I. BACKGROUND
The Vallses own a home in Coventry, Connecticut that is insured by Allstate. In October 2015, the Vallses noticed several horizontal and vertical cracks in their basement walls. While the degree of damage is disputed, it is not disputed that the basement walls remain standing. Accepting the facts plausibly alleged in the complaint, the dispute is whether Allstate's homeowner's insurance Policy (the "Policy") covers the damage the Vallses have alleged.
The Vallses originally filed this action in state court, and Allstate timely removed the case to the District Court. The amended complaint principally asserts three causes of action against Allstate: (1) breach of contract based on Allstate's denial of coverage under the Policy; (2) breach of the implied covenant of good faith and fair dealing; and (3) unfair and deceptive practices in violation of the Connecticut Unfair Insurance Practices Act ("CUIPA"), as enforced through the Connecticut Unfair Trade Practices Act ("CUTPA").
The Policy is an "all-risk" policy that covers "sudden and accidental direct physical loss to property ... except as limited or excluded in this policy."
We will cover:
a) the entire collapse of a covered building structure;
b) the entire collapse of part of a covered building structure; and
c) direct physical loss to covered property caused by (a) or (b) above.
For coverage to apply, the collapse of a building structure specified in (a) or (b) above must be a sudden and accidental direct physical loss caused by one or more of the following: ...
b) hidden decay of the building structure; ...
f) defective methods or materials used in construction, repair, remodeling or renovation.
Collapse does not include settling, cracking, shrinking, bulging or expansion.3
The sole issue on appeal is whether the gradual deterioration of the Vallses' still-standing basement walls constitutes a covered "collapse" under this provision of the Policy.
II. CERTIFICATION
Because this case depends on Connecticut state law, and a large number of Connecticut homes covered by homeowners' policies appear to be similarly affected by defective concrete foundations, we contemplated certifying the question of coverage to the Connecticut Supreme Court. At oral argument, we asked the parties whether they were amenable to certification. Allstate, the out-of-state party in this diversity case, strenuously objected to certification. For the reasons that follow, we decline to certify.
Under the rules of this Court and Connecticut law, we may certify a question to the Connecticut Supreme Court "if the answer may be determinative of an issue" in a pending case before us "and if there is no controlling appellate decision, constitutional provision or statute."
There is much to be said in favor of certification in such a case. The issue is, of course, one of Connecticut law. Without the guidance of the Connecticut Supreme Court, we can have no assurance that our resolution will correspond to what the Connecticut Supreme Court would or will eventually decide. In a diversity case, we sit in some sense as an intermediate appellate court of the state, but our rulings on an issue of state law are not reviewable by the highest court of the state. As a result, we risk that "the party who lost in federal court has been unjustly denied her state-law rights," without any "means of effective redress."
On the other hand, as courts have recognized, certification has significant potential detriments for the parties, many of which are present in this case. It increases, at times enormously, the expenses incurred by the parties, as it requires at least two additional rounds of appellate review.
In addition, while our Court has at times underlined the value of certification to our federal system, in that the device helps to realize the federalist objective of Erie Railroad Co. v. Tompkins ,
We recognize that in certain unusual circumstances, the arguments favoring certification may be strong notwithstanding objection by a party. For example, some "state law questions only arise in disputes governed exclusively by federal law, such as bankruptcy or copyright," such that "unless there is certification, the state courts [would be] substantially deprived of the opportunity to define state law."
These cases, however, raise no such special circumstances. Notwithstanding the potential benefits of certification, its inevitable burdens on the parties relating to cost and delay and its consequence for a party exercising its right to have a diversity case decided by a federal court weighs against certification when the parties do not unanimously consent. For these reasons, we have concluded that certification to the Supreme Court of Connecticut is not appropriate in this case.
III. DISCUSSION
There is no dispute that Connecticut law governs our interpretation of the Policy. Connecticut courts interpret an insurance policy "by the same general rules that govern the construction of any written contract"-that is, by "look[ing] at the contract as a whole, consider[ing] all relevant portions together and, if possible, giv[ing] operative effect to every provision in order to reach a reasonable overall result."
The Vallses contend that our interpretation of the Policy's collapse provision should be governed by Beach v. Middlesex Mutual Assurance Co. ,
We now turn to the limiting effect of the terms "sudden and accidental" and "entire collapse" within the Policy. The phrase "sudden and accidental" in the Policy
Reading "sudden" in its context, i.e. joined by the word "and" to the word"accident," the inescapable conclusion is that "sudden," even if including the concept of unexpectedness, also adds an additional element because unexpectedness is already expressed by "accidental." This additional element is the temporal meaning of "sudden," i.e. abruptness or brevity. 21
Here, the gradual erosion and cracking of the basement walls was not sudden. Thus, the inclusion of the words "sudden and accidental" in the collapse provision is sufficient to bar coverage under the Policy for the damage sustained to the Vallses' basement walls.
Because any alleged collapse here was not "sudden," it follows that the damage to the Vallses' walls is not covered by the Policy. But even if such cracking could be said to have occurred suddenly or accidentally, the Vallses' claim is still barred because the damage sustained to their basement walls cannot be deemed an "entire collapse."
* * *
The Vallses claim that it is inconsistent to interpret the term "sudden" as imposing an abruptness requirement when several of the Policy's enumerated causes of collapse-including "hidden decay"-occur gradually. But this argument is unavailing, since physical collapse can occur abruptly even if the underlying cause proceeds slowly. One district court has helpfully illustrated the distinction as follows:
There's termites in the house. No collapse. They're eating away; every day they're eating away. No collapse. They keep eating away. Finally, they eat enough that the beam fails. ... Now there's coverage. Now you have a collapse or falling in. The fact that it was caused by termites and it was a slow process doesn't mean you didn't have an abrupt collapse. You did, when the beam failed and there was literally a falling of the beam, a failure of the beam.24
While the concrete in the Vallses' basement walls may be gradually deteriorating, there has been no sudden entire collapse, and there is no coverage for gradual decay unless it has caused such a collapse. Accordingly, the Vallses' claim was properly excluded under the Policy.
We conclude that the horizontal and vertical cracking in the Vallses' basement walls does not constitute a covered "collapse" under the Policy. Accordingly, Allstate did not breach its contract by denying coverage for the Vallses' claim. And because Allstate did not breach its contract, the Vallses' bad faith and CUTPA/CUIPA claims necessarily fail.
To summarize: We hold that the "collapse" provision in the Allstate homeowner's insurance policy at issue here does not afford coverage for basement walls that exhibit signs of deterioration but that have not collapsed suddenly, accidentally, and entirely, as required by the Policy. For the foregoing reasons, we AFFIRM the District Court's September 28, 2017 judgment dismissing the Vallses' amended complaint for failure to state a claim.
Notes
J.A. 27.
Id. at 28.
Id. at 36 (emphasis omitted).
See
Riordan v. Nationwide Mut. Fire Ins. Co. ,
McCarthy v. Olin Corp. ,
See also Brown v. Argosy Gaming Co. ,
See Tunick v. Safir ,
See Corsair Special Situations Fund, L.P. v. Pesiri ,
See
See
Gutierrez v. Smith ,
See R.R. Comm'n of Tex. v. Pullman Co. ,
See Tunick ,
See Arizonans ,
Lexington Ins. Co. v. Lexington Healthcare Grp., Inc. ,
Id. at 38 (internal quotation marks omitted).
Id. (internal quotation marks omitted).
Beach ,
J.A. 36.
Buell Indus., Inc. v. Greater New York Mut. Ins. Co. ,
J.A. 36 (emphasis added).
See
Agosti v. Merrimack Mut. Fire Ins. Co. ,
See Capstone Bldg. Corp. v. Am. Motorists Ins. Co. ,