BOSTON, MA – A federal judge has denied an early victory to a pair of Plymouth homeowners in their lawsuit against ASI Assurance Corp. (“ASI”), ruling that a factual dispute over the duration of a water leak from a cracked shower pan prevents a judgment as a matter of law. The case, which involves claims of breach of contract, bad faith, and unfair practices under M.G.L. c. 93A, will now proceed to discovery.
In a memorandum and order issued on August 13, 2025, Senior United States District Judge Nathaniel M. Gorton found that ASI’s defense, while contested, relies on a genuine dispute of material fact that cannot be resolved at the pleading stage.
Background: A Cracked Shower Pan and a Six-Figure Claim
The dispute began in December 2023, when homeowners Guilande Alexandre and Murat Joseph discovered a puddle in the basement of their Plymouth residence. They hired a plumber who determined the source was a cracked shower pan in a basement bathroom. The plumber’s report noted the significant rate of water discharge, estimating the shower could dump “five gallons every two minutes,” causing the basement to flood “pretty quickly”.
Following the discovery, the homeowners submitted a claim to ASI for water damage, with estimated repair costs exceeding $107,000.
The Investigation and Denial
ASI retained American Leak Detection (“ALD”) to inspect the property and determine the cause of the loss. ALD’s subsequent report became a central point of contention in the litigation.
- ALD’s Findings: The report confirmed the plaintiffs’ assertion regarding the cause, stating, “The source of the damage was determined to be from the basement bathroom shower pan. The shower pan base is severely cracked”. The report also explicitly found “no evidence that the damage was caused by groundwater intrusion”.
- The Crucial Conflict: Despite confirming the source, the ALD technician categorized the event as a “Long Term Event (more than 2 weeks)”. However, the same report included a critical disclaimer: “American Leak Detection technicians are not experts in duration of events”.
Based on ALD’s conclusion of a long-term event, ASI issued denial letters on March 28 and June 13, 2024, disclaiming coverage. The insurer relied primarily on a policy exclusion for “constant or repeated seepage or leakage of water… over a period of 14 or more days”. ASI also cited policy exclusions for groundwater damage and damage caused by “faulty, inadequate or defective…maintenance”.
Homeowners’ Motion for Judgment on Pleadings: A Clash Over “Incongruous” Defenses
The homeowners filed suit in Massachusetts Superior Court, and ASI subsequently removed the case to federal court. The plaintiffs then filed a Motion for Judgment on the Pleadings, arguing that ASI’s denial was legally unsupportable based on the available documents.
In their memorandum, the plaintiffs argued that ASI’s denial was “incongruous, contradictory, and internally incompatible” with the findings of its own consultant. They asserted that ASI could not meet its burden of proof for the 14-day exclusion because its own expert “disqualifies itself on the critical temporal element of proof”.
In its opposition, ASI countered that material facts were clearly in dispute, making judgment at this stage improper. The insurer pointed to ALD’s conclusion that the leak was a “Long Term Event (more than 2 weeks)” as a plausible basis for its denial. ASI also argued that other evidence, such as “photographs that show rotted wood and mold growth,” supported its position that the damage was not sudden and accidental.
The Court’s Ruling: Factual Disputes are for a Jury
Judge Gorton methodically denied the plaintiffs’ motion as to all three counts, concluding that the case was not ripe for a judgment as a matter of law.
Count I (Breach of Contract): The judge determined that the core disagreement over the 14-day exclusion “is precisely the kind of factual dispute that cannot be resolved at the pleading stage”. He emphasized that while interpreting contractual terms is a matter of law for the court, “the applicability of a contractual term to the facts of a particular case, including whether an insurance policy exclusion applies, is a question of fact for jury consideration”.
Count II (Breach of Good Faith): Judge Gorton explained that a breach of contract, even if it were proven, does not automatically constitute a breach of the implied covenant of good faith and fair dealing. He wrote that an insurer contesting coverage, even if its position is ultimately incorrect, is “not sufficient” to prove bad faith so long as there is a legitimate factual dispute. The decision stated that a good faith determination is “ordinarily a question of fact to be determined by the jury…and this case is not the exception”.
Count III (Violation of M.G.L. c. 93A): The motion was denied on the consumer protection claim because ASI’s liability is not “‘reasonably clear'”. The court noted that when “legitimate differences of opinion” exist between an insurer and an insured regarding coverage, Chapter 93A does not compel the insurer to settle the claim.
Key Takeaways for Insurance Professionals
The Alexandre v. ASI decision reaffirms several points for coverage lawyers, claims professionals, and underwriters regarding policy coverage disputes:
- High Bar for Early Victories: The ruling underscores the high procedural bar for an insured in a policy coverage dispute to win their case by a motion for judgment on the pleadings. If an insurer can point to a genuine dispute of a material fact in the record—even a contested one—courts will refuse to enter judgment on the pleading but will instead allow the case to proceed to discovery and summary judgment.
- The Seepage Exclusion Hinge: The case is a classic example of how “constant or repeated seepage” exclusions can turn a seemingly straightforward plumbing leak into complex litigation. The outcome will likely hinge not on the cause of the loss (a cracked shower pan), but on the duration—a factual question that must be proven. (For a multimillion-dollar bad faith claim over a similar sewage backup, see Owen Gallagher’s article, “AgencyChecklists,” August 12, 2024, “Continental’s Mold Exclusion Denial Leads to Bad Faith Lawsuit.”)
- The Double-Edged Expert Report: An expert report containing both helpful conclusions and limiting disclaimers can create significant litigation risk. While ALD’s “long-term event” finding provided ASI with a basis for its denial, the disclaimer that its technicians are “not experts in duration” gave the plaintiffs a powerful argument for their bad faith and 93A claims.
- Plausible Denials Defend Against Bad Faith Claims: The decision reaffirms that an insurer with a credible, fact-based reason for denying a claim is not liable for unfair claim practice or bad faith suit, even if a court ultimately rules against the carrier’s coverage position.
Owen Gallagher
Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists
Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.
Connect with me directly, by calling me at 617-598-3801.
