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Courteau v. Teachers Insurance Co.

United States District Court, D. Connecticut

September 5, 2018

KENNETH T. CORTEAU, et al. Plaintiffs,
v.
TEACHERS INSURANCE CO. Defendant.

          RULING ON MOTION FOR SUMMARY JUDGMENT

          Michael P. Shea, U.S.D.J.

         I. Introduction

         Plaintiffs Kenneth Courteau and Cheryl Courteau filed this action against their homeowner's insurance provider, Teachers Insurance Company, for failure to pay for damages to the basement walls of their home caused by cracking concrete. The plaintiffs brought claims of breach of contract (Count One), breach of the implied covenant of good faith and fair dealing (Count Two), 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”). In my ruling on the defendant's motion to dismiss, I dismissed the plaintiffs' CUTPA claim. (See ECF No. 30 at 1.) Now before me is the defendant's motion for summary judgment with respect to the plaintiffs' remaining counts. (ECF No. 31.) For the reasons that follow, I grant the defendant's motion.

         II. Background

         A. Factual Background

         The following facts, which are taken from the parties' Local Rule 56(a) Statements and the exhibits, are undisputed unless otherwise indicated. “Plaintiffs Kenneth and Cheryl Courteau have lived at 98 Winwood Circle, Somers, Connecticut (“the Property”) continuously since 2006.” (ECF No. 33, Defendant's Local Rule 56(a)1 Statement (“Def.'s L.R. 56(a)1 Stmt.”) at ¶ 1; ECF No. 36-1, Plaintiffs' Local Rule 56(a)2 Statement (“Pl.'s L.R. 56(a)2 Stmt.”) at ¶ 1.) The defendant “insured the Property under separate policies of insurance, each with one year terms, beginning on October 1, 2006 and continuing until October 1, 2016.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 2; Pl.'s L.R. 56(a)2 Stmt. at ¶ 2.) During the plaintiffs' tenure in the Property, “Plaintiff Kenneth Courteau had seen all along what he characterized as normal wear and tear cracks in the house concrete.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 3; Pl.'s L.R. 56(a)2 Stmt. at ¶ 3.) “In or around September 2015, Plaintiffs received an offer to purchase their home, which they accepted. The deal fell through, however, when the prospective buyers obtained a home inspection report that contained negative findings concerning the foundation and garage concrete.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 4; Pl.'s L.R. 56(a)2 Stmt. at ¶ 4.)

         “On October 19, 2015, Plaintiffs submitted an insurance claim to [the defendant].” (Def.'s L.R. 56(a)1 Stmt. at ¶ 5; Pl.'s L.R. 56(a)2 Stmt. at ¶ 5.) After “[a]n adjuster retained by [the defendant] inspected the Property on October 22, 2015, ” the defendant “denied Plaintiffs' claim by letter dated October 26, 2015.” (Def.'s L.R. 56(a)1 Stmt. at ¶¶ 6-7; Pl.'s L.R. 56(a)2 Stmt. at ¶¶ 6-7.) The plaintiffs' insurance policies with the defendant took two forms between 2006 and 2016. “From October 1, 2006, when Plaintiffs first insured with [the defendant], through October 1, 2013, the [defendant's] Policy (“Policy”) did not contain any applicable coverage for collapse of a building or part of a building.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 10; Pl.'s L.R. 56(a)2 Stmt. at ¶ 10.) The versions of the Policy used thereafter contained “incidental coverage, applicable to direct physical loss to covered property involving the collapse of a building or part of a building.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 8 (internal quotation marks omitted); Pl.'s L.R. 56(a)2 Stmt. at ¶ 8.[1]) The post-2013 Policy defined the “collapse of a building or part of a building” as “an abrupt caving in, falling in, falling down, or giving way of the building or the part of the building that prevents the building or the part of the building from being occupied for the purpose for which it was intended just before caving in, falling in, falling down, or giving way . . . .” (Id.) It also stated that “the following are not considered to be in a state of collapse: a) a building or part of a building that has not caved in, fallen down, or given way even if it displays evidence of bending, bowing, bulging, cracking, expansion . . . and b) a building or a part of a building in danger of caving in, falling in, falling down, or giving way.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 9; Pl.'s L.R. 56(a)2 Stmt. at ¶ 9.)

         “The damage alleged by the Plaintiffs . . . is the result of a process of deterioration that has been occurring since the concrete [for the Property] was originally poured in 1984 . . . .” (Def.'s L.R. 56(a)1 Stmt. at ¶ 11; Pl.'s L.R. 56(a)2 Stmt. at ¶ 11.) “Petrographic analysis by Dr. Sidney Carter confirmed that core samples drilled from Plaintiffs' foundation walls contain[] iron sulfide materials, principally pyrrhotite, and that the cracking in the concrete relates to the oxidation of the iron sulfide minerals within the aggregates.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 13 (internal quotation marks omitted); Pl.'s L.R. 56(a)2 Stmt. at ¶ 13.) Despite these findings, the plaintiffs “currently occupy the Property” and continue to “use [the] basement as they have since they have owned the Property.” (Def.'s L.R. 56(a)1 Stmt. at ¶ 14; Pl.'s L.R. 56(a)2 Stmt. at ¶ 14.) “No one has told Plaintiffs that the cracks in their foundation walls present a safety hazard, ” “that the Property or the foundation walls are in imminent danger of falling down, or that they need to move out of the property.” (Def.'s L.R. 56(a)1 Stmt. at ¶¶ 15-16; Pl.'s L.R. 56(a)2 Stmt. at ¶¶ 15-16.)

         B. The Plaintiffs' Complaint

         According to their complaint, “the plaintiffs were notified [in October of 2015] that the basement walls of their home had a series of horizontal and vertical cracks throughout by way of a home inspection commissioned by a prospective buyer of their home.” (Id. at ¶ 6.) The plaintiffs subsequently “undertook an investigation of the ‘pattern cracking' condition, ” revealing that it had occurred “due to a chemical compound found in certain basement walls constructed in the late 1980s and the early 1990s with concrete most likely from the J.J. Mottes Concrete Company.” (Id. at ¶¶ 7-8.) The plaintiffs allege that “[t]he aggregate used by the J.J. Mottes Concrete Company in manufacturing the concrete in that particular 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. at ¶ 9.)

         After this realization, the plaintiffs claim they “made a timely claim for coverage of the loss in accordance with the terms of the [defendant's Policy] and the policies issued during the preceding years.” (Id. at ¶ 15.) The plaintiffs allege that “[t]he defendant denied [their] claim for coverage by way of [a] letter claiming that the [Policy] does not afford coverage for the condition affecting their basement walls.” (Id. at ¶ 16.) The plaintiffs claim that the defendant denied them coverage under the Policy on grounds contrary to “the express provisions of the [Policy].” (ECF No. 18 (“Complaint”) at ¶ 18.) As such, they allege a claim of breach of contract against the defendant. (See Id. at ¶¶ 1-20.) The plaintiffs also allege a claim for breach of the implied covenant of good faith and fair dealing on the basis that the defendant “intentionally cited policy exclusions wholly inapplicable to the plaintiffs' claim for coverage knowing full well that the plaintiffs, like most insureds, are unsophisticated with respect to the complex language contained in insurance policies.” (Id. at ¶ 24.)

         III. Legal Standard

         Summary judgment is appropriate only when the moving party “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). “In making that determination, a court must view the evidence in the light most favorable to the opposing party.” Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (internal quotation marks omitted). “A fact is material if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir. 2007) (internal quotation marks omitted). The moving party bears the burden “of showing that no genuine factual dispute exists . . ., and in assessing the record to determine whether there is a genuine issue as to any material fact, the court is required to resolve all ambiguities and draw all factual inferences” in favor of the non-moving party. Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 203 (2d Cir. 1995).

         IV. Discussion

         A. Breach of Contract Claim

         The parties' dispute over the plaintiffs' breach of contract claim focuses on the language of the Policy. The plaintiffs argue they are entitled to relief under both the pre-2013 and post-2013 versions of the Policy-or at least that there are factual disputes that preclude summary judgment. (See ECF No. 36 at 4-5.) For the reasons that follow, I conclude that their claims are foreclosed under both versions of the Policy.[2]

         1. Pre-2013 Policy

         “An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract . . . .” Connecticut Medical Ins. Co. v. Kulikowski, 286 Conn. 1, 5 (2008) (internal quotation marks omitted). Thus, “[t]he determinative question is the intent of the parties, that is, what coverage the . . . [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy . . . . If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning.” Id. (internal quotation marks omitted). “When interpreting [an insurance policy], [a court] must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in to reach a reasonable overall result.” Johnson v. Connecticut Ins. Guar. Ass'n, 302 Conn. 639, 643 (2011) (internal quotation marks omitted). “In determining whether the terms of an insurance policy are clear and unambiguous, [a] court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity . . . . Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms.” Id. An insurance policy “is ambiguous when it is reasonably susceptible to more than one reading.” Id. In such circumstances, “any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy.” Id. at 643 (internal quotation marks omitted).

         Here, the terms of the pre-2013 Policy unambiguously foreclose coverage of the plaintiffs' claim. The pre-2013 Policy covered the plaintiffs' “residence and related private structures on the insured premises for risks of direct physical loss unless specifically excluded.” (See ECF No. 32-1, Exhibit 1 (“Pre-2013 Policy”) at 7.) The pre-2013 Policy sets forth a number of exclusions, however, including the following:

We do not pay for loss caused by the settling, cracking, shrinking, bulging or expanding of a building structure or mobile home, pavements, patios or other outdoor structures.
. . .
We do not pay for loss which results from one or more of the following: . . . a defect, a weakness, an inadequacy, a fault or unsoundness in materials used in construction or ...

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