Mazzarella et al v. Amica Mutual Ins Co
ORDER granting with prejudice 38 Motion to Dismiss as it relates to any claimed damage to the concrete basement walls; granting without prejudice 38 Motion to Dismiss as it relates to any claimed damage that is not connected to the deterioration of the basement walls. Plaintiffs may file a Third Amended Complaint alleging coverage for such damage within 30 days of this Order. Signed by Judge Stefan R. Underhill on 2/8/18. (Kaas, E.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JOSEPH MAZZARELLA and WENDY
No. 3:17-cv-598 (SRU)
AMICA MUTUAL INSURANCE
RULING ON MOTION TO DISMISS
In the present insurance dispute, Amica Mutual Insurance Co. (“Amica”) has moved to
dismiss the claims brought against it by Joseph and Wendy Mazzarella. The Mazzarellas
complaint alleges that (1) Amica breached its contract with the Mazzarellas by denying coverage
under their homeowner’s policy for damage to their basement walls and various other parts of
their house; (2) Amica breached the implied covenant of good faith and fair dealing by denying
coverage; and (3) Amica committed unfair and deceptive practices proscribed by the Connecticut
Unfair Insurance Practices Act (“CUIPA”), as enforced through the Connecticut Unfair Trade
Practices Act (“CUTPA”). Because the Mazzarellas have failed to show their policy with Amica
covered the alleged “direct physical loss” damage to their home, I grant the motion and dismiss
the complaint in its entirety.1
The Mazzarellas argue that Amica’s Motion to Dismiss should be denied because it was untimely filed.
Federal Rule of Civil Procedure 15(a)(3) provides: “[A]ny required response to an amended pleading must be made
within the time remaining to respond to the original pleading or within 14 days after service of the amended
pleading, whichever is later.” The Second Amended Complaint was filed and served on August 16, 2017. Twentyone days later, on September 6, 2017, Amica filed this Motion to Dismiss. While technically untimely, I will not
deny the motion for that reason. First, Amica correctly points out that the Mazzarellas have not alleged any
prejudice from the delay. See Cowan v. Cahill, 2016 WL 5348567 at *3 (D. Conn. Sept. 23, 2016). Furthermore,
“the Second Circuit prefers that district courts decide cases on their merits rather than by default.” Id. Accordingly,
I am reaching the merits of Amica’s motion.
Standard of Review
A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) is designed
“merely to assess the legal feasibility of a complaint, not to assay the weight of evidence which
might be offered in support thereof.” Ryder Energy Distribution Corp. v. Merrill Lynch
Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984) (quoting Geisler v. Petrocelli, 616 F.2d
636, 639 (2d Cir. 1980)).
When deciding a motion to dismiss pursuant to Rule 12(b)(6), the court must accept the
material facts alleged in the complaint as true, draw all reasonable inferences in favor of the
plaintiffs, and decide whether it is plausible that plaintiffs have a valid claim for relief. Ashcroft
v. Iqbal, 556 U.S. 662, 678–79 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56 (2007);
Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
Under Twombly, “[f]actual allegations must be enough to raise a right to relief above the
speculative level,” and assert a cause of action with enough heft to show entitlement to relief and
“enough facts to state a claim to relief that is plausible on its face.” 550 U.S. at 555, 570; see also
Iqbal, 556 U.S. at 679 (“While legal conclusions can provide the framework of a complaint, they
must be supported by factual allegations.”). The plausibility standard set forth in Twombly and
Iqbal obligates the plaintiff to “provide the grounds of his entitlement to relief” through more
than “labels and conclusions, and a formulaic recitation of the elements of a cause of action.”
Twombly, 550 U.S. at 555 (quotation marks omitted). Plausibility at the pleading stage is
nonetheless distinct from probability, and “a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of [the claims] is improbable, and . . . recovery is very
remote and unlikely.” Id. at 556 (quotation marks omitted).
The Mazzarellas have resided at their home in Tolland, Connecticut since their house was
constructed in 1992. Each year since 1992, the Mazzarellas have purchased primary
homeowners insurance coverage from Amica. The relevant policy at issue in the instant case is
Homeowners Policy No. 661106-22ZV (“the Policy”), which insured the Mazzarellas’ home
from November 17, 2015 through November 17, 2016.
On February 16, 2016, the Mazzarellas notified Amica of property damage to their
residence. The damage included, inter alia, damage to the basement walls, upper walls, floors,
tiles, windows, doors, and chimneys. 2nd Am. Compl., Doc. No. 37, at ¶ 15. On March 7, 2016,
Amica responded and stated that it had insufficient information to determine the existence of
coverage and informed the Mazzarellas that it would undertake an investigation of the damage.
Id. at ¶ 16. On March 22, 2016, an investigation was conducted by Cianci Engineering, LLC
(“Cianci”), A.E. Oberhaus, Inc. (“Oberhaus”), and GeoDesign, Inc. (“GeoDesign”). Id. at ¶ 17.
Cianci issued an “Investigation of Damages” report to Amica on April 6, 2016 in which it
determined that the claimed damage was the result, at least in part, of “ongoing exposure to
water and oxygen.” Id. at ¶ 18. GeoDesign issued an “Engineering Report” on July 12, 2016 in
which it determined that the concrete in the residence contained a “‘high and unusual’ content of
pyrrhotite[,]” which “oxidizes and reacts with the paste.” Id. at ¶ 19. Within the Engineering
Report, GeoDesign also issued a “Report of Petrographic Evaluation” in which it concluded that
“oxidation of pyrrhotite due to exposure to water and oxygen infiltration damaged the
Residence’s cement basement walls.” Id. at ¶ 20.
Approximately ten months after the Mazzarellas notified Amica of their property
damage, and after three attempts by the Mazzarellas to obtain Amica’s coverage position, Amica
notified them that the claimed damage was not covered under the Policy. Id. at ¶¶ 22, 23. In
denying coverage, Amica asserted that the residence’s damage did not qualify for “collapse”
coverage. Id. at ¶ 24. Moreover, Amica asserted “numerous exclusions and conditions in the
Policy,” the exact nature of which were unspecified in the operative complaint.
On March 16, 2017, the Mazzarellas filed the instant suit in Connecticut Superior Court.
Amica removed the case to this Court on April 12, 2017 and filed its first Motion to Dismiss.
Docs. # 10, 11. The Mazzarellas filed an Amended Complaint on May 10, 2017 in which they
alleged that Amica breached its policy by not covering the damage and cited two policy
provisions under either of which Amica should have provided coverage: (1) direct physical loss;
or (2) collapse. Doc. # 16. On May 24, 2017, Amica filed its Second Motion to Dismiss. Doc. #
21. At a hearing on the motion, I stated that the Mazzarellas’ claimed loss did not qualify as a
“collapse” due to the lack of abrupt falling down or caving in, and did not yet qualify as a “direct
physical loss” because the Mazzarellas had failed to provide enough detail to remove the damage
from the policy exclusions that likely applied. Accordingly, I orally granted Amica’s Second
Motion to Dismiss without prejudice on July 12, 2017. Doc. # 33.
On August 16, 2017, the Mazzarellas filed the operative Second Amended Complaint.
Doc. # 37. In Count One, they allege that Amica breached the Policy by failing to cover the
damage done to their home, and seek coverage under only the “direct physical loss” policy
provision. In Count Two, the Mazzarellas allege that Amica’s failure to cover the damage
breached the implied covenant of good faith and fair dealing. In Count Three, the Mazzarellas
allege that Amica violated the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen.
Stat. § 42-110a, et seq., and the Connecticut Unfair Insurance Practices Act (“CUIPA”), Conn.
Gen. Stat. § 38a-815, et seq., by failing to cover their claimed damage and for engaging in a
business practice of denying coverage for claims involving the oxidation of concrete. Amica
filed its Third Motion to Dismiss on September 6, 2017, alleging that the Policy explicitly
excluded the claimed direct physical loss to the Mazzarellas’ home, and, therefore, the Second
Amended Complaint, in its entirety, should be dismissed. Doc. # 38. I heard oral argument on
the motion on November 20, 2017 and took it under advisement. Doc. # 46.
A. Count One: Breach of Contract
The Mazzarellas claim in Count One of their Second Amended Complaint that Amica
breached its policy by failing to cover the damage to their home, which should have been
covered under the “Direct Physical Loss” provision of the Policy. The extent of their allegations
is that there was “property damage” to their house including “damage to concrete basement
walls, interior walls, floor tiles, subfloors and wood floors, interior doors and windows, and the
chimney, as well as damage from rainwater.” 2nd Am. Compl., Doc. No. 37, at ¶ 12. They
further assert that the “damage” was as a result of the “infiltration of water and oxygen into
pyrrhotite, an iron sulfide mineral found in the concrete.” Id. at ¶ 13. Further, they allege that
the “infiltration of water and oxygen caused oxidation, which led to the formation of sulfur acids,
called an internal ‘sulfate attack,’ which damaged the concrete basement walls” of their home.
Id. at ¶ 14. The Mazzarellas, however, failed to satisfy their initial burden of showing that they
sustained a direct physical loss, and, in the alternative, any such damage was expressly excluded
from the coverage Policy. They further failed to show that their damage should have been
covered under a theory of “efficient cause.” Accordingly, Count One is dismissed.
1. Direct Physical Loss
The burden is first on the Mazzarellas to “demonstrate that the loss suffered falls within
the terms of the policy.” Yale Univ. v. Cigna Ins. Co., 224 F. Supp. 2d 402, 424 (D. Conn.
2002). The Mazzarellas cite to the Policy’s “Section I – Perils Insured Against” which states that
Amica “insure[s] against direct physical loss to property . . . .” 2nd Am. Compl., Doc. No. 37, at
¶ 35. See also Policy § I(A)(1) at pg. 9 (Doc. # 38-3). “Direct loss” is defined as “[a] loss that
results immediately and proximately from an event.” England v. Amica Mutual Ins. Co., 2017
WL 3996394 at *7 (D. Conn. Sept. 11, 2017) (MPS). A “direct physical loss” has been
interpreted to mean a “physical, tangible alteration to any property.” Id.
The Mazzarellas provide no detail in support of their claim of this type of loss. They do
not elaborate about the damage that has actually occurred to their home; they very thinly assert
that there was “damage” to various portions of their house without further elaboration. Though
they allege that the damage, whatever damage that may be, was caused by oxidation due to water
and oxygen in the concrete, there is still insufficient factual detail to determine exactly what type
of loss they are claiming. They briefly claim that the oxidation damaged the concrete basement
walls, but two important questions still remain: (1) what damage was caused to the concrete
basement walls (i.e., cracking, bulging, etc.); and (2) how were the other named areas of the
house (“interior walls, floor tiles, subfloors and wood floors, interior doors and windows, and the
chimney”) damaged by this oxidation.
In their First Amended Complaint, the Mazzarellas alleged that the specific damage was
an expansion within the concrete caused by the oxidation. Am. Compl. at ¶¶ 28, 31 (Doc. # 16).
At oral argument on Amica’s Motion to Dismiss that complaint, I pointed out that “gradual
expansive reaction” sounded like bulging, which is specifically excluded under the Policy. Now,
in their Second Amended Complaint, the Mazzarellas have omitted any allegation of expanding
concrete, and have not alleged any other type of damage in its place. The plaintiffs cannot
survive a motion to dismiss simply by making their allegations too vague for the court to
determine that they are the same allegations as those previously dismissed. It is the plaintiffs’
initial burden to set forth the loss for which they seek coverage. Yale Univ. v. Cigna Ins. Co.,
224 F. Supp. 2d at 424.
Additionally, though not specifically pled, any claim by the Mazzarellas that the
oxidation itself is the direct physical loss is without merit. A District Court recently granted a
Motion to Dismiss in a case with substantially similar facts: England v. Amica Mutual Ins. Co.,
2017 WL 3996394 (D. Conn. Sept. 11, 2017) (MPS). There, the plaintiff specifically alleged,
inter alia, that a chemical reaction occurring in concrete in her home was itself a direct physical
loss. England at *6. In dismissing the complaint, the court stated that the term loss
[I]ncludes perceptible harms that manifest as a consequence of triggering events—but
does not include the triggering harms themselves. That the Policies specify that Amica
provides coverage only for ‘direct physical losses’ further underscores that a covered loss
is treated separately from its cause for the purposes of coverage, and must be in the form
of a perceptible harm for a policyholder to claim coverage.
Id. The court further held: “[T]he chemical reaction itself, absent any physical manifestation in
the Property marking a change to an unsatisfactory state, is not a ‘direct physical loss’ or other
‘loss’ under the Policy.” Id. at *8. Therefore, any claim that the oxidation of the concrete is the
“direct physical loss” must fail.2
Because the Mazzarellas failed to adequately allege that the damage to their home was a
“direct physical loss,” Count One must be dismissed.
It is also important to note that the plaintiff in England specifically pleaded that the chemical reaction
occurring in her concrete walls was a “direct physical loss” whereas here the Mazzarellas did not.
2. Policy Exclusions
Nevertheless, even if the Mazzarellas had adequately alleged direct physical loss, their
damage would be expressly excluded from coverage under the terms of the Policy. Because
Amica relies on exclusionary clauses to deny coverage, it bears the burden of demonstrating
“that all the allegations within the complaint fall completely within the exclusion.” State Farm
Fire & Cas. Co. v. Tully, 322 Conn. 566, 575 (2016).
In response to the Mazzarellas claims of “direct physical loss,” Amica points to a number
of Policy exclusions, which expressly provide that the Policy does not cover direct physical loss
to property caused by the following:
(a) Wear and tear, marring, deterioration;
(f) Settling, shrinking, bulging or expansion, including resultant cracking, of bulkheads,
pavements, patios, footings, foundations, walls, floors, roofs or ceilings.
Mem. Supp. Amica’s Mot. Dismiss, Doc. # 28-1, at 15. See also Policy § I(A)(2)(c)(6) at 10.
Subsection (a) excludes direct physical loss to property that results from, inter alia,
“deterioration.” Policy at 10. The Merriam-Webster definition of “deterioration” is “the action
or process of becoming impaired or inferior in quality.” See https://www.merriamwebster.com/dictionary/deterioration. On the basis of the thin allegations in the complaint, it
appears that the weakened condition of the concrete, and any damage to the other named portions
of the home (though the nature of such damage is unknown), was caused by the “deterioration”
of the concrete. Accordingly, this exclusion would apply directly to the Mazzarellas’ claim. So,
too, would subsection (f). It is hard to imagine that the damage alleged, the infiltration of water
and oxygen into the concrete causing oxidation, caused anything other than bulging and
expanding concrete, which led it to crack. In fact, as previously mentioned, that is exactly the
kind of damage the Mazzarellas alleged in previous versions of their complaint. The damage the
Mazzarellas complain of falls squarely within the subsection (f) exclusion to coverage.
Amica also cites to its Policy provision that excludes coverage for damage caused by
“water below the surface of the ground, including water which exerts pressure on, or seeps, leaks
or flows through a building … foundation … or other structure.” Mem. Supp. Amica’s Mot.
Dismiss, Doc. # 38-1, at 16. See also Policy § I(A)(3)(c) at 12. The Mazzarellas directly allege
that the damage to their home was as a result of water infiltrating their concrete basement walls
and oxidizing. This Policy provision, therefore, directly excludes the Mazzarellas’ claim from
Moreover, although the parties do not cite it, another provision of the Policy appears to
apply to exclude loss caused by defective concrete. Section (B)(3) of the Exclusions provision of
the Policy provides that Amica does not insure for “loss to property” that is caused by “[f]aulty,
inadequate or defective . . . [m]aterials used in . . . construction . . . of part or all of [the]
property.” Policy at 13. If the defective concrete itself is the “loss to property,” it seems to fall
well within the exclusion relating to defective materials used to construct the property. See Kim
v. State Farm Fire & Cas. Co., 2017 WL 2766162, at *6 (D. Conn. June 26, 2017) (granting
summary judgment when policy excluded losses for defective materials and record evidence
showed that the loss was result of defective concrete). Accordingly, even if the Mazzarellas had
sufficiently alleged a “direct physical loss” to their home, there are numerous specific Policy
provisions that would exclude coverage for the Mazzarellas’ damage.
3. Efficient Cause
In their Second Amended Complaint, the Mazzarellas have alleged that “the infiltration
of water and oxygen into the Residence’s concrete constitutes the ‘efficient cause’ of the
Residence’s ‘direct physical loss.’” 2nd Am. Compl., Doc. No. 37, at ¶ 41. The Mazzarellas did
not assert an “efficient cause” allegation in either of their first two complaints. See Compl., Doc.
# 1; Am. Compl., Doc. # 16. In their first complaint, the Mazzarellas alleged that they alerted
Amica to the damage to their home “including cracking, crumbling, and discoloration in
concrete, cracking, heaving, and separation of floors and tiles, warping and racking of windows
and doors, and separation of chimneys from the Residence.” Compl., Doc. # 1, at ¶ 23. The
Mazzarellas cited the reports created by Amica’s inspectors to allege that the water and oxygen
created a “gradual expansive reaction” within the concrete walls and the oxidation created
“significant expansive forces within the concrete” which caused it to “crumble and break apart.”
Id., at ¶¶ 26, 31. In their Amended Complaint, the Mazzarellas alleged that they alerted Amica
to the “significant property damage” in their home which they “‘preliminarily believed …
[resulted] from expansion of pyrite.’” Am. Compl., Doc. # 16, at ¶ 25. The Mazzarellas again
cited the inspectors’ reports to allege that the water and oxygen exposure created a “gradual
expansive reaction” in the concrete, and the oxidation caused “significant expansive forces”
within the concrete. Id., at ¶¶ 28, 31. The Mazzarellas now allege, eighteen months after they
first alerted Amica to the damage, that the water and oxygen infiltration was the “efficient cause”
of the damage to their home.
“In the determination whether a loss is within an exception in a policy, where there is a
concurrence of two causes, the efficient cause—the one that sets the other in motion—is the
cause to which the loss is to be attributed, though the other cause may follow it and operate more
immediately in producing the disaster.” Frontis v. Milwaukee Ins. Co., 156 Conn. 492, 499
(1968). “[W]hat is meant by proximate cause is not that which is last in time or place, not
merely that which was in activity at the consummation of the injury, but that which is the
procuring, efficient, and predominant cause.” Id. at 497-98. The “efficient cause” test
“distinguishes between an excluded event which causes a loss … and a covered event which
causes a loss in the form of an excluded event.” Farrell v. Royal Ins. Co. of America, 989 F.
Supp. 159, 165 (D. Conn. Mar. 31, 1997).
The Mazzarellas allege that the efficient cause of the direct physical loss was “the
infiltration of water and oxygen into [their] concrete basement walls.” Mem. Opp. Amica’s Mot.
Dismiss, Doc. # 40, at 7. Amica counters that the “direct cause of the alleged damage is not the
infiltration of water, but rather the claimed chemical reaction and cracking of the deleterious
concrete.” Mem. Supp. Amica’s Mot. Dismiss, Doc. # 38-1, at 18. Regardless of which is the
efficient cause, the infiltration of water and oxygen or the chemical reaction, neither would be “a
covered event.” As previously mentioned, the Policy expressly precludes coverage for damage
caused by “water below the surface of the ground, including water which exerts pressure on, or
seeps, leaks or flows through a building … foundation … or other structure.” Policy § I(A)(3)(c)
at 12. The Policy further provides that Amica does not insure “for loss caused directly or
indirectly by [water]. Such loss is excluded regardless of any other cause or event contributing
concurrently or in any sequence to the loss.” Policy § I(A) at 12. Accordingly, any damage
created by the infiltration of water into the concrete would not be covered under the Policy.
Additionally, a chemical reaction within concrete does not constitute a “loss” under Amica’s
Policy and, therefore, cannot be covered as the “efficient cause” of the damage. See England,
2017 WL 3996394 at *8. Regardless of whether the water and oxygen infiltration came first, or
the internal chemical reaction, neither can serve as an “efficient cause” to bring the Mazzarellas’
damage under the terms of the Policy.
4. Ensuing Loss
The Mazzarellas have also alleged damage to parts of their home other than the
basement. Specifically, they allege “direct physical loss” to the “interior walls, floor tiles,
subfloors and wood floors, interior doors and windows, and the chimney” as a result of “water
and oxygen infiltration.” 2nd Am. Compl., Doc. No. 37, at ¶¶ 12, 36. The Policy has an
“ensuing loss” provision that provides coverage for loss that ensues from damage that is
excluded from coverage, so long as the ensuing loss is not precluded by any other policy
provision. Policy § I(A) at 10. Although the Mazzarellas have not explicitly claimed that the
damage to other parts of the home should be covered under this ensuing loss provision, I think it
is prudent to address the issue.
“An ensuing loss occurs where there is a peril, i.e., a hazard or occurrence which causes a
loss or injury, separate and independent but resulting from the original excluded peril, and this
new peril is not an excluded one, from which loss ensues.” New London Cty. Mut. Ins. Co. v.
Zachem, 2012 WL 1292662, at *2 (Conn. Super. Ct. Mar. 29 2012), aff’d, 145 Conn. App. 160
(Conn. App. 2013) (emphasis added) (internal quotation marks omitted). Residual damage is not
considered an “ensuing loss” if it was proximately caused by the non-covered event. Sansone v.
Nationwide Mut. Fire Ins. Co., 47 Conn. Supp. 35, 39 (Super. Ct. 1999), aff’d, 62 Conn. App.
526 (Conn. App. 2001) (denying coverage for losses sustained during repairs of damage caused
by insect infestation because the infestation, which was not covered under the policy,
proximately caused the repair damages). “Proximate cause has been defined as [a]n actual cause
that is a substantial factor in the resulting harm.” Id. (emphasis in original) (internal quotation
marks omitted). In order to qualify as an “ensuing loss,” there must be an “aggravating activity
or event that caused [the] additional losses” other than the losses arising from the original
Courts have interpreted this type of provision to cover losses such as contamination from
asbestos, lead, or other chemicals that are contained within building materials and released as a
result of wear and tear on the property. See Yale University v. Cigna Ins. Co., 224 F. Supp. 2d
402 (D. Conn. 2002). In such circumstances, the contamination is considered property loss that
is “distinct” from wear and tear, a non-covered event, and, therefore, falls under the ensuing loss
provision. Id. Further, “[w]here a property insurance policy contains an exclusion with an
exception for ensuing loss, courts have sought to assure that the exception does not supersede the
exclusion by disallowing coverage for ensuing loss directly related to the original excluded risk.”
Id. at 420 (internal quotation marks omitted).
Here, if the losses to the rest of the residence were proximately caused by and directly
related to the infiltration of water into the concrete basement walls, and/or the subsequent
oxidation within the concrete, then the losses are excluded from coverage. The Second
Amended Complaint is vague regarding the alleged cause of the damage to parts of the home
other than the basement, but it appears to me that the Mazzarellas are alleging that the damage to
the basement caused the damage to other portions of the house. They do not allege any
“distinct” loss or “separate and independent” incident that led to the damage to the walls, floors,
doors, windows, and chimney. Accordingly, I read the Second Amended Complaint to allege
that the damage to the basement proximately caused the damage to the remainder of the house
and, therefore, the subsequent loss is not covered by the ensuing loss provision of the Policy.
The Mazzarellas have failed to state a plausible claim against Amica for breach of
contract, and, accordingly, I dismiss Count One pursuant to Fed. R. Civ. P. 12(b)(6).
B. Count Two: Breach of the Implied Covenant of Good Faith and Fair Dealing
The Mazzarellas allege in Count Two that Amica breached its implied duty of good faith
and fair dealing by: (1) handling their property damage claim in bad faith by failing to issue
timely determination of coverage and mishandling their claims of damage to their “chimney,
siding, and framing”; (2) failing to set forth a reasonable basis under the Policy to justify denial
of coverage by focusing only on the “collapse” exclusion and ignoring the Policy’s coverage for
“direct physical loss”; (3) attempting to enforce the “collapse” coverage in a manner that violates
public policy; and (4) “acted intentionally, willfully, wantonly, and/or in reckless disregard of its
obligations under the Policy and/or applicable law.” 2nd Am. Compl., Doc. No. 37, at Count 2,
“Every contract imposes upon each party a duty of good faith and fair dealing in its
performance and in its enforcement.” Warner v. Konover, 210 Conn. 150, 154 (1989). “A
breach of that implied covenant involves a defendant dishonestly imped[ing] the plaintiff’s right
to receive benefits that he or she reasonably expected to receive under the contract. [B]ad faith is
not actionable apart from a wrongful denial of a benefit under the policy, however. If a
plaintiff’s breach of contract claim fails, so too does his [or her] claim of bad faith denial of
coverage.” Agosti v. Merrimack Mut. Fire Ins. Co., 2017 WL 3710786 at *7 (D. Conn. Aug. 28,
2017) (SRU) (citations omitted) (internal quotation mark omitted).
Amica asserts that if I dismiss the Mazzarellas’ breach of contract claim, then I should
also dismiss the Mazzarellas’ breach of the implied covenant of good faith and fair dealing claim
“as a matter of law.” Mem. Supp. Amica’s Mot. Dismiss, Doc. No. 38-1, at 25. Because I
conclude that I must dismiss the Mazzarella’s claim for breach of contract—and hold that Amica
did not wrongfully deny a contractually mandated benefit under the Policy—I also dismiss the
Mazzarella’s claim for breach of the implied covenant of good faith and fair dealing pursuant to
Fed. R. Civ. P. 12(b)(6).
C. Count Three: Violations of CUTPA/CUIPA
The Mazzarellas allege in Count Three that Amica violated CUTPA based on alleged
CUIPA violations, which prohibits unfair competition and/or unfair and deceptive acts or
practices in the business of insurance. The allegations in Count Three are substantially similar to
those in Count Two, that Amica erroneously failed to cover the damage, with the additional
allegation that Amica’s “business practice of denying coverage for property damage claims
involving oxidation of concrete is supported by its consistent refusal to cover such claims.” Id.
at ¶ 65. Amica argues that, like the Mazzarellas’ claim for breach of the implied covenant of
good faith and fair dealing, the Mazzarellas’ CUTPA/CUIPA claim must fail in the absence of a
viable breach of contract claim. See Mem. Supp. Amica’s Mot. Dismiss, Doc. No. 38-1, at 25.
“To succeed on a CUTPA/CUIPA claim, a plaintiff must show that the defendant
engaged in an act prohibited by CUIPA’s substantive provisions, and that the act proximately
caused the harm alleged.” Agosti, at *8. The relevant CUIPA provision here is “the prohibition
of unfair settlement practices.” Liston-Smith v. CSAA Fire & Cas. Ins. Co., 2016 WL 6246300 at
*3 (D. Conn. Oct. 25, 2016). “A claim of unfair settlement practice under CUIPA/CUTPA
requires the plaintiff to allege that the defendant has committed the alleged proscribed act with
sufficient frequency to indicate a general business practice.” Id. (internal quotations omitted).
“Unfair settlement practices include ‘not attempting in good faith to effectuate prompt, fair and
equitable settlements of claims in which liability has become reasonably clear.’” Id. (citing
Conn. Gen. Stat. § 38a-816(6)(F)).
“The requirement that the insurer settle when the insured’s liability is reasonably clear
means that the existence of liability has to be substantially certain. Logically speaking, liability
cannot be substantially certain where it plainly does not exist on the explicit … terms of the
contract. Hence, if the defendant’s interpretation of the policy’s coverage limitation was correct,
then the application of that interpretation cannot have constituted oppressive, unethical or
unscrupulous conduct in violation of the statutes.” Id. (citations omitted) (internal quotation
The Mazzarellas’ CUTPA/CUIPA claim challenges Amica’s denial of coverage under the
insurance policy. Without any obligation to pay under the policy, however, Amica “‘could not
have violated CUIPA or CUTPA.’” Id. (citing Wright v. State Farm Mut. Auto Ins. Co., 1997
WL 746434 at *4 (Conn. Super. Ct. Nov. 18, 1997)). Because the Second Amended Complaint
fails to state a claim against Amica for breach of contract, I dismiss their claim for violation of
CUTPA and CUIPA pursuant to Fed. R. Civ. P. 12(b)(6).
For the reasons set forth above, Amica’s third Motion to Dismiss (doc. # 38) is granted
with prejudice as it relates to any claimed damage to the concrete basement walls. To the extent
that the Mazzarellas allege any damage that is not connected to the deterioration of the basement
walls, the motion is granted without prejudice. The Mazzarellas may file a Third Amended
Complaint alleging coverage for such damage within 30 days of this Order.
Dated at Bridgeport, Connecticut, this 8th day of February 2018.
/s/ STEFAN R. UNDERHILL
Stefan R. Underhill
United States District Judge
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