Mazzarella v. Amica Mutual Ins Co, 3:17-cv-00598

Background

Joseph and Wendy Mazzarella owned a home insured by Amica under a homeowners policy for Nov 17, 2015–Nov 17, 2016; they reported damage on Feb 16, 2016 affecting basement concrete and other interior elements.
Engineering reports indicated high pyrrhotite content in concrete that oxidized when exposed to water and oxygen, allegedly causing deterioration/structural damage to basement walls.
Amica investigated, then denied coverage (citing lack of “collapse” and unspecified exclusions); the Mazzarellas sued asserting breach of contract (seeking coverage under “direct physical loss”), breach of the implied covenant of good faith and fair dealing, and CUTPA/CUIPA violations.
The district court previously dismissed an earlier complaint without prejudice; the Second Amended Complaint limited coverage theory to “direct physical loss” (not collapse) and added an “efficient cause” allegation.
Court held the complaint failed to plausibly allege a covered “direct physical loss,” and that the alleged damage fell within multiple policy exclusions (deterioration, expansion/bulging, subsurface water, and defective materials); ensuing-loss and efficient-cause arguments could not salvage coverage.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs sufficiently alleged a “direct physical loss” under the policy	Mazzarella: oxidation of pyrrhotite in concrete caused damage to basement walls and other house parts that constitutes a direct physical loss	Amica: allegations are too vague to show a tangible, covered physical alteration; the chemical reaction itself is not a “loss”	Court: dismissed — plaintiffs failed to plausibly allege a perceptible direct physical loss
Whether policy exclusions bar coverage (deterioration, expansion/bulging, subsurface water, defective materials)	Mazzarella: loss caused by water/oxygen oxidation should be covered (or is efficiently caused)	Amica: the damage fits explicit exclusions (deterioration, bulging/expansion, water under ground, defective materials)	Court: held exclusions apply; coverage would be excluded even if a direct loss were alleged
Whether “efficient cause” or “ensuing loss” doctrines bring loss within coverage	Mazzarella: water/oxygen infiltration is the efficient cause and damage to other parts may be ensuing loss	Amica: both the infiltration and internal chemical reaction are excluded per policy; ensuing-loss must be distinct and independent	Court: rejected efficient-cause theory and found ensuing-loss inapplicable because subsequent damage was proximately caused by excluded peril
Whether bad faith/CUTPA/CUIPA claims survive without breach of contract	Mazzarella: Amica handled claim in bad faith and follows a business practice of denying oxidation claims	Amica: if no contractual obligation exists to pay, CUIPA/CUTPA and bad-faith claims fail	Court: dismissed these statutory and implied-duty claims because the underlying contract claim fails

Key Cases Cited

Yale Univ. v. Cigna Ins. Co., 224 F. Supp. 2d 402 (D. Conn.) (ensuing-loss analysis and limits on exception to exclusions)
State Farm Fire & Cas. Co. v. Tully, 322 Conn. 566 (Conn. 2016) (insurer bears burden to show complaint falls entirely within an exclusion)
Frontis v. Milwaukee Ins. Co., 156 Conn. 492 (Conn. 1968) (efficient-cause proximate-cause test for attributing loss)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading plausibility standard)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must contain factual allegations supporting legal claims)
Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774 (2d Cir. 1984) (purpose of Rule 12(b)(6) motion)