Top Court hears arguments about whether insurance companies should pay for crumbling foundations

Dec. 19--Lawyers representing homeowners with failing foundations told the state's highest court Tuesday that the definition of collapse used in home insurance policies should cover the structural damage that causes a foundation to crumble.

"You're asking the homeowner to play chicken with the collapse of their home," Michael Parker said in oral arguments before the Connecticut Supreme Court.

The court's decision on the matter will determine whether thousands of homeowners in Connecticut will have to pay for their costly foundation repairs or whether insurance companies will be forced to cover the damages.

According to estimates by the state, as many as 34,000 homes in eastern and north central Connecticut could be affected by crumbling concrete foundations. A mineral called pyrrhotite that breaks down when exposed to oxygen and water is partially to blame for the issue, according to state reports. Insurance companies have denied homeowner's claims saying that the deterioration does not constitute a structural collapse, leaving victims to spend hundreds of thousands of dollars on repairs.

Parker, a lawyer for homeowners Steven and Gail Karas of Vernon, asked that the court to define collapse to include the "map cracking" and any damage that compromises the structural integrity of a building. With map cracking -- also called "spider cracking" -- lines of cracks spread out like a map across a foundation.

The couple is suing their insurance provider, Liberty Insurance, for denying the claim on their Vernon home. A Willington couple has a similar suit filed against the company, which was also addressed in Tuesday's oral arguments.

Parker cited a 1987 case, Beach v. Middlesex, where the Supreme Court ruled that if undefined by insurance companies, collapse is ambiguous enough in definition to include coverage for "any substantial impairment of the structural integrity of a building."

"The court was quite clear ... but the point of Beach I'd like to emphasize is that if the insurer wanted a different version of collapse, they had every right to redefine it. Liberty made no attempt to redefine it," Parker said.

An attorney for Liberty Insurance, Robert Kole, said that the definition of collapsed used by the insurance companies is not ambiguous. He said if the house was still standing and homeowners were still living in the home, the dwelling could not be classified as collapsed.

"We're talking about houses that are standing and safe to live in," he said. "They may be standing for another 1,000 years."

Kole argued that the collapse of the home would need to be imminent for the damage to be covered by insurance policies. He said that a collapse needs to be sudden and imminent.

"There is no independent evidence of that," he said.

During the oral arguments, justices went back and forth with the lawyers on how exactly the court could define collapse. Chief Justice Richard A. Robinson asked if the collapse would begin when the homeowners identifies that their foundation is failing either by seeing the telltale cracking or getting the foundation tested for pyrrhotite.

"Are you saying that the minute you find this mineral in your foundation that you know you have a major problem?" he asked.

Robinson also pressed Parker on whether the presence of and the subsequent cracking of the foundation was a sure sign that a home would collapse.

"It may collapse, it may not collapse. It may last 50 years," Robinson said.

Justice Maria Araujo Kahn asked the defense if the homeowner waited until their house was in peril of collapsing if they would be responsible for not reporting and fixing the damage sooner.

"What about a duty to mitigate?" she asked. "Wouldn't you argue that if a homeowner waited to do anything, they'd have a duty to mitigate the issue?"

Kole said that the damage would need to be severe enough to need mitigation for the homeowners to be responsible.

In addition to the Karas family's case, lawyers for a Willington woman, Edith Jemiola, also presented oral arguments to the Supreme Court on Tuesday.

Jemiola is suing her insurance provider, the Hartford Casualty Insurance Company, and is asking that the court define abrupt in relation to the risk of collapse.

"Caving in has to be given a meaning that is separate from falling down," her attorney Jeffrey Lindequist said.

A lawyer for the insurance company, Thomas Farrish argued that the slow decay of the home's foundations was the opposite of an abrupt collapse. Crumbling foundations are known to take 15 to 20 years to be visible and the damage can often be slow moving depending on the severity of the issue.

"The abrupt falling down has to render the house uninhabitable," he said. "There is nothing abrupt happening to these houses."

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