Tred R. Eyerly | Insurance Law Hawaii
Connecticut courts have been inundated with collapse cases the past couple of years due to insureds’ living in homes that were constructed with defective concrete manufactured by J.J. Mottes Concrete Company. In a duo of cases, the Connecticut Supreme Court responded to a certified question from the U.S. District Court, holding that collapse required that the building be in imminent danger of falling down. Vera v. Liberty Mut. Fire Ins. Co., 2019 Conn. LEXIS 339 (Conn. Nov. 12, 2019).
Plaintiffs had resided in their home since 2009. The home was built in 1993. In August 2015, after learning about the problem of crumbling basement walls affecting homes in their community due to cement manufactured by Mottes, they retained a structural engineer to evaluate their basement walls. The engineer found spider web cracking approximately 1/16 of an inch wide in the basement walls and three small vertical cracks. There were no visible signs of bowing. The engineer did not find that the walls were in imminent danger of falling down, but recommended that the basement walls be replaced.
Plaintiffs submitted a claim under their homeowners policy to Liberty Mutual. The claim was denied. The policy did not define collapse, but stated that collapse did not include “settling, cracking, shrinking, bulging or expansion.”
Plaintiffs sued in state court and Liberty Mutual removed to the federal district court. Liberty Mutual moved for summary judgment, arguing that plaintiffs could not establish a substantial impairment of the structural integrity of the basement walls without proof that the walls were in imminent danger of falling down or caving in. The federal district court certified a question to the Connecticut Supreme Court, asking the Supreme Court to clarify the meaning of the term “collapse” when the term was not defined in a homeowner’s policy.
The seminal case in Connecticut was Beach v. Middlesex Mut. Assurance Co., 532 A. 2d 1297 (1987), where the court held that “collapse,” when not defined in the policy, was sufficiently ambiguous to include coverage for any substantial impairment of the structural integrity of the insured’s home. Now the court considered whether “collapse” also required that the building be in imminent danger of falling down or caving in.
The court held that to meet the substantial impairment standard, an insured whose home had not actually collapsed had to present evidence demonstrating that the home nevertheless was in imminent danger of such a collapse. In other words, the insured had to show that the building was in imminent danger of falling down or caving in.