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Gilmore v. Teachers Insurance Co.

United States District Court, D. Connecticut

September 4, 2019




         This is one of the many "so-called 'crumbling concrete cases'" brought by Connecticut residents, whose homes were allegedly built with tainted concrete and whose insurers declined to cover the resulting structural damage. Valls v. Allstate Ins. Co., 919 F.3d 739, 741 (2d Cir. 2019).

         Here, Marianne and Thomas Gilmore ("Plaintiffs") contend that Teachers Insurance Company ("Defendant") wrongfully denied a property damage claim concerning the deterioration of their home's foundation. Plaintiffs allege that Defendant breached the contract between them, breached the implied covenant of good faith and fair dealing, and violated the Connecticut Unfair Insurance Practices Act ("CUIPA") and the Connecticut Unfair Trade Practices Act ("CUTPA"). Defendant now moves to dismiss all claims.

         For the reasons that follow, Defendant's Motion to Dismiss is granted.

         I. Background

         The following facts are drawn from Plaintiffs' First Amended Complaint and from the insurance policies attached and incorporated by reference.

         Plaintiffs own a home in Tolland, Connecticut. (First Am. Compl. [Doc. # 15] ¶ 3.) They purchased it on June 22, 2012 and obtained a homeowner's insurance policy from Defendant on that same day. (Id. ¶¶ 3, 4.) Defendant has continually insured Plaintiffs' home "[a]t all times relevant and material to this claim." (Id. ¶ 5.)

         Plaintiffs' original insurance policy ("2012 Policy") with Defendant did not include property collapse in its section on "incidental property coverages." (Ex. 1 (2012 Policy) to Def.'s Mot. Summ. J. [Doc. # 18-1] at 11-12.) Rather, the 2012 Policy disclaimed any loss "caused by the settling, cracking, shrinking, bulging or expanding of a building structure," (id. at 13), and "loss which results from ... a defect, a weakness, an inadequacy, a fault or unsoundness in materials used in construction or repair" of the insured property, (id. at 17).

         In 2013, Defendant updated the terms of its homeowner's insurance coverage and added new language referring to property collapse. (Ex. 2 (2013 Policy) to Def.'s Mot. Summ. }. [Doc. # 18-2] at 14-15.) The revised policy ("Revised Policy") explicitly provided for the coverage of the "collapse of a building" if caused by decay where "no 'insured' knew of or could reasonably be expected to suspect the presence of such decay prior to collapse," (id. at 14), or if caused by "the use of defective materials or methods in construction ... if the collapse occurs during the course of construction," (id. at 15). The Revised Policy defined "collapse" as an "abrupt caving in, falling in, falling down, or giving way that prevents the building or the part of the building from being occupied for the purpose for which it was intended just before" the collapse. (Id. at 15.) But the Revised Policy specifically excluded "bending, bowing, bulging, cracking, ... sagging, settling, or shrinkage" from this definition.[1] (Id.) This language has remained in effect through the present. (See Ex. 7 (2018 Policy) to Def.'s Mot. Summ. J. [Doc. # 18-7] at 14-15.)

         In 2017, Plaintiffs brought in a contractor to inspect the foundation of their home and analyze the concrete used. (First Am. Compl. ¶¶ 6-10.) A petrographic test showed that the foundation contained pyrrhotite, a mineral contaminant that can cause concrete to expand and crack. (Id. ¶ 10.) Pyrrhotite-contaminated concrete "deteriorate[s] over time, but will not abruptly collapse." (Id. ¶ 24.) Plaintiffs observed that this was consistent with the damage to their home, where the "concrete walls had suffered from a substantial impairment," (id. ¶ 15), but were "unable to abruptly collapse because they are anchored at the top with bolts to the house and at the bottom by the basement floor and are compressed" by the house's weight, (id. ¶ 23).

         Around this time and prior to the completion of the petrographic test, Plaintiffs filed an insurance claim with Defendant for coverage of the foundation damage. (Id. ¶ 8.) Defendant sent an insurance adjuster to Plaintiffs' home and then denied the claim on the grounds that "the cracks were caused by settlement and therefore the claim was excluded under the Settling, Cracking, Shrinking, Bulging or Expansion exception" ("Settlement Exception"). (Id. ¶ 12.)

         On October 28, 2018, Plaintiffs filed a complaint in Connecticut superior court, claiming that Defendant had wrongfully denied their insurance claim. (Notice of Removal [Doc. # 15] ¶l.) That suit was then removed to the United States District Court for Connecticut on the basis of diversity. (Id.) Plaintiffs' suit contains three counts. First, Plaintiffs assert breach of contract, on the basis that Defendant improperly invoked the Settlement Exception when "settlement was not the cause of the foundation cracks." (First Am. Compl. ¶ 12.) Second, they claim that Defendant breached the implied covenant of good faith and fair dealing. Third, Plaintiffs allege that Defendant violated CUIPA and CUTPA.

         Defendant moves to dismiss all lliree counts under Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted.

         II. ...

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