Recent Chinese drywall legal decisions in federal and Louisiana state courts won’t provide relief for Florida’s victims

Floridians must prepare for a long, hard fight

Many Florida homeowners are asking how the recent federal and Louisiana state legal decisions related to Chinese drywall, which have received extensive news coverage, will impact their individual state actions in Florida. The answer: While these decisions may represent baby steps toward a possible favorable outcome, they will provide no relief to victims here in Florida.

At the forefront of the discussions among Florida’s Chinese drywall victims is the federal matter, in which Judge Eldon Fallon entered a judgment on behalf of seven Virginia homeowners for more than $2.6 million. Floridians must understand that although this is good news, it has little or no effect on anyone other than these seven homeowners. In fact, it’s unlikely the seven homeowners will actually see one nickel from this judgment, which is against a Chinese company that has disputed the jurisdiction of the federal court from day one. Some of the rulings, such as Judge Fallon striking the experts who were expected to testify on behalf of the defendant, may have some carry-over effect in the Florida state court actions. However, the entry of this final judgment will bring no immediate relief to victims here in Florida.

In the Louisiana case of Simon Finger and Rebecca Finger versus Audubon Insurance Company, No. 09-8071, a judge rebuffed an insurance company’s use of the pollution exclusion and two other exclusions in an “all-risk” homeowners’ insurance policy to deny claims resulting from so-called Chinese drywall.  Although on the surface this may seem like a decision that might be used as precedent to obtain coverage under homeowner policies here in Florida, it really has no effect.  Historically, Louisiana state law interprets these exclusions very narrowly.  Florida, on the other hand, has historically interpreted these exclusions broadly under a different standard.  Broadly read exclusions lead to less coverage for homeowners.  Therefore, although this decision may be a baby step toward the final result, it will provide no relief to victims here in Florida.

Each one of these decisions is important.  Having the plaintiffs win these initial skirmishes is good for victims.  However, victims in Florida ultimately need to hear that a Florida court has ruled that the insurance companies for the builders, developers, suppliers and distributors cover the loss and are responsible for the damage. Until this day comes, most of these defendants will not settle with plaintiffs and will voluntarily pay damages until they know whether their insurance company will foot the bill.

Most, if not all of our current efforts, are directed to this one goal.  When this day comes, I am hopeful and confident that the plaintiffs will be successful. Meanwhile, Florida’s victims need to prepare for a long, hard fight.