Unpublished Disposition, 851 F.2d 360 (9th Cir. 1988)

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U.S. Court of Appeals for the Ninth Circuit - 851 F.2d 360 (9th Cir. 1988)

Stephen G. OPPENHEIM; Nancy Oppenheim, Plaintiffs-Appellants,v.DIRECTOR FEDERAL EMERGENCY MANAGEMENT AGENCY; ComputerSciences Corporation, Defendants-Appellees.

No. 86-6357.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 5, 1988.Submission Withdrawn and Resubmitted May 23, 1988.Decided June 22, 1988.




Between January 27, 1983 and March 12, 1983, real properties owned by Stephen and Nancy Oppenheim in Malibu and Newport Beach, California sustained substantial water damage during and following unusually heavy storms. The properties were insured by policies of insurance issued under the National Flood Insurance Program. Approximately thirty days after the damage occurred, the Oppenheims gave "Notice [s] of Loss" to the Federal Emergency Management Agency ("FEMA"). Three FEMA insurance adjusters inspected the properties on separate occasions. One adjuster offered a settlement, which the Oppenheims rejected. Another said a contractor would contact the Oppenheims. He never did. All three adjusters gave the impression that the Oppenheims' loss was being considered. The Oppenheims waited for something to happen. Nothing did. Finally, they filed suit against the FEMA on January 27, 1986, in federal district court in California. They sought enforcement of their policies, together with damages "for breach of the implied covenant of good faith and fair dealing and emotional distress."

The Oppenheims did not file a "proof of loss" with the FEMA within sixty days of the date of loss, as required by their policies. Neither did they file an administrative claim with the FEMA before filing suit on their federal tort claims as required by 28 U.S.C. § 2675(a). The FEMA moved to dismiss the suit under Federal Rule of Civil Procedure 12(b) (1) for lack of subject matter jurisdiction, and Rule 12(b) (6) for failure to state a claim upon which relief could be granted. The district court dismissed the Oppenheims' "complaint and action ... with prejudice." The ground for dismissal was not stated.

On appeal the Oppenheims contend, as they did in opposition to the FEMA's motion to dismiss, that the FEMA is estopped from relying on their failure to file a proof of loss and an administrative claim. They base their estoppel argument on the facts set forth in their declarations filed in opposition to the FEMA's motion to dismiss. In these declarations, the Oppenheims state that the FEMA neither provided them with proof of loss forms, nor told them that they were required to file a proof of loss. They further state that a FEMA adjuster, Porter Moss, met Stephen Oppenheim at the Malibu property at "the end of April, 1983." Stephen showed Moss "all of the damage sustained by the property caused by flooding." Moss offered $21,240.40 "on the spot for the damage sustained to the property." The Oppenheims rejected the settlement offer, but told Moss they would be willing to negotiate further. Moss left and the Oppenheims did not hear from him again.

On May 9, 1983, Stephen met with FEMA adjuster Jerry Bowling at the property located at 423 East Edgewater, Newport Beach. Stephen showed Bowling "all of the damage sustained by the property caused by flooding." Bowling made notes to himself and "left without saying a word regarding the monetary value of the damage sustained." Stephen understood that Bowling would contact him again. Bowling never did. On May 23, 1983, Stephen met with FEMA adjuster Robert L. Maher at the property at 421 East Edgewater, Newport Beach. Stephen showed Maher "all of the damage sustained by the property caused by the flooding." Maher also made notes to himself and "left without saying a word regarding the monetary value of the damage sustained, although he indicated that he would send a contractor to continue the investigation." The contractor never showed up and Stephen never heard from Maher again. Neither Moss, Bowling, or Maher advised Stephen that he had not filed a timely proof of loss. Stephen thought that "the requirements regarding Proof of Loss had been fulfilled." Nancy essentially joined in Stephen's declaration. In addition she stated that Stephen told her that the adjusters had told him "they would offer him a settlement after they completed their investigation."


We recently considered the showing a plaintiff must make to estop the FEMA from relying on the requirement that a proof of loss must be filed within sixty days following a loss. See Wagner v. Director, Fed. Emergency Management Agency, No. 87-6108, slip op. 5657 (9th Cir. May 20, 1988). We explained that to establish estoppel against the FEMA, a claimant must show "affirmative misconduct falling below some minimum standard of decency, honor, and reliability." Id. at 5667 (internal quotation marks and citations omitted).

Taking as true all the allegations made by the Oppenheims in their complaint and in their declarations, the alleged conduct by the FEMA did not rise to the level necessary to establish estoppel against the government.

A party seeking to raise estoppel against the government must establish affirmative misconduct going beyond mere negligence; even then, estoppel will only apply where the government's wrongful act will cause a serious injustice, and the public's interest will not suffer undue damage by imposition of the liability. A mere failure to inform or assist does not justify application of equitable estoppel.

Id. at 5666 (internal quotation marks and citations omitted).

Admittedly, this is a high standard. On occasion, citizens may suffer losses because of a failure to complete some preliminary step required to perfect a claim against a governmental agency, and this failure may result from reliance on something an agency employee or representative said or did. Nonetheless, as we stated in Wagner,

[b]ecause the federal government's "fiscal operations are so various, and its agencies so numerous and scattered," there is always a risk that misinformed agency employees and representatives may err in interpreting statutes and regulations, and even "the utmost vigilance would not save the public from the most serious losses." Moreover, " [t]he government could scarcely function if it were bound by its employees' unauthorized representations."

Id. at 5665 (citations omitted). It is for these reasons that the governmental estoppel standard is such a difficult one to meet. And perhaps in this context it becomes somewhat more understandable why the Oppenheims' claims must be dismissed. See, e.g., Phelps v. FEMA, 785 F.2d 13, 18-19 (1st Cir. 1986) (FEMA agent's advice that claimant need not file a written report was insufficient to estop the government); Goldberg v. Weinberger, 546 F.2d 477, 480-81 (2d Cir. 1976) ("It is well established that 'estoppel cannot be set up against the Government on the basis of an unauthorized representation or act of an officer or employee who is without authority in his individual capacity to bind the Government.' "), cert. denied, 431 U.S. 937 (1977).

The government's motion to dismiss also rested on the Oppenheims' alleged failure to file their complaint within twelve months after the date of mailing of notices disallowing their claims, as the National Flood Insurance Act requires. See 42 U.S.C. § 4072. The Oppenheims contend they never received the letters disallowing their claims, and as a result the twelve-month period never commenced. We need not resolve this question because dismissal is required for failure to file a timely proof of loss, as required by the insurance policies, and for failure to file an administrative claim, as required by the Federal Tort Claims Act. See 28 U.S.C. § 2675(a).

The district court did not give the Oppenheims leave to amend their complaint. They conceded at oral argument, however, that the sum total of the facts that could be alleged to establish estoppel against the FEMA were set forth in their declarations filed in response to the FEMA's motion to dismiss. These facts are insufficient to support an estoppel against the government and, therefore, it would have been futile to have granted leave to amend.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3