Colorado Court Applies Massachusetts Law to Bar Coverage for Chinese Drywall

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A Colorado state court applied Massachusetts law to deny an excess carrier’s summary judgment motion that sought to disclaim coverage for defective Chinese drywall claims.  Specifically, the court found that use of the term “pollutant” within the absolute pollution exclusion to be ambiguous “at this stage in the proceedings.”  In doing so, the court set the case up for trial.

The underlying claims giving rise to this coverage matter involve allegations that defective drywall, imported into the U.S. from China, was installed into homes.  It is alleged that the defective drywall emitted strong sulfuric smell and caused corrosion of metal items in homes.  Although the primary carriers provided coverage, the excess carrier refused to do so.

Citing the relevant pollution exclusion, and Massachusetts law on the treatment of the pollution exclusion, the Colorado court found the word “pollutant,” as used in the exclusion, to be ambiguous.  The excess carrier disputed Massachusetts as the proper choice-of-law, asserting that Florida law should apply.  Notwithstanding the excess carrier’s contention, the court stated that the outcome on the motions would remain the same, even if Florida law applied.

Click below for a copy of the decision.
Probuild Holdings, Inc. et al. v. Travelers Property Casualty Company of America, et al.
 (Case No. 2010CV378) (D.C. Colo., Boulder County, October 4, 2013)