Andrew v. Allstate Insurance Co.

          RULING ON MOTION TO DISMISS

          Michael P. Shea, U.S.D.J.

         Plaintiffs Kenneth E. Andrew and Sheila M. Andrew (collectively, “Plaintiffs”) filed this action in state court against their homeowner's insurance provider, Allstate Insurance Company (“Allstate”), for failure to pay for damages to the basement walls of their home caused by cracking concrete. (ECF No. 1.) Allstate removed the case to this court on July 18, 2017. (ECF No. 1.) Plaintiffs bring claims of breach of contract (Count One) and unfair and deceptive practices in violation of the Connecticut Unfair Insurance Practices Act, Conn. Gen. Stat. § 38a-816 et seq. (“CUIPA”) and the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. (“CUTPA”) (Count Two). Allstate has moved to dismiss both claims on the grounds that the insurance policy at issue did not cover the alleged damage, and the CUIPA/CUTPA claim on the additional ground that Allstate's denial of coverage was not in bad faith. (ECF No. 22.) For the reasons set forth below, the motion to dismiss is GRANTED.

         I. Factual Allegations

         According to the allegations in the amended complaint, Plaintiffs have owned their home in Willington, Connecticut, since 2002. (ECF No. 20 ¶ 4.) Allstate has insured the home at all relevant times. (Id. ¶ 5.) Plaintiffs have made all required insurance payments. (Id. ¶ 6.)

         In December 2016, while attempting to sell their home, Plaintiffs were notified that the basement walls had a series of horizontal and vertical cracks. (Id. ¶ 7.) Plaintiffs began to investigate this “pattern cracking” by consulting area professionals and learned that the condition of their basement walls was due to a “chemical compound found in certain basement walls” that were constructed between the early 1980s and late 1990s using concrete “most likely from the J.J. Mottes Concrete Company.” (Id. ¶¶ 8-9.) Plaintiffs learned that the aggregate used in manufacturing the concrete during that time period contained a chemical compound which, “with its mixture with the water, sand and cement necessary to form the concrete, began to oxidize (rust) and expand, breaking the bonds of the concrete internally and reducing it to rubble.” (Id. ¶ 10.)

         Plaintiffs allege that “[a]t some point between the date on which the basement walls were poured and late December of 2016, the basement walls suffered a substantial impairment to their structural integrity.” (Id. ¶ 12.) As a result, Plaintiffs claim that “[i]t is only a question of time until the basement walls of [their] home will fall in due to the exterior pressure from the surrounding soil.” (Id. ¶ 13.) Plaintiffs notified Allstate of the condition and their claim for coverage on February 3, 2017. (Id. ¶¶ 18-19.) Allstate denied their claim for coverage, claiming that the homeowners' policies issued to the Plaintiffs do not afford coverage for the condition affecting the basement walls. (Id. ¶ 20.) As a result of the denial, Plaintiffs expect that replacing their basement walls, along with related restoration of their deck, landscaping, driveway, and walks, will cost at least $250, 000. (Id. ¶ 24.)

         Plaintiffs' Homeowner's Policy (“Policy”) has three “Sections.” (ECF No. 22-2 at 24.)^[1]The provisions at issue in this case appear in “Section I - Your Property, ” which addresses property coverage and contains the following subsections: “Coverage A Dwelling Protection, ” “Coverage B Other Structures Protection, ” “Coverage C Personal Property Protection, ” “Additional Protection, ” and “Section I-Conditions.” (Id.)

         Under “Section I - Your Property, ” the Policy states:

Losses We Cover Under Coverages A and B: We will cover sudden and accidental direct physical loss to property described in Coverage A-Dwelling Protection and Coverage B-Other Structures Protection except as limited or excluded in this policy.

Losses We Do Not Cover Under Coverages A and B: We do not cover loss to the property described in Coverage A-Dwelling Protection or Coverage B-Other Structures Protection consisting of or caused by: . . . .

12. Collapse, except as specifically provided in Section I-Additional Protection, under item 11, “Collapse.” . . .

In addition, we do not cover loss consisting of or caused by any of the following: 15. a) wear and tear, aging, marring, scratching, deterioration, inherent vice, or latent defect; . . .

d) rust or other corrosion, mold, wet or dry rot; . . .

g) settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings; . . . .

22. Planning, Construction or Maintenance, meaning faulty, inadequate or defective:

. . .

c) materials used on repair, construction, renovation or remodeling . . . .

(Id. at 29-31.)

         The “Additional Protection” portion of ...