Is My Drywall Chinese? - HB Litigation Conferences

that has not been physically injured. An “occurrence” is defined to mean “an accident,
including continuous and repeated exposure to substantially the same general harmful
conditions.” In general, property damage is accidental if it was not expected or intended by
the contractor.
In the case of Chinese drywall, it is likely that the courts will hold that the fumes
given off by the drywall have caused property damage. Complaints against contractors
allege that the fumes from the drywall have damaged copper wiring, HVAC coils, and metal
jewelry, and that the odor of the fumes permeates the house, often causing the inhabitants to
evacuate their home. Such allegations are likely to satisfy the property damage requirement
in the contractor’s CGL policy. See, e.g., Essex Ins. Co. v. BloomSouth Flooring Corp., 562
F.3d 399, 406 (1st Cir. 2009) (applying Massachusetts law) (pervasive odor from carpet that
permeated building constituted property damage for purposes of subcontractor’s CGL
policy).
Under the law of most states, the property damage caused by Chinese drywall will
also be deemed to be caused by an occurrence, i.e. to be accidental, as long as the contractor
was not aware of the harmful effects of such drywall when it was installed. Although the
courts are divided on the issue, the courts of most states have held that property damage to a
builder’s work can be “accidental” for insurance purposes. The law of Florida, Texas, South
Carolina, Arizona, Tennessee, Virginia, Maryland and Kansas is particularly favorable on the
occurrence issue. See, e.g., Auto Owners Ins. Co. v. Newman, 2008 WL 648546, at *2 -*4
(S.C. March 10, 2008); Lamar Homes, Inc. v. Mid-Continent Ins. Co., 242 S.W.3d, 1, 13
(Tex. 2007); United States Fire Ins. Co. v. J.S.U.B., Inc. 979 So.2d 871, 885 (Fla. 2007).
The law of Louisiana is also favorable, although the Supreme Court of Louisiana has not yet
ruled on the issue. See, e.g., Broadmoor Anderson v. National Union Fire Ins. Co., 912
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