On the Chinese Drywall Blog, we've talked about class action suits, individual suits against builders and suppliers, suits by builders against its suppliers, and other similar actions. However, in Florida, one couple seeks to hold another party liable for their Chinese Drywall damages: their own homeowners insurer. The claim makes a great deal of sense, and it adds to the mystery of who will eventually be responsible for the Chinese Drywall damages. The suit was brought in a Florida U.S. District Court, and is captioned Baker v. American Home Assurance Company, Inc., Middle District of Florida, No. 09-cv-188-FtM-99DNF. (read here) According to the complaint, the homeowners made a claim in December 2008 related to damages caused by Chinese Drywall. The complaint describes the cause of the damage as coming from "drywall...emitting gases which have damaged the Subject Property and the contents therein." After inspection and testing, the insurer denied the claim for "contamination." The Baker complaint argues that the damages were not caused by "contaminants" as defined by the policy. The policy at the center of the Baker action defines "contaminates" as follows:
An impurity resulting from the mixture of or contact with a foreign substance.According to the complaint, there was not 'mixture or contact with a foreign substantance,' and therefore, the pollution exclusion would not apply. The Baker exclusion is far less detailed then some of the other pollution exclusions found in Commercial General Liability policies...and therefore, may be interpreted differently. If pollution exclusions in homeowners policies are generally less complex than GCL policies, it may be prudent for homeowners to make timely claims against their homeowner policies if they are faced with Chinese Drywall damages. It's too early to predict exactly who will be responsible for damages associated with Chinese Drywall, especially since so many parties are involved. To rely simply on one remedy (i.e. a class action) is probably an irresponsible choice for homeowners faced with significant damages. We're likely to see a flood of suits in the coming months against builders, home insurers, suppliers and other responsible parties. Home insurance policies will likely file subrogation claims against builders, suppliers and other parties as well. We'll monitor the Baker suit as it proceeds. Stay tuned.