Fletcher v. Standard Fire Ins. Co.

• Decision Date: 17 January 2015
• Docket Number: No. 13–cv–5463 ADSAKT.,13–cv–5463 ADSAKT.
• Citation: 80 F.Supp.3d 386
• Parties: Stephen C. FLETCHER and Karen C. Fletcher, Plaintiffs, v. The STANDARD FIRE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of New York

80 F.Supp.3d 386

Stephen C. FLETCHER and Karen C. Fletcher, Plaintiffs

v.The STANDARD FIRE INSURANCE COMPANY, Defendant.

No. 13–cv–5463 ADSAKT.

United States District Court, E.D. New York.

Signed Jan. 17, 2015.

Shayne, Dachs, Corker, Sauer & Dachs, LLP, by Norman H. Dachs, Esq., of Counsel, Mineola, NY, for Plaintiffs.

Carter, Ledyard & Milburn, LLP, by Judith A. Lockhart, Esq., Leonardo Trivigno, Esq., of Counsel, New York, NY, for Defendant.

Stradley Ronon Stevens & Young LLP, by Gina M. Stowe, Esq., of Counsel, Philadelphia, PA, for Defendant.

MEMORANDUM OF DECISION & ORDER

SPATT, District Judge.

On October 2, 2013, the Plaintiffs Stephen C. Fletcher and Karen C. Fletcher (collectively, the “Plaintiffs”) commenced this action pursuant to 42 U.S.C. § 4072 seeking to recover flood-related damages to their residence from Superstorm Sandy pursuant to a Standard Flood Insurance Policy issued by the Defendant Standard Fire Insurance Company (the “Defendant”) under the National Flood Insurance Program.

Presently before the Court are (i) the Defendant's motion pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ.P.”) 56 to dismiss the Plaintiffs' claim; and (ii) the Plaintiffs' cross-motion pursuant to Fed.R.Civ.P. 56 for summary judgment on their claim. For the foregoing reasons, the Court grants the Defendant's motion and dismisses the Plaintiffs' claim.

I. BACKGROUND

Unless stated otherwise, the following facts are drawn from the parties' Rule 56.1 statements. Triable issues of fact are noted.

The Plaintiffs are citizens of New York who owned a one-family residence located in Massapequa, New York. The parties do not make clear when the Plaintiffs purchased their home. The mortgagee of the Plaintiffs' property was CitiMortgage, Inc. ISOA ATIMA (“CityMortgage”). The parties do not make clear the meaning of “ISOA ATIMA” in their papers.

The Defendant is an insurance company authorized to do business in the State of New York. (Answer at ¶ 1.) As relevant to the instant dispute, Congress created the National Flood Insurance Program (“NFIP”) by passing the National Flood Insurance Act of 1968, 42 U.S.C. § 4001 et seq. (Id. at ¶ 4.) The purpose of the statutes was to provide adequate flood insurance in at-risk areas by offering subsidized flood insurance. Id. at § 4001(b). On April 1, 1979, the Federal Emergency Management Agency (“FEMA”) became the agency responsible for operating the NFIP. See 42 U.S.C. § 4071.

In 1983, FEMA created the Write Your Own (“WYO”) Program, which gave insurance companies the ability to issue, under their own names as insurers, Standard Flood Insurance Policies (“SFIPs”) to individuals as “fiscal agent[s] of the Federal Government.” (See Answer at ¶ 1.) In other words, the insurance companies serve as administrators for the federal program, and it is the U.S. government, not the companies, that pays the claims. McGair v. Am. Bankers Ins. Co. of Florida, 693 F.3d 94, 96 (1st Cir.2012) (citation omitted).

WYO companies, such as the Defendant, must issue SFIPs whose terms are set by regulation and cannot be “altered, varied, or waived other than by the express written consent” of FEMA. 44 C.F.R. § 61.13.

The Defendant provided the Plaintiffs with a SFIP consistent with the FEMA regulations. 44 C.F.R. Pt. 61, App. A(1), (2) ; Fletcher Aff., Ex. A. In that regard, a section of the SFIP entitled, “Policy Renewal,” states: (1) “This policy will expire at 12:01 a.m. on the last day of the policy term”; and (2) “We must receive the payment of the appropriate renewal premium within 30 days of the expiration date.” 44 C.F.R. Pt. 61, App. A(1), (2) ; Fletcher Aff., Ex. A, at 16. The policy further states:

3. If we find, however, that we did not place your renewal notice into the U.S. Postal Service, or if we did mail it, we made a mistake, e.g., we used an incorrect, incomplete, or illegible address, which delayed its delivery to you before the due date for the renewal premium, then we will follow these procedures:

a. If you or your agent notified us, not later than one year after the date on which the payment of the renewal premium was due, of non-receipt of a renewal notice before the due date for the renewal premium, and we determine that the circumstances in the preceding paragraph apply, we will mail a second bill providing a revised due date, which will be 30 days after the date on which the bill is mailed.

Id.

The Plaintiffs' SFIP became effective on September 2, 2002. (Holmes Decl., Ex. A.) Prior to September 19, 2010, CitiMortgage submitted premium payments to the Defendant on the Plaintiffs' behalf.

On July 19, 2010, the Defendant prepared a notice to the Plaintiffs. (Holmes Decl., Ex. A.) The top of the Notice states, “Policy Expiration Date: 9/02/2010” and “Billing Date: 07/19/2010.” (Id. ) (emphasis in original). The Notice then states, “RENEWAL NOTICE: Your flood insurance is about to expire on the date shown above. Please follow renewal instructions on the remittance coupon below.” (Id. ) (emphasis in original). The Notice further states that to renew the “CURRENT COVERAGE,” the Plaintiffs are required to remit a payment of $2,686, and to obtain “INCREASED COVERAGE,” they are required to remit a payment of $2,711. (Id. )

On September 1, 2010, the Defendant prepared another Notice with the same information. However, this notice stated, “FINAL NOTICE: Your flood insurance policy expired on the date shown above. Please disregard this notice if your payment has already been mailed.” (Id. )

On September 17, 2010, the Defendant prepared a notice to CityMortgage. (Holmes Decl., Ex. A.) The notice stated, “The attached premium invoice represents a flood insurance policy that has cancelled for non-payment and which shows your institution as having interest in the listed property.” (Id. ) The notice further states that pursuant to Section 525 of the National Flood Insurance Reform Act:

[I]f ... the lender or servicer determines that the security property and any personal property securing the loan lack adequate flood insurance coverage, the lender or servicer must notify the borrower of the borrower's responsibility to obtain coverage at the borrower's expense. If the borrower fails to purchase flood insurance within 45 days after notification, the lender must purchase the insurance on the borrower's behalf. We notified both you and the borrower, on your behalf, 45 days prior to their policy's expiration and subsequently, have not received any payment.

(Id. ) Finally, the notice states, “Renewal of the above flood policy is both permitted and required under National Insurance Reform Act of 1994. Please remit payment as soon as possible to effect coverage at the earliest possible date.” (Id. )

The Defendant assert that these notices were “automatically generated” and sent out, respectively, on July 19, 2010; September 1, 2010; and September 17, 2010. (Holmes Decl. at ¶ 7.) In support of this assertion, the Defendant relies on a declaration by Scott Holmes, a “Director of Technical Services” and a “custodian of records” for the Defendant. (Id. at ¶ 2.)

The Plaintiffs did not submit a payment to the Defendant prior to September 2, 2010, or at any time thereafter. However, the Plaintiffs deny “knowledge or information sufficient to form a belief as to whether premium payments were made by [the] mortgagee.” (The Pls.' Counterstatement of Facts at ¶ 3.)

On October 29, 2012, the Plaintiffs' residence was damaged as a result of SuperStorm Sandy. On October 2, 2013, the Plaintiffs instituted the present action seeking $86,100 in damages under the SFIP issued by the Defendant.

II. DISCUSSION

A. Legal Standards

Fed.R.Civ.P. 56(a) provides that a court may grant summary judgment when the “movant shows there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law.” The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” James River Ins. Co. v. Power Mgmt., Inc., No. 12–CV–02706 (ADS), 55 F.Supp.3d 446, 451–52, 2014 WL 5460548, at *4 (E.D.N.Y. Oct. 28, 2014) (Spatt, J.) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ).

“If the movant successfully demonstrates that there is no genuine issue of material fact, then the burden shifts to the non-movant who must come forward with specific facts showing that a genuine issue exists.” D'Iorio v. Winebow, Inc., No. 12–CV–1205 (ADS), 68 F.Supp.3d 334, 344, 2014 WL 7335466, at *8 (E.D.N.Y. Dec. 26, 2014) (Spatt, J).

“A fact is material if it might affect the outcome of the suit under the governing law, and an issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Reeves v. Anderson, No. 11–CV–3770 SAS, 2014 WL 7336459, at *3 (S.D.N.Y. Dec. 24, 2014) (citing Windsor v. United States, 699 F.3d 169, 192 (2d Cir.2012) ). In determining if a genuine dispute of material fact exists, “the court must resolve all ambiguities and draw all justifiable factual inferences in favor of the party against whom summary judgment is sought.” Buckley v. Deloitte & Touche USA LLP, 888 F.Supp.2d 404, 415 (S.D.N.Y.2012) aff'd, 541 Fed.Appx. 62 (2d Cir.2013) (citation omitted).

However, a party “opposing summary judgment does not show the existence of a genuine issue of fact to be tried merely by making assertions that are conclusory” or “based on speculation.” Id. (citations omitted). In that regard, “[w]here it is clear that no rational finder of fact ‘could find in favor of the nonmoving party because the evidence to support its case is so slight,’ summary judgment should be granted.” F.D.I.C. v. Great Am. Ins. Co., 607 F.3d 288, 292 (2d Cir.2010) (quoting Gallo v....