United States District Court, D. Connecticut
KENNETH T. COURTEAU and CHERYL A. COURTEAU Plaintiffs,
TEACHERS INSURANCE COMPANY Defendant.
RULING ON MOTION TO DISMISS
Michael P. Shea, U.S.D.J.
Kenneth Courteau and Cheryl Courteau (the
“Courteaus”) filed this action against their
homeowner's insurance provider, Teachers Insurance
Company (“Teachers”), for failure to pay for
damages to the basement walls of their home caused by
cracking concrete. (ECF No. 18.) The Courteaus bring claims
of breach of contract (Count One), breach of the implied
covenant of good faith and fair dealing (Count Two), and
unfair and deceptive practices in violation of the
Connecticut Unfair Insurance Practices Act, Conn. Gen. Stat.
§ 38a-816 et seq. (“CUIPA”) and the
Connecticut Unfair Trade Practices Act, Conn. Gen. Stat.
§ 42-110a et seq. (“CUTPA”) (Count
Three). Teachers has moved to dismiss Counts Two and Three
for failure to state claims on which relief can be granted.
(ECF No. 24.) For the reasons set forth below, the motion is
GRANTED as to Count Three and DENIED as to Count Two.
to the allegations in the first amended complaint, Teachers
has insured the Courteaus' home in Somers, Connecticut
since 2006. (ECF No. 18 ¶¶ 3-4.) The Courteaus have
always timely and satisfactorily paid their insurance
premiums. (Id. ¶ 5.)
October of 2015, the Courteaus discovered that the basement
walls of their home had “a series of horizontal and
vertical cracks throughout.” (Id. ¶ 6.)
Upon investigation, the Courteaus learned that a chemical
compound in the concrete was oxidizing and expanding,
“breaking the bonds of the concrete internally”
and causing “pattern cracking.” (Id.
¶¶ 7-9.) They also learned that the concrete was
mostly likely supplied by the J.J. Mottes Concrete Company,
which manufactured concrete for certain homes in the late
1980s and early 1990s. (Id. ¶¶ 8-9.)
According to the Courteaus, it is only a matter of time
before the basement walls fall in, and the entire home falls
into the basement. (Id. ¶¶ 12-13.) The
cost of repair is expected to be at least $250, 000.
(Id. ¶ 20.)
October 19, 2015, the Courteaus notified Teachers of the
problem, and on October 26, 2015, Teachers denied their claim
for coverage. (Id. ¶¶ 14-16.) In its
denial letter, Teachers stated:
[sic] investigation revealed the damage was caused by
cracking in the foundation. We have reviewed your
homeowner's policy and unfortunately coverage is excluded
for this cause of loss.” (ECF No. 18-2 at 2.) The
Courteaus' Homeowners Policy covered:
direct physical loss to covered property involving the
collapse of a building or part of a building if the collapse
was caused only by one or more of the following… 3)
decay, but only if no ‘insured' knew of or could
reasonably be expected to suspect the presence of such decay
prior to the collapse… 6) the use of defective
materials or methods in construction or repair if the
collapse occurs during the course of construction or repair.
(ECF No. 18-1 at 13-14.) However, it did not cover:
“loss caused by the settling, cracking, shrinking,
bulging, or expanding of: a) bulkheads; b) ceilings; c)
floors; d) footings; e) foundations; f) patios; g) paved
areas; h) roofs; or i) walls.” (Id. at 23.)
Teachers cited this latter provision in its denial letter.
(ECF No. 18-2 at 2-3.)
to the Courteaus, Teachers participates in the American
Association of Insurance Services, Inc. (“AAIS”),
an organization aimed at collecting data about insurance
claims and drafting policy provisions. (Id.
¶¶ 33-34.) Through participation in AAIS, Teachers
had knowledge of many claims in northeastern Connecticut due
to similar concrete decay, the strategies other insurers had
used to deny claims, and cases such as Bacewicz v. NGM
Ins. Co., 2010 WL 3023882 (D. Conn. Aug. 2, 2010), where
plaintiffs were awarded judgment against the insurer for
concrete decay based on “nearly identical” policy
language. (Id. ¶¶ 36-38.) The Courteaus
allege that in the denial letter, Teachers
“intentionally cited policy exclusions wholly
inapplicable to the plaintiffs' claim for coverage
knowing full well that the plaintiffs, like most insureds,
are unsophisticated with respect to the complex language
contained in insurance policies.” (Id. ¶
Courteaus filed this action in state court, and Teachers
removed it to this court on April 12, 2016. (ECF No. 1.) On
May 2, 2016, the Courteaus filed a three-count amended
complaint (ECF No. 18), and on June 13, 2016, Teachers moved
to dismiss the second and third counts, for breach of the
implied covenant of good faith and fair dealing and violation
of CUIPA and CUPTA. (ECF No. 24.)
motion to dismiss, I take the plaintiffs' factual
allegations in the complaint “to be true and [draw] all
reasonable inferences in” their favor. Harris v.
Mills, 572 F.3d 66, 71 (2d Cir. 2009). “To survive
a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citation and quotation
marks omitted). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. A court need
not accept legal conclusions as true and “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”