INSURANCE LAW: Superior Court holds that homeowners policy does not provide coverage to vendor for claims arising out of crumbling foundation

The plaintiffs in the underlying action brought suit alleging negligent misrepresentation, intentional misrepresentation, and negligence against the sellers of a home to the plaintiffs, alleging that the defendants knew or should have known of the home’s crumbling foundation condition and failed to disclose and/or intentionally camouflaged the condition.  The homeowners insurer for the seller brought a declaratory judgment claiming that it had no duty to defend or indemnify the underlying action.

The insurer claimed that the absence of an occurrence did not trigger coverage under the homeowners policy or an excess policy.  The sellers claimed that because they were alleged to have camouflaged the condition, coverage was triggered.  The Superior Court looked to an Appellate Court case in concluding that the defendants did not cause any of the property damage by way of their alleged misrepresentations.  Id. citing New London County Mutual Ins. Co. v. Sielski, 159 Conn. App. 650, 660 (2015).

“All of the defendants here attempt to circumvent the authority in Sielski by arguing that they allegedly exacerbated the plaintiffs’ damages by camouflaging the condition, thereby creating an issue of material fact as to the scope of damages …, this court is not persuaded.  The [underlying] complaint simply does not make the claim nor seek damages based on this theory.”

Metropolitan Property & Casualty Ins. Co. v. Pukatch, 2017 WL 2452346 (Conn. Super. Elgo, J.)