279 F.Supp.3d 370
D. Conn.2017Background
- Barry and Robin Agosti own a home insured by Allstate; they discovered progressive cracking and concrete deterioration in their basement walls and obtained a structural engineer’s report recommending replacement.
- The Agostis filed an insurance claim (Nov. 10, 2015) asserting the damage constituted a “collapse” under Allstate’s policy; Allstate denied the claim (Apr. 19, 2016).
- The Agostis sued in Connecticut state court alleging breach of contract (Count IV), breach of the covenant of good faith and fair dealing (Count V), and violations of CUIPA/CUTPA (Count VI); Allstate removed and moved to dismiss under Rule 12(b)(6).
- The Allstate policy excludes loss caused by “settling, cracking, shrinking, bulging or expansion” but includes an Additional Protection for “Collapse,” which covers only the “entire collapse” of a building or part of a building that is a “sudden and accidental direct physical loss.”
- The court accepted the Agostis’ factual allegations as true for pleading purposes but concluded the complaint fails to plausibly allege an “entire collapse” as required by the policy.
- The court granted Allstate’s motion: Counts Four, Five, and Six were dismissed and Allstate was terminated as a party.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Coverage A (Dwelling) covers the concrete deterioration | Agostis: policy is all-risk and does not expressly exclude chemical-reaction losses | Allstate: policy expressly excludes loss consisting of settling/cracking/etc., so loss is excluded | Held: Excluded under Coverage A because loss consists of cracking/settling/etc. |
| Whether the Additional Collapse protection covers the claimed loss | Agostis: collapse can include substantial structural impairment from the chemical reaction; cracking may be manifestation of collapse | Allstate: Collapse protection limited by qualifiers (no cracking, must be sudden/accidental, must be entire) and thus no coverage | Held: Collapse clause narrowed by qualifiers; still considered further but ultimately fatal due to "entire collapse" requirement |
| Whether the collapse was “sudden and accidental” | Agostis: chemical reaction is sudden and accidental; loss is physical manifestation of that event | Allstate: policy requires the loss itself be sudden/abrupt; progressive deterioration is not covered | Held: Court assumes arguendo Agostis could allege suddenness but finds other policy limits dispositive (did not rely on suddenness) |
| Whether the policy covers an "entire collapse" given progressive deterioration of walls | Agostis: did not meaningfully contest that collapse must be entire; emphasized catastrophic nature of chemical reaction | Allstate: policy covers only an actual/entire collapse (not imminent or partial structural impairment) | Held: "Entire collapse" means an actual, complete collapse (of structure or part); plaintiffs did not allege such an actual collapse — breach of contract dismissed; related bad-faith and CUIPA/CUTPA claims dismissed as derivative |
Key Cases Cited
- Beach v. Middlesex Mut. Assurance Co., 205 Conn. 246 (Conn. 1987) (defines "collapse" as potentially including substantial impairment of structural integrity and construes cracking exclusion in context)
- Buell Indus. v. Greater N.Y. Mut. Ins. Co., 259 Conn. 527 (Conn. 2002) (discusses interpretation of "sudden" in insurance exclusions)
- Johnson v. Connecticut Ins. Guar. Ass’n, 302 Conn. 639 (Conn. 2011) (insurance contracts are interpreted by ordinary contract principles; ambiguities construed for insured)
- Paese v. Hartford Life & Accident Ins. Co., 449 F.3d 435 (2d Cir. 2006) (insured bears burden to prove coverage)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (pleading plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must contain factual content that makes claim plausible)