Monday, March 7, 2011

Ervin Gonzalez Objects to Victor Diaz Chinese Drywall Settlement?

Hmm, there is undoubtedly a huge back story here:
Miami-Dade Circuit Judge Joseph Farina has overruled objections and approved a $1.8 million settlement in a Chinese drywall class action with Homestead homeowners.

Farina approved more than $2.9 million in attorney fees and costs to close the case.

Ervin Gonzalez of Colson Hicks Eidson in Coral Gables tried at a Feb. 4 hearing to scuttle the settlement on behalf of 29 of the 79 members in the suit between Keys Gate homeowners and Banner Supply, distributor of the defective drywall.

Farina recognized in the order that many homeowners wanted to opt out of the settlement because personal injury, bodily injury and medical-monitoring claims were never asserted in the complaint.

However, he said the settlement language defined released claims as "any and all causes of action, damages or injuries arising from or related to defective drywall."

This was the exact language used in a separate settlement involving other defendants in the same class action, Farina noted. South Kendall Construction, Palm Isles Holdings and Keys Gate Realty worked out their $6.6 million settlement first, and Farina said the appropriate time to raise an objection on illness claims was at that settlement hearing last July.

"Objecting to this principle now, for the first time, is not timely — particularly when counsel for the objectors was among those attorneys who signed" the initial settlement, Farina stated in the order.

Gonzalez said that while he appreciated the judge's willingness to hear homeowners' concerns, they would appeal.

"We feel it's a matter of great importance that should be decided by a court of higher authority," he said. "We think it's a matter of first impression in the state of Florida."

Farina noted homeowner concerns about bodily injury are prospective and unconfirmed at this time because no scientific proof has been produced showing the tainted drywall causes illness.

The judge did suggest homeowners still have recourse to pursue bodily injury claims. Banner Supply is suing Knauf Plasterboard, the Chinese manufacturer, and homeowners could attach their claims to that suit.

He said health claims also could be made before a New Orleans federal judge presiding over multi-district litigation.
A couple things -- it's pretty unusual to see a release of personal injury claims in a suit for economic injury arising out of property damage.

And of course the Judge is right that class members could assert personal injury claims in other forums, such as in New Orleans, but to do so they would have to opt out of the settlement and therefore not receive any of the benefits for a case that had been only about property damage.

It's also interesting that the Court apparently certified a class -- for settlement purposes only -- that presumably included individual personal injury claims.  I wonder whether those claims were valued in the settlement and, if so, how much?

(That doesn't mean the settlement is not proper btw).

As for lateness, the Judge notes Ervin was a signatory to a prior settlement with other defendants that also included an identical release of personal injury claims.

Now that's where it gets interesting -- perhaps the back story begins right there?


Anonymous said...


Anonymous said...

sometimes even great lawyers fail to read the fine print, or, read the fine print and fail to recognize the implication. happens to da best of dem.

Anonymous said...

Couldn't happen to a nicer guy.

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