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Richmond v. National Gypsum Services Co. & Lowe's Home Improvement Centers, Inc.

United States District Court, E.D. Louisiana

October 16, 2018


         SECTION “F”



         Before the Court is Lowe's Rule 12(b)(6) motion to dismiss, on the ground that the plaintiffs' claims against it are barred by res judicata. For the following reasons, the motion is GRANTED, and the plaintiffs' claimed are DISMISSED with prejudice. In addition, the plaintiffs are ordered to reimburse Lowe's for its attorneys' fees, litigation expenses, and costs incurred in enforcing its injunction against the plaintiffs.


         This lawsuit arises out of the purchase and installation of Chinese drywall in a residence located in New Orleans, Louisiana following Hurricane Katrina.

         In October of 2006, Cedric and Raquel Richmond purchased a residence located at 7021 Cove Drive in New Orleans that had sustained water damage during the storm. At the time of the purchase, the water-damaged drywall had been removed, but new drywall had not yet been installed. The following year, the property underwent renovations, including the installation of new drywall. Cedric Richmond, acting as general contractor, purchased approximately 180-190 sheets of drywall from Lowe's stores located in New Orleans.[1] After the renovations were complete, Mr. Richmond moved into the property and resided there until mid-2014 when he began renting out the property.

         Meanwhile, on June 14, 2010, Glen Vereen filed suit in the Superior Court of Muscogee County Georgia against Lowe's for damages caused by allegedly defective drywall. Vereen amended his complaint on July 23, 2010, proposing to bring the action on behalf of himself and all others similarly situated nationwide. Just a few days later, on July 27, 2010, the Georgia state court issued a preliminary order certifying a nationwide putative class action for settlement purposes and ordering the issuance of notices.

         Thereafter, on November 28, 2010, the plaintiffs and defendants entered into a Supplemental Amendment to Class Action Settlement Agreement. After holding a fairness hearing the following year, the Superior Court of Muscogee County Georgia ultimately issued a Final Order and Judgment on January 11, 2012, certifying the following class:

Any Person in the United States, who, during the Class Period [from the beginning of time through July 27, 2010], purchased, installed or had installed on real property Defective Drywall or were owners and/or residents on such real property. Excluded from the Class shall be the following:
(i) All persons who during the Class Period were officers, directors, or employees of the Company, and
(ii) All persons currently serving as judges or justices in the State Courts of Georgia and the members of their immediate family.

         The Settlement Agreement, which was incorporated into the Final Order and Judgment, defined the released claims as follows:

[A]s of the Final Effective Date, the Representative Plaintiff, and all Settlement Class members who have not properly and timely excluded themselves from the Class . . . do hereby expressly and irrevocably waive, release, and forever discharge the Company . . . from any and all claims, demands, complaints, disputes, causes of action, rights of action, suits, debts, liabilities, obligations, and damages of every nature whatsoever, including but not limited to personal injury or property damages, economic, compensatory or punitive damages, fines, costs, repair or replacement damages, subrogation, or indemnity claims, whether based on federal, state, or local law, statute, ordinance, regulation, warranty, tort law, product liability law, common law, equity, private contract, agreement, or any other authority or basis whatsoever (collectively, "Claims"), whether known or unknown, asserted or unasserted, patent or latent, that the Releasing Parties now have, ever had, or may in the future have, arising out of, resulting from, or relating in any way to allegedly Defective Drywall.[2]

(Emphasis added).

         Some five years after the Vereen judgment was entered, in the Spring of 2017, the Richmonds attempted to sell their property. During that process, a home inspector first alerted them to the possibility that the property contained “Chinese drywall.” In response, the Richmonds retained Driskill Environmental Consultants, LLC to conduct another inspection. On June 14, 2017, Driskill inspected the residence and issued a report stating that there was “extensive, advanced corrosion to copper ground wiring, copper pipe water supply lines, and the A/C evaporator coils.” The report concluded that a majority of the drywall installed in the property was defective and that removal was required.

         On June 14, 2018, the Richmonds sued National Gypsum Services Company (the alleged manufacturer of the drywall); Lowe's Home Center, Inc.; and Louisiana Citizens Property Insurance Corporation in the Civil District Court for the Parish of Orleans, asserting redhibition and negligence claims against National Gypsum and Lowes's, a products liability claim against National Gypsum, and insurance coverage claims against Louisiana Citizens. National Gypsum timely removed the lawsuit to this Court on August 6, 2018, after which the plaintiffs moved to remand. On October 3, 2018, this Court denied the plaintiffs' motion and dismissed Louisiana Citizens without prejudice.

         Lowe's now moves to dismiss the plaintiff's claims against it under Federal Rule of Civil Procedure 12(b)(6). Lowe's contends that the plaintiffs' claims are barred by res judicata, in light of the Superior Court of Muscogee County Georgia's Final Order and Judgement in Vereen v. Lowe's Home Centers, Inc., Civil Action File No. SU10-CV-2267B.



         Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. Such a motion is rarely granted because it is viewed with disfavor. See Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982)).

         Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)(citing Fed.R.Civ.P. 8). "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, ...

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