October 10, 2013

Jenner & Block won a significant and groundbreaking victory for clients ProBuild Holdings, Inc. and ProBuild Company, LLC with the defeat of two motions for summary judgment brought against ProBuild as part of longstanding litigation.

ProBuild supplies construction materials to residential and commercial builders who, beginning in 2009, faced numerous lawsuits from homeowners and builders alleging that ProBuild had imported and sold defective Chinese-made drywall.  Although ProBuild settled the underlying Chinese drywall claims, ProBuild’s insurers refused to indemnify ProBuild for the settlements, contending that Chinese drywall was a “pollutant” excluded from coverage by their policies’ pollutions exclusions.  The firm's Insurance Litigation and Counseling Practice helped ProBuild reach settlements with all but one insurer, Fireman’s Fund Insurance Company (FFIC).

In August 2013,  FFIC filed two motions for summary judgment against ProBuild, one of which alleged that ProBuild’s Chinese drywall claims were barred by the “Pollution-Absolute Exclusion” in FFIC’s policies.  ProBuild vigorously opposed FFIC’s motion based on a detailed analysis of Massachusetts law and the testimony of three expert witnesses regarding the scientific and chemical properties of Chinese drywall.  

On October 4, 2013, the district court in Boulder, Colorado, agreed with ProBuild’s interpretation of Massachusetts law and denied each of FFIC’s motions.  Judge Andrew Hartman held that the "Pollution – Absolute Exclusion" and its use of the term “pollutant” are ambiguous as applied to Chinese drywall and should be construed in favor of coverage for the insured at this stage in the proceedings.

The matter is scheduled for trial in November 2013, but Judge Hartman's ruling is a significant victory for ProBuild and joins only a handful of others across the country in which a court has refused to apply an "absolute pollution" exclusion to bar coverage for Chinese drywall claims.

The team representing ProBuild includes Partners Matthew L. Jacobs and Brian S. Scarbrough and Associate Jan A. Larson.  

Several media outlets reported on the ruling, including Law360 and the LexisNexis Legal Newsroom Mealey's.