United States District Court, D. Connecticut
SHAWN M. KOWALYSHYN, et al., Plaintiffs,
EXCELSIOR INSURANCE COMPANY, et al. Defendants.
RULING ON DEFENDANTS' MOTIONS FOR SUMMARY
Jeffrey Alker Meyer, United States District Judge
case is brought by plaintiff homeowners, Shawn and Kim
Kowalyshyn, against their homeowner insurance providers,
Peerless Insurance Company and Kemper Independence Insurance
Company. Plaintiffs allege that their insurers failed to pay
for damages to the basement walls of their home caused by
cracking and deteriorating concrete. Plaintiffs allege that
this constitutes a breach of contract, a breach of the
implied covenant of good faith and fair dealing, and unfair
practices in violation of the Connecticut Unfair Trade
Practices Act (CUTPA) and the Connecticut Unfair Insurance
Practices Act (CUIPA). Both insurers have moved for summary
judgment on all of plaintiffs' claims. For the reasons
described below, I will grant Peerless's motion for
summary judgment in its entirety, and grant in part and deny
in part Kemper's motion for summary judgment.
purchased a home in Willington, Connecticut in July of 2007.
Doc. #51 at 2. The home has a concrete foundation, as well as
a second concrete foundation wall covering the original
foundation. Doc. #62-3 at 6. In connection with this
purchase, plaintiffs commissioned a home inspection report.
Id. at 4. The report did not note cracking in the
foundation, but did note the presence of the second concrete
foundation wall. Doc. #69-1 at 20. The home inspector wrote
that it appeared that the second wall had been poured as a
result of damage caused by backfilling. Id.
Plaintiffs were aware that a second foundation wall had been
poured but did not believe this reflected that the home was
structurally unsound. Docs. #62-3 at 6, #62-4 at 5.
Shawn Kowalyshyn was aware of minor, hairline cracks in the
exterior foundation at the time he purchased the house in
2007. Doc. #62-3 at 6. Plaintiffs purchased a homeowners'
insurance policy from Peerless for the period of July
2007-July 2008. Doc. #51 at 2. Plaintiffs later purchased
a homeowners' insurance policy from Kemper that began in
November 2007 and continues to the present. Id. at
first noticed extensive cracking in the basement walls of
their home in August 2015 after they learned from news
reports about widespread problems of defective concrete used
to build homes in Connecticut. Doc. #51 at 2. An
investigation of the cracking revealed that the basement was
constructed with defective concrete that likely originated
from J.J. Mottes Concrete Company. Id. at 3. This
concrete includes a high level of pyrrhotite, which causes
swelling and cracking in the concrete when exposed to oxygen
and water. The basement walls will continue to deteriorate
and eventually crumble as a result of the faulty concrete.
expert evaluated the home on April 12, 2016. Ibid.
The only way to salvage the home would be to replace the
foundation, which is projected to cost approximately $200,
000. Id. at 5.
notified Peerless of the condition on September 23, 2015.
Id. at 4. Peerless's policy covers “direct
physical loss to covered property involving collapse of a
building or any part of a building caused only by one or more
of the following: . . . (b) Hidden decay; . . . (f) Use of
defective material or methods in construction, remodeling or
renovation if the collapse occurs during the course of the
construction, remodeling or renovation.” Doc. #51-1 at
10. On September 25, 2015, Peerless denied coverage for the
claim. Doc. #51-2. The denial letter noted that Peerless only
covered the home for the year of 2007-2008 and that Peerless
could no longer inspect the damage that had occurred as of
that time. Id. at 2. The letter also cited a series
of exclusions under the policy, but did not clarify or
explain which exemptions Peerless believed applied or why.
notified Kemper of the condition on September 22, 2015. Doc.
#51 at 12. Kemper's policy also covered collapse in its
“Additional Coverages” section, although the
definition of collapse was amended during the course of
coverage in 2011. One definition of “collapse”
applied for 2007-2011, and an updated definition applies from
2011 forward.Kemper's old policy from 2007-2011
covered collapse that caused “direct physical loss to
covered property involving collapse of a building or any part
of a building caused only by one or more of the following: .
. . (b) Hidden decay; . . . (f) Use of defective material or
methods in construction, remodeling or renovation if the
collapse occurs during the course of the construction,
remodeling or renovation.” Doc. #51-3 at 15. The policy
clarified that collapse did not include “settling,
cracking, shrinking, bulging or expansion.”
Ibid. In a section entitled “Perils Insured
Against, ” the policy covered all “risks of
direct loss” to covered property with specific
enumerated exclusions. Doc. #51-3 at 17. The exclusions
included loss caused by “inherent vice, latent
defect” or “settling, shrinking, bulging or
expansion, including resultant cracking” of
“foundations, walls, floors.” Id. at 18.
In another section entitled “Exclusions, ” the
policy excluded coverage for “faulty, inadequate or
defective . . . materials used in …
construction.” Id. at 21.
new policy from 2011 and onward altered the definition of
“collapse” to be “an abrupt falling down or
caving in of a building or any part of a building with the
result that the building or part of the building cannot be
occupied for its current intended purpose.” Doc. #61-2
at 3. The policy stated that “collapse” did not
extend to a structure that is merely “in danger of
falling down or caving in” or one that “shows
evidence of cracking, bulging, sagging, bending, leaning,
settling, shrinkage or expansion.” Ibid.
conducted an investigation of plaintiffs' claim,
including an inspection of the home on September 28, 2015.
Doc. #51-4 at 2. Kemper denied coverage for the claim on
January 14, 2016. Doc. #51-4. Kemper's denial letter
cited multiple reasons as the basis for denial and explained
why Kemper believed that the claim was not covered under its
policy. Id. at 7-8.
principles governing the Court's review of a motion for
summary judgment are well established. Summary judgment may
be granted only if “the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to a judgment as a matter of law.”
Fed.R.Civ.P. 56(a). I must view the facts in the light most
favorable to the party who opposes the motion for summary
judgment and then decide if those facts would be enough-if
eventually proved at trial-to allow a reasonable jury to
decide the case in favor of the opposing party. My role at
summary judgment is not to judge the credibility of witnesses
or to resolve close contested issues but solely to decide if
there are enough facts that remain in dispute to warrant a
trial. See generally Tolan v. Cotton, 134 S.Ct.
1861, 1866 (2014) (per curiam); Pollard v. New
York Methodist Hosp., 861 F.3d 374, 378 (2d Cir. 2017).
argues that even if plaintiffs' loss would otherwise be
covered under the policy, there is no dispute of material
fact that the loss did not occur during the very limited
period of time that its policy was in effect for plaintiffs.
Peerless's policy includes a provision limiting coverage
for “property damage” that “occurs”
during the policy period. Doc. #51-1 at 21. The relevant loss
in this case is the collapse of plaintiffs' home. I
assume for purposes of this argument that
“collapse” in the Peerless policy includes
“substantial impairment of the structural
integrity” of the home. See Beach v. Middlesex Mut.
Assur. Co., 205 Conn. 246, 252 (1987); see also
Roberts v. Liberty Mut. Fire Ins. Co., 264 F.Supp.3d
394, 409 (D. Conn. 2017) (discussing widespread adoption of
Beach standard and “in the absence of a
contrary policy definition-a building has
‘collapsed' by suffering a substantial impairment
of structural integrity if it would have caved in had the
plaintiffs not acted to repair the damage”) (internal
quotation marks and brackets omitted). I further assume that
the extensive map cracking in plaintiffs' foundation
constitutes substantial impairment of the structural
integrity of plaintiffs' home. Nevertheless, I agree with
Peerless that there is no dispute of material fact that any
collapse can be proved to have occurred during the narrow
time frame in which Peerless insured plaintiffs' home.
do not know precisely when the substantial cracking in their
basement concrete took place. Plaintiffs' expert
indicated that he had previously testified that a foundation
with this type of defective concrete would be substantially
impaired after 10 to 14 years, which would place the map
cracking during the years of 1999-2003. Doc. #62-5 at 8-9.
Plaintiffs' expert further testified that, given his
experience with this concrete condition, he believed that the
map cracking would have been present in plaintiffs'
foundation walls by 2007. Id. at 10. But he also
noted that the 2007 home inspector report did not mention the
cracking, which he believes the inspector would have noted
had the cracking been present at the time. Id. at
12. Additionally, plaintiff Shawn Kowalyshyn testified that
he only noticed minor spider cracking in the walls in 2007.
Doc. #62-3 at 6. The expert further testified that he
determined “with a high degree of engineering
certainty” that the ...