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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 homeowners 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 homeowners 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 plaintiff, 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 reservation of rights to the plaintiff stating, inter alia, that the operative counterclaim 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 documents 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 testimony 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 summary 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 summary 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 judgment of the trial court.

The following facts, which are undisputed, and procedural 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’Henaffs and the plaintiff. Ultimately, the L’Henaffs terminated their contract with the plaintiff on December 14,

2016. The plaintiff filed a mechanic’s lien on the property 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 relevant 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’Henaffs 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’Henaffs’] 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’Henaffs] . . . [f]ailing to ensure proper plumbing connections were used throughout the building . . . [f]ailing

to take reasonable steps to ensure that construction
progressed in a timely manner . . . [f]ailing to complete 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 properly 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 construction 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’Henaffs 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 connection with its work and planning, the status of the

work performed by the plaintiff as of the date of termination, 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 problems 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 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 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 ‘‘investigated 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 continuous 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 physically 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 September 11, 2018, the plaintiff submitted to the defendant

certain pleadings from the underlying litigation, including the L’Henaffs’ first revised counterclaim, the plaintiff’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 defendant Mezoff’s deposition transcript and the August, 2018
email. The defendant acknowledged receipt of the materials submitted by the plaintiff.

On October 15, 2018, the defendant issued a disclaimer 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 damage’’ caused by an ‘‘occurrence’’ and, therefore, it did

not trigger coverage under the policy. (Internal quotation 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 documents and information that demonstrated that the plaintiff 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 underlying litigation dated August 22, 2017, to disclaim coverage.’’ 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 defendant’s duty to defend.

On September 10, 2021, the defendant filed its own

motion for summary judgment, accompanied by a memorandum of law and supporting exhibits, as to both

counts of the plaintiff’s complaint. Therein, the defendant argued that it ‘‘did not have a duty to defend the

plaintiff against the revised counterclaim in the underlying [litigation]. The revised counterclaim did not allege

‘property damage’ caused by an ‘occurrence’ and therefore did not trigger coverage under the applicable policy. 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 property 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 property damage if not remedied but that it did not demonstrate 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 occurrence 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 determined 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 rendered 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 defendant 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 establishing a reasonable possibility of coverage. . . . After
all, the duty to defend derives from the insurer’s contract with the insured, not from the complaint.’’ (Citations omitted; internal quotation marks omitted.) Hartford 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 determined 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 . . . conceivable but tortured and unreasonable.’’ (Internal quotation 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 contract 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 coverage the . . . [insured] expected to receive and what

the [insurer] was to provide, as disclosed by the provisions 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 construing] 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 exclusions (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 plaintiff’s appeal. In deciding whether the defendant was

obligated to defend the plaintiff in the underlying litigation, we begin our analysis with the initial grant of

coverage in the policy’s insuring agreement, which provides 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 substantially the same general harmful conditions.’’ The policy

defines ‘‘property damage’’ as ‘‘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 physically 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 improperly 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 extrinsic 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 allegations 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 allegations of the revised counterclaim assert property damage. 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 ‘‘consensus 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 construction deficiencies unless they damage other, nondefective property.’’ Id., 785. In other words, ‘‘the commercial

general liability policy covers claims for property damage 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 monoxide 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, accordingly, 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 defective installation of windows, a defective vapor barrier,

water leakage or water damage, or any ‘property damage’ of any kind.’’ Additionally, the counterclaim’s allegation that, ‘‘[a]s a direct and proximate result of [the

plaintiff’s] material breach of the terms of the construction contract, the [L’Henaffs have] suffered, and will

continue to suffer, damages to be ascertained at trial’’

reasonably alleges contract damages, not property damage. 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’’ (emphasis 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 information.

As noted previously, 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

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 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.)

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 preventing [p]hysical injury to tangible property . . .

before the alleged deficiency has caused property damage 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 Mezoff’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 plaintiff conflates water collection with water damage. Because

there was no indication of water damage, and considering 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 defendant argues that Mezoff opined, at most, that ‘‘construction deficiencies could potentially result in water damage to nondefective areas of the property if not fixed.’’

(Emphasis omitted.) According to the defendant, this
possibility of future damage does not qualify as ‘‘property damage’’ under our Supreme Court’s decision in

Capstone.

In construing the phrase ‘‘physical injury,’’ our Supreme

Court in Capstone Building Corp. v. American Motorists 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 alteration 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 property 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 language. See Capstone Building Corp. v. American

Motorists Ins. Co., supra, 308 Conn. 782 (‘‘under the

plain language of the commercial general liability policy, 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 bubbling 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 company’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 collecting 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 tangible 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 property.12 We conclude that the notification of the mere

presence of water, without some corresponding physical 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 policy.

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 requirements 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 underlying 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.’ ’’ (Emphasis 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 defendant’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 constituted one occurrence, that ‘‘the occurrence is the defective work, whereas

the property damage—in this case water intrusion—results from that occurrence.’’ (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 alteration 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.