Jackson v. Fid. Nat'l Ins. Co.

• Decision Date: 20 May 2015
• Docket Number: CIVIL ACTION NO. 13-5647 SECTION "L" (5)
• Parties: CHRISTINE JACKSON v. FIDELITY NATIONAL INSURANCE COMPANY
• Court: U.S. District Court — Eastern District of Louisiana

CHRISTINE JACKSON v. FIDELITY NATIONAL INSURANCE COMPANY

CIVIL ACTION NO. 13-5647 SECTION "L" (5)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

May 20, 2015

ORDER & REASONS

Before this Court is Defendant's Motion for Summary Judgment. (Rec. Doc. 33). Having read the parties' briefs and reviewed the applicable law, the Court now issues this Order & Reasons.

I. UNDISPUTED FACTS

This case arises out of damage to Plaintiff's property in La Place, Louisiana, which was allegedly caused by Hurricane Isaac. Defendant Fidelity National Insurance Company ("Fidelity") provided flood coverage through the National Flood Insurance Program ("NFIP") for the property in question. Fidelity issued a Standard Flood Insurance Policy ("SFIP") to Plaintiff covering the building located on her property. (Rec. Doc. 33-2 at 2). The SFIP bears policy number 17115055577601 for a policy term of September 2, 2011 to September 2, 2012. (Rec. Doc. 33-2 at 2). Plaintiff's coverage limits under the SFIP were $182,000.00 for Coverage "A" (dwelling coverage), subject to a $2,000 deductible, and $30,000.00 for Coverage "B" (contents coverage), subject to a $1000.00 deductible. (Rec. Doc. 33-3 at 2).

Plaintiff submitted a flood claim to Fidelity stemming from flood damage to her house that occurred on August 29, 2012. Upon receipt of Plaintiff's claim, Fidelity began the process of adjusting her claim and assigned Conrad Owens, an independent adjuster, to inspect Plaintiff'sproperty. (Rec. Doc. 33-4 at 2, 36-1 at 2). Owens assessed the flood damage and prepared a building estimate of $48,834.14 with recoverable depreciation of $4,969.78, for a total building claim of $53,803.02. (Rec. Doc. 33-4 at 3).

On October 24, 2012, Plaintiff executed a Proof of Loss in the amount of $48,834.15 for her building claim and signed a Replacement Cost Proof of Loss for her recoverable depreciation of $4,969.78. (Rec. Doc. 33-2 at 26, 33-4 at 3). Plaintiff also signed a Proof of Loss for the contents claim for $26,556.13. (Rec. Doc. 33-3 at 2, 33-4 at 3). Plaintiff also alleges that on October 24, 2012, Nathan Michelson notified Fidelity Flood Claims Department of Michaelson & Messinger Ins. Specialists, LLC's ("M&M") representation of Plaintiff and that a written estimate would be forthcoming. (Rec. Doc. 36-1 at 2).

Fidelity issued payments to Plaintiff under the SFIP Building Coverage in the amount of $48,834.15 for the building claim and $4,969.78 for the recoverable depreciation on November 9, 2012. (Rec. Doc. 33-4 at 3). Fidelity issued a check for the undisputed contents claim in the amount of $26,555.13 on December 7, 2012. (Rec. Doc. 33-4 at 3).

On December 6, 2012, Dan Onofrey forwarded M&M's estimate of Plaintiff's damages, totaling $284,332.91,¹ to Fidelity. (Rec. Doc. 36-3 at 22). Mr. Onofrey requested in his accompanying letter that Fidelity review the estimate and set up a supplemental claim. (Rec. Doc. 36-3 at 3). Plaintiff did not provide a supplemental Proof of Loss for this claim. Fidelity has no evidence of a waiver from the Federal Insurance Administrator for this particular claim and property, beyond the amounts already paid to Plaintiff. (Rec. Doc. 33-4 at 4). Plaintiff ultimately filed suit against Fidelity on August 28, 2013 for Fidelity's failure to pay her actual losses. (Rec. Doc. 1).

II. PRESENT MOTION (Rec. Doc. 33)

Fidelity argues that this Court should grant Summary Judgment because "[t]he Fifth Circuit has consistently held that failure to submit a signed and sworn Proof of Loss bars recovery." (Rec. Doc. 33-1 at 8). While Plaintiff submitted a signed and sworn Proof of Loss for the amounts that Fidelity paid, Fidelity maintains that Plaintiff's failure to submit a signed and sworn Proof of Loss for the additional claims bars proceeding with this lawsuit. (Rec. Doc. 33-1 at 9). Moreover, Fidelity argues that Plaintiff did not secure a waiver for the Federal Insurance Amounts Administrator for her additional Proof of Loss. (Rec. Doc. 33-1 at 10).

Plaintiff opposes the motion. Plaintiff argues that pursuant to 44 C.F. R. § 61, app. (A)(1), art. VII (J)(9), an insurer can accept an adjuster's report in lieu of a Proof of Loss. Plaintiff relies on Young v. Imperial Fire & Cas. Co. and argues that Plaintiff's initial Proof of Loss, coupled with M&M's estimate, satisfies the Proof of Loss requirements under Art. VII(J)(4). (Rec. Doc. 36 at 3) (citing No. 13-5246, 2014 WL 1456408 (E.D. La. April 14, 2014) (Lemmon, J.)).

Fidelity replies. Fidelity argues that while a WYO carrier may accept an adjuster's report in lieu of a signed and sworn Proof of Loss, the insured must sign the report, and Plaintiff failed to sign the adjuster's report. (Rec. Doc. 39 at 2). In response to Plaintiff's reliance on Young, Fidelity argues that the instant case is distinguishable because the plaintiff in that case submitted a pre-suit proof of loss for amounts over and above what was paid by the carrier. (Rec. Doc. 39 at 2). Here, Fidelity maintains that Plaintiff never submitted a Proof of Loss for any amount beyond what she has been paid.

III. LAW AND ANALYSIS

A. The Standard

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, 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." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial." Id. When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute [to be] 'genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party [and a] fact [to be] 'material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

B. Failure to Submit a Signed and Sworn Proof of Loss

In 1968, Congress created the NFIP to provide flood insurance coverage at or below actuarial rates because private insurance companies could not economically underwrite these policies. See Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998). The program is operated by the Federal Emergency Management Agency ("FEMA") and is supported by the federal treasury. Id. Flood insurance policies can be issued by FEMA or through private insurers known as "Write Your Own" companies who serve as fiscal agents of the United States. Id. FEMAprovides fixed terms and conditions that must be used in the federal flood insurance policies, known as the Standard Flood Insurance Policy ("SFIP"). Id. "The provisions of an insurance policy issued pursuant to a federal program must be strictly construed and enforced." Id. at 954; see also Marseilles Homeowners Condominium Ass'n Inc. v. Fidelity Nat. Ins. Co., 542 F.3d 1053, 1057-58 ("Under FEMA regulations, strict adherence is required to all terms of the SFIP.") (quoting Forman v. Fed. Emergency Mgmt. Agency, 138 F.3d 543, 545 (5th Cir. 1998)).

Disputes regarding provisions of the SFIP should be "resolved under federal law 'by drawing upon standard insurance law principles.'" Hanover Bldg. Materials, Inc. v. Guiffrida, 748 F.2d 1011, 1013 (5th Cir. 1984) (quoting West v. Harris, 573 F.2d 873, 880-81 (5th Cir. 1978)); see also Studio Frames Ltd. v. Standard Fire Ins. Co., 483 F.3d 239, 244-45 (4th Cir. 2007) (explaining that federal common law governs the interpretation of federal flood insurance policies and that "[u]nder federal common law, the federal courts draw upon standard principles of insurance law to resolve disputes over coverage in an SFIP."); Suopys v. Omaha Prop. & Cas, 404 F.3d 805, 809 (3d Cir. 2005) (explaining that federal courts "apply standard insurance principles to construe the SFIP").

Turning now to the relevant portion of the SFIP, Article VII(J)(4) provides:

4. Within 60 days after the loss, send us a proof of loss, which is your statement of the amount you are claiming under the policy signed and sworn to by you, and which furnishes us with the following information:

a. The date of the time of loss;

b. A brief explanation of how the loss happened;

c. Your interest (for example, "owner") and the interest, if any, of others in damaged property;

d. Details of any other insurance that may cover the loss;

e. Changes in title or occupancy of the covered property during the term of the policy;

f. Specifications of damaged buildings and detailed repair estimates;g. Names of mortgagees or anyone else having a lien, charge, or claim against the insured property;

h. Details about who occupied any insured building at the time of loss and for what purpose; and

i. The inventory of damaged personal property described in J.3. above.

5. In completing the proof of loss, you must use your own judgment concerning the amount of loss and justify that amount.

44 C.F.R. pt. 61, app. A(1), art. VII(J). The SFIP further provides that the insured "may not sue [the insurer] to recover money under this policy unless [the insured has] complied with all the requirements of the policy." Id. art. VII(R).

The Fifth Circuit has repeatedly warned that the proof of loss requirement, as with all provisions of the SFIP, should be strictly enforced. See Wright v. Allstate Ins. Co., 415 F.3d 384, 387 (5th Cir. 2005). Failure to submit a timely, signed and sworn proof of loss, with all of the required elements, is a valid basis for denying an...