Houlihan v. Safeco Insurance Company of America

          RULING ON MOTION TO DISMISS

          WARREN W. EGINTON SENIOR U.S. DISTRICT JUDGE

         In this action, plaintiffs Robert and Ann Marie Houlihan challenge the defendants Safeco Insurance Company of America and American Commerce Insurance Co.'s failure to provide coverage for the damage to basement walls of their home. Plaintiffs allege breach of contract and violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) against each defendant. Defendant American Commerce Insurance has filed a motion to dismiss relative to counts three and four. For the following reasons, the Court will grant the motion to dismiss.

         FACTUAL BACKGROUND

         For purposes of ruling on this motion to dismiss, the Court assumes that all of the factual allegations in the complaint are true. The Court also includes facts concerning the insurance policies that plaintiff did not attach but that are integral to the complaint.^[1]

         Plaintiffs own and occupy a home in South Windsor, Connecticut that was built in 1985. Between 1994 and 2013, plaintiffs insured the home with a policy issued by Safeco and its predecessor in interest. Since 2013, plaintiffs have insured the property with defendant American Commerce Insurance.

         In late January 2017, plaintiffs hired a professional engineer who inspected the basement walls of their home. He discovered that their home was constructed with defective concrete and that the basement walls had “pattern cracking” caused by a chemical compound used in the late 1980s and 1990s. Plaintiffs allege that the concrete basement walls of the home are in a state of collapse. However, they also allege that they are currently occupying the home. They do not allege that their home or any part of it has fallen down or caved in.

         Plaintiffs requested coverage from American Commerce Insurance for the damage caused by the condition of the basement walls. By letter dated December 11, 2017, defendant American Commerce Insurance denied the coverage request from plaintiffs.

         American Commerce Insurance Policy

         The American Commerce Insurance policy was issued to plaintiffs for their home commencing June 4, 2013. The policy has been renewed annually since that time.

         The policy insured against risk of direct physical loss but excluded loss “[i]nvolving collapse” (except as provided for in the Additional Coverages provision) caused by “[f]reezing, thawing, pressure or weight of water or ice, … to a … footing, foundation, bulkhead, wall, or any other structure or device that supports all or part of a building, or other structure.” It also excluded loss from wear and tear, deterioration, latent defect, and “[s]ettling, shrinking, bulging or expansion, including resultant cracking, of … footings, foundations, floors, roofs or ceilings.”

         In the additional coverage provision, the policy defines “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.” It specifies further that a “building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse[;]” that a “part of a building that is standing is not considered to be in a state of collapse even if it has separated from another part of the building[;]” and that a “building or any part of a building 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.”

         DISCUSSION

         The function of a motion to dismiss is “merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.” Ryder Energy Distrib. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984). When deciding a motion to dismiss, the Court must accept all well-pleaded allegations as true and draw all reasonable inferences in favor of the pleader. Hishon v. King, 467 U.S. 69, 73 (1984). The complaint must contain the grounds upon which the claim rests through factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff is obliged to amplify a claim with some factual allegations to allow the court to draw the reasonable inference that the defendant is liable for the alleged conduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Plaintiffs maintain that the policy provides coverage for a state of collapse and that defendant American Commerce Insurance has breached its contract. Plaintiffs argue that the words “abrupt, ” “collapse” and phrase ...