Score One for the Insurers In Chinese Drywall.

We have previously reported on Chinese drywall claims and some of the consolidated lawsuits pending in New Orleans. One of these lawsuits, a coverage lawsuit, has been decided in the insurers’ favor — http://www.laed.uscourts.gov/Drywall/Orders/O&R.homeowners.insurance.pdf

In this case, the court was faced with the issue of whether homeowner’s policies excluded coverage because of the faulty materials exclusion By way of background, the homeowners had argued that the faulty material exclusion did not apply because “the drywall was not faulty because it functioned properly as drywall.”

The trial court disagreed. It held that “although [the] drywall serves its intended purpose as a room divider, wall anchor and insulator, the allegations in the complaints provide that the drywall emits foul-smelling odors and releases gases which damage silver and copper components in the home, including electrical devices, appliances and wiring.” Therefore, the court concluded, “the drywall sheets are faulty because the materials of which they are composed.”

For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com