Vera v. Liberty Mutual Fire Ins. Co. ( 2020 )

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STEVEN L. VERA ET AL. v. LIBERTY MUTUAL
FIRE INSURANCE COMPANY
(SC 20178)
Robinson, C. J., and Palmer, McDonald, D’Auria,
Mullins, Kahn and Ecker, Js.
Syllabus
The plaintiffs, whose home was insured by the defendant insurance com-
pany, sought to recover damages from the defendant in an action brought
in state court and subsequently removed to the United District Court
for the District of Connecticut. The plaintiffs alleged, inter alia, that the
defendant had breached certain provisions of the applicable homeown-
ers insurance policy by declining coverage for cracking in their concrete
basement walls. A structural engineer whom the plaintiffs retained to
evaluate the walls concluded that they were not in imminent danger of
falling down and required no structural supports but would continue
to deteriorate further due to being constructed with defective concrete.
The plaintiffs claimed that they were covered under the policy because
the deterioration of the concrete in their basement walls had substan-
tially impaired their structural integrity such that they were in a state
of collapse, as that term had been defined in Beach v. Middlesex Mutual
Assurance Co. (205 Conn. 246), in which this court concluded that that
the term ‘‘collapse’’ in a homeowners insurance policy, when otherwise
undefined, is sufficiently ambiguous to include coverage for any substan-
tial impairment of the structural integrity of an insured’s home. The
defendant filed a motion for summary judgment, claiming, inter alia,
that the plaintiffs could not establish a substantial impairment of the
structural integrity of their basement walls without proof that the walls
were in imminent danger of falling down or caving in. Prior to deciding
the defendant’s motion, the District Court certified a question of law
to this court concerning what constitutes substantial impairment of
structural integrity for purposes of applying the collapse provisions in
the homeowners insurance policy at issue. Held that the issue raised
in this case was substantially identical to that considered in the compan-
ion case of Karas v. Liberty Ins. Corp. (335 Conn. 62), and the court
concluded, consistent with its decision in Karas, that, to satisfy the
substantial impairment of structural integrity standard, an insured whose
home has not actually collapsed must present evidence demonstrating
that the home nevertheless is in imminent danger of falling down or
caving in, that is, in imminent danger of an actual collapse.
Argued December 18, 2018—officially released, November 12, 2019*
Procedural History
Action to recover damages for, inter alia, breach of
an insurance contract, and for other relief, brought to
the Superior Court in the judicial district of Tolland,
where the case was removed to the United States Dis-
trict Court for the District of Connecticut; thereafter,
the court, Chatigny, J., certified a question of law to
this court concerning the application of Connecticut
insurance law.
Brian D. Danforth, for the appellants (plaintiffs).
Robert A. Kole, with whom was Kieran W. Leary, for
the appellee (defendant).
Opinion
PALMER, J. This case, which comes to us on certifica-
tion from the United States District Court for the Dis-
trict of Connecticut; see General Statutes § 51-199b (d),1
is a companion case to Karas v. Liberty Ins. Corp., 335
Conn. 62, A.3d (2019), and requires us to clarify,
as we have in Karas, the meaning of the term ‘‘collapse’’
in a homeowners insurance policy when that term is
not otherwise defined in the policy. More specifically,
we must decide whether our holding in Beach v. Middle-
sex Mutual Assurance Co., 205 Conn. 246, 252, 532 A.2d
1297 (1987), that the term ‘‘collapse,’’ when not defined
in such a policy, is ‘‘sufficiently ambiguous to include
coverage for any substantial impairment of the struc-
tural integrity’’ of the insureds’ home, also requires a
showing that the building is in imminent danger of fall-
ing down or caving in. We conclude that it does.
The plaintiffs, Steven L. Vera and Kim E. Vera, have
resided in their home in the town of Willington since
2008. That home, which was built in 1993, is insured
under a homeowners insurance policy issued to the
plaintiffs by the defendant, Liberty Mutual Fire Insur-
ance Company. In August, 2015, after learning about
the problem of crumbling basement walls affecting
homes in their community due to the use of defective
concrete manufactured by the J.J. Mottes Concrete
Company (Mottes), in the construction of those walls,2
the plaintiffs retained William F. Neal, a structural engi-
neer, to evaluate the condition of their basement walls.
Although Neal observed ‘‘very narrow spider web crack-
ing’’ approximately one-sixteenth of an inch wide in
the interior basement walls and ‘‘three small vertical
cracks’’ of a similar size in the exterior walls, there
were no visible signs of bowing. Neal concluded that
the walls were not in imminent danger of falling down
and required no structural supports of any kind at that
time. In his report, Neal stated that, ‘‘[b]ased solely on
[his] visual observations, the most likely cause of the
spider web cracking is the onset of Alkali-Silica-Reac-
tion (ASR). ASR is a chemical reaction between alkali
aggregate and silica in the concrete mix. It typically
causes this type of distress to be visible [fifteen] to
[twenty] years after the foundation is poured. It is very
likely the ASR will continue to deteriorate the concrete,
and the basement walls will begin to bulge inward until
they structurally fail. There is no way to arrest the
process, and there is no way to repair the existing dam-
age.’’3 Neal recommended that the basement walls be
replaced.
After receiving Neal’s report, the plaintiffs filed a
claim under their homeowners insurance policy. The
defendant denied the claim, explaining in its denial let-
ter that the plaintiffs’ policy ‘‘does not afford coverage
for . . . cracking to the foundation due to faulty, inade-
quate or defective materials . . . [or] settling.’’
Following the denial of their claim, the plaintiffs com-
menced an action in state court, alleging that the defen-
dant had breached the collapse provisions4 of their pol-
icy by denying their claim. Specifically, the plaintiffs
contended that the deterioration of the concrete within
the basement walls had substantially impaired the walls’
structural integrity such that they were in a state of
‘‘collapse’’ under the definition of that term that this
court adopted in Beach. In addition to breach of con-
tract and breach of the covenant of good faith and fair
dealing, the plaintiffs also alleged that the defendant
had violated the Connecticut Unfair Insurance Practices
Act, General Statutes § 38a-815 et seq., and the Connect-
icut Unfair Trade Practices Act, General Statutes § 42-
110a et seq.
The defendant subsequently removed the case to fed-
eral court and, in September, 2017, filed a motion for
summary judgment, claiming that the plaintiffs cannot
establish a substantial impairment of the structural
integrity of their basement walls without proof that the
walls are in imminent danger of falling down or caving
in, and that the plaintiffs did not adduce such proof
because the walls are not in any such danger. In support
of its motion for summary judgment, the defendant
underscored that Neal had been deposed in connection
with the underlying litigation and testified that the plain-
tiffs’ foundation is among the least affected Mottes foun-
dations he has seen, that the foundation has not lost
its structural integrity, and that the plaintiffs can con-
tinue to safely reside in their home for the foreseeable
future. When asked in his deposition whether he could
say ‘‘with any reasonable degree of engineering proba-
bility’’ that the walls would begin to bulge inward
‘‘within the next 100 years,’’ Neal responded, ‘‘no,’’ but
added that he thought that it was ‘‘more probable than
not’’ that they would need to be replaced ‘‘within that
time period.’’
While the defendant’s motion for summary judgment
was pending, the defendant urged the District Court
to seek this court’s guidance by way of certification
regarding the question of what constitutes ‘‘substantial
impairment of structural integrity’’ for purposes of
applying the ‘‘collapse’’ provisions of the plaintiffs’
homeowners insurance policy. The District Court
granted the defendant’s request, concluding that guid-
ance as to the meaning of the ‘‘substantial impairment of
structural integrity’’ standard was warranted because,
since Beach, no Connecticut appellate court has had
occasion to clarify that standard, and ‘‘insurance cover-
age in Mottes concrete cases is an important issue of
public policy, with many . . . pending cases and many
more likely to be filed.’’5 Vera v. Liberty Mutual Fire
Ins. Co., Docket No. 3:16-CV-72 (RNC), 2018 WL
3014112, *3–4 (D. Conn. June 15, 2018).
With respect to the merits of the certified question,
the defendant claims, inter alia, that the plaintiffs’ home
has not collapsed under any plausible interpretation of
the term ‘‘collapse.’’ The defendant contends that, if
that word as used in the policy is to retain any relation
to its natural and ordinary meaning, ‘‘substantial impair-
ment of structural integrity’’ must mean that a building,
though not yet in pieces on the ground, is in imminent
danger of falling down or caving in. Certainly, the defen-
dant argues, it ‘‘must mean more than a few ‘very small,’
‘hairline’ cracks to a house’s interior basement walls,
which is how the [plaintiffs’] own expert describes the
alleged damage to their house. . . . [According to the
defendant] [n]o layperson would use the word ‘collapse’
to describe [such a] state of affairs,6 and no court out-
side of Connecticut has stretched ‘collapse’ coverage
anywhere near that far.’’ (Emphasis omitted; footnote
added and omitted.)
The plaintiffs argue against an imminence require-
ment, maintaining that ‘‘substantial impairment of
structural integrity’’ should be understood to mean only
that a building ‘‘is no longer structurally sound.’’
According to the plaintiffs, the deterioration of their
basement walls is no ‘‘run-of-the-mill’’ foundation
related problem but, rather, is similar to a terminal
illness or a ‘‘time bomb . . . .’’ (Internal quotation
marks omitted.) In essence, they argue that, although
their basement walls may not presently be in imminent
danger of falling down, they are nevertheless ‘‘afflicted
with a nonreversible condition’’ that someday will
‘‘result in the destruction of their home unless the con-
crete is replaced.’’
The issue raised and the merits of the underlying
arguments presented by the parties are substantially
identical to those considered in the companion case of
Karas v. Liberty Ins. Corp., supra, 335 Conn. 62. Our
examination of the issue in Karas addresses the argu-
ments of the parties in the present case. In Karas, we
concluded ‘‘that, to meet the substantial impairment
standard, an insured whose home has not actually col-
lapsed must present evidence demonstrating that the
home nevertheless is in imminent danger of such a
collapse. Of course, whether this evidence satisfies the
standard in any particular case necessarily will depend
on the specific facts of the case and the strength and
credibility of the expert testimony adduced by the
insured and the insurer.’’ Id., . We reach the same
conclusion in the present case.
The answer to the certified question is the ‘‘substan-
tial impairment of structural integrity’’ standard
requires a showing that the building is in imminent
danger of falling down or caving in, that is, in imminent
danger of an actual collapse.
No costs shall be taxed in this court to any party.
In this opinion the other judges concurred.
* November 12, 2019, the date that this decision was released as a slip
opinion, is the operative date for all substantive and procedural purposes.
1
General Statutes § 51-199b (d) provides in relevant part: ‘‘The Supreme
Court may answer a question of law certified to it by a court of the United
States . . . if the answer may be determinative of an issue in pending
litigation in the certifying court and if there is no controlling appellate
decision, constitutional provision or statute of this state.’’
2
It is estimated that as many as 34,000 homes may be affected by defective
concrete manufactured by Mottes. See L. Foderaro & K. Hussey, ‘‘Financial
Relief Eludes Connecticut Homeowners with Crumbling Foundations,’’ N.Y.
Times, November 15, 2016, p. A24. According to a report commissioned by
the state of Connecticut, the stone aggregate used in Mottes concrete
between 1983 and 2010 contains significant amounts of pyrrhotite, a ferrous
mineral that oxidizes in the presence of water and oxygen to form expansive
secondary minerals that crack and destabilize the concrete, resulting in its
premature deterioration. See Department of Consumer Protection, State of
Connecticut, Report on Deteriorating Concrete in Residential Foundations
(Decemer 30, 2016) pp. 1, 7–9, available at http://crcog.org/wp-content/uploads
/2016/12/report_on_deteriorating_concrete_in_residential_foundations.pdf
(last visited November 6, 2019).
3
It is not clear to us whether Neal’s opinion with respect to the cause of
the cracking in the plaintiffs’ basement walls is different from the cause
identified by the Department of Consumer Protection in its report on the
broader problem of such cracking in homes throughout Connecticut. See
footnote 2 of this opinion. For present purposes, any such difference is imma-
terial.
4
Those provisions provide in relevant part: ‘‘Collapse. We insure for direct
physical loss to covered property involving collapse of a building or any
part of a building caused only by one or more of the following: a. [Certain
perils identified elsewhere in the policy, including fire, lightning, windstorm,
hail, explosion, riot, civil commotion and volcanic eruption]; b. [h]idden
decay; c. [h]idden insect or vermin damage; d. [w]eight of contents, equip-
ment, animals or people; e. [w]eight of rain which collects on a roof; or
f. [u]se of defective material or methods in construction, remodeling or
renovation if the collapse occurs during the course of the construction,
remodeling or renovation. Loss to an awning, fence, patio, pavement, swim-
ming pool, underground pipe, flue, drain, cesspool, septic tank, foundation,
retaining wall, bulkhead, pier, wharf or dock is not included under items
b., c., d., e., and f. unless the loss is a direct result of the collapse of a build-
ing. Collapse does not include settling, cracking, shrinking, bulging or expan-
sion.’’
5
The District Court declined to certify two additional questions; see Vera
v. Liberty Mutual Fire Ins. Co., Docket No. 3:16-CV-72 (RNC), 2018 WL
3014112, *3 (D Conn. June 15, 2018); namely, ‘‘[i]s ‘substantial impairment
of structural integrity’ the applicable standard for ‘collapse’ under the [home-
owners] insurance provision at issue,’’ and, ‘‘[u]nder Connecticut law, do
the terms ‘foundation’ and/or ‘retaining wall’ in a homeowners insurance
policy unambiguously include basement walls . . . [and] [i]f not . . .
should extrinsic evidence as to the meaning of ‘foundation’ and/or ‘retaining
wall’ be considered?’’ We address and answer the first of these two questions
and address part of the second question, however, in Karas v. Liberty Ins.
Corp., supra, 335 Conn. 62.
6
This court previously has observed ‘‘that provisions in insurance con-
tracts must be construed as [laypersons] would understand [them] and not
according to the interpretation of sophisticated underwriters . . . .’’ (Inter-
nal quotation marks omitted.) Connecticut Medical Ins. Co. v. Kulikowski,
286 Conn. 1, 16, 942 A.2d 334 (2008).