Corteau v. Teachers Ins. Co., 338 F. Supp. 3d 88

Kenneth and Cheryl Courteau own a Somers, CT home insured by Teachers Insurance Co. under policies from 2006–2016 (pre-2013 and post-2013 forms).
In October 2015 plaintiffs submitted a claim after a buyer's inspection revealed horizontal and vertical pattern cracking in basement walls; core testing showed pyrrhotite/iron sulfide oxidation causing progressive concrete deterioration.
Plaintiffs continued to occupy the house; no one told them it was imminently dangerous or uninhabitable.
Plaintiffs sued for breach of contract and breach of the covenant of good faith and fair dealing after the insurer denied coverage; a prior motion dismissal eliminated their CUTPA claim.
The insurer moved for summary judgment arguing the pre-2013 policy exclusions for cracking/defective materials and the post-2013 policy’s limited “collapse” coverage (requiring an abrupt event that renders the property uninhabitable) preclude coverage.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether damage from pyrrhotite-related cracking is covered under pre-2013 policy	Courteau: loss is covered under general dwelling coverage; exclusions do not bar recovery as alleged damage arises from an insured loss	Teachers Ins.: pre-2013 policy expressly excludes loss caused by cracking, bulging, expansion and defects in construction materials	Court: pre-2013 policy unambiguously excludes the claimed loss; summary judgment for defendant
Whether damage is covered under post-2013 policy’s "Collapse" provision	Courteau: collapse definition is ambiguous; “abrupt” could mean unexpected, and property’s diminished marketability shows it cannot be used as intended	Teachers Ins.: collapse coverage requires an abrupt caving in that prevents occupancy; policy expressly excludes cracking, bulging, expansion absent abrupt collapse	Court: post-2013 collapse coverage unambiguously requires abrupt event rendering property uninhabitable; gradual deterioration falls outside coverage; summary judgment for defendant
Whether insurer breached implied covenant of good faith and fair dealing	Courteau: insurer acted in bad faith by invoking inapplicable exclusions and denying claim	Teachers Ins.: no bad faith because denial was legally supported by policy language; contract claim fails so related bad-faith claim fails	Court: bad-faith claim fails because there is no contractual coverage; summary judgment for defendant

Connecticut Medical Ins. Co. v. Kulikowski, 286 Conn. 1 (interpreting insurance policy language and ordinary-meaning rule)
Johnson v. Connecticut Ins. Guar. Ass'n, 302 Conn. 639 (policy construed as a whole; ambiguities construed for insured)
Capstone Bldg. Corp. v. Am. Motorists Ins. Co., 308 Conn. 760 (scope of bad-faith/breach of implied covenant requires impairment of contractual benefits)
Buell Indus., Inc. v. Greater New York Mut. Ins. Co., 259 Conn. 527 ("sudden"/"abrupt" requires an event occurring within a short amount of time)
Kim v. State Farm Fire & Cas. Co., 262 F. Supp. 3d 1 (D. Conn.) (similar concrete-deterioration claim and applicability of crack/defect exclusions)
Liston-Smith v. CSAA Fire & Cas. Ins. Co., 287 F. Supp. 3d 153 (D. Conn.) (gradual concrete deterioration does not satisfy "abrupt collapse" coverage)