Florida Homeowner Insurers Dismissed from Chinese Drywall Proposed Class Action Suit
Mar 22, 2011
At the request of plaintiff homeowner insureds, Judge Eldon E. Fallon of the United States District Court of the Eastern District of Louisiana entered an order on March 16, 2011 dismissing a proposed class action lawsuit filed against Florida homeowner insurers for damages arising from defective Chinese drywall. The dismissal follows on the heels of Judge Fallon’s December 17, 2010 ruling finding no coverage under numerous Louisiana homeowners’ insurance policies for damages caused by Chinese drywall.
The proposed class action suit was filed in September 2010 as a “tag along” case to other class action Chinese drywall litigation pending against manufacturers, suppliers and insurance companies. The litigation concerning the drywall products was centralized in the Eastern District of Louisiana in June 2009 by order of the United States Judicial Panel on Multidistrict Litigation. This particular class action suit, referred to as “Omni VI,” alleged direct claims against over 100 homeowner insurers in Florida, Louisiana, Alabama, Mississippi and Texas. Many of the carriers intended to fight the lawsuit based on jurisdictional grounds, as well as policy coverage exclusions. However, before any defensive motions were filed in the case, Judge Fallon entered a significant order in December 2010 dismissing a related class action against several Louisiana homeowner insurers based on corrosion and faulty materials coverage exclusions.
After Judge’s Fallon’s ruling, the plaintiffs’ steering committee, appointed by the court to conduct and coordinate the litigation, as well as act as a spokesperson for all plaintiffs at pretrial proceedings, announced that the plaintiff insureds would dismiss their claims against their homeowner insurers-with prejudice.
However, coverage cases against Florida homeowner insurers remain pending in state court. And, while this class action dismissal concludes with finality the claims asserted by the named plaintiff insureds, it does not preclude the filing of similar claims by other insureds, or the filing of another proposed class action in Florida.
In fact, in a recent ruling by a state court judge in Tampa, Florida, the court found Chinese drywall damages to be covered under a homeowners’ all-risk policy. In this case, Circuit court judge Robert A. Foster Jr. examined the policy’s corrosion and defects exclusion and found them inapplicable. The court further found that the damages caused by the drywall amounted to an “ensuring loss.”
Should you have any comments or questions, please contact Colodny Fass.
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