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Chinese Drywall

It is estimated that approximately 320 million square feet of drywall was imported into the United States from China between 2005 and 2007. Most of the drywall was shipped to Florida, Louisiana, Mississippi, Alabama and Virginia. Some home and property owners have complained that the imported drywall emits an unpleasant sulfur/rotten egg odor which is alleged to cause corrosion of copper, including wire, heating and cooling components and appliances.

These allegations have given rise to numerous lawsuits. For example, many property owners have brought suit against manufacturers, distributors, contractors, installers and developers.  Lawsuits are pending in state court in several jurisdictions, and federal court lawsuits have been consolidated in a Multidistrict Litigation (MDL) pending in the United States District Court for the Eastern District of Louisiana. Several class action lawsuits are also pending in the Eastern District of Louisiana and elsewhere.

These allegations have also resulted in claims for insurance coverage and related lawsuits, under both property insurance policies, including homeowners insurance, and liability insurance policies. In some instances, claimants have sought to transfer the insurance coverage litigation to the MDL in Louisiana. [Related article of interest: “Avoiding the MDL for Insurance Coverage Disputes,” Insurance Law360.]

Legal issues raised by Chinese Drywall insurance coverage lawsuits include:

Zelle represents a major property and casualty insurer on a national basis with respect to Chinese Drywall disputes and has provided advice to other insurers. Zelle attorneys have decades of experience with cutting-edge first and third party insurance coverage litigation. Coupled with the firm’s strength in class action litigation and prior MDL experience, the firm is well positioned to provide legal counsel and representation with respect to these disputes.  If you are facing Chinese Drywall claims, please contact us. We would welcome the opportunity to discuss resolution strategies with you.

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