Dumas et al v. USAA General Indemnity Company

Filing 51

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT. For the reasons set forth in the attached ruling, the Court GRANTS defendant's motions for summary judgment (Docs. # 35 , # 36 ). Defendant's motion in limine (Doc. # 47 ) is DENIED as moot. The Clerk of Court shall close this case.Signed by Judge Jeffrey A. Meyer on 8/6/2019. (Sokoloff-Rubin, E.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

ALEXANDER J. DUMAS et al.,
Plaintiffs,
v.

No. 3:17-cv-01083(JAM)

USAA GENERAL INDEMNITY CO.,
Defendant.

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
Alexander J. Dumas and Margaret A. Dumas have filed this lawsuit against their home
insurance company, USAA General Indemnity Company (USAA). Plaintiffs dispute the
company’s failure to pay for damage to the foundation of their home caused by cracking and
deteriorating concrete. Their claim is one of many such “crumbling foundation” claims that have
been filed in this Court by homeowners in Connecticut. Although I regret that plaintiffs must live
under a shadow of uncertainty about the stability and value of their home, I conclude that they
have not established grounds for coverage under their insurance policy. Accordingly, I will grant
defendant’s motion for summary judgment.
BACKGROUND
Plaintiffs Alexander and Margaret Dumas bought their house in Bolton, Connecticut in
1990. Doc. #42-1 at 1. They were the first owners. Before purchasing the house, Mr. Dumas
noted small cracks on the first floor of the northwest corner. He and his wife commissioned a
home inspection report in connection with their purchase. The report noted cracks in the
basement walls, among other issues. The inspectors instructed plaintiffs to watch the cracks and
pay immediate attention if they grew. Id. at 2.

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In 2010, plaintiffs purchased homeowners’ insurance from USAA. Although plaintiffs
did not report the cracking concrete problem to USAA until 2015, they admit that they noticed a
problem at least by 2011. During the spring and summer of 2012, Mr. Dumas tried repairing
some of the cracks on his own. He noticed the patched cracks worsening within six months.
Doc. #42-1 at 2.
At his deposition, Mr. Dumas was asked why he did not call the insurance company in
2012, when he was concerned enough about the cracks to try to repair them on his own. He
stated, “I honestly don’t know. I guess I was just a bit in denial about it.” Id. at 3; Doc. #36-2 at
20.
What prompted him to contact the insurance company was a visit from his neighbor, who
had come to help him brainstorm ideas for basement renovations and suggested that he should
deal with the crumbling concrete problem before attempting to renovate. Doc. #36-2 at 16. When
asked at his deposition if it surprised him when his neighbor said the cracks were a problem, Mr.
Dumas responded, “sort of, yes it did,” and elaborated that, though he had been monitoring the
cracks since 2012, “I guess I was denying it. You know, I guess I didn’t want to hear that.” Ibid.
Plaintiffs filed a claim with USAA on or about June 25, 2015. Doc. #42-1 at 3. An
engineer hired by USAA inspected the house a month later. He issued a report stating that the
cracking arose in part from defective concrete, that the problem was already present when
plaintiffs bought the home, and that the resulting damage had occurred over time. Ibid.
Plaintiffs hired their own expert who opined that the cracking was caused in part by high
levels of pyrrhotite in the concrete, which causes swelling and cracking when exposed to oxygen
and water. Doc. #42-3 at 2-3. He said that a house with pyrrhotite will eventually collapse,
although he could not say that would happen in less than 25 years, and that the concrete would

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need to be replaced in two to three years. Ibid.; Doc. #42-1 at 6, 10; Doc. #36-9 at 45-46, 106.
He also said that the damage to the house had not occurred suddenly (with “sudden” defined by
him as “a break that happens almost immediately”) and that there had been no “falling-in” or
“caving-in” of the foundation walls or the house as a whole or an imminent peril that the walls or
house would do so. Doc. #42-1 at 6; Doc. #36-9 at 103-104.
Plaintiffs continue living in their house. At his deposition, Mr. Dumas testified that he
would characterize the problem as a gradual condition that has gotten progressively worse over
time. He said he has noticed the cracks getting bigger since he started paying attention to them in
2012, and that the basement walls are “slowly crumbling; they are slowly falling apart.”
Doc. #42-1 at 4; Doc. #36-2 at 21. Plaintiffs allege that it will cost $193,320 to fix their property.
Doc. #42-1 at 10.
USAA denied coverage on August 18, 2015. Plaintiffs followed with this lawsuit alleging
claims for breach of contract, breach of the duty of good faith and fair dealing, and violations of
the Connecticut Unfair Trade Practices Act (CUTPA) and the Connecticut Unfair Insurance
Practices Act (CUIPA). USAA now moves for summary judgment. Docs. #35, #36.
DISCUSSION
The principles governing the Court’s review of a motion for summary judgment are well
established. Summary judgment may be granted only 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). I must view the facts in the light most favorable to the party who
opposes the motion for summary judgment and then decide if those facts would be enough—if
eventually proved at trial—to allow a reasonable jury to decide the case in favor of the opposing
party. My role at summary judgment is not to judge the credibility of witnesses or to resolve

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close contested issues but solely to decide if there are enough facts that remain in dispute to
warrant a trial. See generally Tolan v. Cotton, 572 U.S. 650, 656–57 (2014) (per curiam);
Pollard v. N.Y. Methodist Hosp., 861 F.3d 374, 378 (2d Cir. 2017).
Count One - breach of contract
Plaintiffs allege that defendant has breached the terms of the insurance policy by
declining coverage. A court must interpret the terms of an insurance policy as it would a contract
to determine if the text of the policy makes the parties’ intent unambiguously clear. Only if the
text of the policy is ambiguous does a court look to other evidence of the parties’ intent and in
light of the rule that any ambiguity or exclusion in the policy must be construed in favor of the
insured. See, e.g., Conn. Ins. Guar. Ass’n v. Drown, 314 Conn. 161, 187-88 (2014).
Collapse
Plaintiffs contend that their loss is covered under multiple provisions of their policy. First
and foremost, they argue that they have experienced a “collapse.” But their policy expressly
defines collapse as “a sudden falling or caving in” or “a sudden breaking apart or deformation
such that the building or part of a building is in imminent peril of falling or caving in and is not
fit for its intended use.” Doc. #36-6 at 34.1 The deposition of plaintiffs and their expert make
clear that the damage was not sudden and in fact occurred gradually over time. This is fatal to

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While the policy underwent a series of revisions during the coverage period, the parties agree that the policy in
relevant part provides coverage for collapse, defined as “a sudden falling or caving in” or “a sudden breaking apart
or deformation such that the building or part of a building is in imminent peril of falling or caving in and is not fit
for its intended use.” Doc. #36-6 at 34 (defining “collapse”). Additionally, collapse is covered only if it is caused by
one of six listed factors, including, among others, “decay that is hidden from view,” and “use of defective materials
or methods in construction, remodeling, or renovation.” See Doc. #36-6 at 47 (policy generally covers “direct,
physical loss to tangible property described in PROPERTY WE COVER . . . unless excluded in LOSSES WE DO
NOT COVER,”), 51 (section titled LOSSES WE DO NOT COVER excludes coverage for collapse, “other than as
provided in ADDITIONAL COVERAGES, ‘collapse’”), 43 (collapse provision in ADDITIONAL COVERAGES
section). The collapse provision of the policy clarifies that “[d]amage consisting solely of settling, cracking,
shrinking, bulging or expansion is not covered by this additional insurance unless it is the direct result of ‘collapse.’”
Id. at 34.

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their claim. The word “sudden” means abrupt, not gradual. See Valls v. Allstate Ins. Co., 919
F.3d 739, 744-45 (2d Cir. 2019) (per curiam); see also Huschle v. Allstate Ins. Co., 2019 WL
1427143, at *3 (D. Conn. 2019).
Plaintiffs insist that, whether or not the loss was sudden, the foundation of their home has
been substantially impaired. This may be true, but it is not the relevant inquiry given the precise
terms of their policy. In cases where a policy does not define collapse, Connecticut courts
interpret the term to mean a substantial impairment to the structural integrity of the home. See id.
at *3 (citing Beach v. Middlesex Mut. Assur. Co., 205 Conn. 246, 249 (1987)). By contrast,
where, as here, the policy expressly defines the term “collapse,” then the terms of the policy
control. Ibid.
Chemical reaction
Plaintiffs next argue that the chemical reaction occurring in the concrete is itself a sudden
and direct physical loss, and that the cracking concrete is just a further manifestation of that loss.
Doc. #42 at 5. They argue that the damage to their property is therefore covered, because “the
policy does not exclude chemical reactions.” Ibid. But as Judge Shea has observed in rejecting a
similar argument, “the terms ‘direct physical loss’ and ‘loss,’ as used in the [policy],
unambiguously require some change to the detriment of the insured, and a chemical reaction—
without any physical manifestations—does not fit that bill.” England v. Amica Mut. Ins. Co.,
2017 WL 3996394, at *6 (D. Conn. 2017) (analyzing substantially similar policy provisions,
along with the ordinary meaning of “loss” and its use in Connecticut law).
The policy’s exclusions use the term “loss” to describe something that is the result of
various underlying processes or events, not the cause. The section titled “LOSSES WE DO NOT
COVER” describes how the policy does not cover “damage consisting of or caused directly or

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indirectly by” enumerated causes that “produce the loss.” Doc. #36-6 at 50. The same section
provides that “2. We do not insure for loss caused by any of the following . . . (c) faulty,
negligent, inadequate or defective . . . (3) materials used in repair, construction, renovation,
remodeling, or maintenance.” Id. at 51. And the “Suit Against Us” provision states that “[n]o
action can be brought against us unless you have . . . started the action within two years after the
date of the loss.” Id. at 56.
The language of these provisions “suggests that the term ‘loss’ must be accorded a
meaning that is limited to observable, tangible effects: if the term ‘loss’ were interpreted to
include the occurrence of an imperceptible chemical process, before that process were to result in
any observable effect, no policyholder could determine a date of loss for the purpose of
establishing the timeliness of the policyholder’s suit.” England, 2017 WL 3996394, at *7; see
also Liston-Smith v. CSAA Fire & Cas. Ins. Co., 287 F. Supp. 3d 153, 161 (D. Conn. 2017)
(concluding that “the chemical reaction is a process that can cause tangible, physical property
damage; it does not qualify as a compensable loss in and of itself.”) (emphasis in original).
To the extent that plaintiffs mean to argue that the effects of a chemical reaction is
covered under the collapse provision of the policy, the policy language makes clear that the
policy excludes coverage for cracking that predates a collapse. Cracking is only covered if it is
caused by (not the cause of) a collapse. Doc. #36-6 at 34 (“Damage consisting solely of settling,
cracking, shrinking, bulging or expansion is not covered by this additional insurance unless it is
the direct result of ‘collapse.’”). This “cracking” exclusion would be wholly superfluous if a
policy holder could circumvent it by claiming that there is coverage for a chemical reaction that
causes cracking in foundation or basement walls even when there has been no collapse. See

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Lester v. Liberty Mut. Fire Ins. Co., 325 F. Supp. 3d 243, 248 (D. Conn. 2018) (holding for
similar reasons that chemical reaction is not covered under a “risk of loss” provision).
Ensuing loss provision
Plaintiffs next argue that they are covered under the so-called “ensuing loss” provision of
the policy. The provision provides in relevant part that “[a]ny ensuing loss to property described
in Dwelling Protection and Other Structures Protection not precluded by any other provision in
this policy is covered.” Doc. #36-6 at 51. This text makes clear that an “ensuing loss” does not
negate an otherwise applicable exclusion under the policy; it allows for coverage only if an
exclusion or exception does not apply. See generally Mazzarella v. Amica Mut. Ins. Co., 2018
WL 780217, at *6 (D. Conn. 2018) (describing function of an “ensuing loss” provision as
allowing for coverage of a loss that is “separate and independent” from an exclusion but
cautioning that “[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”) (internal
citations and quotation marks omitted). Because plaintiffs do not identify any grounds for loss
that are separate and independent from the exclusions that apply in this case, they are not entitled
to coverage under the “ensuing loss” provision of the policy. See Lester, 325 F. Supp. 3d at 248
(rejecting same argument on same grounds).
Reasonable repairs provision
Plaintiffs further argue that their loss is covered under the “reasonable repairs” provision
of the policy. This provision states: “In the event that covered property is damaged by an
applicable loss under Section I – LOSSES WE COVER, we will pay the reasonable expense
incurred by you, for necessary measures taken solely to protect against further damage.”

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Doc. #36-6 at 40. But as the text of this provision makes clear, it applies only if there is a peril
for which there is coverage in the first instance. Plaintiffs have not shown an initial covered loss.
Accordingly, they are not entitled to payment for reasonable repairs that they might make to their
house. See Lester, 325 F. Supp. 3d at 248-49 (rejecting same argument).
Counts Two and Three - covenant of good faith and CUTPA/CUIPA
Because plaintiffs have not alleged plausible grounds to conclude that the defendant
breached the insurance contract, there are no grounds for plaintiffs’ additional claims for breach
of the duty of good faith and fair dealing or for plaintiffs’ statutory CUIPA and CUTPA claims
as alleged in Counts Two and Three of the complaint. See Valls, 919 F.3d at 745 & n.25;
Kowalyshyn v. Excelsior Ins. Co., 2018 WL 888724, at *7 (D. Conn. 2018).
CONCLUSION
For the reasons set forth above, the Court GRANTS defendant’s motions for summary
judgment (Docs. #35, #36). Defendant’s motion in limine (Doc. #47) is DENIED as moot. The
Clerk of Court shall close this case.
It is so ordered.
Dated at New Haven this 6th day of August 2019.
/s/Jeffrey Alker Meyer
Jeffrey Alker Meyer
United States District Judge

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