Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Judge rules for insurer in drywall coverage case

Reprints

MIAMI—A federal district court judge in Florida ruled that the liability insurer of a property development group has no duty to provide coverage for property damage or defend Chinese drywall claims that manifested prior to the issuance of the insurance policy.

Judge Kenneth A. Marra of U.S. District Court Southern District of Florida ordered last week that Amerisure Mutual Insurance Co. has no duty to provide coverage for property damage or bodily injury claims stemming from Chinese drywall claims made by their insured developer because those damages occurred before the issuance of the developer's policy with Amerisure, despite claims against the developer in an underlying lawsuit being made during the active policy period.

The case—Amerisure Mutual Insurance Co. vs. Albanese Popkin the Oaks Development Group L.P.—stems from the underlying case against Boca Raton, Fla.-based Albanese Popkin brought by Alan and Annette Goddard. Albanese Popkin completed construction on the Goddards' Florida home in October 2006, according to court documents.

The Goddards initially discovered damage to the air conditioning coils in one of their seven air handling units and a periodic sulfur odor in December 2006, court documents said, damages that have been proven to be due to the presence of Chinese drywall in a building or home.

In April 2009, the Goddards said the sulfur odor in the home was more pronounced, according to court documents, and that sometime between April and May of that year they notified Albanese Popkin of property damage to the structure, including the failure of all seven air handling units and damage to electrical wiring and plumbing fixtures.

It was not until later that summer that the Goddards discovered the property damage in their home was directly related to the presence of Chinese drywall installed in the home, court documents state.

At the time the Goddards filed a complaint against Albanese Popkin, the developers had a commercial general liability policy through Farmington Hills, Mich.-based Amerisure, according to court documents, as well as two umbrella liability insurance policies.

The CGL and the umbrella policies were in force when the Goddards notified Albanese Popkin of the damages.

Amerisure argued in its motion for summary judgment that the Goddards first noticed damage and a sulfuric odor stemming from the Chinese drywall in 2006, prior to the inception of Albanese Popkin's insurance policies.

Meanwhile, Albanese Popkin and the Goddards argued that the damage was continuous and that the first manifestation of the damages is not the crucial trigger.

In his order, Judge Marra outlined that the occurrence of the damages, as outlined by Amerisure's policy, was the critical trigger in Albanese Popkin's policy. Since the Goddards admitted to first noticing damage in 2006, prior to the developer's policy with Amerisure, Judge Marra ruled in favor of the insurer.

“Manifestation of the damage is relevant in this context because it establishes that the Goddards sustained actual damage before the policy in question became effective,” Judge Marra wrote. “Therefore, there was no "bodily injury' or "property damage' during the policy period.”