Filed Under:Markets, Litigation

Judge Denies Insurer's Attempt To Stop Policy Coverage For Drywall

NU Online News Service, Dec. 3, 1:33 p.m. EST

National Union Fire Insurance Company of Pittsburgh, a Chartis company, was not successful in getting a federal judge in Florida to say the insurer has no duty to defend or indemnify a drywall contractor.

The contractor, F. Vicino Drywall Inc., is named as a defendant in 17 lawsuits related to allegedly defective Chinese drywall and recently filed a motion to dismiss a motion by National Union for summary judgment on the basis that policy exclusions clear the company from having to defend or indemnify National Union.

National Union issued three umbrella policies to F. Vicino. The insurer was seeking a ruling that it owes nothing to F. Vicino, though the Deerfield Beach, Fla.-based contractor has not yet requested payment or reimbursement of defense costs from National Union, according to a ruling from U.S. District Court in the Southern District of Florida.

F. Vicino filed a motion to dismiss based on the fact there is no controversy.

"I conclude that this action does not qualify as a proper case or controversy," wrote Judge Alan S. Gold. "Even if all the allegations in the complaint are true, [National Union] has not alleged a judgment or settlement that would exhaust the primary insurance and trigger its own excess policies.

"The parties' liabilities at this time are merely contingent and may never materialize," the judge continued.

Judge Gold said National Union may file an amended complaint if a controversy--that its policies will indeed be called upon by F. Vicino--arises.

Amerisure Cleared of Coverage

In other drywall-related litigation out of the Southern District of Florida, a judge ruled Amerisure Mutual Insurance Co. will not have to defend a builder against drywall-related lawsuits because policies between the two were written after damages in an underlying case occurred.

Amerisure sought a summary judgment against Albanese Popkin the Oaks Development Group, which is being sued by a homeowner alleging damage due to the alleged corrosive effects of Chinese drywall.

Amerisure issued a commercial general liability policy to Albanese in January 2008. The suit against Albanese relates to alleged damaged first reported by the homeowners in 2006 but Albanese, and the homeowners, argue that the damage was continuous.

"The fact that the damage was continuous in nature is irrelevant to the court's analysis," wrote Judge Kenneth A. Marra in granting Amerisure's motion. "Therefore, there is no coverage or duty to defend."

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