Clark et al v. Wright National Flood Insurance Company, No. 2:2018cv04852 - Document 40 (E.D. La. 2019)
Court Description: ORDER AND REASONS DENYING 9 Motion for Summary Judgment. Signed by Judge Sarah S. Vance on 1/23/2019. (clc)
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Clark et al v. Wright National Flood Insurance Company Doc. 40 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA WILLIAM T. CLARK, III, ET AL. VERSUS CIVIL ACTION NO. 18-4852 WRIGHT NATIONAL FLOOD INSURANCE COMPANY SECTION “R” (3) ORD ER AN D REASON S Before the Court is plaintiffs William Clark’s and Michael Pearl’s m otion for sum m ary judgment. 1 Because plaintiffs did not com ply with the requirements of their insurance policy, they are not entitled to sum m ary judgm ent on their claim against defendant Wright National Flood Insurance Com pany. I. BACKGROU N D This action arises out of an insurance dispute over property dam age caused by two floods in Louisiana during the sum m er of 20 16. Plaintiffs William Clark and Michael Pearl allege property dam age to their hom e after a flood in March 20 16 and a second flood in August 20 16. 2 At the tim e of the flooding, plaintiffs’ hom e was insured through a standard flood insurance 1 2 R. Doc. 9-2 at 1 ¶ 1; R. Doc. 14-3 at 1-2 ¶ 1. Id. Dockets.Justia.com policy (SFIP) provided by defendant Wright, which participates in the National Flood Insurance Program. 3 Plaintiffs tim ely reported their losses to Wright, and Wright assigned a claim s corporation to inspect the loss and assist plaintiffs in presenting their claim . 4 The claim s corporation sent an insurance adjuster, Alan Nunnelley, to inspect the property and prepare dam age estim ates and a proof of loss. 5 After his inspection, Nunnelley sent plaintiffs a proof of loss estim ating $ 0 for building dam ages and $ 89,643.39 for property contents losses after the application of the policy deductible. 6 Plaintiffs disputed Nunnelley’s proof of loss and decided to subm it their own. 7 Plaintiffs subm itted their proof of loss to Wright on December 7, 20 16. 8 Wright did not respond. 9 Nunnelley then created a final proof of loss on September 5, 20 17 that reflected a net loss of $ 63,663.82. 10 Using Nunnelley’s final proof of loss, plaintiffs attem pted to file separate claim s for the disputed and undisputed portions of their losses, as they had done for an earlier flood that occurred in March 20 16. 11 Plaintiffs filed a proof of loss for 3 4 5 6 7 8 9 10 11 R. Doc. 9-2 at R. Doc. 9-2 at Id. R. Doc. 9-2 at R. Doc. 9-2 at R. Doc. 9-2 at Id. R. Doc. 9-2 at R. Doc. 9-2 at 2 ¶ 2; R. Doc. 14-3 at 2-3 ¶ 2. 2 ¶ 3; R. Doc. 14-3 at 3 ¶¶ 3-4. 4 ¶ 8; R. Doc. 14-3 at 4-5 ¶ 8. 4 ¶ 9; R. Doc. 14-3 at 5 ¶ 9. 4-5 ¶¶ 10 -11; R. Doc. 14-3 at 5-6 ¶¶ 10 -11. 6 ¶ 13; R. Doc. 14-3 at 7 ¶ 13. 6-7 ¶¶ 15-17; R. Doc. 14-3 at 7-9 ¶¶ 15-17. 2 only the undisputed item s—requesting $ 63,663.82 based on Nunnelley’s proof of loss—on February 7, 20 18. 12 Like their original proof of loss, Wright did not respond to plaintiffs’ February proof of loss. 13 On May 14, 20 18, plaintiffs filed this action against Wright, claim ing breach of contract. 14 Plaintiff then filed a m otion for sum m ary judgment for the allegedly undisputed losses. 15 Wright opposes the m otion. 16 II. LEGAL STAN D ARD Sum m ary judgment is warranted when “the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 10 69, 10 75 (5th Cir. 1994). When assessing whether a dispute as to any m aterial fact exists, the Court considers “all of the evidence in the record but refrain[s] from m aking credibility determ inations or weighing the evidence.” Delta & Pine Land Co. v. Nationw ide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 20 0 8). 12 13 14 15 16 All reasonable inferences are drawn in favor of the R. Doc. 9-2 at 7 ¶ 17; R. Doc. 14-3 at 8-9 ¶ 17. R. Doc. 9-2 at 9 ¶ 22; R. Doc. 14-3 at 10 ¶ 22. R. Doc. 1 at 61 ¶ 142. R. Doc. 9. R. Doc. 14. 3 nonm oving party, but “unsupported allegations or affidavits setting forth ‘ultim ate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a m otion for sum m ary judgment.” Galindo v. Precision Am . Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 10 75. A dispute about a m aterial fact is genuine “if the evidence is such that a reasonable [factfinder] could return a verdict for the nonm oving party.” Anderson v. Liberty Lobby , Inc., 477 U.S. 242, 248 (1986). If the dispositive issue is one on which the m oving party will bear the burden of proof at trial, the m oving party “m ust come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally ’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonm oving party can then defeat the m otion by either countering with evidence sufficient to dem onstrate the existence of a genuine dispute of m aterial fact, or “showing that the m oving party’s evidence is so sheer that it m ay not persuade the reasonable fact-finder to return a verdict in favor of the m oving party.” Id. at 1265. If the dispositive issue is one on which the nonm oving party will bear the burden of proof at trial, the m oving party m ay satisfy its burden by m erely pointing out that the evidence in the record is insufficient with respect to an essential elem ent of the nonm oving party’s claim . See Celotex, 4 477 U.S. at 325. The burden then shifts to the nonm oving party, who m ust, by subm itting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonm ovant m ay not rest upon the pleadings, but m ust identify specific facts that establish a genuine issue for trial. See, e.g., id.; Little, 37 F.3d at 10 75 (“Rule 56 m andates the entry of sum m ary judgment, after adequate tim e for discovery and upon m otion, against a party who fails to m ake a showing sufficient to establish the existence of an elem ent essential to that party’s case, and on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322). III. D ISCU SSION Plaintiffs seek paym ent of the $ 63,663.82 listed as the net loss in Nunnelley’s September 5, 20 17 final proof of loss. 17 But neither proof of loss they subm itted to Wright satisfied the requirements of the SFIP. The December 20 16 proof of loss did not specify the am ount that plaintiffs claim ed under the policy, and the February 20 18 proof of loss was untimely. Wright issued the plaintiffs’ flood policy as part of the National Flood Insurance Program (NFIP). Congress created the NFIP in 1968 to provide affordable flood insurance to flood prone areas. See Gow land v. Aetna, 143 17 R. Doc. 9 at 3. 5 F.3d 951, 953 (5th Cir. 1998). FEMA operates the program and issues policies directly or through private insurers, such as Wright, known as “Write Your Own” com panies. Id. Whether FEMA or a “Write Your Own” com pany issues a policy, claim s are paid directly from the federal treasury. Id. Policies are issued in the form of a SFIP, and no provision of the policy can be altered, varied, or waived without the express written consent of the Federal Insurance Adm inistrator. Id.; 44 C.F.R. §§ 61.4(b), 61.13(d). Since pay-outs im plicate the federal treasury, provisions of the SFIP m ust be strictly enforced and construed. Gow land, 143 F.3d at 954; W right v. Allstate Ins. Co., 415 F.3d 384, 386-87 (5th Cir. 20 0 5). “A NFIP participant cannot file a lawsuit seeking further federal benefits under the SFIP unless the participant can show prior compliance with all policy requirem ents.” Richardson v. Am . Bankers Ins. Co. of Fla., 279 F. App’x 295, 298 (5th Cir. 20 0 8) (citing 44 C.F.R. pt. 61, app. A(1) art. VII(R)). In case of a flood loss to insured property, the insured m ust satisfy several requirements before bringing a lawsuit. See 44 C.F.R. pt. 61, app. A(1) art. VII(J ). Forem ost, the insured m ust provide a complete, sworn Proof of Loss (POL) within 60 days after the loss, “or within any extension authorized by FEMA.” Form an v. FEMA, 138 F.3d 543, 545 (5th Cir. 1998). 6 In this case, an extension was granted, and plaintiffs’ deadline for filing their proof of loss was December 31, 20 17. 18 In addition, the proof of loss m ust include docum ents supporting the claim ed am ount, including “[s]pecifications of dam aged buildings and detailed repair estim ates,” as well as “inventory of dam aged property showing the quantity, description, actual cash value, and the am ount of loss.” 44 C.F.R. pt. 61, app. A(1) art. VII(J ). These are strict requirem ents. Form an, 138 F.3d at 546; Richardson, 279 F. App’x at 298. Thus, an insured’s failure to provide a com plete, sworn proof of loss statement with supporting documentation “relieves the federal insurer’s obligation to pay what otherwise m ight have been a valid claim .” Gow land, 143 F.3d at 954; see also Marseilles Hom eow ners Condo. Ass’n, Inc. v. Fid. N at. Ins. Co., 542 F.3d 10 53, 10 55 (5th Cir. 20 0 8) (filing a com plete proof of loss is a “condition precedent” to bringing suit for proceeds under a SFIP); W ells v. Fidelity N at. Ins. Co., No. 0 6-5381, 20 0 8 WL 2781539, at *4 (E.D. La. J uly 14, 20 0 8) (“Plaintiff’s failure to file [supporting] docum entation prior to filing suit is fatal to her claim .”). Plaintiffs were provided with a copy of the SFIP, which requires them to send a proof of loss or a “statement of the am ount [they] are claim ing 18 R. Doc. 14-3 at 4 ¶ 5. 7 under the policy signed and sworn to by [them ].”19 44 C.F.R. pt. 61, app. A(1) art. VII(J ). Plaintiffs’ December 20 16 proof of loss states: Enclosed is an invoice from the contractor for repairs that were done; subtracting the $ 650 .0 0 charged for building a platform, the flood-related part of that invoice actually totals $ 32,310 .0 0 . Also enclosed is the adjuster’s list of contents losses from this flood. Under Fifth Circuit law, stating the am ount of an invoice and attaching an adjuster’s list of contents losses does not am ount to stating the am ount claim ed under the policy. See Cum m ings v. Fidelity N at. Indem . Ins. Co., 636 F. App’x 221, 224 (5th Cir. 20 16) (attaching a four-page list of contents with a replacem ent cost of $ 10 4,390 does not meet the requirem ents of the SFIP when that num ber did not appear on the signed proof of loss); see also DeCosta v. Allstate Ins. Co., 730 F.2d 76, (1st Cir. 20 13) (insurer need not reim burse losses docum ented in an adjuster’s estim ate that was appended to proof of loss when the losses were not included in the amount stated in the proof of loss). Plaintiffs did not seek payment for any portion of the item s on the contents list in the proof of loss, nor did they sign and swear to the am ount in the attached adjuster’s estim ate, which would be required under the SFIP to claim those losses. See DeCosta, 730 F.3d at 85 (plaintiff “had to sign and swear to the am ount in [the adjuster’s] estim ate,” along with other 19 R. Doc. 9-4 at 34. 8 SFIP requirements). The proof of loss does not even claim the $ 32,310 from the invoice, it merely states that this is the flood-related part of the invoice. Because the December 20 16 proof of loss did not meet the requirem ents of the SFIP, Wright is excused from paying plaintiffs’ claim . Gow land, 143 F.3d at 954. Plaintiffs’ February 20 18 proof of loss also does not comply with the requirements of the SFIP because it was subm itted after the December 20 17 deadline. 20 44 C.F.R. pt. 61, app. A(1) art. VII(J ). Plaintiffs argue that the February 20 18 proof of loss is tim ely even though it was subm itted after the deadline because the claim ed losses had already been claim ed in the December 20 16 proof of loss. 21 But the December 20 16 proof of loss did not actually claim any of the losses in Nunnelley’s estim ate, and even if it had, plaintiffs cite no authority for this supposed exception to the requirem ent of tim ely filing the proof of loss. The Fifth Circuit has held that claim ants m ust file a proof of loss that com plies with all of the SFIP’s provisions for every supplem ental claim , even when the original proof of loss referred to an intent to supplement the claim . Ferraro v. Liberty Mut. Fire Ins. Co., 796 F.3d 529, 534 (5th Cir. 20 15). That plaintiffs filed an earlier proof of loss regarding the 20 21 R. Doc. 9-7 at 2. R. Doc. 17 at 7-8. 9 same incident does not autom atically render a later proof of loss timely. Wright is therefore excused from paying the amounts claim ed in the February 20 18 proof of loss. Because plaintiffs did not com ply with the SFIP’s proof of loss requirements, they are not entitled to sum m ary judgm ent. IV. CON CLU SION For the foregoing reasons, the Court DENIES plaintiffs’ m otion for sum m ary judgment. New Orleans, Louisiana, this _ _23rd _ _ _ day of J anuary, 20 19. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 10
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