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Thurston Foods, Inc. v. Wausau Business Insurance Co.

United States District Court, D. Connecticut

October 22, 2017

THURSTON FOODS, INC., Plaintiff,
v.
WAUSAU BUSINESS INSURANCE COMPANY, Defendant.

          RULING ON CROSS MOTIONS FOR RECONSIDERATION

          Warren W. Eginton, Senior U.S. District Judge

         In this action, plaintiff Thurston Foods, Inc., seeks to recover benefits under a commercial property insurance policy issued by defendant Wausau Business Insurance Company. Plaintiff has alleged claims for breach of contract, bad faith, and violation of the Connecticut Unfair Insurance Practices Act (“CUIPA”) and the Connecticut Unfair Trade Practices Act (“CUTPA”).

         In a ruling dated May 17, 2017, the Court granted in part and denied in part defendant's motion for summary judgment; it denied plaintiff's motion for partial summary judgment. Specifically, the Court granted defendant's motion for summary judgment relevant to the exclusion for spider cracking damage; however, the Court provided that a jury could still consider whether the cracking exception applies as it remains a question of fact whether the heaving damage was “caused by or resulted from” the cracking. The Court also ruled that the jury should consider whether freezing within the ventilation system caused the floor damage, and if so, whether that damage falls within the “Earth Movement” exclusion. Plaintiff requests clarification or reconsideration of the Court's ruling relevant to the cracking exclusion. Defendant seeks reconsideration of the Court's ruling regarding (1) failure to disregard the Piho affidavit; (2) failure to find that there is no coverage for snow removal under the Policy; (3) failure to find that there is no coverage for non-damaged matching ceiling tiles included in Thurston's claim submission; (4) denial of summary judgment on the bad faith claims; and (5) misreading of the exclusions relevant to earth movement and cracking. For the following reasons, the Court will grant the motions for reconsideration and will clarify its prior ruling.

         DISCUSSION

         A motion for reconsideration "generally will be denied unless the moving party can point to controlling decisions or data . . . that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). "The major grounds justifying reconsideration are 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'" Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992).

         Insurance contracts are to be interpreted according to the same rules that govern the construction of written contracts. Great Lakes Reinsurance (UK), PLC v. JDCA, LLC, 2014 WL 6633039, at *8 (D. Conn. Nov. 21, 2014). Insurance policy words must be accorded their ordinary and natural meaning, and any ambiguity in the terms of the policy must be construed in favor of the insured. Hansen v. Ohio Casualty Ins. Co., 239 Conn. 537, 542 (1996). "The determinative question is the intent of the parties, " as disclosed by the policy terms viewed in their entirety. Community Action for Greater Middlesex County, Inc. v. American Alliance Insurance Co., 254 Conn. 387, 399 (2000). The court must “look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result.” O'Brien v. U.S. Fid. & Guar. Co., 235 Conn. 837, 843 (1996).

         In interpreting contract terms, the Court must afford the language used "its common, natural and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract." Wolosoff v. Wolosoff, 91 Conn.App. 374, 381 (2005). Where the language of the contract is clear and unambiguous, the contract should be given effect according to its terms. Breiter v. Breiter, 80 Conn.App. 332, 336 (2003). A contract is unambiguous when its language is clear and conveys a definite and precise intent. Cantonbury Heights Condominium, Inc. v. Local Land Dev. LLC, 273 Conn. 724, 735 (2005). "A contract term not expressly included will not be read into a contract unless it arises by necessary implication from the provisions of the instrument. . . ." Heyman v. CBS, Inc., 178 Conn. 215, 227 (1979). "A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity and words do not become ambiguous simply because lawyers or laymen contend for different meanings." Barnard v. Barnard, 214 Conn. 99, 110 (1990).

         Ambiguity "must emanate from the language used" by the parties. United Illuminating Co. v. Wisvest-Connecticut, LLC, 259 Conn. 665, 671 (D. Conn. 2002). If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous. Lopinto v. Haines, 185 Conn. 527, 538 (1981). The question of whether a contractual provision is ambiguous presents a question of law. LMK Enterprises, Inc. v. Sun Oil Co., 86 Conn.App. 302, 306 (2004). Where a contract term is found to be ambiguous, the court may properly discern the intent of the contract through consideration of extrinsic evidence. See United Illuminating Co., 259 Conn. at 675.

         Earth Movement and Cracking Exclusions

         Subsection 1.b of “Exclusions” addresses earth movement and provides:

We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss….. (b)(4) Earth sinking (other than sinkhole collapse) rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface.

Section 2.d. (4) of “Exclusions” sets forth that defendant “will not pay for loss or damage caused by or resulting from … settling, cracking, shrinking or expansion….” Subsection 2 of the Exclusions concludes with the following language: “But if an excluded cause of loss that is listed in 2.d. (1) through (7) results in a ‘specified cause of loss' or building glass breakage, we will pay for the loss or damage caused by that ‘specified cause of loss' or building glass breakage.”

         Plaintiff points out that Section 2.d. (4) lacks the anti-concurrent language contained within Section 1 relevant to the earth movement exclusion. There is no indication that the anti-concurrent language of Section 1 applies to the cracking exclusion of Section 2.d. (4). Further, the concluding language of Section 2 contemplates coverage of an excluded loss enumerated in subsections d. (1)-(4), such as cracking, when caused by a “specified cause of loss.” Prior court decisions have held that analogous language may be reasonably interpreted to mean that an exclusion does not apply to a loss that was caused by a loss not otherwise excluded. See Sentinel Assocs. v. American Mfr. Mut. Ins. Co., 804 F.Supp. 815, 820 (E.D. Va. 1992).

         Construing all ambiguity in favor of the insured, the Court clarifies that the cracking exclusion applies unless the cracking was the result of a covered loss. In light of the disputed factual issues identified in the Court's prior ruling on summary judgment, a jury ...


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