Louisiana MDL Drywall Case Affords Insight Into Florida-Based Claims
Dec 20, 2010
By Maria Elena Abate, Shareholder
Colodny Fass
Judge Eldon E. Fallon of the United States District Court of the Eastern District of Louisiana has issued a December 16, 2010 Order (“Order”) in the ongoing multi-district litigation (“MDL”) relating to Chinese drywall, which grants several Louisiana homeowner insurers’ Motions to Dismiss based on the Corrosion and Faulty Materials Exclusions of their various respective policies.
The Court also determined that the Plaintiff’s complaint (as alleged) did not plead any “ensuing damage” that could be considered a “second accident, separable and different in kind, such as a fire” and thus dismissed the complaint for ensuing damage, but did not foreclose the filing of future claims.
In the Order, the Court addressed various other defenses and exclusions, such as:
- Whether the claims constituted direct physical loss
- Whether the claims involved latent defects
- Whether the pollution and/or contamination exclusion applied
The Court found that, under Louisiana law, these defenses did not bar coverage.
Judge Fallon additionally denied claims for adjusted living expenses, personal injury and diminished value, stating that these were contingent upon finding an underlying covered loss. Finally, claims for bad faith, valued policy law payments and injunctive relief also were dismissed.
Importantly, the Court’s Order is based on Louisiana state and federal cases. Thus, it will not have any precedential value in relation to any Florida-based claims, inasmuch as these will have to be analyzed on the basis of Florida law and policy language.
However, the Order affords significant insight into Judge Fallon’s thought processes on the substantive insurance issues involved in the homeowner insurance cases.
A copy of the Order is attached for review. To access a complete history of the MDL Litigation, click here.
Should you have any questions or comments, please contact Maria Elena Abate (mabate@colodnyfass.com)