Harris v. Nationwide Mut. Fire Ins., No. 15-6132 (6th Cir. 2016)Annotate this Case
In 2006, plaintiffs procured a mortgage from Regions to purchase a home near the Cumberland River. The National Flood Insurance Act (NFIA) requires mortgagors to obtain flood insurance for properties in flood zones, 42 U.S.C. 4012a(b)(1). CoreLogic provided Regions with flood-zone certification. The National Flood Insurance Program Flood Insurance Rate Map (FIRM) showed that the property was in a Special Flood Hazard Area (SFHA), but CoreLogic informed plaintiffs that their property was in a non-SFHA zone. FEMA issued a revised FIRM for the area months later. Regions informed plaintiffs that their home was in a flood zone and that they must procure flood insurance within 45 days. Plaintiffs hired Vandenbergh, who procured for them a Nationwide Standard Flood Insurance Policy for a home constructed before the effective FIRM. Plaintiffs’ home, built in 1984, after the 1981 FIRM, required a post-FIRM policy, under which they could receive full coverage only after obtaining an elevation certificate showing sufficient elevation above the base flood zone. A 2010 flood submerged plaintiffs’ home in 16” of water. Nationwide informed plaintiffs of pre-/post-FIRM discrepancy and required an elevation certificate, which showed that the home’s lower level was below the base flood-zone elevation. Because plaintiffs’ home was post-FIRM and situated below the base flood-zone elevation, their SFIP did not cover all losses “below the lowest elevated floor.” FEMA upheld Nationwide’s coverage determination. The Sixth Circuit affirmed partial summary judgment for Vandenbergh, but vacated dismissal of claims against Regions, CoreLogic, and Nationwide. The NFIA did not preempt state-law claims arising from procurement of the SFIP: that plaintiffs would not have purchased their home absent defendants’ negligence and breach of fiduciary duty.