Karas et al. v. Liberty Insurance Corporation (SC 20149):
In the first of a trilogy of cases, the Connecticut Supreme Court, in Karas, answered the federal certification questions; whether “substantial impairment of structural integrity” is the applicable standard for “collapse” under the subject homeowner’s insurance policy; what constitutes “substantial impairment of structural integrity” in applying the policy’s “collapse” provision; and whether the term “foundation” unambiguously includes basement walls. Plaintiffs filed suit against the defendant after denial of their claim for “collapse” of their basement walls. The plaintiffs argued that a collapse pursuant to Beach v. Middlesex Mutual Assurance Co., 205 Conn. 246 (1987) had occurred. In Beach, the Court held that the term “collapse”, when undefined, is “sufficiently ambiguous to include coverage for any substantial impairment of the structural integrity of a building.” The Court concluded: 1) that the Beach standard applies to the plaintiffs’ policy, 2) that the ‘‘substantial impairment of structural integrity’’ standard requires proof that the home is in imminent danger of falling down and, and 3) that the term ‘‘foundation’’ unambiguously encompasses the home’s basement walls.