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Carney v. Allstate Insurance Company

United States District Court, D. Connecticut

September 20, 2018




         I. Introduction

         This case concerns a contract dispute over an insurance policy and whether it covers damage to the basement walls of Plaintiff's home caused by defective concrete. Plaintiff alleges breach of contract (Count I) and violations of the Connecticut Unfair Insurance Practices Act (“CUIPA”) and Unfair Trade Practices Act (“CUTPA”) (Count III) stemming from Defendant's decision to decline coverage for the damage under Plaintiff's insurance policy.[1] Defendant now moves for summary judgment as to Counts I and III of Plaintiff's Amended Complaint. For the reasons that follow, Allstate's Motion for Summary Judgment, Dkt. 36, is GRANTED.

         II. Factual Background and Procedural History

         Plaintiff purchased the property located at 18 Deer Meadow, Tolland, Connecticut (the “Property”) in 2003. Dkt. 19 (Am. Compl.) ¶ 3. The Property was built in 1998. Id. Allstate “insured the Property under separate policies of insurance [(the “Policy”)], each with one year terms, since July 11, 2003, and continuing through to the present.” Dkt. 36-2 (Def.'s Stmt. Undisputed Material Facts (“SUMF”)) ¶¶ 4, 5.

         The Policy specifies under “Losses We Cover Under Coverages A and B, ” that it covers “sudden and accidental direct physical loss to property . . . except as limited or excluded in this policy.” Dkt. 36-4 (Mot. Summ. J. Ex. A., Ex. 1 (Policy)) at 5-6. Under exclusions, the Policy specifies that it does not cover, inter alia, “15. . . . (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” and/or “22. Planning, Construction or Maintenance, meaning faulty, inadequate or defective: . . . (b) design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; (c) materials used in repair, construction, renovation or remodeling; or (d) maintenance; of property whether on or off the residence premises by any person or organization.” Id. at 7-8. Additionally, it states that it does not cover “[c]ollapse, except as specifically provided in Section I - Additional Protection.” Id. at 7.

         “Section I - Additional Protection” specifies that the Policy “will cover (a) the entire collapse of a covered building structure” and “(b) the entire collapse of part of a covered building structure” when that collapse is “a sudden and accidental direct physical loss caused by . . . hidden decay of the building structure . . . [or] defective methods or materials used in construction, repair, remodeling or renovation.” Id. at 15. Finally, the Policy states that “[c]ollapse does not include settling, cracking, shrinking, bulging or expansion.” Id. The Allstate Policy does not contain a specific definition for “collapse, ” but defines “building structure” as “a structure with walls and a roof.” Id. at 3.

         In July of 2015, Plaintiff observed “some hairline cracking” in a porch at the front of the Property. Dkt. 36-2, at ¶ 13. A month later, in August of 2015, Plaintiff noticed a “more significant pattern of horizontal and vertical cracks” throughout the basement walls of the Property. Dkt. 37 (Pl.'s Opp'n), at 1-2; Dkt. 36-2, at ¶ 14. Plaintiff's builder told her that the concrete at issue had been supplied by the J.J. Mottes Company and Plaintiff proceeded to procure an engineer to investigate the condition. Dkt. 37, at 2. Plaintiff's engineer conducted a visual inspection, observing the pattern of cracking and bowing of the walls in several locations, and reported that he believed that the cracking was “was caused by an Alkali-Silica-Reaction and that the walls would continue to deteriorate over time.” Id. The engineer further concluded “that the walls were structurally unsound at the time of his inspection and that corrective action was necessary.” Id. at 2-3.

         Plaintiff filed a claim with Defendant in August or September of 2015. Id. at 3; Dkt. 36-2, at ¶ 5. Defendant's experts inspected the condition of the concrete and concluded that it was “the result of long-term progressive deterioration of the foundation walls as the result of pyrrhotite, a reaction iron sulfide contained in the concrete aggregate since it was first poured.” Dkt. 36-2 ¶¶ 16-18. Following the investigation, Defendant denied the claim by letter dated February 8, 2016. Dkt. 36-2, at ¶ 6; Dkt. 36-5 (Mot. Summ. J. Ex. B, Ex. 1 (Denial Letter)). The letter stated:

Your claimed loss involved cracking to the concrete in your foundation. Allstate's investigation has determined that the cracking is likely the result of the effect of water and air on pyrrhotite in the aggregate in the foundational concrete that has been present since the foundation was poured. The cracking is a condition that has progressed over an extended period of time.

Dkt. 36-5, at 2. It further explained that one or more exclusions applied to the claimed loss because “the foundation cracking at the Property is not ‘sudden and accidental direct physical loss'” but instead has “progressed gradually over the years” and “[t]he Property did not collapse, within the scope of [the Policy].” Id. at 1-3.

         Based on inspection, the parties' experts in this case agree “that the conditions they observed in Plaintiff's foundation walls are the result of long-term deterioration” and “that the oxidation of the reaction materials, which is triggered by exposure to air and water, occurs over an extended period of time, not suddenly, ” Dkt. 36-2, at ¶¶ 19-20; Dkt. 38 (Pl.'s Resp. Def.'s SUMF), at ¶¶ 19-20, with Plaintiff's expert further specifying that “the cracking condition is the result of numerous sudden events.” Dkt. 38, at ¶¶ 20. The Property's basement walls are still standing and continue to support the house above. Dkt. 36-2, at ¶ 23. The Property continues to be safe for use as a home. Id. at ¶ 25; Dkt. 38, at ¶ 25.

         III. Standard of Review

         Summary judgment should be granted “if 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). The moving party bears the burden of proving that no factual issues exist. Vivenzio v. City of Syracuse, 611 F.3d 98, 106 (2d Cir. 2010). “In determining whether that burden has been met, the court is required to resolve all ambiguities and credit all factual inferences that could be drawn in favor of the party against whom summary judgment is sought. Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). “If there is any evidence in the record that could reasonably support a jury's verdict for the nonmoving party, summary judgment must be denied.” Am. Property Assurance Co. v. Hapag Lloyd Container Linie, GmbH, 446 F.3d 313, 315-16 (2d Cir. 2006) (quotation omitted). In addition, the court should not weigh evidence or assess the credibility of witnesses” on a motion for summary judgment, as “these determinations are within the sole province of the jury.” Hayes v. New York City Dep't of Corr., 84 F.3d 614, 619 (2d Cir. 1996).

         “A party opposing summary judgment ‘cannot defeat the motion by relying on the allegations in [her] pleading, or on conclusory statements, or on mere assertions that affidavits supporting the motion are not credible.' At the summary judgment stage of the proceeding, [p]laintiffs are required to present admissible evidence in support of their allegations; allegations alone, without evidence to back them up, are not sufficient.” Welch-Rubin v. Sandals Corp., No. 3:03-cv-481, 2004 WL 2472280, at *1 (D. Conn. Oct. 20, 2004) (quoting Gottlieb v. County of Orange, 84 F.3d 511, 518 (2d Cir.1996). “Summary judgment cannot be defeated by the presentation . . . of but a ‘scintilla of evidence' supporting [a] claim.” Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 726 (2d Cir. 2010) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986)).

         IV. Discussion

         As many courts before have done, this Court now considers whether the concrete decay condition afflicting Plaintiff's basement walls is covered by the Policy. Dkt. 36-1, at 3; Dkt. 37, at 6. Because there is no genuine issue of material fact and the relevant Policy language unambiguously denies coverage for Plaintiff's claimed loss, this Court GRANTS Defendant's Motion for Summary Judgment as to Counts I and III.

         A. Count I: Breach of Contract

         An insurance policy “is to be interpreted by the same general rules that govern the construction of any written contract.” Zulick v. Patrons Mut. Ins. Co., 287 Conn. 367, 372-73 (2008). Any contract “must be construed to effectuate the intent of the parties, which is determined from the language used and interpreted in the light of the situation of the parties and the circumstances connected with the transaction.” Murtha v. City of Hartford, 303 Conn. 1, 7-8 (2011) (quoting Remillard v. Remillard, 297 Conn. 345, 355 (2010)); Harbour Pointe, LLC v. Harbour Landing Condominium Ass'n, Inc., 300 Conn. 254, 260 (2011) (“In ascertaining the contractual rights and obligations of the parties, we seek to effectuate their intent, which is derived from the language employed in the contract, taking into consideration the circumstances of the parties and the transaction.” (quotations omitted)).

         Where the language of a contract is unambiguous, a court “must give the contract effect according to its terms.” Harbour Pointe, 300 Conn. at 260 (quoting Cantonbury Heights Condominium Ass'n Inc. v. Local Land Dev., LLC, 273 Conn. 724, 734-35 (2005)). A contract is unambiguous when “its language is clear and conveys a definite and precise intent . . . . The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity.” Id. “[T]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.” Id.

         Where the language of an insurance policy is ambiguous, such language must be construed against the insurance company that drafted the policy. See Springdale Donuts, Inc. v. Aetna Cas. & Sur. Co., 247 Conn. 801, 806 (1999). However, any ambiguity in a contract “must emanate from the language used by the parties” and “a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself.” Murtha, 300 Conn. at 9. “The contract must be viewed in its entirety, with each provision read in light of the other provisions ... and every provision must be given effect if it is possible to do so . . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous.” Harbour Pointe, 300 Conn. at 261 (quoting Cantonbury Heights, 273 Conn. at 735). “Whether a contract is unambiguous is a question of law for the Court, appropriately decided at the summary judgment stage.” Lees v. Allstate No. 3:15-cv-1050, 2017 U.S. Dist. LEXIS 196728, at *14-17 (D. Conn. Nov. 30, 2017) (citing Continental Ins. Co. v. Atlantic Cas. Ins. Co., 603 F.3d 169, 180 (2d Cir. 2010)).

         Defendant argues that the “plain and unambiguous” language of the Policy does not cover Plaintiff's claimed loss. Dkt. 36-1, at 10. In particular, Defendant argues that Plaintiff's claim is not covered because (1) it is not a “sudden and accidental direct physical loss” as required by the Policy, and even if it were, loss consisting of or caused by cracking of walls or rust or corrosion and loss caused by defective materials used in construction are excluded from coverage and (2) the additional coverage for collapse requires a “sudden and accidental” “entire collapse, ” which did not occur in this case, and specifically excludes the shrinking, cracking, and bulging that has occurred in this case. Id. at 3.

         Plaintiff concentrates entirely on the argument that hidden decay and defective materials have caused the deterioration of the walls, which has ultimately resulted in a substantial impairment of structural integrity amounting to a covered collapse under Beach v. Middlesex Mutual Assurance Company, 205 Conn. 246, 252 (1987). Dkt. 37, at 9-11. Further, Plaintiff argues that the question of whether the collapse was “sudden and accidental” under the Policy is ambiguous in the context of collapse coverage, and ...

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