Eaker v. State Farm Fire and Cas. Ins. Co.

• Decision Date: 17 September 2001
• Docket Number: No. Civ.A.1:00-CV-12RG.,Civ.A.1:00-CV-12RG.
• Parties: David L. EAKER, Sr. and Deborah Eaker, Plaintiff, v. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Mississippi

216 F.Supp.2d 606

David L. EAKER, Sr. and Deborah Eaker, Plaintiff, v. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Defendant.

No. Civ.A.1:00-CV-12RG.

United States District Court, S.D. Mississippi, Southern Division.

September 17, 2001.

COPYRIGHT MATERIAL OMITTED

Robert P. Myers, Jr., Owen & Galloway, PLLC, Gulfport, MS, for plaintiff.

Billy W. Hood, Allen, Vaughn, Cobb & Hood, Gulfport, MS, for defendant.

ORDER GRANTING MOTION OF DEFENDANT FOR SUMMARY JUDGMENT AND DENYING MOTION OF PLAINTIFFS TO AMEND

GUIROLA, United States Magistrate Judge.

BEFORE THE COURT is the Motion of the Defendant, State Farm Fire and Casualty Insurance Company ("State Farm") for Summary Judgment [Docket No. 23-1]. Also pending before this Court is the Motion of the Plaintiffs, David L. Eaker, Sr., and Deborah Eaker (the "Eakers") to Amend [Docket No. 28-1]. Having carefully considered said motions, the briefs and arguments of the parties, as well as the record before it and the relevant legal authority, it is the opinion of the Court that the Motion of the Defendant State Farm for Summary Judgment is well taken and should be granted and the Motion of the Plaintiffs, the Eakers, to Amend, is not well taken and will be denied.

I. FINDING OF FACTS

The Plaintiffs, David and Deborah Eaker, reside at 10330 Shorecrest Road in Biloxi, Mississippi, and did so reside in September 1998. The Eakers purchased two insurance policies with State Farm. The first, Policy Number 24-99-3976-0, was a special form 3-Homeowner's Policy (Homeowner's Policy, Exhibit "A").¹ The second, Policy Number 24-RA-6098-3, was a Preferred Risk Flood Insurance Policy (Flood Policy, Exhibit "B").

On September 28, 1998, Hurricane Georges caused damage to the Eaker home. The Plaintiffs submit that on or about September 29, 1998, that they contacted State Farm by calling an "800" number advertised as the Storm Damage Claims Number for State Farm. (Exhibit "1", ¶ 4, to Plaintiffs' Response to Motion for Summary Judgment, Affidavit of Deborah Eaker; Exhibit "2", ¶ 4, Affidavit of David L. Eaker, Sr.). Deborah Eaker spoke to an individual who represented herself as Evette Richards; Deborah Eaker submits that she provided Ms. Richards with a detailed account of the damages sustained by the Eakers' residence, including flood damages, and was informed that a State Farm adjuster would be dispatched and would contact the Eakers within 5-7 days. (Exhibit "1", ¶ 4, Affidavit of Deborah Eaker.) Deborah Eaker submits that Ms Richards advised her that State Farm would investigate the claim, that no further action was required by the Eakers with regard to their claim, and that State Farm was on notice of the claim. (Id.)

On or about October 15, 1998, after not having any contact with State Farm representative relative to hurricane damage, Deborah Eaker again contacted State Farm by calling the State Farm Command Center in Gulfport, Mississippi. (Exhibit "1", ¶ 5.) An appointment was made for October 22, 1998, for an adjuster to examine the Eakers' storm damages. (Id.) A State Farm representative did not appear on October 22, 1998, but ultimately, after several more phone calls by the Eakers, an appointment to view the premises was set for November 3, 1998, by Mr. Brad LeBonde of State Farm. (Affidavit of LeBonde, Exhibit "C") (Exhibit 2, ¶ 6). On this date, LeBonde inspected the premises and settled on-site with the insured. (Exhibit "C"); the claim was paid under the Eakers' Homeowner's Policy and the file was closed by LeBonde. (Exhibit "C"). The Plaintiffs submit that LeBonde indicated that he was not authorized to make adjustments for flood claims, but that he would inform the appropriate representatives of State Farm and that someone with State Farm would contact them to make an appointment to adjust the flood loss claim. (Exhibit "2", ¶ 6); Mr. Eaker submits that LeBonde indicated that no additional action was required of the Eakers except to wait for State Farm to contact them. (Id.)

In March of 1999, the Eakers contacted State Farm and made further claims with State Farm as they submit they were never again contacted by State Farm. (Id.) State Farm representatives claimed no knowledge of the Eakers' flood loss claim. (Exhibit "2", ¶ 8). An appointment to view the premises was scheduled on March 18, 1999. Mr. Steve White of State Farm met with the Eakers to discuss claimed damages to the home. (Affidavit of White, Exhibit "D"). The Eakers informed White that the home had settled and some water pipes had broken from flooding in Hurricane Georges. (Exhibit "D"). White inquired why it took so long for the Eakers to file the flood loss claim. Mr. Eaker indicated that he had notified State Farm and that he had been, or should have been, put on a waiting list. (Exhibit "D"). Eaker also indicated that he and his wife had family and health problems and were not concerned with the settlement problem until recently whereby they contacted State Farm. (Exhibit "D"). As of March 18, 1999, the Eakers had not filed a "Proof of Loss" for any flood loss claim. (Affidavit of White, Exhibit "D").

On March 27, 1999, State Farm employed the services of Top Hat Chimney Sweeps to inspect the fireplace, and received a report stating, "unsafe cracks in fireplace ... received from [the] Hurricane." (Top Hat Chimney Sweeps Safety Inspection Report, Exhibit "E").

State Farm concluded its investigation of the Eaker's flood claim and determined that damages to the interior of the home amounted to $550.00. (Exhibit "F"). Because the damage was less than the $750 deductible, the Eakers were informed by State Farm that no payment would be made under the flood policy. (See correspondence dated March 30, 1999, Exhibit "G").

On April 22, 1999, legal counsel for the Eakers, Robert P. Myers, Jr., wrote Mr. Steve White advising State Farm that he had been retained by the Eakers to assist them in resolving their dispute for claimed damages resulting from Hurricane Georges. (Myers' correspondence of April 22, 1999, Exhibit "H"). Mr. Myers forwarded to State Farm a report dated April 13, 1999, from Carl D. Germany, an architect who had been retained by the Eakers to inspect their home. (Exhibit "I"). Germany related settlement and foundation problems to flood water from Hurricane Georges and estimated the cost of leveling the home at approximately $89,750.00. (Germany correspondence of April 13, 1999, Exhibit "I").

In response, Steve White contacted Rob Myers, Jr., and advised him that someone from State Farm would again inspect the property in light of Carl Germany's recommendation for leveling the property. Shortly thereafter, Mr. White left the Mississippi Gulf Coast and the claim was assigned to Jamye Woody. (Affidavit of Steve White, Exhibit "D").

As a result, on July 12, 1999, Jamye Woody of State Farm arranged for Vanderbrook Engineering to inspect the dwelling and determine what damages, if any, were flood related. (Affidavit of Jamye Woody, Exhibit "J"). The investigation and inspection were conducted on July 19, 1999. Vanderbrook Engineering issued a report indicating that settlement was not related to the flood waters of Hurricane Georges but instead, due to long term settlement of the home. (Vanderbrook Report, Exhibit "L").

On August 12, 1999, Jamye Woody forwarded a letter to the Eakers' attorney, Robert P. Myers, Jr., informing him that, upon inspection and investigation, the damage to the home was caused by ground settlement, and not covered under the flood policy². (Exhibits "O" and "B"). Following August 12, 1999, Jamye Woody was no longer the claim representative working on the Eakers' flood claim. The claim was subsequently handled by Jack Collins ("Collins").

On September 30, 1999, the Plaintiffs' attorney, Robert Myers, Jr., wrote to Collins of State Farm, inquiring whether State Farm would provide coverage under the homeowner's policy for the settlement to the Eakers' home. (Exhibit "N").

On October 8, 1999, Collins wrote Plaintiffs' attorney denying coverage under the homeowner's policy number 24-99-3976-0. (Exhibit "P"). Collins also sent correspondence to David Eaker on October 12, 1999, explaining State Farm's denial of the claim. (Exhibit "Q").

The Plaintiffs filed suit on January 6, 2000, in the United States District Court alleging that State Farm had breached contractual provisions under both the homeowner's and flood policies.

Finally, it is undisputed that the Eakers never filed a "Proof of Loss" with State Farm under the flood policy. (See Exhibits "D", "J" and "M").

II. CONCLUSIONS OF LAW

Summary judgment is appropriate where the pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Federal Rule of Civil Procedure 56(c). When a proper motion for summary judgment is made, the non-moving party must set forth specific facts showing that there is a genuine issue for trial. Federal Rule of Civil Procedure 56(e). Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). See also Eber v. Harris County Hosp. Dist., 130 F.Supp.2d 847 (S.D.Tex.2001). This Court has jurisdiction of this matter pursuant to 42 U.S.C. § 1983 and pendent jurisdiction of state law claims.

A. The Flood Insurance Policy

State Farm moves the court to dismiss the Plaintiffs' claim under the Flood Insurance Policy, Number 24-RA-6098-3, as State Farm is merely appearing for the purpose of this portion of the motion in its "fiduciary"³ capacity as the "fiscal agent of the United States"⁴ and at the expense of the U.S. Treasury.⁵ Language to this effect is found on the first line of the Standard Flood Insurance Policy (herein SFIP), "Issued Pursuant to the National Flood Insurance Act of 1968, or Any Acts Amendatory Thereof (Hereinafter Called the Act), and Applicable Federal...