Carriers Dropped for Misjoinder in Chinese Drywall Case

In this suit alleging products liability and contract claims arising from the use of allegedly defective Chinese drywall in various properties, a Norfolk Circuit Court grants two defendant insurance carriers’ motion to sever a count seeking a declaration that the carriers are liable to provide insurance coverage to the other defendants.

The many cases pending in this court relating to the importation, sale and installation of allegedly defective Chinese drywall have previously been consolidated for pretrial purposes pursuant to the Multiple Claimant Litigation Act. The first 11 counts of the complaint by plaintiff Cynthia Talbot in the instant matter are substantially identical to the many other complaints in these consolidated cases and include breach of contract, breach of warranties, negligence, negligence per se, unjust enrichment, private nuisance and violations of Virginia’s Consumer Protection Act. The complaint also includes, however, a count XII against the liability carriers seeking a declaration that they are liable to provide insurance coverage to defendants Porter-Blaine and Venture Supply. Plaintiff filed on Nov. 19, 2010, a motion for partial summary judgment as to the liability carriers, seeking a determination that the carriers have a duty to defend and to indemnify Porter-Blaine and Venture Supply for the claims asserted against them relating to the Chinese drywall.

The liability carriers move to drop for misjoinder, arguing that the claims against them have no relationship to the claims against the remaining defendants and do not arise out of the same transaction or occurrence, and they have been impermissibly joined in violation of Va. Code § 8.01-5(B), which forbids including a liability insurance carrier as a party in a suit against the carrier’s insured. Porter-Blaine and Venture Supply join in the motion.

While subsection (A) of Code § 8.01-5 authorizes the court to drop a misjoined party “at anytime as the ends of justice require,” subsection (B) does not permit the insurance company to be joined at all. Plaintiff asks the court to join the company to this litigation long enough to get the coverage issue adjudicated, but that action appears to be clearly prohibited by the statute. The court finds no case law to suggest that a different result should follow where the cases have been consolidated for multiple claimant litigation.

The motions of the liability carriers are granted.

Talbot v. Oxfordshire LLC (Hall, J.) No. CL 10-3893, Jan. 3, 2011; Norfolk Cir.Ct.; Richard Serpe, Michael Imprevento, Stephen J. DeBoer, Theodore I. Brenner, John B. Mumford Jr., Timothy S. Brunick, Richard A. Saunders, Mark C. Nanavati, Thomas Garrett, John Franklin III for the parties. VLW 011-8-001, 4 pp.