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Jang v. Liberty Mutual Fire Insurance Co.

United States District Court, D. Connecticut

March 27, 2018

JAMES M. JANG and ANNA S. PARK, Plaintiffs,
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.

          ORDER ADOPTING RECOMMENDED RULING AND GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          Janet Bond Arterton, U.S.D.J.

         The Court has reviewed Judge Margolis's thorough and well-reasoned Recommended Ruling [Doc. # 40], granting in part and denying in part Defendant Liberty Mutual Fire Insurance Company's Motion [Doc. # 34] for Summary Judgment. For the reasons discussed below, the Court hereby adopts in full the Recommended Ruling's denial of summary judgment on Counts I and II of the Complaint and grant of summary judgment on Count III.

         I. Background

         The Court assumes the parties' familiarity with the facts underlying this Motion, as discussed in the Recommended Ruling. (Rec. Ruling at 3-6.) Plaintiffs claim that Defendant has failed to provide coverage under their Homeowners Policy for deterioration and substantial impairment to the structural integrity of their home. (Compl. [Doc. # 1] } f 4-6, 8, 10-15.) Plaintiffs bring claims for breach of contract (Count I), breach of the implied covenant of good faith and fair dealing (Count II), and unfair and deceptive practices in violation of the Connecticut Unfair Insurance Practice Act ("CUIPA") and the Connecticut Unfair Trade Practices Act ("CUTPA") (Count III). Judge Margolis recommended that summary judgment be denied as to Counts I and II and granted as to Count III. The parties cross-objected.

         II. Discussion

         1. Legal Standard and Standard of Review

         Summary judgment is appropriate where, "resolv[ing] all ambiguities and draw[ing] all permissible factual inferences in favor of the party against whom summary judgment is sought, " Holcomb v. Iona Coll., 521 F.3d 130, 137 (2d Cir. 2008), "the movant shows 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). "A dispute regarding a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Williams v. Utica Coll. of Syracuse Univ., 453 F.3d 112, 116 (2d Cir. 2006) (quotation marks omitted). "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 the 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)).

         Under D. Conn. Local Civil Rule 72.2, in the event of an objection to a Recommended Ruling, this Court "shall make a de novo determination of those portions of the proposed decision to which objection is made, and may accept, reject, or modify the recommended ruling in whole or in part."

         2. Breach of Contract (Count I)

         Defendant objects [Doc. # 42] to the Recommended Ruling's denial of summary judgment on Count I, for breach of contract, contending that (1) "[t]he claimed loss to the plaintiffs' foundation is not covered under the Liberty insurance policy[, ]" (2) "there has been no 'collapse' pursuant to Connecticut law[, ]" (3) the "claimed loss did not occur during the Liberty Policy[, ]" (4) "the claim is barred by the policy's suit limitation provision[, ]" (5) "the recommended ruling erred in finding unambiguous terms to be ambiguous[, ]" and (6) in the alternative, "the recommended ruling erred in not considering extrinsic evidence to resolve any purported ambiguity." (Def.'s Obj. at 1-2.)

         While Defendant objects on all six of the grounds listed above, the core of Defendant's objection-which touches on the sub-objections listed above as (1) and (2)-involves Defendant's claim that the Recommended Ruling erroneously applied the Connecticut Supreme Court's decision in Beach v. Middlesex Mut. Assur. Co., 205 Conn. 246 (1987) in finding that the claimed loss here could constitute a covered "collapse" under the policy pursuant to Connecticut law.

         Defendant contends that because the "collapse" provision at issue explicitly states that "collapse" does not include settling, cracking, shrinking, bulging or expansion, the claimed loss here does not constitute a collapse under the unambiguous terms of the policy. (Mem. Supp. Def.'s Obj. [Doc. #42-1] at 2.)

         This objection is ill-founded, under both Connecticut law and the policy itself. The policy's provision for coverage of "collapse" states that "we insure for 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. [h]idden decay . . . f. [u]se of defective material or methods in construction, remodeling or renovation[.]" (Rec. Ruling at 10.) The policy then states that "[c]ollapse does not include settling, cracking, shrinking, bulging or expansion[.]" (Id.)

         Defendant argues that "[i]t is completely speculative whether this home will ever be in any danger" and that as a matter of law, "cracking, bulging or expansion in the foundation of a safe home cannot be made synonymous with 'collapse.'" (Def.'s Obj. at 6.) The Court agrees with Defendant that under Connecticut law and the unambiguous terms of the policy, mere settling, cracking, shrinking, bulging, or expansion, absent more, would not constitute "collapse." But Plaintiffs do not allege that they have suffered mere settling or cracking, and instead point to evidence that their home has been substantially structurally impaired-in line with Beach's definition of "collapse" under Connecticut law. And as the Magistrate Judge noted, "there are two dueling expert opinions on this issue, thereby clearly establishing an issue of material fact." (Rec. Ruling at 14.) While Defendant's expert has found that the "observed condition ... is not a substantial impairment to the structural ...


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