United States District Court, D. Connecticut
JAMES T. AINSWORTH, et al. Plaintiffs,
AMICA MUTUAL INS. CO. Defendant.
RULING ON MOTION TO DISMISS
Michael P. Shea, U.S.D.J.
James T. Ainsworth and Nancy H. Ainsworth filed this action
in state court against their homeowner's insurance
provider, Amica Mutual Insurance Company
(“Amica”), for failure to pay for damages to
their basement walls caused by cracking and deterioration in
the concrete. Amica removed the case to this court on July 7,
2016. (ECF No. 1.) On September 11, 2017, the plaintiffs
filed a second amended complaint, bringing the following
claims: (i) breach of contract (count one); (ii) declaratory
judgment concerning the coverage of the plaintiffs' home
(count two); (iii) breach of the implied covenant of good
faith and fair dealing (count three); and (iv) 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 four).
(ECF No. 43 (“Complaint”) at ¶¶ 8-84.)
Now before me is the defendants' motion to dismiss, which
chiefly contends that the plaintiffs' claims fail because
the homeowner's insurance policy for their property
unambiguously does not cover the losses they assert. (ECF No.
46.) For the reasons set forth below, this motion is granted
in part and denied in part. It is granted with respect to the
plaintiffs' breach of the implied covenant of good faith
and fair dealing claim (count three) and declaratory judgment
claim (count two). It is denied with respect to the
plaintiffs' other claims.
Factual Allegations and Pertinent Policy Language
Plaintiff's Factual Allegations
makes the following factual allegations, which I assume to be
plaintiffs purchased their home in 1997 and insured it since
that time “with a homeowner's policy issued by
[Amica].” (Complaint at ¶¶ 5-6.) The
“plaintiffs have paid the premium charged by [Amica]
each year and, without further action on the plaintiffs'
part, the subject policy was automatically renewed by [Amica]
subject to the payment of the related premiums, all of which
were timely and satisfactorily paid.” (Id. at
2012, the plaintiffs noticed that the basement walls of their
home had a series of horizontal and vertical cracks
throughout.” (Id. at ¶ 9.) The plaintiffs
subsequently hired a local engineer to look into the problem.
(Id. at ¶ 10.) The engineer “suggested
that the problems [the plaintiffs] were experiencing were due
to defective concrete used in the construction of the
basement walls of their home.” (Id. at ¶
11.) He was of the opinion, however, “that [the
plaintiffs] had discovered the condition in their walls early
enough to prevent further deterioration and salvage the
concrete basement walls by designing an interior support wall
system constructed with properly batched concrete and
abutting the existing basement walls of their home.”
(Id. at ¶ 12.) Relying upon this
recommendation, the “plaintiffs installed the interior
support wall system designed by their engineer in spring of
2013 and were thereafter under the impression that the
problems with the original basement walls were resolved and
that the home had, at all times, remained structurally
sound.” (Id. at ¶ 13.)
late summer and early fall of 2015, however, “the
plaintiffs saw local news coverage which now suggested that
the cause of the deterioration of the original basement walls
of their home was a chemical compound found in certain
basement walls constructed between the mid-1980s and the late
1990s with concrete most likely from the J.J. Mottes Concrete
Company.” (Id. at ¶ 14.) “In
particular, the 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 ¶ 15.) The plaintiffs
learned from local news coverage in the late summer and fall
of 2015 that, “contrary to the suggestion of the
engineer that they had hired earlier, there is no known
scientific or engineering method or process which is
effective in stopping or reversing the deterioration.”
(Id. at ¶ 16.)
seen the news coverage, the plaintiffs inspected the new
walls poured within their home and discovered that, despite
being constructed with good and sufficient concrete, the new
walls had begun to display the pattern of cracking associated
with Mottes concrete suggesting that the continued expansion
of the original walls had begun to adversely impact the new
walls constructed in 2013.” (Id. at ¶
17.) “At some point between the date on which the
original basement walls were poured and the month of July,
2015, the basement walls suffered a substantial impairment to
their structural integrity, which substantial impairment was
not cured or otherwise corrected by the installation of the
interior basement walls.” (Id. at ¶ 18.)
“It is only a question of time until the basement balls
of the plaintiffs' home will fall in due to the exterior
pressure of the surrounding soil, ” causing “the
entire home [to] fall into the basement.” (Id.
at ¶¶ 19-20.)
realizing the extent of the damage to their home, the
plaintiffs filed a claim with Amica on September 29, 2015.
(Id. at ¶¶ 37-38.) Amica “denied
coverage by way of a letter dated December 16, 2016, claiming
that the homeowner's policies issued by the defendant do
not afford coverage for the condition affecting their
basement walls.” (Id. at ¶ 39.) The
plaintiffs allege that Amica “breached its contractual
obligation” under the policy by refusing to provide
coverage for their claim. (Id. at ¶¶
plaintiffs also assert that “[a]t some point in the
early to middle 2000s, perhaps earlier, [Amica] became aware
of the fact that a No. of homes it insured in the northeast
corner of Connecticut, principally in Tolland County-which is
well within the business service of J.J. Mottes Concrete-and
which were constructed between the mid-1980s and late 1990s
were highly likely to have basement walls constructed with
the defective concrete [noted above].” (Id. at
¶ 56.) Amica knew that these homes would show telltale
signs of cracking in the near future and that, “unless
repaired, all of the homes constructed between the mid-1980s
and late 1990s with the defective concrete would eventually
collapse once the concrete disintegrated to the point where
it could no longer support the weight of the structure above
or oppose the lateral pressure of the earth against the
basement walls or both.” (Id. at ¶¶
57-58.) “Armed with this knowledge, the defendant made
a change to the Additional Coverages section of its
homeowner's policies to avoid liability for the potential
claims of the plaintiffs' and other similarly situated
insureds in northeastern Connecticut which it well knew
either existed but was undiscovered or would arise upon the
passage of time.” (Id. at ¶ 59.) Amica
“also knew, or should have known, that the structural
integrity of all of the basement walls within the homes
constructed between the mid-1980s and late 1990s with the
defective concrete had become substantially impaired prior to
the defendant's attempts to alter the Additional
Coverages section of its homeowner's policies.”
(Id. at ¶ 60.) Despite this knowledge, Amica
made no attempt to explain or disclose to its insureds the
reasons for the changes to its homeowner's policies.
(Id.at ¶¶ 61-62.)
Amica “participates in the Insurance Services Office,
Inc. (‘ISO') which is a cooperative organization
formed and controlled by its participants for the purpose,
among others, of collecting data on the type of claims made,
the policy provisions cited for the basis of each claim, the
geographic areas in which the claimed damage has occurred,
and the actions taken by insurers in response to such
claims.” (Id. at ¶ 71.) The plaintiffs
allege that, through participation in the ISO, Amica had
knowledge of many claims in northeastern Connecticut
resulting from similar concrete decay, the strategies other
insurers had used to deny such claims, and cases such as
Bacewicz v. NGM Ins. Co., No. 3:08-CV-1530 (JCH), in
which claimants were awarded judgment against an insurer for
concrete decay based on “nearly identical” policy
language. (Id. at ¶¶ 74-76.) The
plaintiffs allege that in its denial letter Amica “gave
the insured a knowingly false and misleading reason for the
denial of coverage.” (Id. at ¶ 77.)
Further, the Plaintiffs allege that Amica is “regularly
. . . engaged” in refusing to resolve concrete decay
claims in good faith, citing seven similar cases in
Connecticut Superior Court in which Amica is a defendant.
(Id. at ¶¶ 80-81.)
The Relevant Language of the Homeowners Policies
has attached to its motion to dismiss the plaintiffs'
homeowner's policies during the relevant time period.
Since the plaintiffs had actual notice of these documents,
rely upon them in framing their complaint, and do not contest
their validity in their objection, I rely upon these
documents in adjudicating Amica's motion to dismiss.
See Cortec Indus., Inc. v. Sum Holding L.P., 949
F.2d 42, 48 (2d Cir. 1991) (“Where plaintiff has actual
notice of all the information in the movant's papers and
has relied upon these documents in framing the complaint the
necessity of translating a Rule 12(b)(6) motion into one
under Rule 56 is largely dissipated.”). The
plaintiffs' homeowner's policies' coverage of
collapse changed several times during the pertinent time
period. I list the relevant versions of the policies below.
plaintiffs' homeowner's policies with Amica before
2007 contained the following coverage for collapse:
. . .
8. Collapse. 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. Hidden decay;
. . .
f. Use of defective material or methods in construction,
remodeling or renovation . . . .
Loss to a . . . foundation [or] retaining wall . . . is not
included under items b. [. . .] 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.
. . .
SECTION I - PERILS INSURED AGAINST
. . .
We insure against risks of direct physical loss to property
described in Coverages A and B . . . . We do not ...