United States District Court, D. Connecticut
RULING ON MOTION FOR SUMMARY JUDGMENT
R. Underhill, United States District Judge
and Annette Roberts sued their insurer, Liberty Mutual Fire
Insurance Co. (“Liberty Mutual”), after Liberty
Mutual denied coverage for the deterioration of their
concrete basement walls. The Robertses allege (1) that
Liberty Mutual breached its insurance contract with them by
denying coverage; (2) that Liberty Mutual breached the
implied covenant of good faith and fair dealing by baselessly
denying coverage; and (3) that Liberty Mutual committed
unfair and deceptive practices proscribed by the Connecticut
Unfair Insurance Practices Act (“CUIPA”) and the
Connecticut Unfair Trade Practices Act (“CUTPA”).
Liberty Mutual has moved for summary judgment, principally
arguing that the damage to the walls is excluded from
coverage under the insurance policy. Because I conclude there
is a genuine dispute of material fact with regard to whether
the damage to the walls is covered under the policy, I deny
Liberty Mutual's motion for summary judgment with respect
to the Robertses' breach of contract claim. At the same
time, because the Robertses have not shown that Liberty
Mutual's coverage position was unreasonable or taken in
bad faith, I grant the motion for summary judgment with
respect to the Robertses' claims for breach of the
implied covenant of good faith and fair dealing and violation
Standard of Review
judgment is appropriate when the record demonstrates that
“there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). When ruling on a summary
judgment motion, the court must “view the evidence in
the light most favorable to the non-moving party and draw all
reasonable inferences in its favor.” Sologub v.
City of New York, 202 F.3d 175, 178 (2d Cir. 2000);
Aldrich v. Randolph Ctrl. Sch. Dist., 963 F.2d 520,
523 (2d Cir. 1992) (court is required to “resolve all
ambiguities and draw all inferences in favor of the nonmoving
party”). “The burden of showing that no genuine
factual dispute exists rests upon the moving party.”
Carlton v. Mystic Transp., 202 F.3d 129, 133 (2d
Cir. 2000). When a motion for summary judgment is properly
supported by documentary and testimonial evidence, however,
the nonmoving party may not rest upon the mere allegations or
denials of the pleadings, but must present sufficient
evidence supporting its position “to require a jury or
judge to resolve the parties' differing versions of the
truth at trial.” Anderson v. Liberty Lobby,
477 U.S. 242, 249 (1986); Colon v. Coughlin, 58 F.3d
865, 872 (2d Cir. 1995).
trial court's function at this stage is to identify
issues to be tried, not decide them, ” Graham v.
Long Island R.R. Co., 230 F.3d 34, 38 (2d Cir. 2000),
and so “[o]nly when no reasonable trier of fact could
find in favor of the non-moving party should summary judgment
be granted.” White v. ABCO Eng'g Corp.,
221 F.3d 293, 300 (2d Cir. 2000). Summary judgment therefore
is improper “[w]hen reasonable persons, applying the
proper legal standards, could differ . . . on the basis of
the evidence presented.” Sologub, 202 F.3d at
the mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be
no genuine issue of material fact. . . . Only
disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of
Anderson, 477 U.S. at 247-48.
complete failure of proof concerning an essential element of
the nonmoving party's case necessarily renders all other
facts immaterial, ” and in such circumstances, there is
“no genuine issue as to any material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986); accord Goenaga v. March of Dimes Birth Defects
Found., 51 F.3d 14, 18 (2d Cir. 1995) (movant's
burden satisfied if it can point to an absence of evidence to
support an essential element of nonmoving party's claim).
To present a “genuine” issue of material fact and
avoid summary judgment, the record must contain contradictory
evidence “such that a reasonable jury could return a
verdict for the non-moving party.” Anderson,
477 U.S. at 248.
with a general overview of the problem of crumbling
foundations in northeastern Connecticut, and then turn to the
specific background of this case. The description of the
broader problem is for informational purposes only, and does
not provide grounds upon which I rely in ruling on the motion
for summary judgment.
Concrete deterioration in northeastern Connecticut
present lawsuit is one of a series of cases in this district
in which Connecticut homeowners have brought claims against
their insurers related to the deterioration of their concrete
basement walls. See, e.g., Alexander v. Gen.
Ins. Co. of Am., 3:16-cv-00059 (SRU); Roberge v.
Amica Mut. Ins. Co., 3:15-cv-01262 (WWE); Kim v.
State Farm Fire & Cas. Co., 3:14-cv-01150 (VLB);
Belz v. Peerless Ins. Co., 3:13-cv-01315 (VAB);
Bacewicz v. NGM Ins. Co., 3:08-cv-01530 (JCH). The
plaintiffs in those cases all allege that their basement
walls have failed structurally due to cracking, crumbling,
and bulging caused by a chemical reaction within the
concrete. See, e.g., Belz, Compl., Doc. No.
1, at 3. They assert that the reaction will continue to
impair the stability of the basement walls until the
walls-and the house that they support- entirely collapse.
See, e.g., Kim, Compl., Doc. No. 1, at 3.
The defendants in the cases all have denied coverage under
the insurance policies, and generally dispute that the walls
have “collapsed.” See, e.g.,
Belz, Answer, Doc. No. 46, at 7; Kim,
Answer, Doc. No. 45, at 8.
to news reports,  homeowners in northeastern Connecticut
began to alert state officials about crumbling basements as
early as 2001. See Lisa W. Foderaro & Kristin
Hussey, Financial Relief Eludes Connecticut Homeowners
with Crumbling Foundations, N.Y. Times, Nov. 14, 2016,
The problem apparently came to widespread attention after it
was the subject of an investigation by Hartford's NBC
affiliate in 2015. Id. To date, more than 400
complaints about deteriorating foundations have been
submitted to Connecticut's Department of Consumer
Protection, and as many as 34, 000 homes across dozens of
towns ultimately may be affected. Id.
2016, the State of Connecticut commissioned a scientific
report that found the deterioration was “caused, at
least in part, by a naturally existing mineral present in the
concrete mix used to pour the foundations.” Conn.
Dep't of Consumer Prot., Report on Deteriorating
Concrete in Residential Foundations 1 (Dec. 30, 2016)
(“DCP Rep.”). That mix included stone aggregate
taken from Becker's Quarry, which was used in concrete by
the J.J. Mottes Concrete Company (“J.J. Mottes”)
of Stafford Springs between approximately 1983 and 2016.
Id. at 7. Becker's Quarry sits in “a vein
of rock that contains significant amounts of
pyrrhotite” (Fe1-xS), a mineral that the state
investigation found to be “a necessary factor in the
chemical reaction leading to the deterioration of the
concrete foundations.” Id. at 8.
is a “highly reactive” mineral that looks similar
to pyrite (fool's gold), but “degrades much more
rapidly than pyrite.” A. Brian Hawkins, Engineering
Implications of the Oxidation of Pyrite, in A.
Brian Hawkins, Implications of Pyrite Oxidation for
Engineering Works 1, 2-4 (2014). In the presence of
oxygen and water, pyrrhotite oxidizes, producing various
forms of rust such as goethite and limonite, as well as
sulfuric acid. Kay Wille & Rui Zhong, Investigating
the Deterioration of Basement Walls Made of Concrete in
CT (2016), App'x D to DCP Rep., at 52; Josée
Duchesne & Benoît Fournier, Deterioration of
Concrete by the Oxidation of Sulphide Materials in the
Aggregate, 7 J. Civil Eng'g & Architecture 922,
930 (2013). The sulfuric acid then “reacts with the
solid of the cement paste” to form “secondary
minerals that cause expansion” such as gypsum,
ettringite, and thaumasite. Wille & Zhong,
supra, at 52; Duchesne & Fournier,
supra, at 930. The products of pyrrhotite oxidation
“are expansive” and, according to the state's
scientific investigation, “might ultimately lead to the
premature deterioration of the concrete foundation[s].”
Wille & Zhong, supra, at 52.
The present litigation
in the spring or summer of 2012, Michael and Annette Roberts
noticed that a series of horizontal and vertical cracks had
appeared in their basement's concrete walls. See
Michael Roberts Depo. (Apr. 14, 2016), Ex. K to Local Rule
56(a)1 Statement, Doc. No. 74-11, at 24; Annette Roberts
Depo. (Apr. 14, 2016), Ex. DD to Mem. Opp'n Mot. Summ.
J., Doc. No. 78-4, at 6. When the Robertses consulted a
building contractor, Dean Soucy, he told them that “the
walls were deteriorating” and needed to be replaced.
Michael Roberts Depo., Doc. No. 74-11, at 33; Annette Roberts
Depo., Doc. No. 78-4, at 11.
December 14, 2012, the Robertses reported a claim under their
homeowners' insurance policy to Liberty Mutual, which has
insured their house since 2007. Local Rule 56(a)1 Statement, Doc.
No. 74, at 1-2. Liberty Mutual sent an engineer, Michael
Berry, to inspect the house on January 3, 2013. Id.
at 3. Berry reported that, despite “various
deficiencies, ” the walls “remain[ed] plumb and
mostly water resistant, ” and he concluded that the
cracks were caused by a lack of “adequate reinforcing
bars” in the concrete. Berry Rep. (Jan. 4, 2013), Ex. G
to Local Rule 56(a)1 Statement, Doc. No. 74-7, at 2. Berry
suggested the Robertses “careful[ly] monitor”
the cracks using calibration strips. Id. If the
cracks grew by more than one-eighth of an inch, he
“recommend[ed] foundation repair using carbon fiber
wall straps.” Id.
Berry's inspection, Liberty Mutual wrote to the Robertses
denying their claim on the basis that the cracks were
“due to faulty construction” and therefore
excluded by the policy. Denial Letter (Jan. 10, 2013), Ex. H
to Local Rule 56(a)1 Statement, Doc. No. 74-8, at 1. In
Coverage A, the policy provides that Liberty Mutual
“insure[s] against risk of direct [physical] loss to
property, ” but adds that Liberty Mutual “do[es]
not insure” for loss:
1. Involving collapse, other than as provided in Additional
2. Caused by: . . .
e. Any of the following:
(1) Wear and tear, marring, deterioration;
(2) Inherent vice, latent defect, mechanical breakdown;
(3) Smog, rust or other corrosion, mold, wet or dry rot; . .
(6) Settling, shrinking, bulging or expansion, including
resultant cracking of pavements, patios, foundations, walls,
floors, roofs, or ceilings . . . .
Pol'y, Ex. A to Local Rule 56(a)1 Statement, Doc. No.
74-1, at 12. In addition, under “Exclusions, ”
Liberty Mutual provides that it also “do[es] not insure
for loss” caused by:
c. Faulty, inadequate, or defective: . . .
(2) Design, specifications, workmanship, repair,
construction, renovation, remodeling, grading, ...