Insurers Want To Dismiss Claims Of Homeowners With Failing Foundations

June 07--Insurance companies named in a class-action lawsuit on behalf of homeowners with failing foundations are looking to get the most pressing claims against them dismissed.

Last week, nearly 30 insurance companies, including Allstate and State Farm, filed a motion requesting that the bad-faith claims in the lawsuit and the class action be dismissed.

"The complaint fails to state a claim against [the insurance companies] upon which relief can be granted," the motion reads.

Filed in January 2016 by Attorney Ryan Barry, the suit claims that 111 active Connecticut insurance companies are part of a "concerted scheme to deny [homeowners] coverage for their failing basement walls, which experts say must be replaced ... because they were built with defective concrete."

The suit was filed on behalf of four homeowners in Ashford, Ellington, Manchester and Stafford.

Since the issue of failing foundations came to light, Gov. Dannel P. Malloy has said as many as 34,130 homes are at risk for failing foundations. At least 522 homeowners in 23 towns have filed complaints with the state Department of Consumer Protection stating that their concrete foundations are failing.

According to a state report in early January, a mineral known as pyrrhotite was present in the concrete aggregate used for the foundations that are now crumbling, and was partly to blame, as was the amount of water used in installation.

Insurance companies have denied homeowners' claims, saying the problem does not qualify for coverage under their definition of collapse, leaving homeowners to bear the burden of a costly foundation replacement. The cost to replace a foundation can be as much as $200,000.

The class-action suit asks insurance companies to cover foundation repairs and pay bad-faith damages under the Connecticut Unfair Insurance Practices Act and Connecticut Unfair Trade Practices Act.

The motion to dismiss says that while insurance companies cover collapse, the homes in question have not collapsed in line with the insurers' definition, so the claims were denied in good faith.

"Further, a denial of coverage based on the definition of 'collapse' in the policy would not violate CUIPA or CUTPA as it is nothing more than a coverage dispute -- which is not an unfair insurance practice," the motion reads.

In the motions to dismiss, filed individually, insurance companies allege that the claims depend on the individual details of each homeowner's policy and class action is an inappropriate method of resolution since every policy is different.

"Plaintiffs' collective claims for declaratory judgment by all plaintiffs against all defendants are particularly problematic," the motion to dismiss reads.

The homeowners' attorney did not return a request for comment.

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