Summary
holding that any Proof of Loss statement must provide enough information for FEMA to evaluate the merits of the claim
Summary of this case from Graham v. FireOpinion
CIVIL ACTION NO: C3-2704, SECTION: "J"(3)
February 17, 2004
ORDER AND REASONS
Before the Court is defendant's Motion to Dismiss or in the Alternative Motion for Summary Judgment (Rec. Doc. 5). The plaintiff opposes the motion (Rec. Doc. 7). Upon consideration of the briefs, the record, and the applicable law, the Court finds that defendant's Motion to Dismiss or in the Alternative Motion for Summary Judgment should be granted in part and denied in part.
Factual Background
The plaintiff purchased standard flood insurance policies ("SFIPs") for the properties located at 7938, 8122, and 8124 Breakwater Drive, New Orleans, LA 70124, through Allstate Insurance Company. Federal Emergency Management Agency ("FEMA") assumed responsibility for these SFIPs under FEMA's repetitive loss policy: the 8122 Breakwater Property had sustained flood losses four times, and the 7938 and 8124 property had sustained flood losses five times. On September 26, 2002, the plaintiff suffered a flood loss on all three of these properties, and he notified FEMA on October 2, 2QO2 of his loss.
FEMA assigned the claims to Sweet Claim Service, Inc., an independent adjuster and reminded the plaintiff to submit a Proof of loss to FEMA within 60 days of the loss. On November 22, 2002, Brian Naquin, the insurance adjuster, requested an extension of time to complete his flood report due to the extensive prior flood loss history of the properties. Also on November 22, 2002, the plaintiff forwarded to FEMA the Proofs of Loss for the three properties at issue. The plaintiff did not provide a specific amount of damages to the properties and did not provide supporting documentation for his losses. Instead, the plaintiff stated that the full repair and replacement cost was an estimated $3,000 to $20,000 for the 7938 property and in excess of the $250,000 policy limits for the other two properties.
On "November 26 and 27, 2002, FEMA rejected the plaintiff's Proofs of Loss because he failed to claim a specific amount of damages for each property and also failed no provide specific supporting documentation for his losses as required by his SFIF.
Discussion
1. Whether Plaintiff's Claim Complied With NFIP Requirements
The plaintiff's action arises under the National Flood Insurance Program ("NFIP") which was established pursuant to the National Flood Insurance Act of 1963, 42 U.S.C. § 4001, et. seq. The NFIP was created because it is uneconomical for private insurance companies to provide flood insurance with reasonable terms and conditions to those in flood prone areas. Federal law governs claims under the NFIP, and the SFIP Proof of Loss Requirement is found in 44 C.F.R. § 61, App. A(1) (2002).
SFIP requires the insured to notify the insurer of the loss and submit a complete signed and sworn proof of loss setting out the nature, cause, and value of the loss. Gowland v. Aetna, 143 F.3d 951, 954 (5th Cir. 1998). The Proof of Loss requirement provides in relevant part:
3. Prepare an inventory of damaged property showing the quantity, description, actual cash value, and amount of loss. Attach all bills, receipts, and related documents;
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 and 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 the 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. 44 C.F.R. § 61, App. A(1) (2002), Art. 7, ¶ J
The defendant contests the adequacy of the plaintiff's Proof of Loss for only one reason: plaintiff did not provide an amount of damages claimed. This statement is not entirely accurate, since the plaintiff sent in estimates for the amount of damages he expected to claim in his Proof of Loss submitted on November 22, 2002. In other words, the NFIP requested that the plaintiff provide an exact dollar amount for the losses he sustained. The NFIP rejected this claim because Article 9, Section J, part 5, ("Article 9J5") of the plaintiff's standard flood insurance policy requires the claimant to "document the loss with all bills, receipts, and related documents for the amount being claimed." This position is inconsistent with both the Code of Federal Regulations and existing case law.
In Burns v. Federal Emergency Management Agency, FEMA refused to fully pay a claim to the plaintiff because he did not provide Mall bills, receipts, and related documents" within 60 days of the date of loss. 84 F. Supp.2d 839, 840 (S.D. Tex. 2000). Like the plaintiff in the present case, the plaintiff in Burns had an Article 9J5 clause in his policy. Id. at 841. The court could not find any support for the assertion that the production of bills, receipts, and other documents must be produced within 60 days of the loss, as FEMA had argued. Id. at 845. Indeed, the court found that the 60 day time limit applied only to the requirements listed in paragraph J of the Federal Regulations. Id. The Code of Federal Regulations provides, "We may request, in writing, that you furnish us with a complete inventory . . . actual cash values or replacement cost . . . amounts of loss claimed, and any written plans and specifications for repair. . . ." 44 C.F.R. Pt. 61, App.(A)(1), Art. 9, ¶ K, c1.1 (2002).
Although Article 9J5 requests that plaintiff furnish "all bills, receipts, and related documents," it does not require him to produce these documents within 60 days. Burns, 84 F. Supp.2d at 845. As the Burns court reasoned, "[t]he phrase `within 60 days' occurs within clause 3, and plainly modifies only the requirements delineated within clause 3." Id. The requirement that an insured document the less with "`bills, receipts, and related documents' is set forth in clause 5, an entirely separate and distinct clause which is silent as to deadlines." Id.
Unquestionably, as the defendants have argued, an insured cannot recover under an SFIP if the Proof of Loss sent to FEMA is unsigned, unsworn, incomplete, or otherwise inadequate. Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998). However, in the present case, the plaintiff provided at least enough information for FEMA to evaluate the merits of the claim. The conclusion is supported by Portnoy v. Dir., Fed. Emergency Mgmt. Agency-Nat'l Flood Ins. Program, No, Civ.A.02-6714, 2GC3 WL 21294980, at *1 (E.D. Pa. 2003).
In Portnoy, the plaintiffs' damage to their property was extensive and unable to be determined within 60 days, much like the plaintiff in the present case. Id. FEMA argued that the plaintiffs did not timely file Proofs of Loss and even if they did, the Proofs of Loss were incomplete because the plaintiffs wrote "to be determined" instead of an actual amount in the categories "Actual Cash Value," "Whole Loss and Damage," and "Amount Claimed." Id. at *2. Although plaintiffs' claim stated that his damages were "to be determined, " the court reasoned that the plaintiffs' responses were not inadequate and denied FEMA's motion for summary judgment. Id.
This Court finds Burns and Portnoy persuasive and holds that plaintiff's submitted Proofs of Loss are adequate.
2. Court Costs, Attorney's Fees, and Jury Trial
First, FEMA states that the National Flood Insurance Act does not provide for court costs, attorney's fees, and prejudgment or post judgment interest. In re Estate of Lee v. NFIP, 312 F.2d 253, 256 (5th Cir. 1937). Second, FEMA argues that the plaintiff is not entitled to a jury trial because sovereign immunity has not been waived under the National Flood Insurance Act ("NFIA") for a jury trial.Center Glass and Trim Co. v. United States, FEMA, 637 F. Supp. 239 (S.D. W. Va. 1986). In addition, plaintiff is not entitled to a jury trial because the NFIA does not grant the right for a jury trial,Kolner v. Dir., Fed. Emergency Mgmt. Agency, 547 F. Supp. 828 (N.D. Ill. 1982). The plaintiff does not rebut the defendant's arguments on these issues, and the law cited by the defendant is accurate. Thus, the Court finds that the plaintiff is not entitled to court costs, attorney's fees, prejudgment or post judgment interest, or a jury trial. Therefore,
IT IS ORDERED that defendant's Motion to Dismiss or in the Alternative Motion for Summary Judgment (Rec. Doc. 5) is GRANTED IN PART regarding court costs, attorney's fees, prejudgment or post judgment interest, and jury trial.
IT IS FURTHER ORDERED that defendant's Motion to Dismiss or in the Alternative Motion for Summary Judgment (Rec. Doc. 5) is DENIED IN PART regarding plaintiff's Proof of Loss claim.