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Va. court: Insurance doesn't cover drywall damages

Thursday - 11/1/2012, 5:18pm  ET

By LARRY O'DELL
Associated Press

RICHMOND, Va. - The Virginia Supreme Court ruled Thursday that a homeowner's insurance policy doesn't cover damage caused by Chinese drywall.

Richard Serpe, an attorney for the homeowner, said the unanimous ruling means hundreds of other Virginians whose homes and health were affected by the toxic material also will be unable to collect on their insurance.

"There are many victims of Chinese drywall who have been waiting for this decision, and if the Supreme Court had allowed victims to make claims there would have been a large number of my clients who would have brought claims," Serpe said.

The attorney said he represents about 200 of the more than 300 Virginia homeowners whose property has been damaged by drywall manufactured in China and used in the construction of thousands of houses, mostly in the South, from 2005 to 2009. Among his clients is Larry Ward of Virginia Beach, whose claim was the subject of Thursday's ruling.

Ward claimed the drywall caused fumes and a sulfuric odor, health problems, and damage to the home's air conditioning system, garage door and flat screen televisions.

A federal judge upheld TravCo Insurance Co.'s denial of Ward's claim, ruling that certain policy exclusions ruled out coverage for damages caused by the drywall. Ward appealed to the 4th U.S. Circuit Court of Appeals, which asked the Virginia Supreme Court whether it considered the exclusions clear and reasonable "in light of the unusual nature of the losses involved."

The policy on Ward's home, which was built in 2007, excluded coverage for damage caused by latent defects, defective materials, rust or other corrosion, or pollutants. The Supreme Court ruled that the exclusions, which Serpe said are typical in homeowners' policies, are unambiguous.

John B. Mumford Jr., an attorney for TravCo, did not immediately return a phone message.

Thousands of homeowners in several states have complained of Chinese drywall problems similar to those outlined by Ward in his insurance claim. A lawsuit is pending in New Orleans against Taishan Gypsum Co. Ltd., which made and sold more than 1.8 million sheets of drywall that were shipped to Virginia, Florida, Louisiana and other parts of the U.S. Another company, Knauf Plasterboard Tianjin Co., agreed in December to pay hundreds of millions of dollars to resolve related drywall claims.

Serpe said Virginia victims also are pursuing complaints against a supplier, builders and drywall installers in the state.


(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)