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WESTCHESTER MODULAR HOMES OF FAIRFIELD
COUNTY, INC. v. ARBELLA PROTECTION
INSURANCE COMPANY
(AC 45433)
Alvord, Elgo and Keller, Js.
Syllabus
The plaintiff insured appealed to this court from the summary judgment
rendered in favor of the defendant insurance company, claiming that
the trial court improperly concluded that the defendant had no duty to
defend the plaintiff against a counterclaim filed by third-party homeown-
ers in an action arising out of a contract for the construction of a
modular home. During construction, disputes arose between the plaintiff
and the homeowners, and the homeowners ultimately terminated their
contract with the plaintiff. The plaintiff filed a mechanic’s lien on the
property and commenced an action to foreclose on the lien. The home-
owners filed a counterclaim, alleging that the plaintiff had breached the
construction contract in various ways, including by performing work
that was substandard, unreasonable, and unworkmanlike. Several
months later, the homeowners disclosed M, a licensed architect and
professional engineer, as an expert witness. During M’s deposition by
the plaintiff’s attorney, M testified that the windows in the home were
not installed with pan flashing, which was a building code violation and
would allow water to leak down between the window and the siding
and rot the wall. He further testified that the repairs required to correct
the issue would cost the homeowners a considerable amount of money.
Three weeks after M’s deposition, the attorney for the homeowners sent
the plaintiff’s attorney an email informing the plaintiff that M had further
investigated the issues about which he had testified and concluded that
the windows were installed with pan flashing but that it was not installed
correctly, which, along with other allegedly defective work by the plain-
tiff, would result in water condensation and eventually water damage
to the roof if the issues were not remedied. The plaintiff filed a claim
for coverage under a commercial general liability policy issued to it by
the defendant. The plaintiff also submitted to the defendant documents
from the underlying litigation, including the homeowners’ counterclaim,
the expert witness disclosure of M, the transcript of M’s deposition, and
the email regarding M’s further investigation of the issues. The defendant
acknowledged receipt of the materials submitted by the plaintiff. One
month later, the defendant issued a disclaimer of coverage and reserva-
tion of rights to the plaintiff stating, inter alia, that the operative counter-
claim filed in the underlying litigation did not allege ‘‘property damage’’
caused by an ‘‘occurrence’’ as defined by the insurance policy and,
therefore, it did not trigger coverage under the policy. Prior to the trial
in the underlying litigation, the plaintiff and the homeowners agreed to
arbitrate their claims. The plaintiff prevailed in the arbitration and
received an award in its favor. The plaintiff subsequently commenced
the present action against the defendant, alleging breach of contract
and breach of the implied covenant of good faith and fair dealing. Both
parties filed motions for summary judgment, and, after oral argument,
the trial court issued a memorandum of decision in which it denied the
plaintiff’s motion for summary judgment and granted the defendant’s
motion for summary judgment. With respect to the plaintiff’s breach of
contract claim, the court determined that the pleadings in the underlying
litigation did not allege property damage and that the extrinsic docu-
ments submitted to the defendant by the plaintiff established only the
existence of possible defective work that could lead to future property
damage if not remedied but that they did not demonstrate the existence
of current property damage that would trigger the defendant’s duty to
defend. Held that the plaintiff could not prevail on its claim that the trial
court improperly granted the defendant’s motion for summary judgment:
contrary to the plaintiff’s argument, the homeowners’ counterclaim
alleged contract damages and construction defects and did not allege
that the defects caused damage to other, nondefective property or that
there was property damage of any kind; moreover, M’s deposition testi-
mony did not trigger a duty to defend because it did not suggest that
property damage had, in fact, occurred, but rather it suggested that he
had identified defective work that, if not remedied, could lead to property
damage in the future; furthermore, the plaintiff did not present this
court with any case law holding that the presence of water, in the
absence of actual damage, amounts to covered physical damage that
would trigger a duty to defend, and, thus, the plaintiff’s notification of
the mere presence of water, without the necessary resulting physical
injury to tangible property, did not provide the defendant with actual
knowledge of facts establishing a reasonable possibility of coverage
because the presence of water did not constitute property damage within
the terms of the policy.
Argued January 3—officially released April 2, 2024
Procedural History
Action to recover damages for, inter alia, breach of
contract, and for other relief, brought to the Superior
Court in the judicial district of Danbury, where the
court, Shaban, J., denied the plaintiff’s motion for sum-
mary judgment and granted the defendant’s motion for
summary judgment and rendered judgment thereon,
from which the plaintiff appealed to this court. Affirmed.
Anita C. Di Gioia, for the appellant (plaintiff).
Ashley A. Noel, for the appellee (defendant).
Opinion
ALVORD, J. The plaintiff, Westchester Modular
Homes of Fairfield County, Inc., appeals from the sum-
mary judgment rendered in favor of the defendant,
Arbella Protection Insurance Company. On appeal, the
plaintiff claims that the court improperly concluded
that, pursuant to a commercial general liability policy,
the defendant had no duty to defend the plaintiff against
a counterclaim filed by a third party in an action arising
out of a contract for the construction of a modular
home. We disagree and, accordingly, affirm the judg-
ment of the trial court.
The following facts, which are undisputed, and proce-
dural history are relevant to our resolution of this
appeal. On or about April 27, 2016, the plaintiff entered
into a contract with Diana Lada L’Henaff and Jean
Jacques L’Henaff for the construction of a new modular
home on property located in New Canaan (property).
During construction, disputes arose between the L’Hen-
affs and the plaintiff. Ultimately, the L’Henaffs termi-
nated their contract with the plaintiff on December 14,
2016. The plaintiff filed a mechanic’s lien on the prop-
erty on or about February 3, 2017, and commenced an
action to foreclose on the lien on or about April 7, 2017
(underlying litigation).
The L’Henaffs filed a counterclaim in the underlying
litigation. In their operative first revised counterclaim,
filed on August 22, 2017, the L’Henaffs alleged, in rele-
vant part, that they ‘‘desired to build a modern home
and had very carefully and specifically specified the
type of insulation, materials, and finishes that they
required the builder that won the job to satisfy.’’ The
L’Henaffs alleged that prior to signing the contract, the
plaintiff ‘‘often responded to [their] frequent queries in a
manner that revealed its lack of knowledge, experience,
and expertise with modern construction.’’ The L’Hen-
affs alleged that ‘‘work on the project progressed slowly
and with constant problems.’’ The L’Henaffs alleged
that the plaintiff had breached the construction contract
by: ‘‘[f]ailing to complete construction within the time
set forth in the construction contract . . . [f]ailing to
complete construction in accordance with the plans
and specifications incorporated by reference into the
construction contract . . . [p]erforming work that was
substandard, unreasonable, and unworkmanlike . . .
[d]isregarding [the L’Henaffs’] repeated requests for
timelines to complete . . . [d]isregarding [the L’Hen-
affs’] repeated requests for materials that complied with
the plans and specifications to review and approve . . .
[f]ailing to construct the building in accordance with the
approved plans . . . [m]aking material changes to the
building design layout without consulting [the L’Hen-
affs] . . . [f]ailing to ensure proper plumbing connec-
tions were used throughout the building . . . [f]ailing
to take reasonable steps to ensure that construction
progressed in a timely manner . . . [f]ailing to com-
plete rough electrical and plumbing in accordance with
plans . . . [f]ail[ing] to provide hardware, lighting, and
various other finishes for which [the plaintiff] charged
[the L’Henaffs] . . . [f]ail[ing] to properly construct
boulder retaining wall . . . [f]ail[ing] to construct walls
that were true and plumb; and . . . [f]ail[ing] to prop-
erly complete site work.’’ The L’Henaffs alleged in their
counterclaim that, ‘‘[a]s a direct and proximate result of
[the plaintiff’s] material breach of the terms of the con-
struction contract, the [L’Henaffs have] suffered, and will
continue to suffer, damages to be ascertained at trial.’’
Also in the underlying litigation, in a June 29, 2018
supplemental disclosure of expert witness, the L’Hen-
affs disclosed Carl Mezoff, a licensed architect and
licensed professional engineer. The disclosure stated
that Mezoff was expected to testify, inter alia, ‘‘about
his opinions concerning the construction work performed
by the plaintiff and its agents, the timeliness of said
work, the processes employed by the plaintiff in con-
nection with its work and planning, the status of the
work performed by the plaintiff as of the date of termina-
tion, the quality of workmanship of the work performed
by the plaintiff as of the date of termination, [and] the
work performed by third parties after the termination
of the plaintiff that was within the scope of the plaintiff’s
contract, including the plaintiff’s allegations pertaining
to the costs incurred by the [L’Henaffs] to both repair
work performed by the plaintiff and complete work left
incomplete by the plaintiff.’’1
On August 1, 2018, the plaintiff’s attorney deposed
Mezoff regarding the condition of the property. In his
deposition, Mezoff testified that ‘‘one of the major prob-
lems that we’ve run into or at least discovered is that
the windows are improperly installed in this building
. . . .’’ Specifically, Mezoff testified that ‘‘[t]he windows
were not installed with pan flashing. There’s no pan
flashing under the windows. That’s a building code vio-
lation, and that will allow water to leak down between
the window and the siding and rot the building below.
So to correct that, they’re going to have to pull out all
the windows, reflash them, reinstall the windows, and
that’s a considerable cost.’’ (Emphasis added.) He further
explained: ‘‘Because there’s no pan flashing, if water
gets past my finger there, it’s going to get into the wall
and rot the wall.’’ (Emphasis added.)
Three weeks after Mezoff’s deposition, on August 21,
2018, the L’Henaffs’ attorney sent the plaintiff’s attorney
an email informing the plaintiff that Mezoff had ‘‘investi-
gated further the issues related to the window flashing
and insulation in the ceiling that he testified about’’
(August, 2018 email). The August, 2018 email states that
Mezoff has concluded that ‘‘the windows were installed
with pan flashing, however, the flashing does not extend
out over the second layer of exterior foam insulation;
water, therefore, is being directed between the two
foam layers, and as a result, water is, and will continue,
to collect in the soffit areas.’’ The email also states that
Mezoff ‘‘has opened the ceiling and discovered (a) there
is no insulation in the drop ceiling on the second floor,
and (b) there is no vapor barrier between the bottom
of the open cell insulation and the top of the drywall
in the ceiling finished by the factory. Therefore, the
ceiling is not code compliant, and the lack of a vapor
barrier will result in water condensation, thus resulting
in water damage to the roof structure if not remedied.
Further there is insufficient insulation both to meet
code and to comply with the contract. Please advise
when you would like to re-depose him.’’2
In September, 2018, the plaintiff, as a named insured
under a commercial general liability policy issued by
the defendant (policy), filed a claim for coverage with
the defendant. The policy’s general insuring provision
states in relevant part: ‘‘We will pay those sums that
the insured becomes legally obligated to pay as damages
because of ‘bodily injury’ or ‘property damage’ to which
this insurance applies. We will have the right and duty
to defend the insured against any ‘suit’ seeking those
damages. However, we will have no duty to defend the
insured against any ‘suit’ seeking damages for ‘bodily
injury’ or ‘property damage’ to which this insurance
does not apply. We may, at our discretion, investigate
any ‘occurrence’ and settle any claim or ‘suit’ that may
result.’’
The following definitions in the policy, which we
discuss subsequently in more detail, are relevant to our
analysis.
‘‘13. ‘Occurrence’ means an accident, including con-
tinuous or repeated exposure to substantially the same
general harmful conditions. . . .
‘‘17. ‘Property damage’ means:
‘‘a. Physical injury to tangible property, including all
resulting loss of use of that property. All such loss of
use shall be deemed to occur at the time of the physical
injury that caused it; or
‘‘b. Loss of use of tangible property that is not physi-
cally injured. All such loss of use shall be deemed to
occur at the time of the ‘occurrence’ that caused it.’’
In connection with its claim for coverage, on Septem-
ber 11, 2018, the plaintiff submitted to the defendant
certain pleadings from the underlying litigation, includ-
ing the L’Henaffs’ first revised counterclaim, the plain-
tiff’s reply to the L’Henaffs’ special defenses and answer
to the counterclaim with its own special defenses, a
second amended complaint, the L’Henaffs’ answer to
the amended complaint, the supplemental disclosure
of expert witness, and a supplement to a motion for
continuance. The plaintiff also submitted to the defen-
dant Mezoff’s deposition transcript and the August, 2018
email. The defendant acknowledged receipt of the mate-
rials submitted by the plaintiff.
On October 15, 2018, the defendant issued a dis-
claimer of coverage and reservation of rights to the
plaintiff. The defendant disclaimed coverage, inter alia,
on the basis that the first revised counterclaim filed in
the underlying litigation did not allege ‘‘property dam-
age’’ caused by an ‘‘occurrence’’ and, therefore, it did
not trigger coverage under the policy. (Internal quota-
tion marks omitted.)
Prior to trial in the underlying litigation, the plaintiff
and the L’Henaffs agreed to arbitrate their claims. The
plaintiff prevailed in the arbitration and received an
award in its favor on July 6, 2020.3
In October, 2020, the plaintiff commenced the present
action against the defendant alleging breach of contract
and breach of the implied covenant of good faith and
fair dealing. In count one, the plaintiff alleged, inter
alia, that the policy obligated the defendant to provide
a defense to the plaintiff when presented with a claim
to which the policy may apply. The plaintiff alleged
that it timely provided the defendant with information
demonstrating that the defendant was obligated to
defend the plaintiff in the underlying litigation and, thus,
the defendant’s disclaimer of coverage constituted a
breach of the policy. The plaintiff alleged that it suffered
damages in excess of $500,000 in the form of defense
costs incurred in the underlying litigation.
In count two, the plaintiff alleged that, ‘‘[d]espite the
plaintiff providing the defendant with voluminous docu-
ments and information that demonstrated that the plain-
tiff was entitled to a defense and indemnification under
the policy when the L’Henaffs refined and amplified
their claim in the summer of 2018, the defendant relied
exclusively on the revised counterclaim from the under-
lying litigation dated August 22, 2017, to disclaim cover-
age.’’ The plaintiff alleged that the defendant’s failure
to consider the materials was purposeful and arose out
of the defendant’s dishonest purpose to deny coverage.
The defendant filed an answer and special defenses,
asserting, inter alia, that coverage was not triggered by
the policy or was excluded pursuant to certain of the
policy’s exclusions. The plaintiff denied the defendant’s
special defenses.
On September 9, 2021, the plaintiff filed a motion for
summary judgment on liability as to count one of its
complaint alleging breach of contract, a memorandum
of law in support thereof, and exhibits. The plaintiff
argued that there existed no genuine issue of material
fact that the defendant had a duty to defend under the
policy and the exclusions to coverage did not apply.
Specifically, the plaintiff contended that the pleadings
from the underlying litigation when considered together
with Mezoff’s deposition transcript and the August, 2018
email demonstrated that the L’Henaffs were claiming
that the plaintiff’s defective work ‘‘was damaging work
that was not itself defective,’’ thus triggering the defen-
dant’s duty to defend.
On September 10, 2021, the defendant filed its own
motion for summary judgment, accompanied by a mem-
orandum of law and supporting exhibits, as to both
counts of the plaintiff’s complaint. Therein, the defen-
dant argued that it ‘‘did not have a duty to defend the
plaintiff against the revised counterclaim in the underly-
ing [litigation]. The revised counterclaim did not allege
‘property damage’ caused by an ‘occurrence’ and there-
fore did not trigger coverage under the applicable pol-
icy. Extrinsic documents submitted by the plaintiff to
[the defendant] in support of its claim for coverage
similarly did not raise the possibility of coverage under
the policy. Furthermore, even if coverage was initially
triggered, coverage was precluded by certain policy
exclusions. As a result, [the defendant] did not have a
duty to defend the plaintiff and therefore did not breach
the policy.’’ The defendant also argued that, because
the plaintiff cannot recover for common-law bad faith
where there exists no wrongful denial of benefits under
the policy, it was entitled to judgment as a matter of
law on count two of the plaintiff’s complaint.
Both parties filed memoranda of law in opposition
to summary judgment, and the plaintiff filed a reply to
the defendant’s opposition. The court, Shaban, J., heard
oral argument on both motions for summary judgment
on December 6, 2021.
On March 29, 2022, the court issued a memorandum
of decision in which it denied the plaintiff’s motion for
summary judgment and granted the defendant’s motion
for summary judgment. With respect to count one of
the plaintiff’s complaint, the court determined that the
pleadings in the underlying litigation did not allege prop-
erty damage. As to the extrinsic documents submitted
to the defendant by the plaintiff, the court determined
that such evidence established only the existence of
possible defective work that could lead to future prop-
erty damage if not remedied but that it did not demon-
strate the existence of current property damage. Because
it concluded that ‘‘neither the pleadings nor the other
extrinsic documents provided to [the defendant] by [the
plaintiff] in the underlying litigation allege or provide
actual knowledge that property damage, [affecting]
other nondefective property, resulted from an occur-
rence that triggered coverage and a duty to defend,’’
the court did not need to consider whether coverage was
barred under any exclusions to the policy. With respect
to count two of the plaintiff’s complaint, the court deter-
mined that the plaintiff could not recover on its claim
alleging a breach of the covenant of good faith and
fair dealing because there was no wrongful denial of
coverage under the policy. This appeal followed.4
We first set forth our standard of review and relevant
legal principles. ‘‘Whether the trial court properly ren-
dered summary judgment in favor of the defendant is
a question of law subject to our plenary review. . . .
Practice Book § 17-49 provides that summary judgment
shall be rendered forthwith if the pleadings, affidavits
and any other proof submitted show that there is no
genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law. In
deciding a motion for summary judgment, the trial court
must view the evidence in the light most favorable to the
nonmoving party. . . . The party moving for summary
judgment has the burden of showing the absence of
any genuine issue of material fact and that the party
is, therefore, entitled to judgment as a matter of law.
. . . On appeal, we must determine whether the legal
conclusions reached by the trial court are legally and
logically correct and whether they find support in the
facts set out in the memorandum of decision of the
trial court.’’ (Citation omitted; internal quotation marks
omitted.) Nash Street, LLC v. Main Street America
Assurance Co., 337 Conn. 1, 8, 251 A.3d 600 (2020).
Because there are no factual issues in dispute in the
present case, the legal question is whether the defen-
dant had a duty to defend the plaintiff. ‘‘The question
of whether an insurer has a duty to defend its insured
is purely a question of law . . . . An insurer’s duty to
defend is determined by reference to the allegations
contained in the [underlying] complaint. . . . The duty
to defend does not depend on whether the injured party
will successfully maintain a cause of action against the
insured but on whether [the complaint] stated facts
which bring the injury within the coverage. . . . If an
allegation of the complaint falls even possibly within
the coverage, then the insurance company must defend
the insured. . . . That being said, an insurer has a duty
to defend only if the underlying complaint reasonably
alleges an injury that is covered by the policy.’’ (Citation
omitted; emphasis in original; internal quotation marks
omitted.) Stewart v. Old Republic National Title Ins.
Co., 218 Conn. App. 226, 240, 291 A.3d 1051 (2023).
Moreover, ‘‘[a]n insurer may be obligated to provide
a defense not only based on the face of the complaint
but also if any facts known to the insurer suggest that
the claim falls within the scope of coverage. . . .
Where the insurer has sufficient knowledge to show that
a claim falls within coverage even though not properly
pleaded to [invoke] coverage, the carrier cannot make
the face of the complaint argument . . . . [W]e should
not employ a wooden application of the four corners
of the complaint rule [that] would render the duty to
defend narrower than the duty to indemnify and . . .
the sounder approach is to require the insurer to provide
a defense when it has actual knowledge of facts estab-
lishing a reasonable possibility of coverage. . . . After
all, the duty to defend derives from the insurer’s con-
tract with the insured, not from the complaint.’’ (Cita-
tions omitted; internal quotation marks omitted.) Hart-
ford Casualty Ins. Co. v. Litchfield Mutual Fire Ins.
Co., 274 Conn. 457, 466–67, 876 A.2d 1139 (2005); see
also Misiti, LLC v. Travelers Property Casualty Co. of
America, 308 Conn. 146, 161, 61 A.3d 485 (2013) (‘‘[w]e
often have stated that the duty to defend must be deter-
mined by the allegations set forth in the underlying
complaint itself, with reliance on extrinsic facts being
permitted only if those facts support the duty to
defend’’). We will not, however, ‘‘predicate the duty to
defend on a reading of the complaint that is . . . con-
ceivable but tortured and unreasonable.’’ (Internal quo-
tation marks omitted.) Stewart v. Old Republic National
Title Ins. Co., supra, 218 Conn. App. 240.
‘‘Our analysis is guided by our usual procedures for
interpreting insurance policies. [C]onstruction of a con-
tract of insurance presents a question of law . . . . The
[i]nterpretation of an insurance policy . . . involves a
determination of the intent of the parties as expressed
by the language of the policy . . . [including] what cov-
erage the . . . [insured] expected to receive and what
the [insurer] was to provide, as disclosed by the provi-
sions of the policy. . . . [A] contract of insurance must
be viewed in its entirety, and the intent of the parties
for entering it derived from the four corners of the
policy . . . [giving the] words . . . [of the policy]
their natural and ordinary meaning . . . [and constru-
ing] any ambiguity in the terms . . . in favor of the
insured . . . .
‘‘The commercial general liability policy is a standard
form developed by the Insurance Services Office, Inc.,
and has been used throughout the United States since
1940. . . . It begins with a broad grant of coverage in
the insuring agreement, followed by a series of exclu-
sions (and exceptions to the exclusions) that define
the contours of coverage.’’ (Citations omitted; footnote
omitted; internal quotation marks omitted.) Capstone
Building Corp. v. American Motorists Ins. Co., 308
Conn. 760, 773–74, 67 A.3d 961 (2013) (Capstone).
With these principles in mind, we turn to the plain-
tiff’s appeal. In deciding whether the defendant was
obligated to defend the plaintiff in the underlying litiga-
tion, we begin our analysis with the initial grant of
coverage in the policy’s insuring agreement, which pro-
vides in relevant part: ‘‘We will pay those sums that the
insured becomes legally obligated to pay as damages
because of ‘bodily injury’ or ‘property damage’ to which
this insurance applies. We will have the right and duty
to defend the insured against any ‘suit’ seeking those
damages. However, we will have no duty to defend the
insured against any ‘suit’ seeking damages for ‘bodily
injury’ or ‘property damage’ to which this insurance
does not apply.’’ The insuring agreement also specifies:
‘‘This insurance applies to ‘bodily injury’ and ‘property
damage’ only if . . . [t]he ‘bodily injury’ or ‘property
damage’ is caused by an ‘occurrence’ that takes place
in the ‘coverage territory’ . . . .’’
‘‘Occurrence’’ is defined in the policy as ‘‘an accident,
including continuous or repeated exposure to substan-
tially the same general harmful conditions.’’ The policy
defines ‘‘property damage’’ as ‘‘a. Physical injury to tan-
gible property, including all resulting loss of use of that
property. All such loss of use shall be deemed to occur
at the time of the physical injury that caused it; or
‘‘b. Loss of use of tangible property that is not physi-
cally injured. All such loss of use shall be deemed to
occur at the time of the ‘occurrence’ that caused it.’’
On appeal, the plaintiff claims that the court improp-
erly determined that the defendant had no duty to defend
the plaintiff in the underlying litigation. The plaintiff
contends that it presented the defendant with sufficient
information, including the previously discussed extrin-
sic documents, in support of a potential covered claim.
Specifically, the plaintiff argues that the L’Henaffs
claimed in the underlying litigation that the plaintiff
caused property damage to nondefective property at their
house. The defendant responds that neither the allega-
tions of the L’Henaffs’ counterclaim nor the extrinsic
documents submitted raised the possibility of existing
property damage.5 Specifically, the defendant contends
that the extrinsic documents suggested, ‘‘at most, that
the construction deficiencies could potentially result
in water damage to nondefective areas of the property if
not fixed.’’ (Emphasis in original.) Thus, the defendant
argues that the court properly determined that it did
not have a duty to defend the plaintiff in the underlying
litigation.6 We agree with the defendant.
Our Supreme Court’s decision in Capstone Building
Corp. v. American Motorists Ins. Co., supra, 308 Conn.
760, informs our determination of whether the allega-
tions of the revised counterclaim assert property dam-
age. In Capstone, the court examined what constitutes
property damage under a commercial general liability
policy with the same definition as the present policy.
See id., 764, 782. The court first noted a lack of ‘‘consen-
sus on the meaning of the term property damage in the
context of claims for defective work under commercial
general liability policies.’’ Id., 777. The court determined,
‘‘[o]n the basis of the language of the policy, ‘physical
injury to tangible property’ would not include construc-
tion deficiencies unless they damage other, nondefec-
tive property.’’ Id., 785. In other words, ‘‘the commercial
general liability policy covers claims for property dam-
age caused by defective work, but not claims for repair
of the defective work itself.’’ Id., 787.
In applying the property damage requirement of the
insuring agreement, the court in Capstone first noted
that, ‘‘[a]lthough the majority of the allegedly defective
work involved defective construction, poor quality, or
building code violations, without more,’’ the plaintiffs
in that case had argued that ‘‘assertions made by [the
University of Connecticut] that the [p]roject suffered
water damage, mold damage, elevated carbon monox-
ide exposure, cracked piping, and structural problems’’
clearly involved property damage. (Internal quotation
marks omitted.) Id., 779–81. The court stated that
‘‘building code violations, defective construction and
poor quality control’’ did not constitute physical injury
to tangible property. Id., 783. Additionally, the escape
of carbon monoxide, without more, did not constitute
property damage because the gas ‘‘ ‘caused no physical,
tangible alteration to any property’ . . . .’’ Id., 782.
Water damage and mold damage, however, ‘‘to portions
of the insured’s project, beyond the defective work
itself,’’ did constitute property damage and, accord-
ingly, the claims based on that physical injury were
within the insuring agreement’s coverage. Id.
In the present case, the first revised counterclaim
alleges construction defects and does not allege damage
that the defects caused to other, nondefective property.
We agree with the trial court that ‘‘[t]he first revised
counterclaim provides no allegations concerning defec-
tive installation of windows, a defective vapor barrier,
water leakage or water damage, or any ‘property dam-
age’ of any kind.’’ Additionally, the counterclaim’s alle-
gation that, ‘‘[a]s a direct and proximate result of [the
plaintiff’s] material breach of the terms of the construc-
tion contract, the [L’Henaffs have] suffered, and will
continue to suffer, damages to be ascertained at trial’’
reasonably alleges contract damages, not property dam-
age. See Stewart v. Old Republic National Title Ins. Co.,
supra, 218 Conn. App. 247 (‘‘an insurer has a duty to
defend only if the underlying complaint reasonably
alleges an injury that is covered by the policy’’ (empha-
sis in original; internal quotation marks omitted)).
We next consider whether the extrinsic documents
submitted to the defendant provided it with ‘‘ ‘actual
knowledge of facts establishing a reasonable possibility
of coverage.’ ’’7 Hartford Casualty Ins. Co. v. Litchfield
Mutual Fire Ins. Co., supra, 274 Conn. 467. The plaintiff
relies primarily on two submissions. First, it relies on
Mezoff’s deposition testimony. Second, it relies on the
August, 2018 email from the L’Henaffs’ counsel advising
the counsel representing the plaintiff in the underlying
litigation of the results of Mezoff’s further investigation.
The defendant acknowledged receipt of this informa-
tion.
As noted previously, Mezoff testified that ‘‘[t]he win-
dows were not installed with pan flashing. There’s no
pan flashing under the windows. That’s a building code
violation, and that will allow water to leak down
between the window and the siding and rot the building
below. So to correct that, they’re going to have to pull
out all the windows, reflash them, reinstall the win-
dows, and that’s a considerable cost.’’ (Emphasis
added.) He further explained: ‘‘Because there’s no pan
flashing, if water gets past my finger there, it’s going
to get into the wall and rot the wall.’’ (Emphasis added.)
We conclude that Mezoff’s deposition testimony does
not trigger a duty to defend because it does not suggest
that property damage has, in fact, occurred. Rather, it
suggests that he has identified defective work that, if
not remedied, could lead to property damage in the
future. See Capstone Building Corp. v. American
Motorists Ins. Co., supra, 308 Conn. 785 n.23 (‘‘[r]epairs
to structural deficiencies, made for the purpose of pre-
venting [p]hysical injury to tangible property . . .
before the alleged deficiency has caused property dam-
age are not within the insuring agreement’s definition of
property damage’’ (internal quotation marks omitted)).
The August, 2018 email presents a closer question.
The email indicates that Mezoff concluded that ‘‘the
windows were installed with pan flashing, however, the
flashing does not extend out over the second layer
of exterior foam insulation; water, therefore, is being
directed between the two foam layers, and as a result,
water is, and will continue, to collect in the soffit areas.’’
The plaintiff argues that, taken together, Mezoff’s
deposition testimony that rot would occur if water
leaked into the space below the windows and Mezoff’s
statement, as reported through counsel in the email,
that water was collecting in the soffits, amounts to a
‘‘belie[f]’’ held by Mezoff that ‘‘water was entering the
area of the exterior walls where the window flashing
was defective, collecting, and rotting the ‘house’ below.’’8
The defendant highlights the discrepancy between Mez-
off’s deposition testimony, wherein he testified that
there was ‘‘no pan flashing’’ under the windows, and
his discovery, upon returning to the property after his
deposition, that ‘‘the windows were installed with pan
flashing, however, the flashing does not extend out over
the second layer of exterior foam insulation . . . .’’ The
defendant contends that Mezoff ‘‘effectively retracted
his opinions concerning the lack of pan flashing’’ and,
thus, the discovery that flashing was present ‘‘mooted
all of his testimony regarding the hypothetical future
water damage that could result from the lack of pan
flashing.’’9 The defendant further argues that the plain-
tiff conflates water collection with water damage. Because
there was no indication of water damage, and consider-
ing Mezoff’s statement that ‘‘the lack of a vapor barrier
will result in water condensation, thus resulting in water
damage to the roof structure if not remedied,’’ the defen-
dant argues that Mezoff opined, at most, that ‘‘construc-
tion deficiencies could potentially result in water dam-
age to nondefective areas of the property if not fixed.’’
(Emphasis omitted.) According to the defendant, this
possibility of future damage does not qualify as ‘‘prop-
erty damage’’ under our Supreme Court’s decision in
Capstone.
In construing the phrase ‘‘physical injury,’’ our Supreme
Court in Capstone Building Corp. v. American Motor-
ists Ins. Co., supra, 308 Conn. 786–87, quoted Travelers
Ins. Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278,
757 N.E.2d 481 (2001), in which the Supreme Court
of Illinois stated that ‘‘ ‘physical injury’ unambiguously
connotes damage to tangible property causing an alter-
ation in appearance, shape, color or in other material
dimension.’’ Id., 312; see also 9A J. Plitt et al., Couch
on Insurance (3d Ed. Rev. 2023) § 129:7 (‘‘[i]n relation
to the first prong of the [property damage] definition,
property suffers physical, tangible injury when the prop-
erty is altered in appearance, shape, color, or in some
other material dimension’’).
It is clear that damage to nondefective property in
the form of rot or mold caused by water intrusion would
be property damage within the terms of the policy lan-
guage. See Capstone Building Corp. v. American
Motorists Ins. Co., supra, 308 Conn. 782 (‘‘under the
plain language of the commercial general liability pol-
icy, water and mold damage to portions of the insured’s
project, beyond the defective work itself, would qualify
as ‘physical injury to tangible property’ ’’); see also
Assurance Co. of America v. Lucas Waterproofing Co.,
581 F. Supp. 2d 1201, 1209 (S.D. Fla. 2008) (‘‘given that
damage to the buildings included water in the soffit
beams, mildew, stucco damage, and peeling and bub-
bling paint, which constitute ‘property damage’ in this
case, it is probable that at least part of the state court
judgment is attributable to repairing damage to other
parts of the property caused by [the waterproofing com-
pany’s] defective work’’).10
This case, however, presents the question of whether
the extrinsic documents suggesting that water was
being directed between the two foam layers and collect-
ing in the soffit areas constitutes property damage, in
other words, whether the notification to the insurer of
the mere presence of water is sufficient to trigger a duty
to defend. The plaintiff has not presented this court with
any case law holding that the presence of water, in the
absence of actual damage, amounts to covered physical
damage.11
We also find the decision in Amtrol, Inc. v. Tudor
Ins. Co., Docket No. Civ.A.01-10461 (DPW), 2002 WL
31194863 (D. Mass. September 10, 2002), persuasive. In
that case, the defendant insurer had issued a standard
form commercial general liability policy to its insured,
Amtrol, Inc. (Amtrol), a corporation that manufactures
and sells residential water heaters. See id., *1. The water
heaters began to develop ‘‘leaks in various locations in
their coil assemblies causing hot water to leak from
the units.’’ Id., *2. In seeking coverage, Amtrol con-
tended that the leakage of water from the water heater
constituted property damage. See id., *5. In other words,
it contended that ‘‘the unwanted presence of water
within the home or building in which the [water heater]
was installed is per se physically injurious.’’ Id., *6.
The court disagreed, stating that, ‘‘in order to meet the
physical damage requirement, one must show that the
water has somehow exacted a physical harm upon tan-
gible property that required remediation or otherwise
diminished the value of the property itself. . . . A leak
that results in no damage beyond the mere presence
of water that can be removed or evaporates without
harm does not constitute property damage.’’ (Citation
omitted; emphasis added.) Id.
In the present case, the extrinsic documents provided
by the plaintiff to the defendant, at most, alerted the
defendant to the mere presence of water, without the
necessary resulting physical injury to tangible prop-
erty.12 We conclude that the notification of the mere
presence of water, without some corresponding physi-
cal damage, did not provide the defendant with ‘‘actual
knowledge of facts establishing a reasonable possibility
of coverage’’ because the presence of water does not
constitute property damage within the terms of the pol-
icy.
Accordingly, the defendant did not have a duty to
defend the plaintiff in the underlying litigation, and the
court properly rendered summary judgment in favor of
the defendant.
The judgment is affirmed.
In this opinion the other judges concurred.
1
The June 29, 2018 supplemental disclosure of expert witness also stated:
‘‘It is expected that Mezoff will testify consistent [with] his review of the
project and experience in the areas of residential design, construction, and
construction process. Mezoff is further expected to testify with respect to
his review and examination of the operative pleadings, discovery responses,
documents produced in this litigation, and his personal inspection of the
project site.’’
The disclosure stated that Mezoff was expected to testify to the following
facts and opinions: ‘‘(I) the work performed, both completed and incomplete,
(1) was not performed in substantial compliance with the construction
contract, plans and specifications, and customary practices applicable to
residential construction, including sequencing and process, (2) was not
performed timely and in a reasonable and workmanlike manner, and (3)
demonstrated a failure by the plaintiff to understand the specific require-
ments and challenges presented by ‘modern’ architectural design; (II) the
plaintiff failed to properly request and obtain change orders in accordance
with the requirements of the contract; (III) the plaintiff failed to properly
and timely identify and secure items specified [in] the contract and attached
schedules and specifications; (IV) the plaintiff failed to properly plan for
the changes that it made to the plans and/or design during the construction
phase to ensure the plaintiff would meet contract deadlines; [and] (V) the
costs of completion of, and corrections to, the work by the [L’Henaffs] was
appropriate, reasonable, and necessary.’’
2
In an August 22, 2018 supplement to a motion for continuance filed in
the underlying litigation, the plaintiff’s counsel states that ‘‘[t]he plaintiff
and its experts are currently investigating the claims brought up at the
deposition of [the L’Henaffs’] new expert [Mezoff] that took place on August
1, 2018. The plaintiff requires sufficient time to inspect, investigate and
obtain expert testimony.’’
3
The arbitration award, which was attached as an exhibit to the plaintiff’s
memorandum of law in support of its motion for summary judgment in this
case, provided that the plaintiff ‘‘shall also recover reasonable [attorney’s]
fees and costs of collection, as provided in the contract, in an amount to
be determined after further argument on that sole issue on the basis of the
affidavit submitted by [the plaintiff’s] counsel with its posthearing brief, all
as previously agreed by counsel. Counsel shall confer and, within five (5)
business days of receipt of this award, shall advise the undersigned whether
they want said argument to proceed by conference call or Zoom conference
and state at least two proposed dates/times for said argument.’’
4
On appeal, the plaintiff does not claim that the court erred in rendering
summary judgment in favor of the defendant on count two of its complaint.
5
The defendant did not argue, either before the trial court or in the present
appeal, that alleged negligent work of the plaintiff could not give rise to an
‘‘occurrence’’ under the insuring agreement. See Capstone Building Corp.
v. American Motorists Ins. Co., supra, 308 Conn. 776 (‘‘because negligent
work is unintentional from the point of view of the insured, we find that it
may constitute the basis for an ‘accident’ or ‘occurrence’ under the plain
terms of the commercial general liability policy’’). Accordingly, we focus
on the property damage requirement of the insuring agreement.
6
The defendant asserts, as an alternative ground for affirmance, that
certain policy exclusions bar coverage. Because we affirm the judgment on
the basis that the court properly determined that there was no property
damage within the terms of the policy, we need not reach the defendant’s
proposed alternative ground for affirmance.
7
In its appellate brief, the plaintiff contends that ‘‘the trial court erred
when it required the plaintiff to demonstrate that information outside of
the counterclaims must provide the defendant with ‘actual knowledge of a
coverable claim’ . . . instead of sufficient knowledge demonstrating the
possibility of a covered claim.’’ (Citation omitted.) Although the trial court
in one instance in its memorandum of decision used the language ‘‘actual
knowledge of a coverable claim,’’ it correctly quoted and applied the law
stating that ‘‘an insurer must provide a defense when ‘it has actual knowledge
of facts establishing a reasonable possibility of coverage.’ ’’ Furthermore,
because our review is plenary, the trial court’s choice of words is immaterial
to our analysis. Accordingly, we reject the plaintiff’s contention.
8
The plaintiff relies on County Wide Mechanical Services, LLC v. Regent
Ins. Co., Docket No. 3:20-CV-1135 (SVN), 2022 WL 1514941 (D. Conn. May
13, 2022), to illustrate the principle that, if an allegation of the complaint
falls even possibly within coverage, the insurer must defend the insured.
We find this case distinguishable because the question before the court in
that case was whether certain building systems, alleged to have been affected
by the defective work of a company that installed a heating, ventilation,
and air conditioning (HVAC) system, constituted nondefective property. See
id., *6.
Specifically, the court considered the following allegation made in underly-
ing litigation against the HVAC company: ‘‘[a]s a result of the failures [of
the HVAC system], The Saybrook has replaced multiple compressors in the
HVAC system and several circuit boards, valves, and other components.’’
(Emphasis added; internal quotation marks omitted.) Id., *1. The court in
the ensuing insurance coverage dispute determined that ‘‘the allegation
plausibly states that the allegedly damaged circuit board, valves, and other
components are external to the HVAC system because the phrase ‘in the
HVAC [s]ystem’ appears to modify only the phrase ‘multiple compressors,’
and not the phrase ‘circuit boards, valves and other components.’ ’’ (Empha-
sis omitted.) Id., *6. The court also stated that the allegation that The
Saybrook had ‘‘ ‘suffered damages’ ’’ as a result of the HVAC company’s
defective work was ‘‘not alleged to have been limited to the HVAC system
itself.’’ Id. Accordingly, the court concluded that the ‘‘underlying complaint
plausibly suggests that its injury includes damage to nondefective property
beyond the HVAC system—circuit boards, valves, and other components—
which raises the possibility that [the underlying plaintiff’s] injury constitutes
‘property damage’ as defined by the insurance policy . . . .’’ Id.
9
In response to the defendant’s argument, the plaintiff, in its appellate
reply brief, argues that factual uncertainty exists with regard to the defen-
dant’s duty to defend. The plaintiff relies on Nash Street, LLC v. Main Street
America Assurance Co., supra, 337 Conn. 1, wherein our Supreme Court
stated that ‘‘[b]ecause all that is necessary to trigger an insurer’s duty to
defend is a possibility of coverage, any uncertainty as to whether an alleged
injury is covered works in favor of providing a defense to an insured, and
uncertainty may be either factual or legal.’’ Id., 10. The court explained that
‘‘[f]actual uncertainty arises when it is unclear from the face of the complaint
whether an alleged injury occurred in a manner that is covered by the
policy.’’ Id. The court also gave an example of factual uncertainty, explaining
that if a policy was active for the 2019 calendar year and the underlying
complaint did not specify when the alleged injury occurred, that would
constitute an example of factual uncertainty ‘‘because it is impossible to
know from the face of the complaint whether the alleged injury took place
during the coverage period.’’ Id.
We disagree with the plaintiff that the revised counterclaim gives rise to
factual uncertainty. The counterclaim does not allege property damage. It
is not that the allegations of the revised counterclaim are uncertain and
require clarification but that they are altogether insufficient.
10
During oral argument before this court, the court ordered the parties
to submit supplemental briefs addressing Travelers Casualty & Surety Co.
of America v. Netherlands Ins. Co., 312 Conn. 714, 95 A.3d 1031 (2014)
(Travelers), in which our Supreme Court concluded that a complaint in
underlying litigation triggered The Netherlands Insurance Company’s duty
to defend, under a commercial general liability policy, a company contracted
to perform masonry for the construction of a law library. See id., 716–17.
The complaint in the underlying litigation in that case alleged that ‘‘[d]uring
the months and years following completion of the project and occupancy
by the state, the state began to experience problems with water intrusion
into the [law] library.’’ (Internal quotation marks omitted.) Id., 744. The
complaint alleged that numerous defects had ‘‘caused tangible and physical
harm to the [law] library . . . .’’ (Internal quotation marks omitted.) Id., 745.
In its supplemental briefing, the plaintiff relies on the court’s statement
in Travelers in rejecting the argument that repeated water intrusions consti-
tuted one occurrence, that ‘‘the occurrence is the defective work, whereas
the property damage—in this case water intrusion—results from that occur-
rence.’’ (Internal quotation marks omitted.) Id., 746. The plaintiff argues
that Travelers is not definitive but ‘‘lends some support’’ to the plaintiff’s
position that ‘‘water collecting in areas where it is not intended to be is
itself property damage.’’ We conclude that the court’s statement, considered
in context, does not impact our analysis of the issue presented in this case.
As the plaintiff acknowledges, the complaint in the underlying litigation in
Travelers ‘‘indicated that the water intrusion had in fact caused physical
damage to property,’’ and the Travelers decision addressed the question of
whether the property damage that had been alleged extended into certain
policy periods, not whether property damage had been alleged at all.
11
Although not directly on point, our Supreme Court’s recent decisions
in Connecticut Dermatology Group, PC v. Twin City Fire Ins. Co., 346
Conn. 33, 288 A.3d 187 (2023) (Connecticut Dermatology), and Hartford
Fire Ins. Co. v. Moda, LLC, 346 Conn. 64, 288 A.3d 206 (2023) (Moda), are
instructive. In Connecticut Dermatology, our Supreme Court considered
whether a policy provision covering ‘‘direct physical loss of or physical
damage to’’ certain property applied to losses caused by the suspension of
an insured’s business operations during the COVID-19 pandemic. (Emphasis
omitted; internal quotation marks omitted.) Connecticut Dermatology
Group, PC v. Twin City Fire Ins. Co., supra, 43. The court concluded that
‘‘the plain meaning of the term ‘direct physical loss of . . . [p]roperty’ does
not include the suspension of business operations on a physically unaltered
property in order to prevent the transmission of the coronavirus. Rather,
in ordinary usage, the phrase ‘direct physical loss of . . . [p]roperty’ clearly
and unambiguously means that there must be some physical, tangible alter-
ation to or deprivation of the property that renders it physically unusable
or inaccessible.’’ Id., 51. The court further explained that ‘‘the virus is not
the type of physical contaminant that creates the risk of a direct physical
loss because, once a contaminated surface is cleaned or simply left alone
for a few days, it no longer poses any physical threat to occupants.’’ Id.,
59. In the companion case of Moda, our Supreme Court relied on its holding
from Connecticut Dermatology to conclude that the losses the insured had
suffered did not result from any tangible physical alteration to its stock or
property and, thus, there was no coverage for such losses under the policy
language. See Hartford Fire Ins. Co. v. Moda, LLC, supra, 73. We find the
reasoning in Connecticut Dermatology and Moda relevant to the present
case because the presence of the virus, like the presence of water, does
not suggest a tangible alteration to nondefective property.
12
The present case is different from B&W Paving & Landscape, LLC v.
Employers Mutual Casualty Co., Docket No. 3:21-cv-01624 (JBA), 2022 WL
17716492 (D. Conn. December 15, 2022). In that case, the underlying com-
plaint broadly alleged property damage caused by the insured plaintiff. See
id., *2. When the complaint was considered together with an expert report
concluding that defects in the plaintiff’s work caused damage to other,
nondefective work, the insurer’s duty to defend was triggered. See id., *3.