New London County Mutual Ins. Co. v. Sielski ( 2015 )

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NEW LONDON COUNTY MUTUAL INSURANCE
COMPANY v. ANDREW SIELSKI ET AL.
(AC 36792)
DiPentima, C. J., and Prescott and Bear, Js.
Argued May 14—officially released September 15, 2015
(Appeal from Superior Court, judicial district of
Hartford, Wiese, J.)
Glenn E. Knierim, Jr., for the appellant (named
defendant).
MaryKate J. Geary, with whom, on the brief, was
Matthew G. Conway, for the appellee (plaintiff).
Opinion
BEAR, J. This appeal arises out of a declaratory judg-
ment action in which the plaintiff, New London County
Mutual Insurance Company, asserted that it did not
have a duty to defend the insured defendant Andrew
Sielski in a separate action brought by Meghan Wish-
neski and James Wishneski (Wishneskis) against the
defendant.1 On appeal, the defendant claims that the
trial court improperly (1) rendered summary judgment
in favor of the plaintiff because the damages claimed
in the separate action were property damages as defined
in the defendant’s homeowners insurance policy (pol-
icy) with the plaintiff, and (2) determined that the ques-
tion of whether the alleged damages constituted
property damages within the meaning of the policy was
a question of law rather than a question of fact. We
affirm the judgment of the trial court.
The following facts and procedural history are rele-
vant to the present appeal. On May 11, 2011, the Wish-
neskis commenced an action against the defendant
(Wishneski action).2 In their seven count, second
amended complaint dated February 22, 2013, the Wish-
neskis alleged that they had entered into a contract to
buy a residential property from the defendant. As part
of his contractual obligations, the defendant completed
a disclosure report, which included representations that
he had no knowledge of any problems concerning base-
ment water seepage, rot and water damage, water drain-
age problems, or driveway problems. After the
Wishneskis purchased the property, however, they
encountered a variety of problems, including drainage
problems on the perimeter of the property, water com-
ing into the property, and severe flooding that washed
away their driveway. They also discovered rotten and
moldy beams in the basement. The Wishneskis alleged
that the defendant knew or should have known of these
issues and misrepresented the condition of the home
because of the exposure of the property to severe flood-
ing during the period that the defendant owned it, and
the Wishneskis’ discovery of newer beams attached to
older moldy and rotten beams in the basement. The
Wishneskis alleged seven theories of recovery, all of
which were predicated on the alleged misrepresenta-
tions of the defendant.
On June 6, 2011, and June 11, 2012, the plaintiff com-
menced this action against the defendant and the Wish-
neskis, respectively. In its December 19, 2012 amended
complaint, the plaintiff alleged that although the defen-
dant had a policy with it that was operative from Febru-
ary 28, 2007, until it was cancelled effective March 13,
2009, the date of the closing of the sale of the property
to the Wishneskis, no claims alleged in the Wishneski
action required it to defend or indemnify the defendant.
On April 8, 2013, the plaintiff filed a motion for sum-
mary judgment on the ground that there was no genuine
issue of material fact in dispute and that the court could
determine as a matter of law whether the plaintiff had
a duty to defend or indemnify the defendant. On April
17, 2014, the court rendered summary judgment in favor
of the plaintiff on its amended complaint, holding, inter
alia, that the theory of negligent misrepresentation and
resulting injury alleged in the Wishneski action did not
constitute property damage as defined in the policy.3
This appeal followed. Additional facts will be provided
as necessary.
I
The defendant first claims that the court improperly
rendered summary judgment in favor of the plaintiff
because the alleged damages claimed in the Wishneski
action as a result of the defendant’s alleged misrepre-
sentations constituted property damage within the
meaning of the policy. The defendant relies heavily on
Capstone Building Corp. v. American Motorists Ins.
Co., 308 Conn. 760, 67 A.3d 961 (2013), and argues that
our Supreme Court’s decision in Capstone Building
Corp. controls this case. The defendant argues that in
Capstone Building Corp., the court interpreted policy
definitions of ‘‘occurrence’’ and ‘‘property damage’’ sim-
ilarly to those found in the policy at issue in the present
case and found that an insurable injury had been
alleged. Thus, the defendant argues that his alleged
misrepresentations and the harm that allegedly resulted
from them constitute both an occurrence and property
damage within the coverage of the policy in the present
case. We disagree.
We begin by setting forth the standard of review and
legal principles that inform our analysis. ‘‘With respect
to summary judgment, our standard of review is well
established. Summary judgment rulings present ques-
tions of law; accordingly, [o]ur review of the . . . deci-
sion to grant [a] . . . motion for summary judgment is
plenary. . . . In addition, the interpretation of an insur-
ance contract presents a question of law, over which
our review is plenary. . . . Finally, with respect to an
insurer’s duty to defend a claim brought against the
insured, [t]he question of whether an insurer has a duty
to defend its insured is purely a question of law, which
is to be determined by comparing the allegations of
[the] complaint with the terms of the insurance policy.’’
(Citations omitted; internal quotation marks omitted.)
Misiti, LLC v. Travelers Property Casualty Co. of
America, 308 Conn. 146, 154, 61 A.3d 485 (2013).
‘‘Under the well established four corners doctrine,
the duty to defend is broader than the duty to indemnify.
. . . An insurer’s duty to defend is triggered if at least
one allegation of the complaint falls even possibly
within the coverage. . . . Indeed, [i]t is well estab-
lished . . . that a liability insurer has a duty to defend
its insured in a pending lawsuit if the pleadings allege
a covered occurrence, even though facts outside the
four corners of those pleadings indicate that the claim
may be meritless or not covered. . . . The obligation
of the insurer to defend does not depend on whether
the injured party will successfully maintain a cause of
action against the insured but on whether he has, in
his complaint, stated facts which bring the injury within
the coverage. If the latter situation prevails, the policy
requires the insurer to defend, irrespective of the
insured’s ultimate liability. . . . In contrast to the duty
to defend, the duty to indemnify is narrower: while the
duty to defend depends only on the allegations made
against the insured, the duty to indemnify depends upon
the facts established at trial and the theory under which
judgment is actually entered in the case. . . . Thus, the
duty to defend is triggered whenever a complaint alleges
facts that potentially could fall within the scope of cov-
erage . . . .’’ (Internal quotation marks omitted.) Trav-
elers Casualty & Surety Co. of America v. Netherlands
Ins. Co., 312 Conn. 714, 739, 95 A.3d 1031 (2014).
‘‘Because the duty to defend is significantly broader
than the duty to indemnify, where there is no duty to
defend, there is no duty to indemnify . . . .’’ (Internal
quotation marks omitted.) DaCruz v. State Farm Fire &
Casualty Co., 268 Conn. 675, 688, 846 A.2d 849 (2004).
The question of whether the alleged damages in the
present case constitute property damage as defined in
the policy requires this court to interpret the policy.
‘‘An insurance policy is to be interpreted by the same
general rules that govern the construction of any written
contract . . . . In accordance with those principles,
[t]he determinative question is the intent of the parties,
that is, what coverage the . . . [insured] expected to
receive and what the [insurer] was to provide, as dis-
closed by the provisions of the policy. . . . If the terms
of the policy are clear and unambiguous, then the lan-
guage, from which the intention of the parties is to be
deduced, must be accorded its natural and ordinary
meaning. . . . Under those circumstances, the policy
is to be given effect according to its terms. . . . When
interpreting [an insurance policy], we must look at the
contract as a whole, consider all relevant portions
together and, if possible, give operative effect to every
provision in order to reach a reasonable overall result.’’
(Internal quotation marks omitted.) Lexington Ins. Co.
v. Lexington Healthcare Group, Inc., 311 Conn. 29,
37–38, 84 A.3d 1167 (2014).
In the present case, section II, coverage E, of the
policy defines the defendant’s liability coverage. It pro-
vides, in relevant part, that the plaintiff will defend and
indemnify the defendant ‘‘[i]f a claim is made or a suit
is brought . . . for damages because of ‘bodily injury’
or ‘property damage’ caused by an ‘occurrence’ to which
this coverage applies . . . .’’ The policy defines an
‘‘occurrence’’ as ‘‘an accident, including continuous or
repeated exposure to substantially the same general
harmful conditions, which results, during the policy
period, in: a. ‘Bodily injury’; or b. ‘Property damage.’ ’’
’’Property damage,’’ in turn, is defined as ‘‘physical
injury to, destruction of, or loss of use of tangible
property.’’
Neither this court nor our Supreme Court has
addressed whether damages arising from a negligent
misrepresentation may be considered property damage
or under what circumstances a negligent misrepresen-
tation can give rise to an occurrence within the meaning
of a homeowners insurance policy. Decisions from our
Superior Court have uniformly held that damages flow-
ing from misrepresentations are not property damage
as that term is normally used in homeowners insurance
policies. See Amica Mutual Ins. Co. v. Paradis, Supe-
rior Court, judicial district of Hartford, Docket No. CV-
13-6041224-S (October 16, 2014) (59 Conn. L. Rptr. 151,
153) (claim in underlying action not property damage
because ‘‘the alleged misrepresentations could not have
caused the property damage; the alleged physical flaws
in the property necessarily predated and were the sub-
ject of the misrepresentations’’) (appeal to Appellate
Court, AC 37353, withdrawn June 30, 2015); Amica
Mutual Ins. Co. v. Basu, Superior Court, judicial district
of Hartford, Docket No. CV-12-6034435-S (December
20, 2013) (57 Conn. L. Rptr. 340, 340, 342) (nondisclo-
sure and concealment of preexisting cracks in basement
walls that became worse after buyer purchased house
predated defendant’s acts and held not to be claim for
property damage); Electric Ins. Co. v. Santo, Superior
Court, judicial district of Waterbury, Docket No. CV-
06-4011494-S (August 6, 2007) (44 Conn. L. Rptr. 41,
43–44) (misrepresentations concerning whether wood
stove and chimney were functional were not claims for
property damage). Relying on this trial court authority,
the United States District Court for the District of Con-
necticut similarly has held that any damages arising
from negligent misrepresentations were economic dam-
ages, rather than property damage within the ambit of
an insurance policy. See Homestead Country Proper-
ties, LLC v. American Modern Home Ins. Co., Docket
No. 3:12CV1003 (JBA), 2013 WL 3716383, *4 (D. Conn.
July 12, 2013).
In response to this court’s questions during oral argu-
ment about how he would respond to the principles in
the previously cited authority, the defendant argued
that Capstone Building Corp. has rendered the legal
theory on which those cases relied invalid. In Capstone
Building Corp., our Supreme Court addressed on certi-
fication from the United States District Court for the
Northern District of Alabama, inter alia, ‘‘[w]hether
damage to a project contracted to be built, which was
caused by defective construction or faulty workman-
ship associated with the construction project, may con-
stitute property damage resulting from an occurrence,
triggering coverage under a commercial general liability
insurance policy . . . .’’ (Internal quotation marks
omitted.) Capstone Building Corp. v. American Motor-
ists Ins. Co., supra, 308 Conn. 771. The court held that
the defective construction as a volitional, albeit negli-
gent, act was not per se excluded from the insurance
policy’s definition of an occurrence. Id., 776. It also
concluded that physical damages caused by the defec-
tive work, such as water and mold damage, could qualify
as ‘‘ ‘[p]hysical injury to tangible property,’ ’’ but that
property damage within the coverage of the policy at
issue did not include the escape of carbon monoxide
alone, the defective work itself, or the cost of repairing
defective work to prevent future harm to the property.
Id., 779–87.
In analyzing whether the alleged injuries could be
considered property damage, however, our Supreme
Court did not have any reason to address the issue of
whether there was any damage to the property that
preexisted the asserted occurrence or a third party’s
damages that flowed from a purported misrepresenta-
tion of fact concerning past damage to, or defect in,
tangible property that would be considered property
damage under the policy. See id., 777–87. Further, there
were no disputes between the parties regarding any
causal connection between the alleged activity and the
asserted property damage; rather, the certified question
before the court assumed that the defective work itself
was the cause of the injury suffered. See id., 771. Thus,
despite some cursory similarities, we find that Capstone
Building Corp. is readily distinguishable from the cir-
cumstances of the present case.
Numerous courts outside this state have addressed
the issue of whether misrepresentation claims are cov-
ered by a homeowners or commercial general liability
insurance policy. Though these courts have analyzed
that issue in a number of ways, a few distinct trends
can be discerned. A number of courts have concluded,
similarly to our Superior Court, that damages resulting
from misrepresentations are economic or contractual
in nature and do not give rise to property damages
within the coverage of the relevant policy. For instance,
in St. Paul Fire & Marine Ins. Co. v. Lippincott, 287
F.3d 703, 706 (8th Cir. 2002), the court held that misrep-
resentations concerning, and efforts to conceal, struc-
tural cracks were not property damage giving rise to a
duty to defend in a separate action because these
actions did not create the damage in question. As the
court noted, ‘‘[t]he structural flaws in the house consti-
tute tangible property damage, but these flaws predate
the occurrence of concealments and misrepresenta-
tions by which the [defendants] incurred liability.’’ Id.
The court concluded that the judgment encompassed
‘‘the intangible losses incurred when the [third parties]
relied to their economic detriment upon the misrepre-
sentations. These damages are pecuniary in nature and
are not property damage within the meaning of the . . .
insurance policies.’’ Id.
In holding that no property damage had been alleged
within the terms of a homeowners insurance policy,
the court in USAA Casualty Ins. Co. v. Bateman, United
States District Court, Docket No. 2:07-CV-3700 (E.D.
Pa. October 30, 2008), stated: ‘‘The acts at issue in the
underlying lawsuit amounted to a misrepresentation of
the status of the home, whether it be intentional or
negligent. At no point did [the defendant’s] acts ever
inflict damage on the home that was not already in
existence prior to the acts in question. Similarly, [the
defendant’s] acts did not even limit the use of the home
for the [u]nderlying [p]laintiffs. While the alleged acts
did impose on the [u]nderlying [p]laintiffs some harm,
the ‘tangible property’ here was not changed in any way
by the misrepresentation. The house was in the same
state prior to the sale as it was after the sale. The only
harm that occurred was that the [u]nderlying [p]laintiffs
did not purchase the home they expected to purchase.
This, however, does not constitute ‘property damage.’ ’’
(Emphasis added.) Accord State Farm Lloyds v. Kes-
sler, 932 S.W.2d 732, 737 (Tex. App. 1996) (‘‘The [third
parties’] petition . . . describe[s] drainage and founda-
tion problems. But those problems are not ‘property
damage’ for which the [defendants] are legally liable
because the [third parties] do not assert that the [defen-
dants] injured the property, destroyed the property,
or caused the resulting loss of use. Instead, the [third
parties] allege that the [defendants] misrepresented the
problems. The [defendants’] alleged misrepresentations
did not cause the drainage and foundation problems;
those problems existed before negotiations began.’’
[Emphasis in original.]), writ denied (June 12, 1997);
Aluise v. Nationwide Mutual Fire Ins. Co., 218 W.
Va. 498, 501, 506–507, 625 S.E.2d 260 (2005) (cracks
in foundational walls and moisture buildup related to
misrepresentation claims merely economic losses and
therefore not covered property damage within policy
terms).
Other courts have held that there was no coverage
under a homeowners or commercial general liability
insurance policy for other reasons. In some circum-
stances, the courts relied on the presence of a volitional
act to hold that no accident took place and, therefore,
there was no occurrence, even if the act was predicated
on a mistake. See Everson v. Lorenz, 280 Wis. 2d 1, 16,
695 N.W.2d 298 (2005). Courts also have refused to find
a causal link between any misrepresentation and the
purported property damage. See, e.g., Colony Ins. Co.
v. Montecito Renaissance, Inc., Docket No. 8:09-CV-
1469-T-30MAP, 2011 WL 4529948, *6 (M.D. Fla. Septem-
ber 30, 2011) (no occurrence in commercial general
liability insurance policy where ‘‘alleged failure of
[d]eveloper and others to make adequate and truthful
disclosures in the [p]rospectus did not cause any of
the alleged physical defects . . . [because] any . . .
physical damage [to the condominium complex] was
caused by defective construction, and/or maintenance
of the property’’ [emphasis in original]); Boggs v. Great
Northern Ins. Co., 659 F. Supp. 2d 1199, 1212 (N.D. Okla.
2009) (although misrepresentations may have caused
purchase of house, no occurrence found where plain-
tiffs’ ‘‘alleged misrepresentations had no effect on the
condition of the fireplaces, because the fireplaces were
defective when the house was built’’);4 State Farm
Fire & Casualty Co. v. Gwin, 658 So. 2d 426, 427–28
(Ala. 1995) (misrepresentations about property infested
with termites, leaky roof, and defective electrical wiring
did not cause those damages); Everson v. Lorenz, supra,
27 (no ‘‘ ‘causation nexus’ between property damage
and alleged actions because the ‘property damage’ . . .
was caused by the preexisting 100-year flood plain, not
by any presale misrepresentation’’).5
Finally, in a case not involving the interpretation of
an insurance policy, our Supreme Court relied on the
Restatement (Second) of Torts in discussing the type
of damages arising from a negligent misrepresentation:
‘‘Section 552B (1) of the Restatement (Second) of Torts
provides: The damages recoverable for a negligent mis-
representation are those necessary to compensate the
plaintiff for the pecuniary loss to him of which the
misrepresentation is a legal cause, including (a) the
difference between the value of what he has received
in the transaction and its purchase price or other value
given for it; and (b) pecuniary loss suffered otherwise
as a consequence of the plaintiff’s reliance upon the
misrepresentation.’’ (Emphasis added; internal quota-
tion marks omitted.) Updike, Kelly & Spellacy, P.C. v.
Beckett, 269 Conn. 613, 645 n.25, 850 A.2d 145 (2004).
In the present case, the gravamen of the Wishneskis’
claim of negligent misrepresentation is that, in the
course of selling the home, the defendant was required
to submit to the Wishneskis a residential property dis-
closure report. In that report, the defendant claimed
that he had no knowledge of any problems relating to
the property including water seepage, rot and water
damage, water drainage problems, and driveway prob-
lems. The Wishneskis relied on these representations
and purchased the property on March 13, 2009. The
defendant’s representations were false or inaccurate,
which the Wishneskis discovered only after they pur-
chased and occupied the property. The property suf-
fered from preexisting conditions, problems, and
defects including susceptibility to flooding, inadequate
water drainage, mold, rot, and other uncorrected water
damage. Although the Wishneskis’ alleged damages
arose from these undisclosed conditions, problems, and
defects, the gravamen of their claim is that they suffered
economic and pecuniary damages as a result of the
defendant’s alleged misrepresentations which induced
them to purchase the property. As in many of the cases
previously discussed, the alleged conditions, problems,
and defects existed prior to the defendant’s alleged
misrepresentations, and subsequent incidents causing
damage after the Wishneskis purchased the property
were the result of those preexisting conditions, prob-
lems, and defects.
On the basis of our review of the record and relevant
case law, we are persuaded that the court properly
determined that the damages claimed by the Wishneskis
as a result of the defendant’s alleged misrepresentations
constituted economic or pecuniary losses, and not prop-
erty damage within the ambit of the coverage of the
policy. See, e.g., Aluise v. Nationwide Mutual Fire Ins.
Co., supra, 218 W. Va. 506 (‘‘damages flowing from mis-
representation . . . have no basis [as] property dam-
age; rather, the only cognizable damages from such
torts are economic and contractual in nature and as
such do not fall within the scope of coverage afforded
by [homeowners] policies . . . .’’ [internal quotation
marks omitted]). The court, therefore, properly con-
cluded that the plaintiff did not have a duty to defend
the defendant under these circumstances.
Even if we were to consider the Wishneskis’ alleged
damages resulting from the defendant’s alleged misrep-
resentations as property damage as that term is defined
within the policy, we agree with those courts that have
held that misrepresentations under similar circum-
stances cannot be considered to cause in actual fact
or proximately the damages in question. ‘‘Traditionally,
an action for negligent misrepresentation requires the
plaintiff to establish (1) that the defendant made a mis-
representation of fact (2) that the defendant knew or
should have known was false, and (3) that the plaintiff
reasonably relied on the misrepresentation, and (4) suf-
fered pecuniary harm as a result.’’ Nazami v. Patrons
Mutual Ins. Co., 280 Conn. 619, 626, 910 A.2d 209 (2006)
(liability for negligent misrepresentation can be predi-
cated on misrepresentation of fact ‘‘that the defendant
. . . should have known was false’’); compare Cap-
stone Building Corp. v. American Motorists Ins. Co.,
supra, 308 Conn. 775 (‘‘[a] deliberate act, performed
negligently, is an accident if the effect is not the
intended or expected result; that is, the result would
have been different had the deliberate act been per-
formed correctly’’ [internal quotation marks omitted]).
The policy here requires that the accident ‘‘results . . .
in’’ or ‘‘cause[s]’’ the property damages for the duty
to defend to arise. Although the Wishneskis’ alleged
economic and pecuniary damages derive from their reli-
ance on the defendant’s alleged misrepresentations,
none of the damage to the property was caused in fact
or proximately by the defendant’s misrepresentations.
See Langevin v. Allstate Ins. Co., 66 A.3d 585, 590–91
(Me. 2013) (where complaint alleged damages caused
by negligent misrepresentations, to be covered under
policy, physical damage to property must have directly
resulted from negligent misrepresentations). The Wish-
neskis may have purchased the property as a direct
result of the defendant’s alleged misrepresentations,
but the actual property damage would have existed with
or without such misrepresentations or the Wishneskis’
purchase. The alleged negligent misrepresentations,
therefore, were not the actual or proximate cause of
the damage to the property. See id., 591 (‘‘damages for
undisclosed physical problems are not covered by the
policy because those physical problems did not result
from the ‘occurrence’ alleged in the underlying com-
plaint’’), citing Veilleux v. National Broadcasting Co.,
206 F.3d 92, 123–24 (1st Cir. 2000), and 3 Restatement
(Second), Torts § 552B (1977); see also Winn v.
Posades, 281 Conn. 50, 56–57, 913 A.2d 407 (2007) (both
actual and proximate causation required to make out
legal cause in negligence claim).6
Our Supreme Court has stated that ‘‘[it] will not predi-
cate the duty to defend on a reading of a complaint
that is . . . conceivable but tortured and unreason-
able. . . . Thus, although an insurer is not excused
from its duty to defend merely because the underlying
complaint does not specify the connection between the
stated cause of action and the policy coverage . . . the
insurer has a duty to defend only if the underlying
complaint reasonably alleges an injury that is covered
by the policy.’’ (Citations omitted; emphasis omitted;
internal quotation marks omitted.) Misiti, LLC v. Trav-
elers Property Casualty Co. of America, supra, 308
Conn. 156. As stated in another context, a sequential
relationship, without more, is insufficient to show the
requisite causal connection. See id., 163 n.11. Conse-
quently, we conclude that the court properly deter-
mined that there was no duty to defend.7
II
Next, the defendant claims that the trial court improp-
erly determined that the question of whether the dam-
ages claimed in the Wishneski action constituted
property damages within the meaning of the policy was
a question of law rather than a question of fact, which
would have precluded the granting of summary judg-
ment. In support of this claim, he relies on the following
language in Capstone Building Corp.: ‘‘[W]hether an
insured party makes a viable claim for property damage
is a highly fact-dependent determination in each case.’’
Capstone Building Corp. v. American Motorists Ins.
Co., supra, 308 Conn. 778. The defendant notes that the
plaintiff submitted only three exhibits in support of its
motion for summary judgment, that only one of these
exhibits contained evidence concerning the damages
claimed, and that the damages alleged all fall within
the definition of property damage in Capstone Building
Corp. The defendant argues that, based on the evidence
submitted, the plaintiff has not offered any proof that
the damages claimed in the Wishneski action were not
property damage as defined within the policy. We dis-
agree with the defendant’s characterization of what this
determination requires.
As noted previously, the standard of review both for
a summary judgment and a determination concerning
an insurer’s duty to defend is plenary. Misiti, LLC v.
Travelers Property Casualty Co. of America, supra, 308
Conn. 154. Our Supreme Court has repeatedly stated
that the question of whether an insurer has a duty to
defend is ‘‘ ‘purely a question of law’ . . . .’’ Id.; accord
Wentland v. American Equity Ins. Co., 267 Conn. 592,
599 n.7, 840 A.2d 1158 (2004); Community Action for
Greater Middlesex County, Inc. v. American Alliance
Ins. Co., 254 Conn. 387, 395, 757 A.2d 1074 (2000). The
court has also long held that an insurer’s duty to defend
is determined by reference to the insurance policy and
the complaint in the underlying action. See Misiti, LLC
v. Travelers Property Casualty Co. of America, supra,
155; Smedley Co. v. Employers Mutual Liability Ins.
Co., 143 Conn. 510, 516–17, 123 A.2d 755 (1956).
Although there are circumstances where facts beyond
those alleged in the underlying complaint and which
are known to the insurer can require the insurer to
provide a defense, an insurer cannot rely on extrinsic
facts to refuse to provide a defense. See Hartford Casu-
alty Ins. Co. v. Litchfield Mutual Fire Ins. Co., 274
Conn. 457, 464, 466–67, 876 A.2d 1139 (2005); accord
Misiti, LLC v. Travelers Property Casualty Co. of
America, supra, 161 (‘‘the duty to defend must be deter-
mined by the allegations set forth in the underlying
complaint itself, with reliance on extrinsic facts being
permitted only if those facts support the duty to
defend’’).
In light of the foregoing principles, this court has
stated that ‘‘[t]o prevail on its own motion for summary
judgment . . . for a declaratory judgment that it has
no duty to defend in the underlying action, the insurer
must establish that there is no genuine issue of material
fact either that no allegation of the underlying complaint
falls even possibly within the scope of the insuring
agreement or, even if it might, that any claim based on
such an allegation is excluded from coverage under an
applicable policy exclusion. . . . [T]he insurer . . . is
necessarily limited to the provisions of the subject
insurance policy and the allegations of the underlying
complaint.’’ (Emphasis added; internal quotation marks
omitted.) New London County Mutual Ins. Co. v. Bialo-
brodec, 137 Conn. App. 474, 479, 48 A.3d 742 (2012). As
the duty to defend may be resolved solely by referencing
the allegations of the complaint and the insurance pol-
icy pursuant to the ‘‘four corners’’ principle, it necessar-
ily follows that whether ‘‘property damage’’ has been
alleged as one of the component parts of that determina-
tion may also be addressed solely by reference to those
two documents.
The defendant’s reliance on Capstone Building Corp.
is misplaced as it does not provide reason to deviate
from this authority. In determining whether the dam-
ages alleged to have arisen out of the defective construc-
tion or faulty workmanship constituted property
damage within the terms of the policy, our Supreme
Court stated in Capstone Building Corp.: ‘‘Although
we reject [the insurance company’s] argument that the
insuring agreement never covers damage to the
insured’s project, whether an insured party makes a
viable claim for property damage is a highly fact-depen-
dent determination in each case. The allegations
detailed in the District Court’s memorandum of law
may be divided into four categories: (1) damage to non-
defective property stemming from defective construc-
tion; (2) carbon monoxide; (3) defective work, standing
alone, including building and fire safety code violations;
and (4) repairs to damaged work.’’ Capstone Building
Corp. v. American Motorists Ins. Co., supra, 308 Conn.
777–78. The court then proceeded to examine each of
these categories, holding that the first ground, if prop-
erly alleged, would set forth a claim for property dam-
age within the terms of the policy, and that the
remaining three would not provide a basis for such an
allegation. Id., 779–87. Thus, the language to which the
defendant points in Capstone Building Corp. does not
demonstrate the intent of the court to deviate from
its longstanding precedent. Rather, when placed in its
proper context, this language demonstrates that the
court was rejecting a per se rule for or against including
all damages related to defective construction in the
initial grant of coverage and requiring, instead, that any
damages claimed be considered individually.8
As Capstone Building Corp. does not change the
nature of the determination that insurers and the courts
must make in evaluating whether a duty to defend
exists, that determination remains a question of law.
See Misiti, LLC v. Travelers Property Casualty Co. of
America, supra, 308 Conn. 154. Therefore, we conclude
that the trial court properly treated the question of
whether the damages constituted property damage
within the meaning of the policy as a question of law.
The judgment is affirmed.
In this opinion the other judges concurred.
1
The Wishneskis are also named as defendants in the plaintiff’s complaint.
Neither filed an appearance in the declaratory judgment action, and a motion
for default against each of them was granted on November 13, 2012. Addition-
ally, neither of the Wishneskis has appeared in this appeal. Because they
have not taken an active role in the deliberations before the trial court
or this court, all references to the defendant in this opinion refer solely
to Sielski.
2
The defendant has also been referred to as ‘‘Andrzej Sielski’’ in both
actions.
3
The trial court held that none of the theories advanced in the second
amended complaint in the Wishneski action were for claims of property
damage or bodily injury. The defendant does not challenge the trial court’s
determination as to the lack of application of the bodily injury coverage
and has limited his arguments on appeal to the claim that the alleged damages
for negligent misrepresentation implicate his property damage coverage.
4
Although this portion of the court’s analysis addressed whether there
was a duty to indemnify, the court later held that there was also no duty
to defend because ‘‘none of the [u]nderlying [c]laims gave rise to liability
under the [p]olicies, because the [third party’s] claims were not covered,’’
and relied on its previous analysis concerning the duty to indemnify to
demonstrate this point. Boggs v. Great Northern Ins. Co., supra, 659 F.
Supp. 2d 1214. ‘‘Thus, the [i]nsurance [c]ompanies could properly conclude
that no potential for liability existed.’’ Id.
5
There are, however, a minority of courts that have held that such situa-
tions can create property damage and an occurrence sufficient to give rise
to a duty to defend. For instance, in Wood v. Safeco Ins. Co. of America,
980 S.W.2d 43, 47 (Mo. App. 1998), the buyer alleged that the insured seller
of the properties represented, inter alia, that the residence was not in a
flood plain and that it had not previously flooded. They further alleged that,
after they had purchased the property, the entire property flooded and that
they would not have bought the property if they had known the true facts.
The court held that a misrepresentation under such circumstances could
qualify as an accident because the falsity in the statement and resulting
harm might be accidental. Id., 52. Similarly, the court held that the alleged
damages included flooding damage to the property, which the buyers would
not have suffered without the false representations because they would not
have bought the house, and that the several feet of water implicated the
‘‘ ‘loss of use’ ’’ portion of the ‘‘ ‘property damage’ ’’ requirement. Id., 53.
Finally, the court held that the ultimate determination of the causal relation-
ship should have been addressed in the litigation by the insurer rather than
in the separate action. Id. On this basis, the court held that a duty to defend
existed. Id.; accord USAA Casualty Ins. Co. v. McInerney, 960 N.E.2d 655,
662 (Ill. App. 2011), leave to appeal denied, 968 N.E.2d 89 (Ill. 2012); Sheets
v. Brethren Mutual Ins. Co., 342 Md. 634, 658, 679 A.2d 540 (1996). We are
not persuaded by the reasoning of these cases.
6
‘‘To prevail on a negligence claim, a plaintiff must establish that the
defendant’s conduct legally caused the injuries. . . . The first component
of legal cause is causation in fact. Causation in fact is the purest legal
application of . . . legal cause. The test for cause in fact is, simply, would
the injury have occurred were it not for the actor’s conduct. . . . The second
component of legal cause is proximate cause . . . . [T]he test of proximate
cause is whether the defendant’s conduct is a substantial factor in bringing
about the plaintiff’s injuries. . . . Further, it is the plaintiff who bears the
burden to prove an unbroken sequence of events that tied his injuries to
the [defendants’ conduct]. . . . The existence of the proximate cause of
an injury is determined by looking from the injury to the negligent act
complained of for the necessary causal connection. . . . This causal con-
nection must be based upon more than conjecture and surmise. . . . An
actual cause that is a substantial factor in the resulting harm is a proximate
cause of that harm. . . . The finding of actual cause is thus a requisite for
any finding of proximate cause.’’ (Citation omitted; internal quotation marks
omitted.) Winn v. Posades, supra, 281 Conn. 56–57.
7
In his reply brief, the defendant attempts to bring the situation here back
within the ambit of Capstone Building Corp. by analogizing the causation of
the water and mold damage in both cases: ‘‘Although the court [in Capstone
Building Corp.] did not describe the precise mechanism of the mold and
water damage, logic suggests that the faulty construction did not directly
cause the water and mold damage to the tangible property. Water and mold
damage occur over time, as the water penetrates and soaks the materials.
Mold grows on the saturated material from spores found in the environment.
Thus, in Capstone Building Corp., the direct cause of the damage was the
introduction of water or moisture unto the materials. The faulty construction
was the indirect cause for failing to protect the material from the water
or moisture. Nonetheless, in Capstone Building Corp. the Supreme Court
determined that the occurrence (faulty construction) caused the property
damage (the water and mold damage).’’
This argument fails to persuade us. The causation issue in Capstone
Building Corp. is both presumed and fairly direct: if there had been no
faulty construction, then the moisture that gave rise to the water and mold
damage might not have entered the property. In the present case, however,
there has been no argument as to how the negligent misrepresentation
caused the tangible property damage in question; as alleged in the complaint,
the conditions giving rise to these issues existed prior to any misrepresenta-
tions or concealment by the defendant, so the misrepresentations cannot
fairly be said to have caused the conditions. The differentiation between
Capstone Building Corp. and this case can be succinctly stated this way:
If the defendant had adequately disclosed the alleged deficiencies of, or
existing damage to, the property, he would have no liability in the Wishneski
action even though the deficiencies and damage still would have existed
and even though the property still would have subsequently flooded because
of the topography of the land in the area of the property.
8
Our Supreme Court has continued to use a similar articulation of the
‘‘four corner’’ principle even after its decision in Capstone Building Corp.
See Travelers Casualty & Surety Co. of America v. Netherlands Ins. Co.,
supra, 312 Conn. 739.