Tred R. Eyerly | Insurance Law Hawaii
Facing yet another collapse claim based upon alleged poorly mixed cement, the Federal District Court in Connecticut denied the insurer’s motion to dismiss. Oliveria v. Safeco Ins Co., 2019 U.S. Dist. LEXIS 147256 (D. Conn. Aug. 29, 2019).
In 1993, the insureds’ purchased their home that had been built in 1986. Safeco insured the property. In February 2017, the insureds noticed that the basement walls had a series of cracks. They consulted professionals and learned that the cracking was due to a chemical compound found in certain concrete walls constructed in the late 1980s with concrete most likely from the J. J. Mottes Concrete Company.
The insureds submitted a claim to Safeco for the substantial impairment to the structural integrity of their basement walls. Safeco denied the claim. The insureds filed suit. Safeco moved to dismiss.
Safeco first argued that the claims were untimely because Safeco insured the property until 2012, and the insureds did not sue until 2018. A suit limitation provision in the policy required suit to be filed within one year of the loss. Federal District Courts in Connecticut had determined that the date on which the insured learned or should have learned of the covered loss triggered the limitation. Safeco’s policy contemplated property damage coverage for “repeated or continuous exposure.” More than one reasonable interpretation of this language was possible. Therefore, the policy could trigger coverage. Consequently, the insureds stated a plausible claim for relief that survived a motion to dismiss.
The claim for Safeco’s breach of the contract was also more properly decided at the summary judgment stage. Safeco also sought dismissal for the Connecticut Unfair Insurance Practices Act and Connecticut Unfair Trade Practices Act claims. The insureds alleged that Safeco denied coverage of similar claims in cases with similar factual circumstances. Thus, they sufficiently alleged a general business practice of unfair settlement handling and sufficiently stated a plausible claim for relief that survived a motion to dismiss.