$15M Richmond lawsuit chasing Chinese drywall maker

Litigation surrounding the Chinese drywall scandal that followed the housing boom of the mid-2000s has found its way into Richmond Circuit Court.

A lawsuit filed Oct. 14 seeks to collect as much as $15 million for a Norfolk supplier and its installation affiliate that claim they were put out of business as a result of the scandal, which involved drywall imported from China that was found to be toxic and prompted thousands of claims from homeowners in Virginia and other states.

Local law firm Sinnott, Nuckols & Logan filed the suit on behalf of the since-closed company, Venture Supply Inc., and its affiliate, Porter-Blaine Corp. They would stand to receive as much as $10 million and $5 million, respectively, with a judgment against the defendant: Chinese drywall manufacturer Taishan Gypsum Co., formerly known as Shandong Taihe Dongxin Co.

The suit, which has yet to be served against Taishan, alleges that drywall it sold to Venture Supply was defective and resulted in numerous lawsuits from homeowners, builders and installers. The fallout ultimately cost the companies business and forced them to liquidate the businesses at a significant loss, the suit claims.

“The damages caused to Venture and Porter were the direct and proximate result of the defective drywall manufactured and sold by Taishan,” the suit states, adding that the company was negligent and breached its contract and warranties.

Attorneys Kenneth Hardt and Mark Nanavati are working the case for Sinnott, Nuckols & Logan. The firm has represented Venture Supply in its previous cases against Taishan.

Hardt said the filing was prompted by an unexpected payment Taishan made earlier this year to the owners of seven homes damaged by the drywall. The court-ordered payment of $3.2 million came as a surprise, Hardt said, after years of proceedings in a Louisiana court in which Taishan either challenged jurisdiction or didn’t show up.

He said the purpose of the new filing is to protect the companies’ interests should Taishan be ordered to make more payments.

“It’s just a method of protecting Venture Supply’s eventual claims,” Hardt said. “We at first never thought that Taishan would come into the United States; they’d just stay over in China and let everybody go over there and try to sue them in China. But they’re actively participating in the (multi-district litigation) down in Louisiana.

“Who knows what will occur as a result of that, but because they have actively started participating down in Louisiana and may eventually come up with some kind of global settlement to resolve all of these Chinese drywall claims, we wanted to put in Venture’s claim for its lost business.”

Venture Supply closed in 2009, laying off its 68 workers at the time. At the height of the building boom in 2006, it had more than 200 employees and annual sales of more than $35 million, according to an article in the Virginian-Pilot.

The company’s president, Sam Porter, said in that article that he had no reason to believe the drywall was unsafe. In an undated statement posted online by the Herald-Tribune, a Sarasota, Florida, newspaper, the company said it imported the product to keep up with demand because domestic drywall was “nearly impossible to obtain” during the boom.

Hardt said the company faced about 200 lawsuits in Norfolk and was also sued other places where it had sold the drywall. He said the product was sold to some installers and builders in Richmond but primarily in Norfolk and the Tidewater area.

“It was a good business,” Hardt said. “It was a very long-standing business down there, had a good reputation, and once the Chinese drywall mess hit the news down there, it was just constantly bad news – bad publicity for Venture.”

Where the firm’s previous cases against Taishan involved indemnity claims, Hardt said the Richmond filing is for loss of business.

Hardt said the firm has won default judgments in Norfolk since it started filing suit against Taishan for Venture Supply. Those judgements, however, don’t guarantee that Venture Supply will get paid.

Hardt said the firm’s location is why the suit was filed in Richmond Circuit Court, which he noted has jurisdiction statewide. He said the suit has not yet been served against Taishan, due in part to the complexities – and expense – of suing a foreign company. They have a year to serve the lawsuit, and Hardt said the filing would be nonetheless effective in the event of a court-ordered payment or settlement.

“If Taishan comes to the table and wants to do a global settlement or something, Venture Supply would be a claimant just like any other builder, installer or anybody else who was financially affected by Chinese drywall,” he said.

Litigation surrounding the Chinese drywall scandal that followed the housing boom of the mid-2000s has found its way into Richmond Circuit Court.

A lawsuit filed Oct. 14 seeks to collect as much as $15 million for a Norfolk supplier and its installation affiliate that claim they were put out of business as a result of the scandal, which involved drywall imported from China that was found to be toxic and prompted thousands of claims from homeowners in Virginia and other states.

Local law firm Sinnott, Nuckols & Logan filed the suit on behalf of the since-closed company, Venture Supply Inc., and its affiliate, Porter-Blaine Corp. They would stand to receive as much as $10 million and $5 million, respectively, with a judgment against the defendant: Chinese drywall manufacturer Taishan Gypsum Co., formerly known as Shandong Taihe Dongxin Co.

The suit, which has yet to be served against Taishan, alleges that drywall it sold to Venture Supply was defective and resulted in numerous lawsuits from homeowners, builders and installers. The fallout ultimately cost the companies business and forced them to liquidate the businesses at a significant loss, the suit claims.

“The damages caused to Venture and Porter were the direct and proximate result of the defective drywall manufactured and sold by Taishan,” the suit states, adding that the company was negligent and breached its contract and warranties.

Attorneys Kenneth Hardt and Mark Nanavati are working the case for Sinnott, Nuckols & Logan. The firm has represented Venture Supply in its previous cases against Taishan.

Hardt said the filing was prompted by an unexpected payment Taishan made earlier this year to the owners of seven homes damaged by the drywall. The court-ordered payment of $3.2 million came as a surprise, Hardt said, after years of proceedings in a Louisiana court in which Taishan either challenged jurisdiction or didn’t show up.

He said the purpose of the new filing is to protect the companies’ interests should Taishan be ordered to make more payments.

“It’s just a method of protecting Venture Supply’s eventual claims,” Hardt said. “We at first never thought that Taishan would come into the United States; they’d just stay over in China and let everybody go over there and try to sue them in China. But they’re actively participating in the (multi-district litigation) down in Louisiana.

“Who knows what will occur as a result of that, but because they have actively started participating down in Louisiana and may eventually come up with some kind of global settlement to resolve all of these Chinese drywall claims, we wanted to put in Venture’s claim for its lost business.”

Venture Supply closed in 2009, laying off its 68 workers at the time. At the height of the building boom in 2006, it had more than 200 employees and annual sales of more than $35 million, according to an article in the Virginian-Pilot.

The company’s president, Sam Porter, said in that article that he had no reason to believe the drywall was unsafe. In an undated statement posted online by the Herald-Tribune, a Sarasota, Florida, newspaper, the company said it imported the product to keep up with demand because domestic drywall was “nearly impossible to obtain” during the boom.

Hardt said the company faced about 200 lawsuits in Norfolk and was also sued other places where it had sold the drywall. He said the product was sold to some installers and builders in Richmond but primarily in Norfolk and the Tidewater area.

“It was a good business,” Hardt said. “It was a very long-standing business down there, had a good reputation, and once the Chinese drywall mess hit the news down there, it was just constantly bad news – bad publicity for Venture.”

Where the firm’s previous cases against Taishan involved indemnity claims, Hardt said the Richmond filing is for loss of business.

Hardt said the firm has won default judgments in Norfolk since it started filing suit against Taishan for Venture Supply. Those judgements, however, don’t guarantee that Venture Supply will get paid.

Hardt said the firm’s location is why the suit was filed in Richmond Circuit Court, which he noted has jurisdiction statewide. He said the suit has not yet been served against Taishan, due in part to the complexities – and expense – of suing a foreign company. They have a year to serve the lawsuit, and Hardt said the filing would be nonetheless effective in the event of a court-ordered payment or settlement.

“If Taishan comes to the table and wants to do a global settlement or something, Venture Supply would be a claimant just like any other builder, installer or anybody else who was financially affected by Chinese drywall,” he said.

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