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Rosenberger v. Amica Mutual Ins. Co.

United States District Court, D. Connecticut

June 6, 2018

STEPHEN ROSENBERGER and MARGIT ROSENBERGER, Plaintiffs,
v.
AMICA MUTUAL INS. CO., Defendant.

          RULING AND ORDER ON MOTION TO DISMISS

          Victor A. Bolden United States District Judge

         Stephen Rosenberger and Margit Rosenberger (the “Rosenbergers” or “Plaintiffs”) sued Amica Mutual Insurance Co. (“Amica” or “Defendant”) after the insurance company denied coverage for cracking in the concrete in the basement of their South Windsor home. After moving to amend their Complaint, the Rosenbergers assert three claims: breach of contract; breach of the covenant of good faith and fair dealing; and violations of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-100a et seq., and the Connecticut Unfair Insurance Practices Act (“CUIPA”), Conn. Gen. Stat. § 38a-815 et. seq.

         Defendant now moves to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(6). See Def. Mot, ECF No. 11.

         For the following reasons, the motion is GRANTED in part and DENIED in part.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         The Rosenbergers live and own a home in South Windsor, Connecticut. Am. Compl. ¶ 1, ECF No. 47. Amica, an insurance company, is incorporated under the laws of the State of Rhode Island and licensed to provide homeowners insurance coverage in Connecticut. Id. ¶ 2.

         A. Factual Allegations

         The Rosenbergers have insured their home with Amica since 1989, and have made all required payments. Id. ¶ 3. According to both parties, the policy language changed several times over the course of the Rosenbergers' relationship with Amica. Id. ¶ 14-15; Def. Mem. at 9-11.[1]The relevant portions of these policies may be grouped into three distinct time periods: the policy language before December 18, 2006; the policy language amended on December 18, 2006, and in effect between December 18, 2006, and December 18, 2012; and the policy language as amended on December 18, 2012, and in effect until at least December 18, 2017. See Def. Mem. at 4, 9, 12.

         1. The Policy Language Before December 18, 2006

         Under the policy language in effect place between December 18, 2005, and December 18, 2006, Amica “insure[d] for direct physical loss to covered property involving collapse of a building, ” but only if “caused . . . by one or more of the following:”

a. Perils lnsured Against in COVERAGE C-PERSONAL PROPERTY. These perils apply to covered buildings and personal property for loss insured by this additional coverage;
b. Hidden decay;
c. Hidden insect or vermin damage;
d. Weight of contents, equipment, animals or people;
e. Weight of rain which collects on a roof; or
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.
Loss to an awning, fence, patio, pavement, swimming pool, underground pipe, flue, drain, cesspool, septic tank, foundation, retaining wall, bulkhead, pier, wharf or dock is not included under items b., c., d., e., and f., unless the loss is a direct result of the collapse of a building.
Collapse does not include settling, cracking, shrinking, bulging or expansion.
This coverage does not increase the liability applying to the damaged property.

         Homeowners Policy (“Dec. 2006 Policy”) at 5, Def. Mot. to Dismiss, Ex. 3, ECF No. 36-4. The policy also excluded coverage for collapse stemming from “wear and tear, marring, deterioration, ” “inherent vice, latent defect, mechanical breakdown, ” smog or smoke, discharge of pollutants and “[s]ettling, shrinking, bulging or expansion, including resultant cracking, of pavements, patios, foundations, walls, floors, roofs or ceilings[.]” Id. at 7-8.

         The 2006 policy appears not to include any provisions explicitly excluding coverage for a chemical reaction. Compare with Am. Compl. ¶ 10 (“Pursuant to coverage of the aforementioned homeowner's insurance policy, losses due to chemical reaction are not excluded from policy coverage.”). The policy did exclude “inherent vice, latent defect, mechanical breakdown” and “smug rust or other corrosion . . . .” Dec. 2006 Policy at 8.

         The policy provided that “[i]n the event that covered property is damaged by an applicable Peril Insured Against, we will pay the reasonable cost incurred by you for necessary measures taken solely to protect against further damage.” Id. at 4. Finally, the 2006 policy stated that “[n]o action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss.” Id. at 12.

         2. The Policy Language Between to December 18, 2006, and December 18, 2012

         The post-2006 policy insured “against risks of direct physical loss to property described in Coverages A and B.” See, e.g., Homeowners Policy (“Dec. 2009 Policy”) at 8, Def. Mot. to Dismiss, Ex. 7, ECF No. 36-8. Those risks included collapse, but under a significantly modified definition. The new policy language stated that “[c]ollapse applies only to an abrupt collapse.” Id. at 7. Furthermore, collapse is defined as “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 intended purpose.” Id. at 7. The provision includes several exclusions, id.:

         C. This Additional Coverage - Collapse does not apply to:

(1) A building or any part of a building that is in danger of falling down or caving in;
(2) A part of a building that is standing, even if it has separated from another part of the building; or
(3) A building or any part of a building that is standing, even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion.

         The policy also modified the “hidden decay” section included in the 2006 policy, stating that it covered collapse, if caused by “[d]ecay, of a building or any part of a building, that is hidden from view, unless the presence of such decay is known to an insured prior to collapse.” Id. at 7.

         3. The Policy Language Between to December 18, 2012 and December 18, 2017

         More recent policies still require a collapse to be “abrupt.” For instance, the policy issued to the Rosenbergers in December, 2016, defines collapse as applying “only to an abrupt collapse” and meaning “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 intended ...


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