Court Opinion

ID: 2968220
Source: CourtListenerOpinion
Date Created: 2015-09-22 04:33:52.006193+00
Date Added: 2024-06-11T15:02:48.128701
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

TOLL BROS., INC.,                          
                    Plaintiff-Appellant,
                    v.
DRYVIT SYSTEMS, INCORPORATED;                        No. 05-1077
IMPERIAL STUCCO, INCORPORATED;
GILL LEVESQUE, d/b/a Imperial
Stucco, LLC,
              Defendants-Appellees.
                                           
            Appeal from the United States District Court
       for the Eastern District of North Carolina, at Raleigh.
                W. Earl Britt, Senior District Judge.
                         (CA-03-175-BR)

                          Argued: October 26, 2005

                         Decided: December 21, 2005

       Before WILKINS, Chief Judge, and NIEMEYER and
                    KING, Circuit Judges.

Affirmed in part, reversed in part, and remanded by published opin-
ion. Chief Judge Wilkins wrote the majority opinion, in which Judge
King joined. Judge Niemeyer wrote a dissenting opinion.

                                COUNSEL

ARGUED: Dexter Ryan Hamilton, COZEN O’CONNOR, Philadel-
phia, Pennsylvania, for Appellant. Jon Peter Antkowiak, Rocky Hill,
2                    TOLL BROS. v. DRYVIT SYSTEMS
Connecticut; Andrew P. Fishkin, EDWARDS & ANGELL, L.L.P.,
Short Hills, New Jersey, for Appellees. ON BRIEF: Kenneth J.
Cesta, EDWARDS & ANGELL, L.L.P., Short Hills, New Jersey, for
Appellee Dryvit Systems, Inc.

                               OPINION

WILKINS, Chief Judge:

   Toll Bros., Inc. (Toll) appeals a district court order granting sum-
mary judgment against it in this action against Dryvit Systems, Inc.,
Imperial Stucco, Inc., and Gill Levesque, d/b/a Imperial Stucco, LLC,1
seeking primarily to recover the costs it incurred in removing alleg-
edly defectively designed synthetic stucco from homes that it had
built and then recladding the homes with a different finish. We affirm
in part, reverse in part, and remand for further proceedings.

                                    I.

   Toll is a real estate developer and builder. In or around 1996, Toll
began development of a residential community called "Newtown
Chase" in Newtown, Connecticut. Toll contracted with Imperial to
clad some of the homes in the development with "Outsulation," a syn-
thetic stucco exterior insulation finish system (EIFS) that Dryvit man-
ufactured.

   In October 1999, several Newtown Chase homeowners whose
homes were clad with Dryvit’s EIFS ("the homeowners") wrote to
Toll expressing concerns regarding the EIFS and alleging that Toll’s
advertising and promotional literature did not reveal that the homes
would be clad in synthetic, rather than actual, stucco. The letter
requested information regarding Toll’s written warranty policies relat-
ing to the EIFS as well as the EIFS product warranty. The homeown-
ers also asked for a letter of compliance from the contractor that
installed the system verifying that installation was completed in
accordance with the manufacturer’s specifications.
    1
   We refer collectively to the latter two parties as "Imperial" and to all
three parties as "Appellees."
                     TOLL BROS. v. DRYVIT SYSTEMS                       3
   In August 2000, the homeowners again contacted Toll, this time
demanding, inter alia, that Toll remove Dryvit’s EIFS from their
homes and reclad them with another finish. By this time, it was not
just the homeowners who had questions regarding Dryvit’s EIFS; Toll
had also come to believe that the EIFS was defectively designed in
that it "permitted water and moisture to penetrate the exterior of the
houses" without "provid[ing] a means for the water to evaporate or
drain," thereby causing significant problems including "rotting, struc-
tural damage, health hazards and diminished property value." J.A.
262. Although Toll had not yet received any complaints of actual
water infiltration from Newtown Chase homeowners, it nevertheless
agreed to remove the EIFS and reclad the homes with a different
product. In return, the homeowners released Toll from liability for
future harm caused by the EIFS and assigned Toll their rights to sue
the responsible parties.

   Toll subsequently initiated this action in Connecticut state court,
primarily seeking compensation for the costs it incurred in stripping
and recladding the homes. Against both Dryvit and Imperial, Toll
asserted claims for unjust enrichment, unfair trade practices (in mis-
representing the capabilities of the EIFS), see Conn. Gen. Stat. Ann.
§§ 42-110a–42-110q (West 2005), negligent and intentional misrepre-
sentation, and claims under the Connecticut Product Liability Act
(CPLA), see Conn. Gen. Stat. Ann. §§ 52-572m–52-572q (West
2005). Toll’s complaint also alleged an indemnification claim against
Imperial based on a contractual indemnity clause.

   After Appellees removed this suit to federal district court,2 the dis-
trict court granted summary judgment against Toll. The court
expressed doubt regarding whether Toll had forecasted sufficient evi-
dence that the EIFS was in fact defectively designed. That issue aside,
however, the court ruled as a matter of law that no such defect had
caused any harm to the homes and that the proximate cause of Toll’s
dispute and settlement with the homeowners was Toll’s misrepresen-
tation to them that the homes would be clad in actual, rather than syn-
thetic, stucco. Ruling as a matter of law that Dryvit could not have
  2
    The suit was removed to the District of Connecticut but was later
transferred to the Eastern District of North Carolina pursuant to the mul-
tidistrict litigation statute. See 28 U.S.C.A. § 1407 (West 1993).
4                    TOLL BROS. v. DRYVIT SYSTEMS
reasonably foreseen that Toll would make such a misrepresentation,
the district court determined that Toll had failed to forecast evidence
creating a genuine issue of fact about whether its injuries were proxi-
mately caused by the defectiveness of the EIFS (or Appellees’ mis-
representations concerning that defectiveness).

   The district court further ruled as a matter of law that Toll’s con-
tract with Imperial did not entitle Toll to indemnification. The court
noted that the indemnity clause in the parties’ agreement states that
Imperial is only obligated to indemnify Toll "from and against all
claims, damages, losses and expenses . . . arising out of or resulting
from the performance of [Imperial’s] Work." J.A. 668. The court rea-
soned that, as a matter of law, the homeowners’ claims arose out of
Toll’s misrepresentations, not Imperial’s work.

                                    II.

   We review the grant of summary judgment de novo, viewing the
disputed facts in the light most favorable to Toll. See Edelman v.
Lynchburg College, 300 F.3d 400, 404 (4th Cir. 2002). Summary
judgment is warranted when the admissible evidence forecasted by
the parties "demonstrates that no genuine issue of material fact exists
and that the moving party is entitled to judgment as a matter of law."
Williams v. Staples, Inc., 372 F.3d 662, 667 (4th Cir. 2004).

                                    A.

   Toll does not dispute that to recover under any of its claims, it must
establish that the financial losses it incurred as a result of its dispute
with the homeowners were proximately caused by the defectiveness
of Dryvit’s EIFS.3 Toll argues, however, that the district court erred
    3
    The district court, in expressing doubt that Toll created a genuine
issue of material fact concerning the defectiveness of the Outsulation
cladding installed on the Newtown Chase homes, did not address what
appears to be the centerpiece of Toll’s case on this issue—the report of
its expert, Mark Williams. Williams opines that Dryvit’s EIFS suffers
from "conceptual design deficiencies" because it "assumes that all water
will be shed at the exterior face of the cladding," when in fact the system
causes "entrapment of incidental water." J.A. 295. And, he further states
                     TOLL BROS. v. DRYVIT SYSTEMS                         5
in ruling that there was no genuine issue of material fact regarding
whether the defective design of Dryvit’s EIFS proximately caused
Toll’s alleged injuries. In so doing, Toll challenges the ruling of the
district court that the record established as a matter of law that its
injuries were proximately caused by its misrepresentation to the
homeowners that the homes were to be clad in actual, rather than syn-
thetic, stucco. We agree with Toll.

   Under Connecticut law,4 proximate cause is "an actual cause that
is a substantial factor in the resulting harm." Stewart v. Federated
Dep’t Stores, Inc., 662 A.2d 753, 758 (Conn. 1995) (internal quota-
tion marks, alteration & emphasis omitted). Whether a plaintiff’s inju-
ries were proximately caused by the defendant generally presents a
factual question for the jury to determine. See id. at 760. The question
becomes one of law "only when the mind of a fair and reasonable
[person] could reach only one conclusion; if there is room for a rea-
sonable disagreement the question is one to be determined by the trier
as a matter of fact." Trzcinski v. Richey, 460 A.2d 1269, 1275 (Conn.
1983) (internal quotation marks omitted).

   Here, the forecasted evidence does not establish as a matter of law
that Toll misled the homeowners regarding whether the homes were
to be clad with synthetic stucco. Although Dryvit forecasted evidence
of the homeowners’ out-of-court complaints that Toll misled them,

that such entrapment has "frequently caused consequential damage to
underlying water sensitive wall components such as sheathing and fram-
ing." Id. at 291. This report alone was sufficient to create a genuine issue
of material fact regarding whether Dryvit’s EIFS was defectively
designed. Appellees do not appear to challenge this conclusion, choosing
instead to argue that Toll failed to forecast sufficient evidence concern-
ing actionable injury and proximate cause. See Br. of Appellees at 13.
  4
    Because this is a multidistrict litigation case, Connecticut law governs
the substantive law issues. See Temporomandibular Joint (TMJ) Implant
Recipients v. E.I. DuPont de Nemours & Co. (In re Temporomandibular
Joint (TMJ) Implants Prods. Liab. Litig.), 97 F.3d 1050, 1055 (8th Cir.
1996) ("When considering questions of state law, . . . the transferee court
must apply the state law that would have applied to the individual cases
had they not been transferred for consolidation.").
6                    TOLL BROS. v. DRYVIT SYSTEMS
the evidence that such complaints were made is not admissible to
prove that they were true. See Fed. R. Evid. 801(c) ("‘Hearsay’ is a
statement, other than one made by the declarant while testifying at the
trial or hearing, offered in evidence to prove the truth of the matter
asserted."); Fed. R. Evid. 802 ("Hearsay is not admissible except as
provided by [the Federal Rules of Evidence] or by other rules pre-
scribed by the Supreme Court pursuant to statutory authority or by
Act of Congress.").

   Moreover, even if the record established as a matter of law that
Toll misled the homeowners regarding whether it used actual stucco
on their homes, there is a genuine issue of material fact regarding
whether the misrepresentations proximately caused Toll’s dispute and
settlement with the homeowners. Homeowner Craig Tenenbaum testi-
fied by deposition that the homeowners’ complaint that Toll repre-
sented to them that the homes were to be clad with actual stucco was
only "one of the reasons" that the homeowners demanded that Dry-
vit’s system be replaced. J.A. 193. The possibility that the system
installed simply was not sufficient to protect the homes from water
damage was also a primary concern. See id. at 194 (Tenenbaum’s
deposition testimony that the homeowners wanted their homes reclad
because they thought Dryvit’s system might cause water damage).
Indeed, in their initial letter to Toll, the homeowners requested Toll’s
written warranty policies regarding the system. Thus, the record did
not establish as a matter of law that the homeowners would not have
made the same demands absent any misrepresentation by Toll.

   Similarly, the record does not establish as a matter of law that any
misrepresentation by Toll was a substantial factor in Toll’s decision
to submit to the homeowners’ demands. Toll forecasted evidence that
it was the likelihood of future water damage to the homes from the
defective EIFS that it was concerned about when it decided to settle
with the homeowners. Specifically, Greg Kamedulski, a Toll vice
president, stated in an affidavit that (1) at the time Toll decided to use
Dryvit EIFS, it believed that the EIFS "was suitable for use on resi-
dential homes"; (2) it reclad the homes because it discovered that the
EIFS "was inherently defective"; and (3) the recladding "was
undertaken in an effort to prevent further damage to the[ ] homes." Id.
at 262-63. For all of these reasons, the district court erred in ruling
as a matter of law that misrepresentations by Toll, rather than the
                     TOLL BROS. v. DRYVIT SYSTEMS                        7
defectiveness of Dryvit’s EIFS, were the proximate cause of Toll’s inju-
ries.5

                                    B.

   Appellees contend that any injuries suffered by Toll were nonethe-
less not actionable in the absence of forecasted evidence that Dryvit’s
system damaged the homeowners’ homes. We agree with Appellees
regarding Toll’s CPLA claim. To recover under the CPLA, a plaintiff
must prove "personal injury, death or property damage caused by" the
product. Conn. Gen. Stat. Ann. § 52-572m(b). Because Toll does not
claim that Dryvit’s EIFS actually damaged the homes, its CPLA
claims fail as a matter of law. Cf. BellSouth Telecomms., Inc. v. W.R.
Grace & Co., 77 F.3d 603, 610-11 (2d Cir. 1996) (holding that CPLA
claim did not accrue simply by presence of asbestos but upon discov-
ery of actual harm caused by the dangerous product).

   The lack of forecasted evidence of property damage is not a proper
ground for affirmance, however, regarding Toll’s other claims. Toll
has alleged that Appellees’ misrepresentations and other tortious
actions induced it to use Dryvit’s defective cladding. These claims
fall outside of the CPLA to the extent that they seek damages for a
wholly financial injury, namely, the cost of Toll’s dispute and settle-
ment with the homeowners. See Gerrity v. R.J. Reynolds Tobacco
Co., 818 A.2d 769, 774-76 (Conn. 2003) (holding that claims alleging
only financial injury and no property damage, death, or personal
injury fall outside the scope of the CPLA).
  5
    Dryvit points out that Toll’s initial settlement offer to the homeown-
ers was not extended to Tenenbaum since he did not purchase his home
from Toll and because he was notified by his seller that his home had
been clad with Dryvit’s EIFS. Dryvit argues that this fact establishes as
a matter of law that Toll’s misrepresentations were the basis for the set-
tlement. This amounts to pure speculation, however. It is also possible
that the absence of a buyer-seller relationship reduced Toll’s incentive to
settle with Tenenbaum because it eliminated Toll’s concern that it would
be liable to Tenenbaum under a warranty theory. See Coburn v. Lenox
Homes, Inc., 378 A.2d 599, 602 (Conn. 1977) ("declin[ing] to extend lia-
bility under a warranty theory from the builder-vendor to a subsequent
purchaser of a house").
8                    TOLL BROS. v. DRYVIT SYSTEMS
   Appellees do not deny that Toll faced potential future liability, by
warranty or otherwise, for damage caused to the homes by Dryvit’s
system. Appellees nevertheless maintain that Toll was required to
choose between allowing such damage to occur or preventing the
damage at its own expense with no right of recourse against Appel-
lees. The law does not require such a Hobson’s choice, however. That
is so because in Connecticut, as elsewhere, the failure by a plaintiff
to make a reasonable attempt to avoid injury from a defendant’s tor-
tious action may bar the plaintiff from recovering for his injury. See
Keans v. Bottiarelli, 645 A.2d 1029, 1031 (Conn. App. Ct. 1994). The
corollary to this proposition is that a plaintiff may recover from a tort-
feasor the expense of a reasonable attempt to avoid being injured by
the tort. See Fogel v. Zell, 221 F.3d 955, 960-61 (7th Cir. 2000) (stat-
ing that had a city learned that it had installed a defectively manufac-
tured sewer pipe, "it would have been entitled by the doctrine of
mitigation of damages to remove the pipe or take other prophylactic
or reparative measures, and to seek restitution of the expense of doing
so from [the manufacturer], provided the expense was prudent in the
circumstances"); Restatement (Second) of Torts § 919(1) (1979)
("One whose legally protected interests have been endangered by the
tortious conduct of another is entitled to recover for expenditures rea-
sonably made or harm suffered in a reasonable effort to avert the
harm threatened."). Here, Toll has created a genuine issue of material
fact regarding whether its recladding of the homes was a reasonable
attempt to avoid incurring liability resulting from Appellees’ tortious
misrepresentations and nondisclosures concerning the capabilities of
Dryvit’s EIFS. Thus, the wholly financial nature of Toll’s alleged
injury did not doom its entire action.

   The dissent rejects our conclusion but misstates the basis for our
decision. The dissent claims that we "accept[ ] . . . that damage to the
houses actually resulted" from Dryvit’s EIFS, post, at 12, when
clearly we do no such thing, see supra, at 7 (noting that "Toll does
not claim that Dryvit’s EIFS actually damaged the homes"). Appel-
lees argued before the district court and continue to argue before us
that the fact that Toll has forecast no evidence that any of the New-
town Chase homes have been damaged by the EIFS entitles them to
summary judgment. As we have explained, we reject the notion that
the lack of evidence of property damage is fatal to Toll’s non-CPLA
claims because Toll would be entitled to recover on those claims if
                    TOLL BROS. v. DRYVIT SYSTEMS                       9
it established that its actions constituted a reasonable attempt to avoid
incurring liability proximately caused by Appellees’ tortious conduct.

   Although the dissent notes that Connecticut law does not allow
recovery of damages for a possible future injury, see post, at 13, it
does not dispute that a plaintiff may be reimbursed under Connecticut
law for expenses it has actually incurred in a reasonable attempt to
avoid future liability resulting from a defendant’s tortious conduct.
The dissent nevertheless states that it would affirm the grant of sum-
mary judgment on the ground that Toll has forecasted insufficient evi-
dence concerning the likelihood that damage would have occurred
had Toll not intervened. See id. at 11. We disagree. Toll forecasted
evidence that the Dryvit’s EIFS causes "entrapment of incidental
water" and that such entrapment has "frequently caused consequential
damage to underlying water sensitive wall components such as
sheathing and framing." J.A. 291, 295. Although the precise likeli-
hood that the EIFS would cause future damage to the Newtown Chase
homes—and the extent of the expected damage—may be relevant on
the issue of whether Toll’s measures constituted a reasonable attempt
to avoid or mitigate its damages from Appellees’ alleged tortious con-
duct, we conclude that Toll’s forecasted evidence is at least sufficient
to create a genuine issue of material fact concerning reasonableness.
See Williams Ford, Inc. v. Hartford Courant Co., 657 A.2d 212, 222
(Conn. 1995) ("We have consistently held that reasonableness is a
question of fact for the trier to determine based on all of the circum-
stances.").

                                  III.

  Toll also maintains that the district court erred in concluding as a
matter of law that Toll was not entitled to indemnification for its
expenditures under its agreement with Imperial. We disagree.

   Toll’s agreement with Imperial states that Imperial must indemnify
Toll "from and against all claims, damages, losses and expenses . . .
arising out of or resulting from the performance of [Imperial’s]
Work." J.A. 668. Imperial agreed to "furnish all labor [and] material"
necessary to clad the homes with Dryvit’s system and "guaranteed"
that all material would "be as specified." Id. at 669, 676, 678-80. Toll
does not point to any specifications regarding the material that Impe-
10                   TOLL BROS. v. DRYVIT SYSTEMS
rial failed to meet. The problem, if any, was that the material that
Imperial had agreed to provide was defectively designed. Stated
another way, assuming that Dryvit’s system was defective, as Toll
alleges it was, it was Toll’s decision to clad the homes with that
defective product, not Imperial’s supplying or installation of the sys-
tem, that caused Toll to incur the costs associated with its dispute
with the homeowners. Indeed, Toll has failed to forecast evidence that
it could have avoided these costs by subcontracting with a different
company.6

                                   IV.

   Appellees maintain that to the extent that summary judgment
should otherwise be reversed, it should be affirmed on the basis of
spoliation of the evidence. Specifically, Appellees complain of Toll’s
removing the EIFS and disposing of it without alerting them or giving
them an opportunity to determine if the systems, as they were actually
installed, were defective. This court is of course free to affirm a judg-
ment on any ground appearing in the record. See United States v.
Smith, 395 F.3d 516, 519 (4th Cir. 2005). But, because the district
court has not yet addressed the spoliation issue, we will refrain from
ruling on it at this time. See Silvestri v. Gen. Motors Corp., 210 F.3d
240, 245 (4th Cir. 2000) (holding that the question of whether a case
should be dismissed because of spoliation is one for the district court
to address in the first instance).
  6
    Toll also notes that Imperial "provided Toll with a separate materials
warranty from Dryvit for the EIFS product." Br. of Appellant at 32
(emphasis added). Toll does not explain, however, how breach of a war-
ranty "from Dryvit" could cause liability on the part of Imperial. Toll
finally maintains that the written agreement that all materials would be
as specified and the warranty that Imperial provided from Dryvit gave
rise to an implied warranty that the materials provided "would be fit for
the ordinary purpose of which the EIFS would be used." Id. Because Toll
provides no further explanation or legal support for this assertion, we do
not address it. See Fed. R. App. P. 28(a)(9)(A) (providing that the appel-
lant’s brief must contain "appellant’s contentions and the reasons for
them, with citations to the authorities and parts of the record on which
the appellant relies"); 11126 Baltimore Blvd., Inc. v. Prince George’s
County, 58 F.3d 988, 993 n.7 (4th Cir. 1995) (en banc) (declining to con-
sider arguments for failure to comply with Rule 28).
                     TOLL BROS. v. DRYVIT SYSTEMS                      11
                                   V.

   In sum, for the foregoing reasons, we affirm the order granting
summary judgment against Toll on its claims under the CPLA and its
indemnification agreement with Imperial, but otherwise reverse the
order and remand for further proceedings consistent with this decision.7

                        AFFIRMED IN PART, REVERSED IN PART,
                                            AND REMANDED

NIEMEYER, Circuit Judge, dissenting:

   Because the majority opinion is based on issues that are, in my
view, irrelevant to the proper disposition of this case, I cannot join it.
I agree with the judgment of the district court because Toll Brothers
failed to submit sufficient evidence to create a genuine issue of mate-
rial fact as to whether the synthetic stucco exterior insulation finish
system ("EIFS") manufactured by Dryvit Systems and installed by
Imperial Stucco caused any actual injury or threatened to cause immi-
nent damage to the seven houses involved in this case.

   Toll Brothers commenced this action to recover from Dryvit and
Imperial reimbursement of the approximately $500,000 that Toll
Brothers incurred to reclad seven houses in its Newtown Chase devel-
opment in Connecticut. Toll Brothers reclad the houses because of a
fear of potential claims. It had already been sued for its use of EIFS
in other developments, and it was facing the threat of a lawsuit by the
Newtown Chase homeowners for misrepresenting the EIFS as real
stucco. Even if there was a defect in the design or manufacture of the
EIFS installed on the seven houses, the system had not failed, nor did
it cause any actual damage to the houses, nor was damage imminent.
Although Toll Brothers may have had sound business reasons for
replacing the EIFS when it did, it was under no legal obligation to do
so other than to fulfill its legal obligation not to misrepresent. When
Toll Brothers replaced the EIFS, therefore, it acted as a legal volun-
teer vis-á-vis Dryvit and Imperial and therefore may not recover its
costs in this action.
  7
   We do not purport to decide any issues not explicitly addressed in this
decision relating to Appellees’ entitlement to summary judgment.
12                   TOLL BROS. v. DRYVIT SYSTEMS
    The majority devotes significant attention to whether Toll Brothers
would be liable for its own alleged misrepresentations, reasoning that
if it was not, it would then have a legitimate claim against Dryvit and
Imperial. See ante at 5-7. This conclusion, however, does not follow;
indeed, the validity of the homeowners’ misrepresentation claim is
irrelevant to the issues before this court. The dispositive principle in
this case is limited to the fact that the EIFS did not cause any damage
to the seven houses so as to create liability for Dryvit and Imperial.

   Although Toll Brothers originally claimed, and the majority
accepted, that damage to the houses actually resulted, this is not sup-
ported by the evidence. See ante at 6 (accepting, in the summary judg-
ment calculus, Toll Brothers’ affidavit that recladding "was
undertaken in an effort to prevent further damage to the homes"
(emphasis added)). Indeed, the summary judgment record contains no
evidence that any homeowner actually sustained damage, or even that
any homeowner would more likely than not sustain damage in the
future — facts that Toll Brothers ultimately conceded. Moreover,
before recladding the houses, Toll Brothers conducted no inspection
of the originally installed cladding, and it did not report finding any
defects in the EIFS material or installation when performing the
recladding operation.

   The majority seeks to overcome this fatal fact by suggesting that
Dryvit does "not deny that Toll faced potential future liability, by war-
ranty or otherwise, for damage caused to homes by Dryvit’s system."
Ante at 8 (emphasis added). This statement either mischaracterizes
Dryvit’s position or misstates Connecticut law.

   If the majority means that future damage was probable, then the
majority misrepresents both Dryvit’s position and the evidence. Dry-
vit does not concede the probability of future damage. In its brief, it
argues, "Fear of future problems that might or might not even occur
is not actionable or actual injury, and is insufficient to withstand sum-
mary judgment." Appellee’s Br. at 15 (emphasis added). Moreover,
Dryvit represented to the court that only a small percentage of appli-
cations of its EIFS nationwide has failed and caused damage.

  If, on the other hand, the majority is resting its position on the
potential or mere possibility of future injury, Dryvit is still not liable.
                    TOLL BROS. v. DRYVIT SYSTEMS                      13
Recovery for potential or merely possible future damage is not per-
mitted under Connecticut law. Conn. Gen. Stat. Ann. §§ 52-572m and
572n; Milford Power Co. v. Alstom Power Co., 263 Conn. 616, 627,
822 A.2d 196, 202 (2003); Potter v. Chicago Pneumatic Tool Co.,
241 Conn. 199, 214, 694 A.2d 1319, 1330 (1997); BellSouth Tele-
comms., Inc. v. W.R. Grace & Co., 77 F.3d 603 (2d Cir. 1996).

   This is not a case where the evidence shows that injury is immi-
nent, inevitable, or even probable. While there is evidence in the
record that the EIFS was negligently designed, there is no evidence
that injury has resulted in or will result in every case, or even in most
cases, where the EIFS has been applied. Indeed, the evidence is that
EIFS has failed in only a small percentage of cases. Toll Brothers
cannot claim that it acted reasonably in expending $500,000 to avoid
this small possibility of damage when none has occurred over several
years and no evidence exists to indicate that damage will occur. This
is fatal to all claims asserted by Toll Brothers, because the necessary
element of injury is missing. Any injury is merely speculative.

  The decision of the district court to dismiss Toll Brothers’ claims
against Dryvit and Imperial was correct, and I would affirm its judg-
ment.