The federal district court for the district of Connecticut has faced a slew of collapse cases, recently dismissing several such cases.
The policies under consideration in each case cover the "entire collapse of a covered building structure" or "the entire collapse of part of a covered building structure." The collapse must be "a sudden and accidental physical loss caused by one of a list of specific causes such as defective methods or materials. In most of the recent cases, the insured alleged that the concrete in basement walls or foundations was cracking due to a chemical reaction. It was further alleged that the chemical reaction would continue to progressively deteriorate, rendering the building structurally unstable.
Unfortunately for the policy holder, these allegations did not constitute a "sudden and accidental" collapse of a building. Therefore, motions to dismiss were granted to the insurer in the following cases:
Agosti v. Merrimack Mut. Fire Ins. Co., 2017 U.S. DIst. LEXIS 137411 (D. Conn. Aug. 28, 2017). The motion to dismiss was granted to insurer because the facts did not establish a "collapse" had occurred. The court did find that the term "collapse" standing alone was ambiguous, but that the policy at issue required that the entire structure collapse, which did not occur here.
Adams v. Allstate Ins. Co., 2017 U.S. Dist. LEXIS 139998 (D. Conn. Aug. 29, 2017). Allstate's motion to dismiss was granted because the crumbling foundation was not the result of a "sudden and accidental" physical loss. Instead, the underlying allegations suggested that the chemical reaction was occurring progressively. The court noted, however, that the chemical reaction that caused the foundation to deteriorate would likely eventually cause the collapse, at which time the insureds could seek coverage.
Miller v. Allstate Ins. Co., 2017 U.S. Dist. LEXIS 140023 (D. Conn. Aug. 29, 2017). Again, the insured's expert determined that the basement walls were cracking due to a chemical reaction which would continue to progressively deteriorate the walls, rendering the building structurally unstable. The complaint described the process as proceeding over time. Allstate's motion to dismiss was granted because there was no sudden collapse alleged.
Clough v. Allstate Ins. Co., 2017 U.S. Dist. LEXIS 140009 (D. Conn. Aug. 29, 2017). Cracking in the walls of the home was caused by a chemical compound that, when mixed with water, began to rust and expand, breaking the bonds of the concrete internally and would eventually reduce the structure to rubble. Allstate's motion to dismiss was granted because the plaintiffs alleged a progressive process of deterioration, not a sudden collapse. If the building eventually collapsed, plaintiffs could seek coverage.
England v. Amica Mut. Ins. Co., 2017 U.S. Dist. LEXIS 146347 (D. Conn. Sept. 11, 2017). The insureds noticed cracking patterns in the basement walls. The insureds' expert concluded that the concrete deterioration and cracking was caused by a chemical reaction occurring in the concrete and recommended that the basement walls be replaced. The insurer denied coverage. When sued, the insurer successfully moved to dismiss. The policy unambiguously required an abrupt event for collapse coverage to apply.
More positive results for the insured were reflected in the following cases:
Roberts v. Liberty Mutual Fire Ins. Co., 2017 U.S. DIst. LEXIS 137412 (D. Conn. Aug. 2, 2017). The insurer's motion for summary judgment was granted as to the unfair practices claims, but there were issues of fact regarding whether a "collapse" had occurred. There were questions regarding whether the property had suffered "substantial impairment of structural integrity."
Sirois v. USAA Cas. Ins. Co., 2017 U.S. DIst. LEXIS 138346 (D. Conn. Aug. 29, 2017). USAA's motion to dismiss was denied because the "sudden" requirement for a collapse was ambiguous where the term was used on its own and not in conjunction with "accident" as was the case with the pollution exclusion.
