Skip to Content

Court Holds ‘Pollution Or Contamination’ Exclusion Precludes Coverage For First-Party Chinese Drywall Claim

February 27, 2012

Hutchings v. American Home Assurance Co., Case No. 11—cv—60072 (S.D. Fla. Feb. 27, 2012).


American Home Assurance Company (“Defendant American”) issued a Homeowner’s policy insuring the residence of Wesley D. Hutchings (“Plaintiff Hutchings”) in Parkland, Florida. On April 30, 2009, Plaintiff Hutchings submitted a Sworn Statement in Proof of Loss to Defendant American, claiming property damage in the amount of $1,604,003.65. The Proof of Loss alleged that Chinese drywall emitted dangerous chemicals, including sulfur compounds, which resulted in corrosion damage to copper wire and tubing, air-conditioning coils, electrical wires, water lines, faucets, flat-screen televisions, and major appliances. Plaintiff Hutchings further stated that the Chinese drywall destroyed the remainder of his residence.

Defendant American retained Engineering Systems, Inc. (“ESI”) to inspect the property and prepare a report regarding the drywall. The ESI report detailed the existence of high strontium levels, and elevated sulfur levels, and identified these compounds as carbonyl sulfide, carbon disulfide, and strontium sulfide. The ESI report associated these compounds with the corrosive attack on the metallic components contained within the property. Defendant American sent a denial of coverage letter to Plaintiff Hutchings, along with a copy of the ESI report.

Plaintiff Hutchings then filed a Complaint in state court in Broward County, Florida, alleging breach of the homeowner’s insurance policy. The matter was removed to the United States District Court for the Southern District of Florida. The District Court granted Defendant American’s motion for judgment on the pleadings, holding that the “pollution or contamination” exclusion precluded coverage for the Plaintiff’s first-party Chinese drywall claim.


Whether the “Pollution or Contamination” exclusion in the Defendant American’s homeowner’s policy precludes coverage for the Plaintiff’s first-party Chinese drywall claim.


The “Pollution or Contamination” exclusion in the Defendant American’s homeowner’s policy is clear and unambiguous and precludes coverage for the Plaintiff’s first-party Chinese drywall claim. 


In reaching its decision, the Court focused on the plain meaning of the language of the “Pollution or Contamination” exclusion, which provided: “We do not cover any loss, directly or indirectly, and regardless of any cause or event contributing concurrently or in any sequence to the loss, caused by the discharge, dispersal, seepage, migration or release or escape of pollutants…. A ‘pollutant’ is any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. A ‘contaminant’ is an impurity resulting from the mixture of or contact with a foreign substance.” 

The Court stated the exclusion unambiguously precludes coverage for the release or discharge of “pollutants.” The Court noted the term “pollutants” is defined to include any “gaseous” irritant or contaminant (including “chemicals”), which the court said encompasses the sulfur gases or dangerous chemicals that were allegedly emitted by the Chinese drywall (and which allegedly caused the damage to the Plaintiff’s property). 


Hutchings may be the first decision (under Florida law) to hold that a first-party Chinese drywall claim is not covered under a homeowner’s policy. The case is consistent with recent Florida cases holding that the policy language of similar pollution exclusions precludes liability coverage for third-party claims. See General Fidelity Ins. Co. v. Foster, 808 F. Supp. 2d 1315 (S.D. Fla. March 24, 2011) (holding that excessive elements of sulfur and strontium that allegedly comprised drywall were “pollutants” falling within the pollution exclusion of commercial general liability policies issued to contractors and, thus, the insurer had no duty to defend contractors from homeowner’s personal injury and property damage claims allegedly caused by the insured contractors’ installation of defective Chinese drywall); Colony Ins. Co. v. Total Contracting & Roofing, Inc., No. 10—23091—CIV, 2011 WL 4962351(S.D. Fla. Oct. 18, 2011) (holding an exclusion for the discharge of “hazardous materials,” defined to include “pollutants,” in commercial general liability policies issued to contractor precluded coverage for claims arising out of the insured contractor’s installation of defective drywall).