SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU

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ST. JAMES DEVELOPMENT CORP., Plaintiff, COMPLAINT -againstIndex No. 09-10186 LONG ISLAND WALLPAPER, INC., KP ORGANIZATION, INC., INTER-COUNTY BUILDING MATERIALS CORP., VENTURE SUPPLY INC., and SHANDONG TAIHE DONG)(IN CO., LTD., Defendants.

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Plaintiff, St. James Development Corp., by its attorneys, Rosenberg Fortuna & Laitman, LLP, as and for its complaint, respectfully alleges as follows: THE PARTIES 1. St. James Development Corp. ("St. James") is a domestic corporation duly

organized and existing under the laws of the State of New York with a principal place of business in the County of Nassau, State of New York. 2. Upon information and belief, defendant Long Island Wallpaper

("Wallpaper") is a domestic corporation with a principal place of business in the County of Suffolk, State of New York. 3. Upon information and belief, defendant KP Organization, Inc. ("KP") is a

domestic business corporation with a principal place of business in the County of Suffolk, State of New York. 4. Upon information and belief, defendant Venture Supply Inc. ("Venture") is

a Virginia corporation with its principal place of business located at 1140 Azalea Garden Road,

Norfolk, Virginia. 5. Upon information and belief, defendant Shandong Taihe Dongxin Co., Ltd.

("Shan dong") is a Chinese corporation with a principal place of business located at Dawenkou, Daiyue District Street Ill, Taian, Shandong Province, China 271026. BACKGROUND 6. St. James is the sponsor and developer of Hamlet Estates at St. .Tames

("Development"), a homeowners association community which, upon full completion, shall consist of up to one hundred sixty-seven (167) homes located in the Hamlet of St. James, Town of Smithtown, County of Suffolk, State of New York. 7. In the course of constructing the Development, St. James constructed several

model homes. The model homes were constructed for the initial purpose of exhibiting the same to prospective purchasers as specimens of the homes available for purchase within the Development. Ultimately, the model homes are marketed for sale as residences, in the same fashion as the other homes within the Development. 8. One such model is the "H" Model, located at Lot 8,5 Hamlet Woods Drive,

within the Development (the "H Model"). 9. On or about April 1, 2006, St. James entered into an agreement with

Wallpaper whereby Wallpaper agreed to perform all work and furnish all supervision, labor, tools, equipment and materials necessary for the construction of sheet rock (drywall), spackle and paint for the H Model (the "Agreement"). 10. Pursuant to the Agreement, Wallpaper was to, inter alia, furnish all

supervision and materials necessary to complete the scope of work provided for therein. 2

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Pursuant to the Agreement, Wallpaper was to provide St. James with a

complete and functional project in full compliance with all applicable local, state and national building codes and regulations. 12. Pursuant to the Agreement, Wallpaper was obligated to repair, remove or

replace any of its workmanship, material and equipment that is defective or substandard. 13. Pursuant to the Agreement, Wallpaper is obligated to pay all expenses

incurred in repairing, removing or replacing any other work required as a result of removing, replacing or repairing defective or nonconforming work. 14. 15. Wallpaper furnished and installed the drywall contained in the H Model. Drywall furnished and installed by Wallpaper at the H Model is defective in

that it emits various sulfide gases and/or other chemicals that create noxious, "rotten egg-like" odors, (the "Defective Drywall"). 16. Wallpaper. 17. ofKP. 18. Sulfides and other noxious gases, such as those emitted from the Defective Upon information and belief, at all relevant times, Wallpaper was the alter ego Upon information and belief, at all relevant times, KP was the alter ego of

Drywall, has caused and shall continue to cause corrosion and damage to personal property, such as plumbing, piping and fixtures, electrical wiring, appliances, air-conditioning and refrigerated coils and other metal surfaces and property. 19. Upon information and belief, Venture imported, distributed, delivered,

supplied, inspected, marketed and/or sold the Defective Drywall to Wallpaper, who, in turn, 3

furnished and installed the Defective Drywall at the H Model. 20. Upon information and belief, Shandong designed, manufactured, exported,

distributed, delivered, supplied, inspected, marketed and/or sold the Defective Drywall to Venture. 21. The drywall was defective in that the gypsum and other components of the

drywall break down and release sulfides and other noxious gases that are then emitted from the Defective Drywall. 22. As a direct and approximate result of the Defective Drywall designed,

manufactured, exported, imported, distributed, delivered, supplied, inspected, marketed, sold and/or installed by defendants herein and the corrosive and harmful effects of the sulfide and other noxious gases being released from the Defective Drywall, St. James has suffered, and continues to suffer damages. These damages include, but are not limited to: (i) cost of inspection; (ii) costs and

expenses necessary to remedy, replace and remove the Defective Drywall and other property that has been inspected; (iii) lost value or devaluation of the H Model; (iv) loss of use and enjoyment of the H Model; and (v) the costs of maintaining ownership of the H Model, including, but not limited to, mortgage interest, real estate taxes, insurance and utilities. AS AND FOR A FIRST CAUSE OF ACTION AGAINST ALL DEFENDANTS (NEGLIGENCE) 23. St. James repeats and realleges the allegations set forth in paragraphs "1"

through "22" of this Complaint as if more fully set forth at length herein. 24. Defendants owed a duty to St. James to exercise reasonable care in designing,

manufacturing, exporting, importing, distributing, delivering, supplying, inspecting, marketing, selling and/or installing the drywall, including the duty to adequately warn of their failure to do the same. 4

25.

Defendants knew or should have known that their wrongful acts and

omissions would result in harm and damages in the manner set forth herein. 26. Defendants breached their duty to exercise reasonable care in the designing,

manufacturing, exporting, importing, distributing, delivering, supplying, inspecting, marketing, selling and/or installing the drywall. 27. Defendants breached their duties to S1. James by failing to warn about the

defective nature of the drywall. 28. Defendant, through the exercise of reasonable care, knew or should have

known the nature of the Defective Drywall and the adverse affects it could have on the H Model. 29. Given the defect in the drywall, defendants knew or should have known that

the drywall could, and would, cause harm and/or damages to S1. James. 30. As a direct and proximate cause of defendants' acts and omissions, St. James

was harmed and has incurred damages as described herein. 31. As a result of the foregoing, St. James has suffered damages in an amount not

presently ascertainable but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars. AS AND FOR A SECOND CAUSE OF ACTION AGAINST ALL DEFENDANTS 32. S1. James repeats and realleges the allegations set forth in paragraphs "I"

through "31" of this Complaint as if more fully set forth at length herein. 33. Defendants were responsible for the manufacturing, inspecting, distributing,

selling and installing of the drywall at issue. 34. By the time defendants' drywall left defendants' hands, the risks associated 5

with the product far outweighed its benefits. 35. Further, by the time defendants' drywall left defendants' hands, they knew,

or should have known, the product was unsafe, defective and could cause serious, physical and economic harm to St. James. 36. functioning product. 37. 38. Defendants failed to uphold this duty. Because defendants' product created an unreasonable risk to St. James' Defendants had a duty to provide St. James with a safe and properly

property, defendants are strictly liable for economic injuries to st. James. 39. No prudent buyer of defendants' product could be expected to determine on

his or her own that defendants' product was dangerous and defective. 40. Defendants not only manufactured, inspected, distributed, sold and/or installed

a poorly designed and defective drywall, but also failed to give St. James adequate warning regarding the risk associated with defendants' product. 41. Defendants' drywall was a substantial factor in the economic and physical

losses that have been, and continue to be, incurred by St. James. 42. As a direct and proximate cause of defendants' acts and omissions, St. James

has incurred, and shall incur, economic losses including, but not limited to, (i) cost of inspection; (ii) costs and expenses necessary to remedy, replace and remove the Defective Drywall and other property that has been inspected; (iii) lost value or devaluation of the H Model; (iv) loss of use and enjoyment of the H Model; and (v) the costs of maintaining ownership of the H Model, including, but not limited to, mortgage interest, real estate taxes, insurance and utilities.

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43.

As a result of the foregoing, S1.James has suffered damages in an amount not

presently ascertainable but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars. AS AND FOR A THIRD CAUSE OF ACTION AGAINST ALL DEFENDANTS (BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY) 44. S1. James repeats and realleges the allegations set forth in paragraphs "I"

through "43" of this Complaint as if more fully set forth at length herein. 45. 46. S1. James was and is in privity, express or implied, with the defendants. S1. James was and is a foreseeable third party beneficiary of any express or

implied warranty made by any of the defendants to each other. 47. At the times defendants installed, utilized, supplied, inspected and!or sold

drywall for use in the H Model, defendants knew, or it was reasonably foreseeable, that the drywall would be installed in the H Model for use as a building material in a residential dwelling unit, and impliedly warranted the product to be fit for that purpose. 48. Defendants' drywall product was placed into the stream of commerce by

defendants in a defective condition and the Defective Drywall was expected to, and did, reach users, handlers and persons coming into contact with said product without any change in the condition in which it was sold. 49. The drywall was defective because it was not fit for the purposes intended or

reasonably foreseeable by defendants; to wit, the installation of the drywall in the I-IModel for use as a building material in a residential dwelling unit, because it contained defects as set forth herein. 50. The defendants breached the implied warranty of merchantability because the

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drywall was not fit to be installed in the H Model as a building material in a residential dwelling unit due to the defects set forth herein. 51. Defendants had reasonable and adequate notice of St. James' claims for a

breach of implied warranty of merchantability and failed to cure. 52. Defendants knew or should have known that their wrongful acts and

omissions would result in economic, incidental and consequential damages in the manner set forth herein. 53. As a direct and proximate cause of defendants' acts and omissions, St. James

shall incur and has incurred economic damages in an amount not presently ascertainable but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars. AS AND FOR A FOURTH CAUSE OF ACTION AGAINST ALL DEFENDANTS (BREACH OF IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE) 54. St. James repeats and realleges the allegations set forth in paragraphs "1"

through "53" of this Complaint as if more fully set forth at length herein. 55. Defendants were in privity with St. James and/or St. James was a foreseeable

third party beneficiary of any warranty. 56. Defendants' drywall product was placed into the stream of commerce by

defendants in a defective condition and was expected to, and did, reach users, handlers and persons coming into contact with said product without any change in the condition in which it was sold. 57. The drywall was defective because it was not fit for the specific purpose of

installing in the H Model as a building material, for which St. James bought the product in reliance on the implied and express warranties of defendants.
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58.

Defendants breached the implied warranty of fitness for a particular purpose

because the drywall was not fit to be installed in the H Model as a building material in a residential dwelling unit due to the defects set forth herein. 59. Defendants had reasonable and adequate notice of St. James' claims for

breach of implied warranty of fitness for a particular purpose and failed to cure. 60. Defendants knew or should have known that their wrongful acts and

omissions would result in economic, incidental and consequential damages in the manner set forth herein. 61. As a direct and proximate cause of defendants' acts and omissions, plaintiff

has sustained damages in an amount not presently ascertainable but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars. AS AND FOR A FIFTH CAUSE OF ACTION (BREACH OF CONTRACT AS AGAINST W ALLP APER AND KP) 62. St. James repeats and realleges the allegations set forth in paragraphs "1"

through "61" of this Complaint as if more fully set forth at length herein. 63. performed on its part. 64. In furnishing and installing the Defective Drywall in the H Model, Wallpaper St. James has performed all conditions and covenants of the Agreement to be

is in breach of the Agreement's covenant to furnish all materials within accepted industry standards. 65. In furnishing and installing the Defective Drywall in the H Model, Wallpaper covenant to furnish all materials necessary for a complete and

is in breach of the Agreement's functional project. 66.

In refusing to repair, remove and/or replace the Defective Drywall and in 9

refusing to pay all expenses of St. James incurred in repairing, removing and/or replacing all other work required as a result of the Defective Drywall, Wallpaper is in breach of the Agreement. 67. As a result of the foregoing, St. .Tameshas sustained damages in an amount but believed to be in excess of Two Hundred Fifty Thousand

not presently ascertainable, ($250,000.00) Dollars.

WHEREFORE, follows: a.

St. James respectfully requests judgment against defendants as

on its first cause of action, against all defendants in an amount not

presently ascertainable, but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars; b. on its second cause of action, against all defendants in an amount not

presently ascertainable, but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars; c. on its third cause of action, against all defendants in an amount not

presently ascertainable, but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars; d. on its fourth cause of action, against all defendants in an amount not

presently ascertainable, but believed to be in excess of Two I-Iundred Fifty Thousand ($250,000.00) Dollars; e. on its fifth cause of action, against defendants Wallpaper and KP, in

an amount not presently ascertainable, but believed to be in excess of Two Hundred Fifty Thousand ($250,000.00) Dollars;

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f. g.

all together with interest thereon from April 20, 2006; and the costs and disbursements of this action.

Dated: Garden City, New York September 15, 2009 ROSENBERG FORTU ~

By:

TO:

LAW OFFICES OF ANDREA G. SAWYERS Attorneys for Defendants LONG ISLAND WALLPAPER, INC. and KP ORGANIZATION, INC. Travelers 300 Huntington Quadrangle, Suite 102-S P.O. Box 9028 Melville, New York 11747 (631) 501-3023 INTER-COUNTY BUILDING MATERIALS CORP. Defendant 908 Long Island Avenue Deer Park, New York 11729 VENTURE SUPPLY, INC. Defendant 1140 Azalea Garden Road Norfolk, Virginia 23502 SHANDONG TAIHE DONGXIN CO., LTD. Defendant Dawenkou Daiyue District Street 111 Taian, Shandong China 271026

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