Archive for the ‘Chinese Drywall’ Category

Orleans Parish Judge Says Insurance On The Hook for Chinese Drywall

On March 31, 2010 Author By Scott Wolfe Jr

In the past, we’ve discussed whether homeowner insurance policies will be liable for Chinese Drywall damages.   This week, Judge Medley in Orleans Parish Civil District Court gave Louisiana it’s first answer holding that the exclusions relied upon by the Defendant insurance companies didn’t make the cut.

Of course, the Defendant insurance company (Audubon Insurance Co) will appeal this ruling, but this is a really great first step for plaintiffs who are looking everywhere for a solution to Chinese Drywall woes.

So, which exact exclusions were adjudicated?

The pollution exclusion, which Judge Medley rejected based upon the Louisiana Supreme Court’s treatment of such clauses in cases like Doerr v. Mobil Oil Corp, which qualifies the pollution exclusion in insurance policies to only cover “environmental damage.”

The “latent defect” exclusion was also rejected, with Medley ruling that the clause didn’t apply because the drywall itself wasn’t a latent defect.    The drywall worked just fine as actual drywall, and therfore, wasn’t a latent defect in itself.

Homeowners Ought to Act Fact to Make Claims

In December 2009, we wrote that “Fast Action” was required for homeowners to make Chinese Drywall claims against their homeowners insurance policies.    Why?    Because policy-holders in Louisiana only have one year to bring claims (and file a lawsuit to enforce the claim) from when they knew or should have known of the loss.

Many homeowners are not making claims because they’re concerned about having their insurance policies cancelled.   Certainly, this is an issue as Louisiana insurance companies have already begun canceling policies on homes with contaminated drywall.    The danger cannot be explained away, but there are two important things to remember about this:  (1) policies are being cancelled regardless of whether claims are being made; and (2) homeowners insurance may be your best bet for fast recovery of drywall damages.

The particular case decided by Judge Medley isn’t part of the federal MDL (or class action).   Like many other homeowners with these problems, the plaintiffs in that case are seeking remedies against their builder and insurer through individual actions in state court.  As evidenced by the Medley decision, these actions are being adjudicated and are posting successful results.

This article was originally posted on Wolfe Law Group’s topic-specific Chinese Drywall Blog.

Posted in:     Chinese Drywall  /  Tags: , , , , , , ,   /   1 Comment

Will Your Insurance Company Cover Illnesses Associated With Chinese Drywall?

On March 22, 2010 Author By Wolfe Guest

This article was written by Chris Wilson.

Thousands of people across the country have purchased new homes that contain Chinese Drywall. Unfortunately, the result has been devastating financial and health problems. People living with Chinese drywall have had a number of health effects such as breathing difficulties, coughing, acne, asthma attacks, bloody nose, dizziness, irritated eyes, nausea, headaches, fatigue, gastrointestinal problems, rashes, sinus problems, and sore throats. As well, there are concerns that long-term exposure to Chinese drywall could cause cancer due to prolonged contact with radon. The question on many people’s minds is if their insurance company will cover their health care costs.

The claim most insurers are making regarding covering health care costs is that drywall is considered a builder defect which is not covered under a homeowners’ insurance policy. As well, they have deemed drywall a pre-existing condition that could lead to future damage, which is why insurance providers will not pay out for a claim or renew a homeowner’s policy until the drywall has been removed. They contend that it is a warranty issue and not an insurance issue. There are a number of insurers that have denied claims or canceled insurance policies based on this contention. Homeowners insurance is not designed to cover defective construction or materials; and as a result, they are not liable to pay out for the claim. It is their contention that homeowners must seek compensation from the manufacturer or a company associated with the installation of the drywall. As well, property insurance policies also have pollution exclusions; therefore, they will usually deny claims, which include any medical coverage. That is, Chinese Drywall claims involving sickness from inhaling unsafe gas odors will normally be denied because they do not fall under an insurance company’s definition of “bodily injury.”

When it comes to personal health insurance plans, you have to read the fine print of your policy to determine their definition of ‘bodily’ injury. Many insurance companies will consider a situation like this to be pollution caused by a third party so they do not cover the expenses associated with treatment. It is important to check to see if there is specific criteria outline in your health insurance policy that may result in coverage denial for treatment for drywall exposure.

Many homeowners have filed class action law suits against the manufactures, developers, general contractors, distributors, and builders, to seek compensation for their financial loss and health treatment costs. The lawsuits include claims for private nuisance, breach of warranty, breach of contract, negligence, and unjust enrichment. Most claims ask for financial compensation for medical expenses associated with illnesses resulting from inhaling toxic fumes originating from the drywall. If you have suffered the effects of drywall exposure, you need to consult with your homeowners’ insurance provider and health insurance provider to find out if the condition will be covered. If not, you should consult with a trial lawyer to learn about possible options on how to get compensation.

This article was originally posted on Wolfe Law Group’s topic-specific Chinese Drywall Blog.

Posted in:     Chinese Drywall, From The Experts  /  Tags: , , ,   /   Leave a comment

Progress towards LRA Grants for Drywall Victims…But We're Not There Yet

On December 23, 2009 Author By Scott Wolfe Jr

Those living with Chinese Drywall in Louisiana received good news today about the Louisiana Recovery Authority’s efforts to grant them financial relief.   While the news is good, the program is not complete and the funds aren’t quite ready to be distributed.

A few weeks ago, the Louisiana Recovery Authority set aside $5 million for Chinese Drywall victims in the state.   That set into motion a bureaucratic process to have the funds approved for disbursement and a structure set in place to approve future payments to victims.

The first step in the process was the actual setting aside of the $5 million in funds.

The second step in the process was having the U.S. Department of Housing and Urban Development approve the idea.   This second step was accomplished yesterday, December 22nd.

For those living with Chinese Drywall, it’s like an early Christmas present…but not one quite ready to be opened.   A spokesperson for the LRA said it best in an interview with the New Orleans Times Picayune, when she said “This is kind of like half the equation.”

As we stated in prior posts, local, state and federal governments certainly have Chinese Drywall aid on their minds…its just a matter of how and when.   This LRA program seems to be one of the most advanced in the country, insofar as planning is concerned.

But it’s the same punchline at the end of the day for victims:  more waiting.

Stay tuned.

This article was originally posted on Wolfe Law Group’s topic-specific Chinese Drywall Blog.

Posted in:     Chinese Drywall  /  Tags: , ,   /   Leave a comment

Fast Action Required To Make Homeowners Insurance Claims

On December 15, 2009 Author By Scott Wolfe Jr

In the past, we discussed whether Homeowners Insurance will be liable for Chinese Drywall damages in Louisiana.  While the jury is still out on this issue, we’ve posted on a number of occasions that the courts may very well find coverage for chinese drywall losses within homeowner insurance policies.

Now, many are reporting that a guest lecturer at the National Association of Public Insurance Adjusters just recently predicted that courts will find at least some coverage for Chinese Drywall damages (As per Merlin Law Group).   Earlier in the year, the folks at Merlin Law Group also posted that the FC&S Bulletin’s June 2009 edition also indicated that there would be coverage for Chinese Drywall losses under homeowner insurance policies.

So, while it’s far from certain that Chinese Drywall damages will be covered by standard homeowner insurance policies…it’s also far from certain that courts will disallow such coverage.   One thing is certain:  insurance companies have largely taken the position that the policies do not cover the damages, and are denying these claims across the board.

This begs the question:  what is the next step?

In Louisiana, most policy holders have just 1 year to file suit for insurance benefits.  The time period begins from when the policy holder knew or should have known of the occurrence or loss.

News of Chinese Drywall problems broke across Louisiana between January and March 2009.   Arguably, those with Chinese Drywall “should have known” of the problem starting at this time.   To be safe, homeowners with Chinese Drywall are facing a very important deadline as the new year approaches.

With so many questions about who is liable for this Chinese Drywall mess, it would be quite devestating for homeowners who may have a viable claim against their homeowners insurance, to lose that claim because they failed to take the necessary action before the alloted time expired.

News around the country is that the insurance industry may be liable for these Chinese Drywall losses.   If you have Chinese Drywall losses, you should consider filing suit to enforce your claim for coverage….or risk losing the opportunity.

This article was originally posted on Wolfe Law Group’s topic-specific Chinese Drywall Blog.

Posted in:     Chinese Drywall  /  Tags: , , ,   /   2 Comments

How Bad Are The Damages…And What Does That Mean Legally?

On December 10, 2009 Author By Scott Wolfe Jr

Chinese Drywall talk is riddled with hearsay.

Is it or is it not bad for your health?   Must the drywall be replaced completely, or can a filtration system solve the problem?   Will the corrosive elements cross-contaminate into other components of the home, or is it isolated in the drywall only?

These questions certainly have practical implications.   After all, the answers to some of these questions will dictate how the drywall is actually repaired.

However, the questions also have implications in the legal arena.

Most notably in Louisiana, the severity of the damages related to corrosive drywall will be a large factor in deciding the question of whether the builder is or is not liable to homeowners for the installed drywall.

In previous posts here at the Chinese Drywall Blog, we discussed the Louisiana New Home Warranty Act and whether it will or will not create liability for builders who installed Chinese Drywall.   Because of the Act’s wording, it may simply come down to how severe the Chinese Drywall damages are.

Under the NHWA, builders are liable to homeowners for any “major strucutral defect” for a period of 5 years.   The question becomes, therefore, are the Chinese Drywall damages major structural defects?

If the damages can be remediated with a simple filtration system, you can count on the builders using this as evidence that the defect was not a major structural defect.  If they are successful, the 1 or 2 year warranty period, as opposed to the 5 year warranty period, would apply, and many of the currently filed claims would be considered as tardy.

If the damages cannot be easily remediated, however, and require the replacement of all sheetrock, and even the replacement of some elements of the framing…the homeowners will argue that this more closely resembles a major structural defect.   Accordingly, the 5 year warranty period would apply.

More specific information about whether the Chinese Drywall damages will be covered under the New Home Warranty Act is found on our blog here.

While knowing the severity of the damages is important to estimate the damage itself, and to understand how to fix the damages….the severity and scope of damages plays an even more important role in the litigation against builders who installed contaminated drywall.   It may be a very important question to answer when deciding whether the 5 year NHWA period applies.

This article was originally posted on Wolfe Law Group’s topic-specific Chinese Drywall Blog.

Posted in:     Chinese Drywall  /  Tags: , , ,   /   2 Comments
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