Baron & Budd attorneys continue to take a leading role in Chinese drywall litigation. When homebuilder WCI filed for bankruptcy, Baron & Budd’s Russell Budd and Bruce Steckler negotiated with WCI to set up a trust to compensate WCI homeowners whose homes are contaminated with toxic Chinese drywall. Steckler was quickly appointed to the WCI Trust Advisory Board to advise the Trustee who oversees the funds. And just recently, Baron & Budd attorney Burton LeBlanc, along with attorneys from New York-based Anderson Kill & Olick, P.C. filed suit in federal district in New Orleans on behalf of the Trustee for the WCI Chinese Drywall Trust against WCI insurers. Read the Complaint.

The WCI Trustee is responsible for paying claims against WCI from homeowners dealing with the toxic drywall, and the insurance proceeds from policies purchased by WCI should be available to pay these claims. But so far, the insurance companies have denied coverage altogether, reserved their rights to deny coverage or refused to respond to claims. In the lawsuit, the Trustee is seeking a ruling from the federal judge that WCI’s insurers must indemnify—or reimburse—the WCI Chinese Drywall Trust for Chinese drywall claims. The Trustee is also seeking damages for breach of contract, alleging that these insurers have violated the terms of their insurance contracts with WCI.

“These insurers want to avoid or delay paying valid claims,” said Bruce Steckler, a Baron & Budd shareholder who handles insurance coverage claims for hurricane-related damages. “The longer they can avoid paying the claim, the more money stays in their pockets; I’ve seen it again and again.” Steckler also serves on the Plaintiffs’ Steering Committee in In Re: Chinese-Manufactured Drywall Products Liability Litigation (MDL No. 2047) in federal district court in New Orleans. All Chinese drywall lawsuits pending in federal court have been consolidated in this court through federal multidistrict litigation (MDL) procedures.

This lawsuit by the WCI Trustee is the first of its kind and will be carefully watched by the insurance industry as well as those involved in the underlying Chinese drywall litigation.

PDF - WCI Trustee Suit Against Insurers Filed

About Baron & Budd, P.C.

Dallas-based Baron & Budd, P.C., with offices in Baton Rouge, Austin and Beverly Hills, is a nationally recognized firm with more than three decades of experience representing people and communities harmed by corporate negligence. It has been recognized repeatedly by the National Law Journal’s “Plaintiffs’ Hot List” (2002-2006, 2008; Incisive Media).