United States District Court, D. Connecticut
JAMES M. JANG and ANNA S. PARK
LIBERTY MUTUAL FIRE INSURANCE CO.
RECOMMENDED RULING ON DEFENDANT'S MOTION FOR
Glazer Margolis, United States Magistrate Judge.
August 19, 2015, plaintiffs James M. Jang and Anna S. Park
commenced this action against defendant Liberty Mutual Fire
Insurance Company [“defendant” or
“Liberty”](Dkt. #1), which complaint was
superseded by an Amended Complaint filed on September 9, 2015
(Dkt. #10) in which plaintiffs allege coverage for damages
sustained from their home's crumbling foundation under
the Homeowners Policy issued by defendant. Specifically,
plaintiffs assert the following three counts: breach of
contract (Count One); breach of implied covenant of good
faith and fair dealing (Count Two); and unfair and deceptive
practices in violation of the Connecticut Unfair Insurance
Practices Act [“CUIPA”] and the Connecticut
Unfair Trade Practices Act [“CUTPA”](Count
Three). (Id.). On December 18, 2015, defendant filed
its answer and affirmative defenses. (Dkt. #18).
August 15, 2017, defendant filed the pending Motion for
Summary Judgment (Dkt. #34), with brief (Dkt. #35), and Local
Rule 56(a)1 Statement of Material Facts and exhibits (Dkt.
in support. On September 5, 2017, plaintiffs filed their
brief in opposition, with Local Rule 56(a)2 Statement of
Material Facts and exhibits. (Dkt. #37). Defendant filed
its reply brief with exhibits attached on September 19, 2017.
(Dkt. #38). Two months later, on November 27, 2017,
Senior United States District Judge Janet Bond Arterton
referred the pending motion to this Magistrate Judge. (Dkt.
reasons set forth below, defendant's Motion for Summary
Judgment (Dkt. #34) is granted in part and denied in
PROPERTY AND INSURANCE
property at 56 Stonefield Trail, South Windsor, Connecticut
was constructed in 1985, and plaintiffs purchased the
property in June 2007. (Pls.' Local R. 56(a)1 Stmt ¶
3; Def.'s Local R. 56(a)2 Stmt ¶ 3; see
Dkt. #10, Count I, ¶ 4 at 2). Liberty first insured
plaintiffs' property on June 22, 2007 under Policy Number
H32-218-137330-40 [hereinafter the
“Policy”](Pls.' Local R. 56(a)1 Stmt
¶¶ 1-2; Def.'s Local R. 56(a)2 Stmt
¶¶ 1-2; see Dkt. #36, Exhs. A-B; see
also Pls.' Local R. 56(a)1 Stmt ¶ 26;
Def.'s Local R. 56(a)2 Stmt ¶ 26; see Dkt.
#36, Exh. L (the initial Liberty Policy incepted on June 22,
2007)). Jang first learned of foundation problems when he was
trying to sell his house in early 2015 (see Dkt.
#36, Exh. H, at 1), 5 and he first reported the
claim to Liberty on August 11, 2015. (Pls.' Local R.
56(a)1 Stmt ¶ 4; Def.'s Local R. 56(a)2 Stmt ¶
4; see Dkt. #36, Exh. B, ¶ 6). Jang had already
consulted with his attorneys prior to reporting his claim.
(Pls.' Local R. 56(a)1 Stmt ¶ 5; Def.'s Local R.
56(a)2 Stmt ¶ 5; see Dkt. #36, Exh. C at
42-43). Jang did not mention his attorneys or similar
lawsuits brought by his attorneys pertaining to homes in the
general vicinity of his home. (Pls.' Local R. 56(a)1 Stmt
¶ 6; Def.'s Local R. 56(a)2 Stmt ¶ 6;
see Dkt. #36, Exh. C at 45-46, 63). Liberty denied
the claim by way of correspondence dated August 11, 2015.
(Pls.' Local R. 56(a)1 Stmt ¶ 7; Def.'s Local R.
56(a)2 Stmt ¶ 7; see Dkt. #36, Exh.
May 11, 2007 home inspection report by Michael Cunningham of
Great ProSpects, LLC, Cunningham documented “large
crack(s)” in the rear foundation. (Pls.' Local R.
56(a)1 Stmt ¶ 12; Def.'s Local R. 56(a)2 Stmt ¶
12; see Dkt. #36, Exh. G at 4). On March 24,
2015, William Neal, P.E. prepared a report for Jang.
(Pls.' Local R. 56(a)1 Stmt ¶ 11; Def.'s Local
R. 56(a)2 Stmt ¶ 11; see Dkt. #36, Exh. F at
1). On September 3, 2015, David Grandpré, a licensed
professional engineer since 1986, inspected plaintiffs'
property (Dkt. #36, Exh. E at 20; Pls.' Local R. 56(a)1
Stmt ¶ 44; Def.'s Local R. 56(a)2 Stmt ¶ 44;
see Dkt. #36, Exh. E at 14), and on November 7,
2016, Grandpré completed his report. (Dkt. #36, Exh.
H). The foundation of plaintiffs' home exhibited cracks
attributable to the oxidation of iron sulfide minerals in the
concrete at the time they submitted their claim to Liberty
and at the time that Grandpré inspected the property.
(Pls.' Local R. 56(a)1 Stmt ¶ 8; Def.'s Local R.
56(a)2 Stmt ¶ 8; see Dkt. #36, Exh. E at 11;
see also Dkt. #36, Exhs. F, H, I & Dkt. #37,
Exh. AA.4). Grandpré believes that visible map
cracking attributable to iron sulfide oxidation constitutes a
substantial impairment of structural integrity. (Pls.'
Local R. 56(a)1 Stmt ¶ 10; Def.'s Local R. 56(a)2
Stmt ¶ 10; see Dkt. #36, Exh. E at 14).
Grandpré noted that “[s]everal cracks had been
patched” (Pls.' Local R. 56(a)1 Stmt ¶ 13;
Def.'s Local R. 56(a)2 Stmt ¶ 13; see Dkt.
#36, Exh. H at 2),  and he opined that the foundation is one
of the least severely cracked foundations out of the
sixty-three that he has observed in connection with his
retention by plaintiffs' attorneys. (Pls.' Local R.
56(a)1 Stmt ¶ 27; Def.'s Local R. 56(a)2 Stmt ¶
27; see Dkt. #36, Exh. E at 35). Petrographic
analysis has confirmed that the cracking is attributable to
iron sulfide oxidation. (Pls.' Local R. 56(a)1 Stmt
¶ 16; Def.'s Local R. 56(a)2 Stmt ¶ 16;
see Dkt. #36, Exh. I at 7).
home is safe to live in (Pls.' Local R. 56(a)1 Stmt
¶ 17; Def.'s Local R. 56(a)2 Stmt ¶ 17;
see Dkt. #36, Exh. E at 31), and the foundation
walls do not need to be shored. (Pls.' Local R. 56(a)1
Stmt ¶ 18; Def.'s Local R. 56(a)2 Stmt ¶ 18;
see Dkt. #36, Exh. E at 29). The foundation walls
are partially underground and retain soil on the exterior.
(Pls.' Local R. 56(a)1 Stmt ¶ 19; Def.'s Local
R. 56(a)2 Stmt ¶ 19; see Dkt. #36, Exh. E at
31, 42). The foundation walls are still holding up the above
structure, and the foundation walls are not in imminent
danger of falling down. (Pls.' Local R. 56(a)1 Stmt
¶¶ 20-21; Def.'s Local R. 56(a)2 Stmt
¶¶ 20-21; see Dkt. #36, Exh. E at 31-32).
Grandpré cannot give a ballpark estimate as to when
the basement walls will fall down absent replacement, or when
the home will become unsafe unless the foundation is
replaced. (Pls.' Local R. 56(a)1 Stmt ¶¶ 22-23;
Def.'s Local R. 56(a)2 Stmt ¶¶ 22-23;
see Dkt. #36, Exh. E at 31-32).
testified that “very good engineer[s]” disagree
as to what constitutes a “substantial impairment to
structural integrity.” (Pls.' Local R. 56(a)1 Stmt
¶ 30; Def.'s Local R. 56(a)2 Stmt ¶ 30;
see Dkt. #36, Exh. E at 12-14).
Grandpré testified that Liberty's disclosed
engineer, Carl Cianci, P.E., is a “very good
engineer.” (Pls.' Local R. 56(a)1 Stmt ¶ 31;
Def.'s Local R. 56(a)2 Stmt ¶ 31; see Dkt.
#36, Exh. E at 12). Cianci has opined that the basement walls
have not suffered a substantial impairment to structural
integrity. (Pls.' Local R. 56(a)1 Stmt ¶ 32;
Def.'s Local R. 56(a)2 Stmt ¶ 32; see Dkt.
#36, Exh. P at 6).
SUMMARY JUDGMENT STANDARD
standard for summary judgment is well established. The moving
party is entitled to summary judgment if it demonstrates that
there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
This showing may be made by depositions, affidavits,
interrogatory answers, admissions, or other exhibits in the
record. Fed.R.Civ.P. 56(c) "The substantive law
governing the case will identify those facts that are
material, and '[o]nly disputes over facts that might
affect the outcome of the suit under the governing law will
properly preclude entry of summary judgment.'"
Bouboulis v. Transp. Workers Union of Am., 442 F.3d
55, 59 (2d Cir. 2006), quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). If the moving party
carries its burden, “the opposing party must come
forward with specific evidence demonstrating the existence of
a genuine dispute of material fact.” Brown v. Eli
Lily & Co., 654 F.3d 347, 358 (2d Cir. 2011),
quoting Anderson, 477 U.S. at 249.
STANDARD FOR INSURANCE POLICY INTERPRETATION
standard for review for interpreting insurance contracts is
[C]onstruction of a contract of insurance presents a question
of law for the court which this court reviews de novo. . . .
It is the function of the court to construe the provisions of
the contract of insurance . . . . The [i]nterpretation of an
insurance policy . . . involves a determination of the intent
of the parties as expressed by the language of the policy .
.. [including] what coverage the . . . [insured] expected to
receive and what the [insurer] was to provide, as disclosed
by the provisions of the policy . . . . [A] contract of
insurance must be viewed in its entirety, and the intent of
the parties for entering it derived from the four corners of
the policy . . . [giving the] words . . . [of the policy]
their natural and ordinary meaning . . . [and construing] any
ambiguity in the terms . . . in favor of the insured . . . .
Conn. Ins. Guar. Ass'n v. Fontaine, 278 Conn.
779, 784-85, 900 A.2d 18 (2006), quoting
Hartford Cas. Ins. Co. v. Litchfield Mut. Fire Ins.
Co., 274 Conn. 457, 462-63, 876 A.2d 1139
(2005)(additional internal quotations & citation
omitted). “[P]rovisions in insurance contracts must be
construed as laymen would understand [them] and not according
to the interpretation of sophisticated underwriters, and . .
. the policyholder's expectations should be protected as
long as they are objectively reasonable from the layman's
point of view.” Vermont Mut. Ins. Co. v.
Walukiewicz, 290 Conn. 582, 592, 966 A.2d 672
(2009)(citations & internal quotations omitted). If the
terms of the Policy are unambiguous, such terms “must
be given their plain and ordinary meaning and extrinsic
evidence is inadmissible to determine the meaning.”
United Techs. Corp. v. Am. Home Assur. Co., 989
F.Supp. 128, 145 (D. Conn. 1997)(Arterton, J.)(citations
omitted). “If[, however, ] the contractual language is
ambiguous and subject to varying reasonable interpretations,
the issue of the parties' intent is a question of fact,
thereby rendering summary judgment inappropriate.”
Royal Ins. Co. of Am. v. Zygo Corp., No. 3:01 CV
1317 (GLG), 2003 WL 21960734, at *2 (D. Conn. Aug. 15,
2003)(citation omitted). “[W]hether an insurance policy
is ambiguous is a matter of law for the court to decide[,
]” Travelers Cas. & Sur. Co. v. Neth. Ins.
Co., 312 Conn. 714, 740, 95 A.3d 1031 (2014), and
ambiguous policy language is construed in favor of coverage.
See Conn. Ins. Guar. Assoc., 278 Conn. at 788-89
(citations omitted). Thus, “where each party has a
reasonable but different interpretation of the phrases
supported by dictionaries and case law, that indicates that
the phrases are ambiguous and must be construed against the
insurer.” Roberts v. Liberty Mut. Fire Ins.
Co., 264 F.Supp.3d 394, 404 (D. Conn. 20017)(Underhill,
J.)(citations & internal quotations
COVERAGE FOR THIS CLAIM
Liberty Policy, as modified by its endorsements, states in
part that Liberty does not insure “for loss . . .
[i]nvolving collapse other than as provided in Additional
Coverage 8.[, ] . . . [c]aused by . . . freezing, thawing,
pressure or weight of water or ice, . . .to a . . .
[f]oundation, . . . [, ] or . . . [f]ooting[, ]” or for
loss caused by “[w]ear and tear, marring,
deterioration; . . .[i]nherent vice, latent defect, . . .
[or, ] [s]ettling, shrinking, bulging or expansion including
resultant cracking, of pavements, patios, foundations, walls,
roofs, or ceilings[.]” (Dkt. #36, Exh. A at 11,
26). The “Additional Coverages[,
]” Liberty insures “direct physical loss to
covered property involving collapse of a building or any part
of a building caused by . . . [h]idden decay[, ] . . . or . .
. [u]se of defective material or methods in construction,
remodeling or renovation . . . .” (Id. at 10,
to plaintiffs, the threshold question in this case is whether
there has been a “collapse of a building or any part of
a building” such that the collapse coverage provided by
the Additional Coverages section of the homeowner's
policy would be triggered. (Dkt. #37, at 8). Specifically,
plaintiffs contend that the “collapse” at issue
in this case was the result of a “chemical reaction
occurring within the walls of the home [which] is not only a
form of hidden decay, but also the result of improper
materials used in the construction of the basement
walls.” (Id. at 9 (footnote omitted);
see Dkt. #36, Exh. H, at 3-4). Plaintiffs'
engineering expert opines that the “concrete used at
the Jang property contained a compound, . . . which was
subjected to a chemical reaction” that
“initially damaged the inside of the concrete on a
microscopic level[, ]” and “[e]ventually the
expansion became visible at the surface of the walls.”
(Dkt. #36, Exh. H at 3).
plaintiffs acknowledge, there has been no “catastrophic
‘tumbling down' or ‘falling down' that
one often associates with the word
‘collapse.'” (Dkt. #37, at 9-10). Rather,
plaintiffs assert that the condition of their home
constitutes a “collapse” as defined by the
Connecticut Supreme Court in Beach v. Middlesex Mut.
Assurance Co., 205 Conn. 246, 252, 532 A.2d 1297 (1987).
(Dkt. #37, at 10-14). In Beach, the policy language
excluded from coverage loss from “settling, cracking,
shrinkage, bulging or expansion of . . . foundations . . .
unless . . . collapse of a building . . . not otherwise
excluded ensues . . . .” 205 Conn. at 250. The
Connecticut Supreme Court held that the term
“collapse” is “sufficiently ambiguous to
include coverage for any substantial impairment of the
structural integrity of a building” that
“subsequently develops out of a loss that appeared, at
its inception, to fall within the rubric of ‘settling,
cracking, shrinkage, bulging or expansion.'”
Id. at 251-52 (multiple citations omitted). As
former Chief Judge Ellen Ash Peters explained in
Beach, “[r]equiring the insured to await an
actual collapse would not only be economically wasteful; but
would also conflict with the insured's contractual and
common law duty to mitigate damages.” Id. at
253 n. 2 (internal citation omitted); see also id.
at 252-53 (citing the “distinct minority” of
cases which hold that “‘collapse'
unmistakably connotes a sudden falling in, loss of shape, or
flattening into a mass of rubble”); but see
Clough v. Allstate Ins. Co., No. 3:17 CV 140 (JBA), 2017
WL 3763841, at *4-5 (D. Conn. Aug. 29, 2017)(Allstate has
limited its coverage by requiring that collapse be
“sudden and accidental” such that a process of
hidden decay does not trigger coverage until a sudden
collapse occurs. The insured must wait until “some
portion of the house . . . eventually collapse[s], at which
time [the insured] may seek coverage.”); Adams v.
Allstate Ins. Co., No. 3:16 CV 1360 (JBA), 2017 WL
3763837, at *3-4 (D. Conn. Aug. 29, 2017)(same).
contends that the policy at issue in Beach
“has a markedly different collapse provision[, ]”
and by defining collapse in the negative by excluding from
coverage “settling, cracking, shrinking, bulging or
expansion[, ]” as was done in Nida v. State Farm
Fire & Cas. Co., 454 So.2d 328, 334 (La.App.),
writ denied, 458 S. 2d 486 (1984), this policy is
significantly different from the one at issue in
Beach. (Dkt. #35, at 14-15 (citation omitted)).
Defendant argues that in light of this difference in
language, “substantial impairment of structural
integrity' is not the standard for
‘collapse'[.]” (Dkt. #35, at 15).
Beach, the Connecticut Supreme Court observed that
“[i]f the defendant wished to rely on a single facial
meaning of the term ‘collapse' . . ., it ha[d] the
opportunity expressly to define the term to provide for the
limited usage it now claims to have intended.” 205
Conn. at 251, citing Nida, 454 So.2d at 334. In this
case, defendant asserts that Liberty has done just that with
the provision excluding settling, cracking, shrinkage, or
expansion. (Dkt. #35, at 14-15). Instead, defendant argues
that Beach is not binding authority, but rather, a
recently decided case from the California Court of Appeals,
Tustin Field Gas & Food, Inc. v. Mid-Century Ins.
Co., 13 Cal.App. 5th 220');">13 Cal.App. 5th 220 (Cal.Ct.App. 2017), is the
authority this court should follow. (Dkt. #35, at 14-15). In
Tustin Field, the California Court of Appeals upheld
the trial court's conclusion that “because the
Policy exclud[ed] ‘settling' and the like, a
‘substantial impairment of structural integrity' is
not a ‘collapse' as a matter of law.” 13
Cal.App. 5th at 228 (citation omitted). This conclusion is
consistent with California law. See Doheny West
Homeowners' Ass'n v. American Guar. & Liability
Ins. Co., 60 Cal.App.4th 400, 405-06 (Cal.Ct.App. 1997).
Connecticut law, however, governs this case.
a slight difference in policy language found in Liberty
policies has been addressed by this Court in Bacewicz v.
NGM Ins. Co., No. 3:08 CV 1530 (JCH), 2010 WL 3023882,
at *6 (D. Conn. Aug. 2, 2010). In Bacewicz,
now-Chief Judge Janet C. Hall concluded that although the
policy language in that case differed slightly from the
language in Beach in that “collapse” did
not include “cracking and bulging[, ]” the
cracking and bulging “may have been symptomatic of
chemical decomposition occurring within the concrete of the
basement walls, ” which would not “preclude a
reasonable jury from concluding that [the insurer] is liable
from failing to cover an substantial impairment to structural
integrity caused by such decomposition.” Id.
Judge Hall also found that “it is difficult - if not
impossible - to imagine any ‘collapse' that did not
at some point manifest itself in the form of cracks, bulges,
or other physical deformities.” Id. Similarly,
the standard articulated in Beach has been applied
to the policy language at issue in this case. See
Roberts, 264 F.Supp.3d at 404-09; Belz v. Peerless
Ins. Co., 46 F.Supp.3d 157, 163 (D. Conn. 2014)(Hall,
J.). Accordingly this Court concludes that Beach is
the binding authority in this case. The next question,
therefore, is whether there exists an issue of fact as to
whether the structural integrity of plaintiffs' home has
become structurally impaired.
argues extensively that even under Beach, the
cracking that has occurred in plaintiffs' home is not a
“collapse[, ]” and therefore, the claim is
properly excluded under the terms of the Policy. (Dkt. #35,
at 15-21). However, there are two dueling expert opinions on
this issue, thereby clearly establishing an issue of material
fact. According to Grandpré, the
concrete basement walls of plaintiffs' home are
“substantially structurally impaired.” (Dkt. #36,
Exh. H at 4). Liberty's expert, Cianci, agrees that there
is map cracking in the foundation of plaintiffs' home,
“indicative of a material defect with the original
concrete used to pour the foundation[, ]” but Cianci
opines that the foundation “is not in imminent danger
of collapse, or in a state of collapse[, ]” and the
“observed condition . . . is not a substantial
impairment to the structural integrity of a
building[.]” (Id., Exh. P, at 7). At this
stage of the case, it is not the Court's role to weigh
the credibility of the evidence of the record and of these
two experts' testimony. See Gabriel v. Liberty Mut.
Fire Ins. Co., No. 3:14 CV 1435 (VAB), 2017 WL 6731713,
at *6 (D. Conn. Dec. 29, 2017). Thus, the issue of whether
there exists a substantial impairment of the structural
integrity of plaintiffs' home is a matter left for the
jury. See id. (“Because, on the
record currently before this Court, a jury could conclude
that the damage amounted to a substantial impairment, a
genuine issue of fact remains for resolution at
trial.”)(citation omitted); Roberts, 264
F.Supp.3d at 414 (“[T]he losses to the Robertses'
basement walls are not excluded from coverage as a matter of
law. Whether the Robertses have proved that their walls
suffered a ‘substantial impairment of [ ] structural
integrity' remains a matter for the jury to
decide”); Metsack, 2017 WL 706599, at *6
(“a material dispute exists regarding whether this
damage is sufficiently ‘substantial' to constitute
a ‘collapse' under the Liberty Mutual Policy's
terms”); Belz v. Peerless Ins. Co., 204
F.Supp.3d 457, 463-64 (D. Conn. 2016)(“[t]he question
of whether the damage was covered under the
‘collapse' provisions of the insurance policy
cannot appropriately be resolved at the summary judgment
stage and should be left for the jury”), recon.
denied, 13 CV 1315 (VAB), 2016 WL 6542828 (D. Conn. Nov.
TIMING OF THE LOSS
contends that the Policy at issue “only responds to
loss which occurs during the Policy[, ]” (Dkt. #35, at
9; Dkt. #36, Policy at 20), and asserts the claimed damages
predate the June 22, 2007 Policy. (Dkt. #35, at 10).
Additionally, defendant points to the “Suit Against
Us” provision in the Policy to argue that “[e]ven
if any aspect of the claim were covered . . ., it is
barred” by this provision. (Id. at
foundation was poured on this property in 1985. (Dkt. #10,
Count 1 ¶ 4, at 2). Defendant argues that
Grandpré's testimony that map cracking would
present itself ten to fifteen years after the pour, and the
opinion of plaintiffs' engineer, Neal, that the cracks in
the foundation are attributable to a chemical reaction which