Hinkhouse Williams Walsh

HWW Wins Summary Judgment On Chinese Drywall Claims.

HWW attorneys Joe Hinkhouse and Frank Valenti won a summary judgment motion in a coverage matter pending before Judge Susan C. Bucklew in the United States District Court for the Middle District of Florida. Judge Bucklew ruled in favor of HWW’s clients, holding that the plaintiff insurers had no duty to defend or indemnify for property damage caused by defective Chinese drywall because the policies' total pollution exclusions clearly precluded coverage.  Granite State Insurance Co., et al. v. American Building Materials Inc., et al., No. 10-1542, 2011 WL 6025655 (M.D. Fla. Dec. 5, 2011). 

In the Granite State action, the insurers sought a declaration that they had no duty to defend or indemnify claims and suits arising out of defective drywall imported from China that allegedly caused damage to real and personal property and physical injuries to persons.  The insurers moved for summary judgment on grounds that a “total pollution exclusion” in the policies barred coverage for property damage or personal injury arising from this Chinese drywall.  

The Court recognized that, under applicable Massachusetts law, the total pollution exclusion contained within the policies at issue had previously been held to be “clear, unambiguous, and enforceable.”  As a matter of first impression in Massachusetts, the court went on to hold that an “objectively reasonable insured” would expect the damage caused by Chinese drywall to be excluded by the total pollution exclusion.  The court based this conclusion on the fact that the Chinese drywall at issue emitted harmful gases that caused damage to real and personal property as well as personal injury, and that these gases constituted “pollutants” under the exclusion.  Distinguishing the gases emitted from Chinese drywall from “a ‘mishap’ in everyday activities, the court held that “the pollution alleged here is the industrial or environmental type of which the Massachusetts Supreme Court would find to be excluded under the policies.”