First Chinese drywall jury trial begins

Bay area attorneys and homeowners are watching closely as the nation's first jury trial concerning tainted Chinese drywall began Monday in Miami.

The result could set the course for thousands of other homeowners stuck with homes that stink like rotten eggs.

The drywall emits a sulfuric gas that corrodes metal and destroys air-conditioning units. Homeowners have also complained of health problems such as trouble breathing, headaches, itchy eyes and nosebleeds.

"Homeowners are in a bad situation," said Victor Diaz, lead attorney in a class-action case in South Florida. "If you know you have Chinese drywall, it's impossible to sell your home."

The Miami trial involves Banner Supply Co., which has sold drywall in Florida for more than 40 years. The company bought bad drywall from importers in 2006 and later discovered it was tainted.

The crux of case is when Banner Supply learned of the problem and what the company did about it.

Banner Supply reportedly said it stopped using the drywall when it received complaints about an odd odor from homeowners who bought WCI Communities homes in South Florida. The company then reportedly made a deal with the manufacturer that involved receiving replacement domestic drywall in exchange for keeping quiet about the drywall's smell.

A company attorney told the South Florida Business Journal that it made the deal because the company didn't know at the time about corrosive effects on metal or any health problems.

"All we knew was there was a complaint related to smell, five homes in WCI had it, and test results showed no health concern," attorney Michael Peterson said. "There was no indication of corrosion or personal injury."

Some experts estimate as many as 100,000 homes were built with the bad Chinese drywall.

The U.S. government is investigating complaints but has recommended that homeowners replace the drywall.

Builders have estimated it costs, on average, about $100,000 per home to replace drywall, an expense not covered by homeowner's insurance.