A German building materials producer is set to start trial Monday in Miami with legal setbacks for destroying evidence in a Chinese drywall lawsuit.
Miami-Dade Circuit Judge Beatrice Butchko granted a motion for sanctions Thursday in a case against Knauf Plasterboard Co. Ltd. and Knauf Gips KG.
Following a two-day evidentiary hearing, Butchko ruled Knauf at one time had gypsum ore from the Luneng and Hebei mines in China, synthetic gypsum and other evidence from a Knauf factory, test results and communications about the results between Knauf employees and scientists at Germany’s Fraunhofer Institute.
The defendants “deliberately destroyed this physical evidence and some related testing or test results,” Butchko said.
The evidence was crucial to the case of Akerman Senterfitt associate Jeffrey Robin and his wife, travel consultant Elisa Robin. Loss of the evidence hurt their ability to rebut Knauf’s attempt to shift blame to China’s Shandong Luneng Tai Mountain Mine Development Group Co. Ltd., Butchko said.
The Knauf defendants had a duty to preserve the physical evidence, she said. During the hearings Oct. 3 and 10, Knauf Plasterboard admitted liability on negligence and strict liability but would not concede on a nuisance count or the issue of punitive damages.
The Robins’ attorney, Victor Diaz of VM Diaz & Partners in Miami Beach, said Knauf Plasterboard’s admissions were an attempt to avoid sanctions.
“Knauf Gips KG continues to contest all issues,” Butchko added.
The sanctions include the striking the Shandong Luneng Tai Mountain Mine company as a Fabre defendant. Butchko also declared the Knauf companies will bear the burden of proving the missing evidence was not due to an intentional act by their employees.
If the jury concludes the evidence was deliberately lost, they may infer it contained “irrebuttable indications of negligence, a duty to warn, the known risk of harm, the exact nature or origin of the product defect and punitive damages,” Butchko said.
In the alternative, if jurors decide the evidence was merely negligently destroyed, a rebuttable presumption of negligence, duty to warn and punitive damages would apply. But this presumption could be overcome if the Knauf defendants “prove otherwise by the greater weight of the evidence,” the judge ruled.
The judge denied the Robins’ motion for a jury instruction of adverse presumption on the missing Fraunhofer Institute documents. She also denied their motion for attorney fees for pursuing the motion for sanctions.
Diaz said the missing evidence did not come to light until thousands of pages of depositions by Fraunhofer employees were translated in May. Over the next four months, the Knauf defendants offered excuses for the missing evidence and communications, he said.
Joy Lundeen, a shareholder at Stearns Weaver Miller Weissler Alhadeff & Sitterson, is lead attorney for the Knauf defendants in a trial scheduled for three weeks.
Defective Chinese drywall that emitted sulphur fumes and corroded household metals was installed in thousands of U.S. homes after demand for building supplies grew during the building boom and following years of destructive hurricane seasons.
The Robins moved out of their home in February 2010, paid for remediation out of their own pockets and moved back in, Diaz said.
This will be the first Chinese drywall trial with the Knauf companies as defendants in Florida, he said.
Knauf reached an $800 million settlement in federal multidistrict litigation with most plaintiffs, but many homeowners preferred to pursue their own lawsuits.