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NEWS DECEMBER 9, 2019 ¦ 9

Karases were among hundreds the [Karases’ homeowners’] in-
of homeowners in northeastern surance policy?
Connecticut whose foundations 2. If the answer to question
were constructed using con- one is yes, then what consti-
crete manufactured by J.J. Mottes tutes “substantial impairment
Concrete Company. The court of structural integrity” for pur-
noted that, according to a study poses of applying the “collapse”
commissioned by the state of provision of [the Karases’ home-
Connecticut and conducted by owners’] insurance policy?
the Department of Consumer 3. Under Connecticut law, [does]
Protection, the stone aggregate the [term] “foundation”. . . in a
used in Mottes concrete between [homeowners’] insurance policy
1983 and 2010 contained sig- unambiguously include basement
nificant amounts of pyrrhotite, a walls? If not, and if [that term
ferrous mineral that oxidizes in is] ambiguous, should extrinsic
the presence of water and oxy- evidence as to the meaning of
gen to form expansive secondary Steven A. Meyerowitz “foundation” . . . be considered?

minerals that crack and destabilize the concrete, re-
sulting in its premature deterioration.
The Connecticut Supreme Court’s Decision
In October, 2013, the Karases discovered that The court first held that Beach’s substantial
their basement walls were cracking and crumbling impairment standard applied to the collapse provi-
in the manner typical of Mottes concrete. On No- sion of the Karases’ homeowners’ insurance policy.
vember 15, 2013, they submitted a claim to their Next, it ruled that the “substantial impairment of
homeowners’ insurance carrier, Liberty Insurance structural integrity” standard required proof that
Corporation. the home was in imminent danger of falling down.
Liberty denied the claim and the Karases sued. Third, the court concluded that the term “foun-
They alleged that Liberty had breached the collapse dation” unambiguously encompassed the home’s
provisions of their insurance policy by declining to basement walls.
compensate them for the purported collapse of their The court explained that the issue it addressed in
basement walls. The Karases also alleged a breach of Beach was whether a house that was still standing
the covenant of good faith and fair dealing and viola- but “in imminent danger of falling over” could nev-
tions of the Connecticut Unfair Insurance Practices ertheless be deemed to be in a state of collapse for
Act (“CUIPA”) and the Connecticut Unfair Trade purposes of a homeowners’ insurance policy that
Practices Act (“CUTPA”). excluded losses resulting from “settling, cracking,
The Karases asserted that they were entitled to shrinkage, bulging or expansion” unless a “collapse
payment under their policy because the deterio- of a building . . . not otherwise excluded ensue[d]. .
ration of the concrete within their basement walls . .” The court said that because of the factual context
constituted hidden decay that so substantially im- in which the Beaches’ claim of coverage was made,
paired the walls’ structural integrity that they were it had no reason to consider whether a building that
in a state of collapse as the Connecticut Supreme was not in any imminent danger of falling over also
Court had defined that term in Beach v. Middlesex could be found to be in a state of collapse under the
Mutual Assurance Co., 532 A.2d 1297 (Conn. 1987). same insurance policy.
The case reached the Connecticut Supreme Court, The court added that, in light of the facts of Beach
where it considered the following questions: and the cases it relied on in adopting the substan-
1. Is “substantial impairment of structural integ- tial impairment standard, a requirement that the
rity” the applicable standard for “collapse” under
¦ Continued on PAGE 10

CONNECTICUT
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