A trust formed to handle Chinese drywall damage claims for over700 homeowners involving a bankrupt homebuilder has filed a federallawsuit naming 14 insurers, seeking indemnification for theirlosses.

WCI Communities Inc., its subsidiaries and subcontractorspurchased insurance policies with aggregate limits of over $200million during the policy periods triggered by Chinese drywallclaims, which began in 2006, according to the New York-based lawfirm of Anderson Kill & Olick, P.C.

An Anderson Kill attorney, Robert M. Horkovich, represents theplaintiff–Robert C. Pate, a trustee of the WCI Chinese DrywallTrust.

According to the complaint, filed in New Orleans U.S. DistrictCourt, the plaintiffs seek “a declaratory judgment that theinsurance companies and the subcontractor insurance companies areobligated to indemnify the WCI Chinese Drywall Trust for lossesarising from claims against WCI Communities Inc. and certain of itssubsidiaries for the development and sale of homes allegedlycontaining defective Chinese manufactured drywall.”

WCI Communities Inc. and its subsidiaries contracted to buildhomes and residential communities in states such as Florida, NewYork, New Jersey, Virginia, Maryland and Connecticut, but wentbankrupt. The WCI Drywall Trust was formed in July 2009, AndersonKill said, to assume liability for the claims.

Those claims, which began in 2006, the complaint notes, were fordamages to homes WCI sold in Florida. The alleged damages includedincreased rates of corrosion of soft metal materials throughout thehouses, various health issues allegedly arising from the drywall,and tarnishing of silver and soft metal within the homes.

In response to WCI's claims, the complaint states: “Theinsurance companies and the subcontractor insurance companies haveeither denied coverage, reserved their rights, failed to reply toWCI's notice letters, or otherwise failed to acknowledgecoverage.”

The complaint seeks damages in an amount to be determined attrial, pre- and post-judgment interest, attorneys' fees, costs, andany other further relief the court deems proper.

The insurance companies involved are:

• American International Specialty Lines Insurance Company
• American Guarantee and Liability Insurance Company
• Amerisure Insurance Company and Amerisure Mutual InsuranceCompany
• Auto-Owners Insurance Company
• FCCI Commercial Insurance Company and FCCI InsuranceCompany
• Hermitage Insurance Company
• Illinois Union Insurance Company
• Landmark American Insurance Company
• Lexington Insurance Company
• Mid-Continent Casualty Company
• National Union Fire Insurance Company of Pittsburgh, Pa.
• Old Republic Insurance Company
• Scottsdale Insurance Company
• Steadfast Insurance Company

Government agencies, collectively called the “InteragencyDrywall Task Force,” have been studying homes containing Chinesedrywall after homeowners reported health problems and structuraldegradation due to living in homes that used Chinese drywall from2004-2007, when domestic drywall was in short supply.

The Interagency Drywall Task Force has released two studies sofar regarding the Chinese drywall complaints. The first found nodirect linkage between the drywall and the reported health problemsand/or degradation.

But the second study, released in November 2009, found a linkagebetween the Chinese drywall, the level of hydrogen sulfide in homeswith the drywall, and the corrosion of metal components in thehomes.

The task force's investigations are ongoing.