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Kim v. State Farm Fire and Casualty Co.

United States District Court, D. Connecticut

June 26, 2017



          Hon. Vanessa L. Bryant, United States District Judge

         Plaintiffs Gueng-Ho Kim and Jae Kim (“Plaintiffs”) bring claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and claims under CUTPA, through CUIPA, against Defendant State Farm Fire and Casualty Company (“State Farm” or “Defendant”). After Defendant's Motion to Dismiss, the only remaining claim alleges breach of contract. Defendant has moved for summary judgment. [Dkt. 30.] For the reasons that follow, State Farm's Motion for Summary Judgment is GRANTED.

         I. Background

         The house at 121 Windshire Drive, South Windsor, Connecticut (the “Property”) was built in 1985. [Dkt. 32-2 (Deposition of David Grandpre (“Grandpre Dep.”) at 78.] Plaintiffs purchased the Property in 2004. [Dkt. 32-2 (Deposition of Gueng-Ho Kim (“G. Kim Dep.”) at 12.]

         Upon purchasing the Property, Plaintiffs purchased a homeowner's insurance policy through State Farm bearing the policy number 07-BL-5701-1 (the “Policy”) and maintained the Policy throughout the relevant time period. [G. Kim Dep. at 41; see e.g., Dkt. 32-8 (Insurance Policy dated 7/23/2005 through 7/23/2006); Dkt. 36-6 (Insurance Policy dated 7/23/2013 through 7/23/2014); Dkt. 35 (Memorandum of Law In Opposition to Summary Judgment) at 3 (representing no material difference in the language of the two policies as they relate to this matter).] In the Policy, State Farm deleted a provision titled “SECTION 1 - ADDITIONAL COVERAGES, Collapse.” [Dkt. 36-6 at 11 (collapse provision), 36 (deletion of collapse provision)[1].] The deleted provision would have provided additional coverage “for direct physical loss to covered property involving the sudden, entire collapse of a building or any part of a building” with certain exclusions. Id. Consistent with that deletion, State Farm also deleted language excluding coverage for “collapse, except as specifically provided in SECTION 1 - ADDITIONAL COVERAGES, Collapse.” Id. at 14.

         The Policy also excludes coverage for direct physical loss to property which “consists of, or is directly and immediately caused by [certain enumerated perils] regardless of whether the loss occurs suddenly or gradually, involves isolated or widespread damages, arises from natural or external forces, or occurs as a result of any combination of these.” Id. at 14. The excluded causes include, among others: “wear, tear, marring, scratching, deterioration, inherent vice, latent defect or mechanical breakdown” and “settling, cracking, shrinking, bulging, or expansion . . . foundation.” Id. at 14. In addition, the Policy does “not insure . . . for any loss consisting of . . . defect weakness, inadequacy, fault or soundness in: (1) planning, zoning, development, survey, siting; (2) design, specifications, workmanship, construction, grading, compaction; (3) material used in construction or repairs; (4) maintenance.” Id. at 15. In addition, the Policy also provided that any legal action against State Farm “must be started within 18 months after the date of loss or damage.” Id. at 37.

         In addition to purchasing the Policy, when Plaintiffs purchased the Property they hired U.S. Inspect, Inc. to inspect the Property. [Dkt. 36-5 (Inspection Report) at 1.] The July 15, 2004 inspection report revealed foundation damage. The report noted efflorescence in the basement, specifically “evidence of water penetration through the foundation walls.” Id. The inspection report further advised that efflorescence “is normally remedied by better control of surface water” and would “most likely” be reduced or eliminated by “[p]roper grading of soil around the house and improvements in the roof drainage system.” Id. Plaintiffs indirectly admitted that they read the inspection report and were aware of the foundation damage caused by efflorescence, asserting that it was their understanding that the sellers of the Property completed the remedial measures to reduce surface water around the foundation suggested in the Inspection Report before Plaintiffs closed sale on the Property. G. Kim Dep. at 25.

         Mr. Kim testified he had noticed some cracks in the Property's foundation “from the beginning when [they] bought the house” but upon further reflection clarified that he “didn't check” for cracking at that time and could not recall whether the concrete was cracked in 2004. Given his understanding from the home inspector's report that the Property had “no structural problems, ” he attributed any cracks to “normal wear and tear stuff” and “normal type uneven, sort of uneven concrete work.” G. Kim Dep. at 46-48. Ms. Kim does not recall the condition of the concrete foundation when Plaintiffs purchased the Property. [Dkt. 36-2 (Deposition of Jae Kim) (“J. Kim Dep.”) at 31.] While the copies provided to the Court are unclear, Mr. Grandpre testified that photographs taken as part of the 2004 home inspection show “a map pattern cracking” in the foundation. [Dkt. 32-2 (Deposition of David Grandpre, P.E.) at 88; Dkt. 32-4 at 21 (photograph in question).]

         Mr. Kim testified Plaintiffs first discovered a problem with the Property's foundation when they attempted to sell the Property in 2014. G. Kim Dep. at 46. A prospective buyer's real estate agent noticed cracks in the basement wall and notified Plaintiffs, who retained a consulting engineer to examine their basement walls. Id. The consulting engineer, William F. Neal, P.E., employed by Residential Engineering Services, LLC, conducted a visual examination of the Property and sent Plaintiffs a letter reporting his findings on July 3, 2014. [Dkt. 32-3 at 1.] The letter stated the Property's “basement is almost fully finished which gave [the engineers] partial visual access to the interior of the foundation.” Id. The interior and exterior foundation had “numerous spider-web cracks” and “the foundation walls in several locations are bowing inward . . . by as much as 1-1/2 [inches].” Id. Mr. Neal also noted “[h]eavy efflorescence . . . in many areas of the basement” which caused water proofing material on part of the interior foundation to “bubble[].” Id. Based on those observations, Mr. Neal concluded “the most likely cause of the foundation distress is Alkali-Silica-Reaction (ASR)” which “is a chemical reaction between alkali aggregate and silica in the concrete mix” and “typically causes [the] type of distress [Plaintiffs' Property was experiencing] 15 to 20 years after the foundation is poured.” Id. Mr. Neal advised that the concrete foundation would continue to deteriorate and the basement walls would continue to bulge inward “until they structurally fail.” Id. He stated no corrective action short of replacing the basement walls would remedy the structural problem. Id.

         Plaintiffs filed a request for coverage for property damage due to the state of the Property's foundation on July 7, 2014. [Dkt. 1-2[2] (3/16/2015 Denial of Coverage) at 1.] On January 5, 2015, in response to that request, State Farm dispatched a consultative engineer with Corrosion Probe, Inc. to inspect Plaintiffs' home. [Dkt. 36-8 at (2/4/2015 Structural Inspection & Assessment) at 2.] The engineer noted during the inspection that “the overall foundation wall system appeared stable with no evidence of an imminent collapse of the structure.” Id. at 9. However, the engineer observed “network cracking in varying degrees” and “[s]ignificant efflorescence” on the interior foundation walls as well as network cracking on the exterior foundation walls. Id. at 3-4. The engineer concluded the Property's foundation was deteriorating as a result of an “expansion arising from the original concrete mix constituents and causing cracking with exposure to water.” Id. at 8. The engineer further concluded the “deterioration most likely existed . . . prior to the purchase by the current owners.” Id. at 9.

         Defendants denied Plaintiffs' request for coverage on March 16, 2015, asserting coverage was excluded from Plaintiffs' Policy as “coverage for settling, cracking, bulging or expansion of the foundation and/or walls of the Premises.” [Dkt. 1-2 at 10.] The denial also asserted the concrete damage was excluded from coverage because it “arose from inherent defects in the concrete” as well as “inherent vice, latent defect and/or defective and inadequate planning, design, workmanship and/or construction.” Id. at 10-11. The denial also asserted the concrete's damage, including visible cracking, “was present prior to the purchase of the Premises and outside the policy period, ” and accordingly ineligible for coverage. Id. at 11.

         Plaintiffs retained David Grandpre, P.E. to serve as an expert[3] in this matter, and Mr. Grandpre inspected the Property on December 7, 2015. [Dkt. 36-4 (David Grandpre, P.E. Inspection Findings) (“Grandpre Findings”) at 2[4].] Mr. Grandpre, like State Farm's consultative engineer, observed “extensive irregular horizontal, vertical, and diagonal cracks in a map pattern” on the Property's basement walls. Id. at 4. He also noted certain exposed walls were “bulging inward” and observed efflorescence on the surface of the walls. Id. at 4. Mr. Grandpre concluded the concrete deterioration was caused by a chemical reaction with a compound in the concrete, which caused the concrete to expand and crack. Id. at 4-5; Grandpre Dep. at 31-33. He opined that the chemical reaction “was likely aided by water initially batched into the concrete, and later by water absorbed by the concrete.” Grandpre Findings at 5. He found the concrete walls “substantially structurally impaired due to the concrete deterioration” and asserted that, with time, they would “continue to weaken until they are no longer competent to perform their intended function of supporting the weight of the floors, walls, and roof.” Grandpre Findings at 5; Grandpre Dep. at 74-76.

         Six months after Mr. Grandpre inspected the Property, on June 16, 2015, Plaintiffs filed their Complaint in the instant action.

         II. Sta ...

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