Is My Drywall Chinese? - HB Litigation Conferences

spraying of pesticide in apartment building); Doerr v. Mobil Oil Corp., 774 So.2d 119 (La.
2000) (exclusion not applicable to injuries arising out of release of hydrocarbons from waste
water treatment facility); West American Ins. Co. v. Tufco Flooring East, Inc., 409 S.E.2d
692, 696-700 (N.C. App. 1991) (exclusion not applicable to injuries caused by floor coating
that emitted styrene vapors).
States that apply the absolute pollution exclusion literally are likely to hold that the
sulfur compounds that are allegedly given off by Chinese drywall are “pollutants” within the
meaning of the absolute pollution exclusion. States that limit the absolute pollution
exclusion to traditional environmental pollution are likely to hold that the fumes given off by
Chinese drywall are not “pollutants” within the meaning of the absolute pollution exclusion.
As discussed in Part VI. below, however, just because a home is located in a particular state
does not mean that the law of that state will apply to the contractor’s claim for insurance
coverage for that home.
With respect to the insurer’s duty to defend, the particular allegations of the
complaint are usually controlling and could affect the court’s decision about whether the
insurer must provide a defense. The insurer has the burden of proving application of an
exclusion. If there is any possibility that the absolute pollution exclusion might not apply to
the facts that are ultimately developed in the suit, the exclusion will not relieve the insurer of
its duty to defend the suit. Complaints that allege only generally that Chinese drywall is
defective many not contain allegations that are sufficient to permit the insurer to prove that
the absolute pollution exclusion is clearly applicable on the face of the complaint.
With respect to the insurer’s duty to indemnify, the actual scientific cause of the
problems caused by Chinese drywall could affect a court’s application of the absolute
pollution exclusion. For example, if the court found that the cause of the problems were
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