In May 2007, Larry Ward purchased a newly constructed home in Virginia Beach, Virginia. He obtained a

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In May 2007, Larry Ward purchased a newly constructed home in Virginia Beach, Virginia. He obtained a homeowner’s insurance policy from TravCo Insurance Company. The policy was renewed annually until May 2010. In May 2009, Ward experienced problems with the home. He retained an expert who determined that the problems were caused by Chinese drywall installed in the home during construction. Ward claimed that the drywall emitted sulfide gases and toxic chemicals that created noxious odors and caused health issues, corrosion, and damage to the home’s airconditioning system, garage door, and flat-screen television. Ward filed a claim with TravCo. TravCo denied Ward’s claim on the basis that the damage caused by the Chinese drywall was excluded from coverage by the terms of the policy. Specifically, the policy excluded losses arising from latent defects, faulty, inadequate or defective materials, rust, corrosion, and pollutants. Ward filed a lawsuit against TravCo in federal court. The federal court certified the issue of the scope of the policy exclusions to the Virginia Supreme Court. How should the Virginia Supreme Court decide this case? Is the defective drywall within the definition of losses excluded from coverage as claimed by TravCo?

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Dynamic Business Law

ISBN: 9781260247893

5th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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