159 Conn.App. 650
Conn. App. Ct.2015Background
- Sielski sold a house to the Wishneskis; he completed a residential disclosure stating he had no knowledge of water seepage, rot, drainage, driveway or related problems.
- After purchase, the Wishneskis discovered drainage/flooding issues, a washed-away driveway, and rotten/moldy basement beams; they sued Sielski alleging negligent misrepresentation and related causes of action.
- Sielski had a homeowners policy with New London County Mutual in force before cancellation at the time of sale; insurer sought a declaratory judgment that it had no duty to defend or indemnify Sielski in the Wishneski action.
- Trial court granted insurer summary judgment, concluding the Wishneskis’ damages were economic/pecuniary (resulting from misrepresentation) and not "property damage" under the policy, and that whether damages constituted property damage was a question of law.
- Sielski appealed, arguing (1) the alleged damages qualified as property damage under Capstone Building Corp., and (2) the question was fact-bound and should not have been decided on summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does insurer have a duty to defend where underlying suit alleges negligent misrepresentation about property condition? | No duty: underlying complaint alleges economic losses from misrepresentation, not property damage under policy definitions. | Duty exists: misrepresentations led to physical harm (water/mold/driveway loss) and fall within "property damage"/"occurrence" (relying on Capstone). | Held for insurer: no duty to defend because alleged harms are pecuniary/economic from preexisting conditions, not property damage caused by an occurrence under the policy. |
| Is the question whether the alleged harms constitute "property damage" a question of fact or law? | Question of law: court can decide by comparing the policy and the underlying complaint. | Question of fact: Capstone says property-damage determinations are fact-dependent; summary judgment premature. | Held: question is one of law for the court under the four-corners rule; summary judgment was appropriate. |
Key Cases Cited
- Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760 (Conn. 2013) (defective construction can, in some circumstances, produce property damage constituting an occurrence; coverage depends on factual category analysis)
- Misiti, LLC v. Travelers Prop. Cas. Co. of Am., 308 Conn. 146 (Conn. 2013) (duty to defend is a question of law determined by comparing the complaint and the policy)
- Travelers Cas. & Surety Co. of Am. v. Netherlands Ins. Co., 312 Conn. 714 (Conn. 2014) (duty to defend is broader than duty to indemnify; triggered if any allegation potentially falls within coverage)
- DaCruz v. State Farm Fire & Cas. Co., 268 Conn. 675 (Conn. 2004) (if no duty to defend, there is no duty to indemnify)
- Winn v. Posades, 281 Conn. 50 (Conn. 2007) (both actual and proximate causation elements required in negligence; plaintiff must show unbroken causal link)