United States District Court, D. Connecticut
AMENDED RULING ON PENDING MOTIONS TO DISMISS AND
A. Bolden United States District Judge
January 29, 2016, Plaintiffs, homeowners in Hartford,
Tolland, and Windham Counties in Connecticut brought a Class
Action Complaint against their homeowners insurance companies
(collectively “Defendants”). ECF No. 1. Following
the filing of the Fourth Amended Complaint, Defendants filed
multiple motions to dismiss, as well as a motion to strike
reasons that follow, the Court GRANTS IN PART AND
DENIES IN PART Defendants' motions to dismiss,
ECF Nos. 497, 499, 502, 505, 508-510, 512, 514, 516, 518,
520, 522, 524, 526, 528, 530, 533, WITHOUT PREJUDICE
TO RENEWAL following resolution by the Connecticut
Supreme Court of the pending certified questions.
explained below, a subset of the counts in the Fourth Amended
Complaint contain policy language that, as a matter of law,
is unambiguous and does not support a claim for relief. The
Court dismisses each Plaintiff whose entire claim for relief
rested on a policy that unambiguously excluded coverage for
abrupt or sudden collapse: Kathy Noblet, Dawn L. Norris, and
Steven and Colleen Swart. Relatedly, the Court dismisses each
Defendant whose entire liability rested on a policy that
unambiguously excluded coverage for abrupt or sudden
collapse: American Commerce Insurance Company, Allstate
Insurance Company, Metropolitan Property & Casualty
Insurance Company, Nationwide Property & Casualty
Insurance Company, and Trumbull Insurance Company. The other
Plaintiffs and Defendants remain parties to this action for
the reasons stated below. The Court DENIES
Defendants' motion to strike class allegations. ECF No.
revised scheduling order with deadlines for the completion of
discovery relating to the class allegations only and for the
submission of a motion for class certification shall be
submitted by Friday, November 16, 2018,
jointly, if possible, but if the various parties cannot
agree, separately. The Court then will hold an in-person
status conference on Thursday, November 29, 2018 at
with this schedule and the Court's inherent authority to
manage cases on its docket,  the Court will
DENY any further amendments to the Fourth
Amended Complaint, absent unforeseen circumstances not now
FACTUAL AND PROCEDURAL BACKGROUND
own homes in Hartford, Tolland, and Windham Counties in
Connecticut. Fourth Am. Compl. (“FAC”) ¶ 1,
ECF No. 488. Defendants are multiple insurance companies who
each provided homeowners insurance to some of the Plaintiffs.
allegedly bought their homes between 1984 and 2015. See
e.g. FAC ¶¶ 8-28. They allege that each of
these properties has basement walls that are “crumbling
and/or exhibiting a pattern of cracking” due to the
oxidation of certain minerals contained in the concrete.
Id. ¶¶ 2, 53. As a result of the
deteriorating concrete, Plaintiffs claim that their
“basement walls are in a state of collapse . . .
.” FAC ¶ 2.
Hallorans' home in Ellington, Connecticut, is
representative of the type of damage the Plaintiffs allegedly
face. Constructed around 1985, their home is a two-story
colonial. FAC, Ex. 1: Fuss & O'Neill Report at 1, 3.
In 2015, engineers examining the house noted “light to
moderate cracking” in the concrete, “with many
cracks located at the corners of the building.”
Id. at 3. Several cracks exceeded one eighth of an
inch in width; most were between one-sixteenth and
one-eighth. Inside the home, “map cracking was observed
in the southwest corner.” Id. at 4. The
engineers also took core samples from the concrete, which
revealed “significant fracturing” as well as
“massive sulfide minerals” later identified as
pyrrhotite. Id. at 5.
engineers concluded that “[t]he oxidation (rusting) of
pyrrhotite causes swelling and cracking” ultimately
resulting “in decreased durability of concrete by
changing the chemical nature of the paste and mechanical
properties of the concrete.” Id. at 5.
Ultimately, the engineers' “professional
engineering judgment” was that the reaction would
continue, “resulting in increased deterioration and
eventual failure of the foundation to function as originally
intended. The structural failure may lead to loss of support
of the building structure, loss of support of the soil on the
outside of the wall and/or allowance of water intrusion into
the basement.” Id. at 6.
allege that “after discovering their deteriorating
basement walls, Plaintiffs have homes that are practically
impossible to sell, practically impossible to refinance and,
eventually, will be impossible to safely live in.” FAC
¶ 4. As a result, each Plaintiff has “made a claim
for coverage with one of the Defendant Insurance
Companies” and either been denied coverage or expected
to be denied coverage at the time of filing of the Complaint.
See id. ¶ 56. The cost of replacing the
basement walls for these homes “is generally between
$100, 000.00 and $250, 000.00 and the homeowners allege that
“[a]fter paying insurance premiums for years, or even
decades, Plaintiffs are left to face this massive expense all
alone.” Id. ¶ 83.
The Insurance Services Office
allege that “[e]ach of the Defendant Insurance
Companies adopted some or all of the language drafted”
by a common organization - the Insurance Services Office,
Inc. (“ISO”). See FAC ¶ 58.
Plaintiffs purport that ISO, an insurance industry
association, has “peddled” language in
standardized policies. Id. ¶ 3. Plaintiffs
contend that the insurance companies, along with ISO, were
aware of the concrete issues in Connecticut “[a]t least
as early as 1996” when claims began to be filed.
Id. ¶ 63. They also allege that ISO and their
insurance companies were aware that the Connecticut Supreme
Court had defined collapse as a “substantial impairment
of the structural integrity of a building.”
Id. ¶ 62 (citing Beach v. Middlesex Mutual
Assurance Co., 205 Conn. 246, 252 (1987).
to Plaintiffs, Defendants and ISO deliberately changed their
policies' definitions of ‘collapse' to try to
avoid or minimize liability for potential claims brought by
Plaintiffs. Id. ¶ 64. The new language excluded
losses to a “foundation” or “retaining
wall” and “excluded ‘settling, cracking,
shrinkage, bulging or expansion” from coverage of
collapse. Id. ¶ 65. Plaintiffs allege that ISO
was not the only organization that did so; the American
Association of Insurance Services (“AAIS”)
adopted similar exclusions. Id. ¶ 66.
“[b]esieged by insureds raising this issue the
Defendant Insurance Companies kept denying claims, ”
according to Plaintiffs, and they “provid[ed] bogus
responses when they knew the claims were good, while at the
same time, casting about for a way to try to shore up the
language in their policies.” Id. ¶ 72.
allege this occurred primarily through “collapse”
provisions, which were amended in 1999 and again in 2011.
Id. ¶¶ 73-74. These changes ultimately
narrowed the coverage for Plaintiffs. Id. ¶ 77.
The “Collapse” Provision
standard insurance policy language produced by ISO, and
allegedly adopted by the insurance companies, went through
several iterations between 1990 and the present. FAC, Ex. 2.
the coverage provided for the “direct physical loss to
covered property involving collapse of a building or any part
of a building” caused by several discrete causes. FAC
¶ 101. These included “hidden decay”,
“hidden insect or vermin damage”, the “use
of defective materials or methods in construction, remodeling
or renovation if the collapse occurs during the course of the
construction, remodeling or renovation[.]” Id.
The term “collapse” was undefined.
1999, ISO language allegedly changed and defined collapse 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 current
intended purpose.” Id. The language clarified
that a building “in danger of following down or caving
in” or that “is standing” is “not
considered to be in a state of collapse, ” even if it
“shows evidence of cracking, bulging, sagging bending,
leaning, settling, shrinkage or expansion.” The policy
language changed several more times after 2000, but included
an identical collapse provision.
allege that each Defendant changed the language of their
policies over time, and that these unilateral changes
“attempted to delete coverage.” FAC ¶ 79.
They argue that they are “homeowners without the
requisite knowledge and resources to make the many intricate
observations needed to determine” if their policies
would cover certain events. FAC ¶ 81. Plaintiffs claim
they “did not and could not negotiate with the
Defendant Insurance Companies at arms' length” but
instead trusted the insurance companies. Id. They
allege that they “relied to their detriment on the
Defendant Insurance Companies' superior knowledge and
skill in purchasing their homeowners insurance
policies[.]” Id. ¶ 81.
homeowners also allege that any changes were
“unilateral” and made “without providing
adequate notice or adequate disclosure” under
Connecticut law. Id. ¶ 78.
filed the first complaint in this case on January 29, 2016.
See Compl., ECF No. 1. The initial complaint
included seven named plaintiffs and more than one hundred
defendants, all insurance companies. Id.
¶¶ 2. Before Defendants had responded, Plaintiffs
filed an amended complaint that included additional
defendants and claims on March 17, 2016. See First
Am. Compl., ECF No. 122. Plaintiffs then moved to certify a
class, which they defined as:
All individuals who own a home in the Connecticut towns of
Manchester, Andover, Ellington, Stafford Springs or any other
Connecticut town located east of the Connecticut River whose
homes are insured by any of the Insurance Defendants, and
whose homes have sustained ‘pattern cracking'
including but not limited to horizontal and vertical cracks
on their basement walls, and whose bad foundation claims have
been denied or will be denied by the Insurance Defendants,
which denials are or will be based on the same standardized
language regarding the term ‘collapse', the term
‘basement', the term ‘foundation', the
term ‘decay', the term ‘hidden', and the
term ‘retaining wall.'
Pls. Mot. for Class Certification, ECF No. 158.
parties then sought different case management orders.
See Pls. Proposed Case Management Order, ECF No.
239; Certain Defs. Non-Consented Mot. For Entry of Proposed
Case Management Plan, ECF No. 240. The Court, in addressing
these motions, provided that any motion for leave to file an
amended complaint would be due by May 6, 2016. Order, ECF No.
254. It also denied Plaintiffs' motion for class
certification without “prejudice to renewal following
the Court's resolution of any motion to amend, and
motions to dismiss directed at the amended complaint.”
then moved for leave to file a Second Amended Complaint on
May 7, 2016. See Pl Mot. for Leave to Amend, ECF No.
290. Plaintiffs sought to add nine additional plaintiffs and
four additional defendants, and to remove three defendants.
Id. at 4-5. Plaintiffs also sought to add additional
causes of action for breach of contract and breach of the
implied covenant of good faith and fair dealing. Id.
Defendants did not oppose amendment. See Defs.
Resp., ECF No. 309. The Court granted the motion, noting the
lack of objection. Order, ECF No. 323.
parties then moved to amend the scheduling order, and
Plaintiffs stated that they intended to file a third amended
complaint. ECF No. 325. The Court granted the request and
stayed responsive pleadings regarding the Second Amended
Complaint. See Order, ECF No. 326.
October 31, 2016, Plaintiffs moved to amend the Complaint yet
again and join additional parties; they sought to add
nineteen new plaintiffs and reduce the overall number of
defendants to thirty. See Pls. Mot. for Leave to
Amend., ECF No. 332. Defendant State Farm Fire and Casualty
Company opposed amendment, but other parties stated they had
no opposition. Cf. State Farm Fire and Casualty Co.
Mem. of L. in Opp., ECF No. 337 (opposing Plaintiffs'
motion for leave) with Defs. Resp., ECF No. 338 at 1
(“In the interest of judicial efficiency and economy
for all parties and this Court, the Defendants listed in
Exhibit 1 do not oppose Plaintiff's Motion insofar as it
seeks leave to file a Third Amended Complaint.”).
the Court addressed the motion, however, Plaintiffs moved for
leave to file a substituted third complaint on December 12,
2016. See Pl. Mot., ECF No. 339. Plaintiffs stated
that the proposed “Substituted Third Amended
Complaint” rectified a number of errors, deleted
references to individuals and companies not in the case,
corrected a number of errors in dates, damage estimates, and
party names, and dropped a number of claims. Id.
Defendants, in large part, again did not oppose amendment,
although they noted that “the proposed Substituted
Third Amended Complaint is Plaintiffs' fifth complaint in
this case” and “[e]ach such amendment has not
only delayed joinder of issues, but has caused Defendants to
incur significant and unnecessary expenses in defending
themselves.” Defs. Resp. to Mot. to Amend/Correct, ECF
No. 340, at ¶ 1. Defendants requested, however, that
further amendment be barred unless Plaintiffs demonstrated
good cause under Federal Rule of Civil Procedure 16.
Id. ¶ 2.
Court granted Plaintiffs' motion and allowed the
Substituted Third Amended Complaint to be filed. See
Order on Mot. Amend Compl., ECF No. 350. The Court noted
Defendants' consent. Id. at 1. The Court denied
the Defendants' request to preclude future amendments
unless Plaintiffs could show good cause because:
“Defendants cite no authority supporting their request
that the Court preemptively impose a good cause standard on
Plaintiffs' potential future requests to further amend
the complaint in this case. The Court will not, therefore,
order that Plaintiffs be precluded from any further
amendments to the complaint in the absence of good
cause.” Id. at 2. Plaintiffs subsequently
filed the Substituted Third Amended Complaint, ECF No. 352.
then filed numerous motions to dismiss. This included joint
motions to dismiss several shared counts, ECF No. 373, and to
strike the class allegations, ECF No. 375. Individual
defendants also filed separate motions to dismiss.
See Travelers Defs. Mot. Dismiss, ECF No. 377;
Citizens Ins. Co. Mot. Dismiss., ECF No. 379; Bunker Hill
Ins. Co., ECF No. 381; New London Cty. Mutual Ins. Co. Mot.
Dismiss, ECF No. 384; Trumbull Ins. Co. Mot. Dismiss, ECF No.
387; Allstate Ins. Co. Mot. Dismiss, ECF No. 391;
Metropolitan Group Mot. Dismiss, ECF No. 394; Kemper
Independence Ins. Co. Mot. Dismiss, ECF No. 397; Liberty
Entities' Mot. Dismiss, ECF No. 399; Homesite Ins. Co.
Mot. Dismiss, ECF No. 401; Amica Ins. Co. Mot. Dismiss, ECF
No. 403; State Farm Mot. Dismiss, ECF No. 405; Merrimack Mutual
Fire Ins. Co. Mot. Dismiss, ECF No. 409; American Commerce
Ins. Co. Mot. Dismiss, ECF No. 411; NGM Ins. Co. Mot.
Dismiss, ECF No. 413; CSAA Fire and Cas. Ins. Co. Mot.
Dismiss, ECF No. 415; Nationwide Property and Cas. Ins. Co.
and Harleysville Preferred Ins. Co. Mot. Dismiss, ECF No.
416; Middlesex Mutual Assurance Co. Mot. Dismiss, ECF No.
420. Plaintiffs responded to these motions on September 15,
2017. See Sept. 2017 Pls. Mem. in Opp. re Mot. to
Strike, ECF No. 457; Sept. 2017 Pls. Resp. to Mot. to Dismiss
and Mot. to Sever, ECF No. 456; Sept. 2017 Pls. Mem. in Opp.
Combined, ECF No. 458.
then filed another motion to amend on September 25, 2017,
seeking leave to file a Fourth Amended Complaint, ECF No.
462. They sought leave to delete parties and claims that are
no longer being pursued in light of the issues raised in
various motions to dismiss, and to delete references to
individuals and companies not in the case, and to add counts
between existing parties, and to correct errors, missing, or
confusing information. Id. at 1-2.
then moved to stay briefing on the pending motions to dismiss
until the Court issued its ruling on the motion to amend.
See Defs. Mot. to Stay, ECF No. 463. Plaintiffs
opposed the Defendants' motion to stay briefing. Mem. in
Opp. re Mot. to Stay Certain Defs. Emerg. Mot. to Stay
Briefing on Subst. Third Am. Compl., ECF No. 467.
September 29, 2017, the Court amended the scheduling order.
Order on Amen. Sched. Order, ECF No. 470. The Court ordered
Defendants to respond to the motion for leave to file a
Fourth Amended Complaint within forty-five days. Id.
at 2. Furthermore, the Court ordered that, should the Court
deny leave to amend, Defendants would have thirty (30) days
to file replies to the pending motions or, if the Court
granted the motion, Defendants would have forty-five (45)
days to answer, move to dismiss, or otherwise respond to the
Fourth Amended Complaint. Id.
filed two objections to the leave to amend. First, a group of
defendants jointly argued that, while the Court has the
discretion to grant leave, it should not do so because
granting Plaintiffs' motion would lead to significant
delay and increased litigation costs. Certain Defs. Opp. to
Pls. Mot. (“Certain Defs. Opp.”), ECF No.
Second, Middlesex Mutual Assurance Company
(“MMAC”) filed an additional response to the
motion for leave. Middlesex Mutual Assurance Co. Response
(“MMAC Resp.”), ECF No. 481. MMAC raised
individual arguments as to the individual Plaintiffs
asserting claims against the company. Id.
Court granted leave to amend and mooted the pending motions
to dismiss on February 8, 2018. See Order on Pl.
Mot. for Leave to Amend (“Leave to Amend Order”),
ECF No. 487. The Court determined that it would exercise its
discretion because the delay had not yet prejudiced the
parties, id. at 12, and no claims were futile,
id. at 12-13. Ultimately, the Court determined
“This case is a complex action involving Plaintiffs who
seek to represent a class in a suit against multiple
defendants, including some claims that relate to the class as
a whole and some that relate to the interaction between
subsets of plaintiffs and defendants. Some delay is
inevitable given the posture of the case.” Id.
at 11. The Court also declined to ban Plaintiffs from further
amendments at that time. Id. at 15. The Court
directed Plaintiffs to file the Fourth Amended Complaint and
set a briefing schedule for a new round of motions to
dismiss. Id. at 16-17.
filed the Fourth Amended Complaint on February 14, 2018. FAC.
Three-thousand and three paragraphs long, the Fourth Amended
Complaint asserts four categories of claims: breach of
contract, declaratory judgment, breach of the implied
covenant of good faith and fair dealing, and violations of
the Connecticut Unfair Trade Practices Act
(“CUTPA”), Conn. Gen. Stat. § 42-110(g), and
Connecticut Unfair Insurance Practices Act
(“CUIPA”), Conn. Gen. Stat. § 38a-815-35.
Each Plaintiff asserts multiple counts against the insurer
who provided insurance on his or her home, and in some cases
an individual Plaintiff alleges unlawful conduct by multiple
also renewed their class allegations. See Id. ¶
2994. According to the Fourth Amended Complaint, Plaintiffs
seek to bring this case on behalf of:
All persons who purchased any of the Defendants'
homeowners insurance policies that insure property located in
Connecticut and which contain coverage for “collapse,
” and who sought coverage for “collapse” of
their basement walls and did not get it; and all persons who
will purchase such homeowners insurance policies from any of
the Defendants and who will seek such coverage, and who are
unaware of the loss at the time of purchase.
Id. ¶ 2995. They allege that the proposed class
would meet the requirements of Rule 23(b)(1), (b)(2) and
(b)(3) of the Federal Rules of Civil Procedure. Id.
then moved, individually and as a group, to dismiss the
Fourth Amended Complaint. See, e.g., Certain Defs.
Mot. to Dismiss, ECF No. 497. Additionally, Defendants moved
to strike the class allegations. See Certain Defs
Class Mem., ECF No. 498. Their motion to strike essentially
employs each of the sections of Rule 23 of the Federal Rules
of Civil Procedure. They argue that Plaintiffs will not be
able to show commonality, and that each claim raises numerous
individualized inquires that would defeat the class
certification motion. Id. at 11. They also argue
that the Plaintiffs cannot meet any of the requirements under
the subsections of Rule 23(b), and therefore class
certification would be inappropriate. Id. at 25-35.
Plaintiffs responded to these motions on May 11, 2018.
See May 2018 Pl. Mem. in Opp. re Mot. to Strike, ECF
No. 543; May 2018 Pl. Mem. in Opp. Combined, ECF No. 544. The
parties filed various reply briefs in May and June of 2018.
oral argument on the pending motions, the Court sua
sponte noted that two other courts in the District had
certified the following question to the Connecticut Supreme
Court: “What constitutes a ‘substantial
impairment of structural integrity' for purposes of
applying the ‘collapse' provision of this
homeowners' insurance policy?” Order at 1, ECF No.
572 (citing r Karas v. Liberty Ins. Corp.,
3:13-cv-01836 (SRU), 2018 WL 2002480 (D. Conn. 2018);
Vera v. Liberty Ins. Corp., No. 3:16-cv-72 (RNC),
2018 WL 3014112 (D. Conn. 2018)). The Court, noting that
other courts in this District had subsequently stayed similar
cases, requested that the ...