall Settlement to $100,000 Per Victim, Closing Gap With Lawyer Payouts”

  1. I’m amazed at our legal system and the lack of integrity, morals, scruples, and honesty these lawyers have displayed … all at the expense of the Consumer.

    Every lawyer involved with the original Lowe’s settlement should be disbarred and prosecuted to the full extent of the law, assets seized, and publicly made examples of what not to do as lawyers.

    Basically they sold their clients down the river and confirmed the level of GREED and CORUPTION our legal system has allowed, encouraged, tolerated, and promoted … all in the name of justice.

    Lawyers need to police these members of their family or group, and others like them, post haste, or know from this day forward, they all carry the same plague, or infection … and will all be considered whores for sale, to the highest bidder.

    Silly me … they are already there and more … and obviously do not care, as long as people hire and pay their fees.

    Remember every politician, as far as I can remember was a lawyer, making laws, and failing to remember who pays the bills … VOTERS, TAX-PAYERS !!!

    Consumers and Americans need justice on this issue and numerous others issues, to numerous to mention …

    Our legal system has become a joke, our politicians have become whores to the lobbyist, and our founding fathers are all turning over in their graves.

    Time to clean house and vote for change … not the change preached in the last election … serious change … I recommend Americans vote for anybody who has never been a politician, actually worked for a living, paid taxes, run a successful business, understands the plight of the average tax-payer (because they are one) and most importantly … NOT A LAWYER !!!

    Remember this when you vote … November 2nd … and every other time you vote … remember this is the only real power, the average tax-payer has left.

    Michael S. Foreman
    Consumer Advocate
    Proud American
    Not a Lawyer

    Sick and tired of the status qua … time for voters, to rise-up and take our government back !!!

  2. EMPM OF PALM COAST says:

    Time to clean house and vote for change … not the change preached in the last election … serious change … I recommend Americans vote for anybody who has never been a politician, actually worked for a living, paid taxes, run a successful business, understands the plight of the average tax-payer (because they are one) and most importantly … NOT A LAWYER!!!
    ==========================================
    that’s what I am hoping from every American, although let me add to it : wake up American and smell all the shit that surrounding you.

  3. EMPM OF PALM COAST says:

    a businessman knows where the employees pay check comes from and make sure how to come up with it the honest way out not just collect the tax payers money and piss it away on lawyers to get away with his visions.

  4. BBrincku says:

    Chinese drywall is not the only one having problems so is the American tainted drywall. Here is our story:

    On December 20, 2008 we read an article in the paper pertaining to Chinese Drywall, described all of the issues we were experiencing. We began our own investigation of our drywall and after reviewing pictures taken of the upstairs drywall before the installment, we determined at least in the upstairs we had no Chinese drywall. All of the pictures indicate the only drywall used upstairs was from National Gypsum Goldbond (Gridmarx). Additionally, our subcontractor insisted he used only American drywall in our home. At that point we were confused since we did not find any Chinese drywall in our home.

    We began searching the internet for answers. We contacted Thomas Eagar, Sc.D., P.E. of Massachusetts Institute of Technology (MIT). We explained our situation and our health concerns regarding our 8 year old son, Harrison. He agreed to help us by testing samples of our drywall and other corroded items from our house. On January 5, 2009 we submitted samples to Thomas Eagar and Dr. Harold R. Larson, both of MIT. The samples consisted of drywall from National Gypsum Gridmarx & US Gypsum, corroded copper pennies, copper wiring & metal from our jewelry box.

    From the drywall samples sent, MIT only tested the National Gypsum Gridmarx drywall sample taken from our air conditioning closet upstairs. They indicated our electrical system must be inspected and replaced as the sulfurous gases causing the corrosion have accelerated the aging process of wiring by tenfold or more. In other words, our four year old home has the wiring of a 40 year old home. Based on the report we received, both Professor Thomas Eagar and Dr. Harold Larson believe our drywall to be defective.

    National Gypsum and Packer Engineering visited our home on March 5th-11th, 2009 and opened every wall. They determined our home didn’t contain any Chinese Drywall. National Gypsum acknowledged there was a serious problem in our home, but denied any issues with the drywall. Our test from MIT and Rimkus Consulting Group, the testing company that our builder’s insurance company hired, both confirmed that our drywall is off gassing. Rimkus tested our well water & told us our water is normal. We also have other scientists that also agree that our drywall is off gassing. Over the past four years our family has experienced various health problems including nose bleeds, respiratory issues, irritated eyes, dizziness, shortness of breath, severe headaches and fainting.

    In conclusion, this ordeal has completely consumed our lives and we are worried about health concerns from our tainted drywall. With that said we are deeply committed to finding the truth. Our drywall came from Apollo Beach, FL. that is next to Teco Energy. There are no standards in making drywall. How was the consumer to know that the drywall was not pure mined gypsum anymore? We are digging deeper into what actually went wrong with our drywall. Our concern is that the drywall industry is totally unregulated. When we buy drywall we don’t know if it was made from byproducts from coal scrubbers or has had some recycled Chinese drywall scrap added to the mix. We had this drywall installed in our homes with no information as its contents nor will the manufactures provide this information. Now that our homes are contaminated we need to know and we have had to file a lawsuit to find out if we have hazardous material in our homes. This is not right! Our attorneys Robert Gary and Greg Weiss are investigating almost a hundred homes with contamination problems from a single drywall plants that makes it’s drywall from flue gas desulfurization. None of these people and perhaps thousands more have any way to find out the source of the raw material in their drywall. If flyash is designated as a hazardous material we as homeowners would have the right to know what we are putting in our homes and what we are exposing our children too. This should be our right these are our homes and they are unlivable and we have to fight in court to get the most basic information if our drywall was made with hazardous materials. That is just plain wrong! Regardless, attention and further detailed investigations need to occur in order to uncover the truth and restore not only our home, but those of the thousands of families that are being affected by this tragedy. I hope that my statement will serve as a catalyst to examine the health and safety issues that may involve American as well as the Chinese drywall. Please watch our two Youtube videos & our CBS News stories. Youtube – Search – “Brincku House” & “A Cry for Help – Brincku” & CBS News – Search – “Bad Drywall Rots New Home” & “Defective Drywall Dilemma”

  5. Mr. and Mrs.Brincku,

    Have watched your videos and read your blogs, articles, and news releases.

    Would appear you have not only specific, detailed, validated, confirmed, and documented evidence and information.

    My question is …

    What have your attorney’s accomplished for YOU ???

    What have you paid for this progress ???

    What has the Gypsum Manufacturer (Domestic Brand) done to resolve your problem ???

    How many others are you specifically talking about, with your same problem ???

    Now, take a deep breath … think about this …

    Judge Fallon has concentrated on Chinese Manufacturers, over-looked Domestic Manufacturers for the most part, and correct me if I’m wrong, by these Manufacturers can easily be brought to justice by our legal system … Remember these are American Companies …

    Denial is not a river in Egypt ???

    Lobbyist are paid to divert attention from their customers, Gypsum Manufacturer Association Members.

    Think about the facts of the original Lowe’s settlement, and who actually profited from that farce ???

    I’m amazed at our legal system and the lack of integrity, morals, scruples, and honesty these lawyers have displayed … all at the expense of the Consumer, YOU Mr. Brincku, are an example.

    Every lawyer involved with the original Lowe’s settlement should be disbarred and prosecuted to the full extent of the law, assets seized, and publicly made examples of what not to do as lawyers.

    Basically they sold their clients down the river and confirmed the level of GREED and CORUPTION our legal system has allowed, encouraged, tolerated, and promoted … all in the name of justice.

    Lawyers need to police these members of their family or group, and others like them, post haste, or know from this day forward, they all carry the same plague, or infection … and will all be considered whores for sale, to the highest bidder.

    Silly me … they are already there and more … and obviously do not care, as long as people hire and pay their fees.

    Mr. Brincku … Look at your lawyers and be very cautious … ask what or why they have not been successful resolving your case ???

    Settlement from American Manufacturer fails to include a BIG pay-off for them ???

    Remember every politician, as far as I can remember was a lawyer, making laws, and failing to remember who pays the bills … VOTERS, TAX-PAYERS !!!

    Consumers and Americans need justice on this issue and numerous others issues, to numerous to mention …

    Our legal system has become a joke, our politicians have become whores to the lobbyist, and our founding fathers are all turning over in their graves.

    Time to clean house and vote for change … not the change preached in the last election … serious change … I recommend Americans vote for anybody who has never been a politician, actually worked for a living, paid taxes, run a successful business, understands the plight of the average tax-payer (because they are one) and most importantly … NOT A LAWYER !!!

    Remember this when you vote … November 2nd … and every other time you vote … remember this is the only real power, the average tax-payer has left.

    Michael S. Foreman
    Consumer Advocate
    Proud American
    Not a Lawyer

    http://Construction-Guru.com

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