Clement v. Wright Nat'l Flood Ins. Co.

587 F.Supp.3d 1129

Richard CLEMENT, Plaintiff,

v.WRIGHT NATIONAL FLOOD INSURANCE COMPANY, Defendant.

Case No. 5:20-cv-890-LCB

United States District Court, N.D. Alabama, Northeastern Division.

Signed February 24, 2022

Richard Clement, Huntsville, AL, Pro Se.

Chad Wesley Bryan, Robert F. Northcutt, Capell & Howard, PC, Montgomery, AL, Joel W. Morgan, Theodore I. Brenner, Freeborn & Peters LLP, Richmond, VA, for Defendant.

OPINION & ORDER

LILES C. BURKE, UNITED STATES DISTRICT JUDGE

This case arises under the National Flood Insurance Program, 42 U.S.C. § 4001, et seq. In early 2020, Richard Clement was living in Huntsville, Alabama, when the basement of his home flooded on two separate occasions. Clement filed claims with his flood insurance provider, Wright National Flood Insurance Company, and ultimately recovered over $18,000 in insurance proceeds.

Proceeding pro se, Clement now alleges that Wright erroneously adjusted his claims and owes him an additional $3,000. Wright, unsurprisingly, has a different view of things and moves for summary judgment under Federal Rule of Civil Procedure 56. As explained below, Clement has no cognizable claim against Wright under the National Flood Insurance Program. The Court therefore grants Wright's motion for summary judgment and dismisses this case with prejudice.

I. BACKGROUND

The National Flood Insurance Program—enacted by Congress in 1968—aims to provide affordable flood insurance coverage to the general public. 42 U.S.C. § 4001. FEMA¹ administers the program and promulgates a "Standard Flood Insurance Policy" (SFIP). Id. § 4011; 44 C.F.R. pt. 61, app. A(1).² FEMA may issue the policy itself or through private insurers known as "Write-Your-Own" (WYO) companies. 42 U.S.C. § 4011 ; 44 C.F.R. § 62.23(a). Acting as fiscal agents of the federal government, WYOs deposit SFIP premiums into and pay SFIP claims out of the United States Treasury. 42 U.S.C. § 4017(a), (d).

WYOs, however, cannot amend or waive any requirement of the SFIP without the express written consent of FEMA. 42 U.S.C. § 4129 ; 44 C.F.R. § 61.13(d) ; 44 C.F.R. pt. 61, app. A(1), art. D. An insured must strictly comply with all SFIP requirements to bring suit under the National Flood Insurance Program. 44 C.F.R. pt. 61, app. A(1), art. R. Federal courts have original jurisdiction over all such claims. 42 U.S.C. § 4072 ; see also Hairston v. Travelers Cas. & Sur. Co. , 232 F.3d 1348, 1349 (11th Cir. 2000).

II. UNDISPUTED FACTS

With this background in mind, the facts at hand are straightforward. In November 2019, Wright National Flood Insurance Company, acting as a WYO, issued a SFIP policy to Richard Clement providing flood insurance coverage for his three-floor home located in Huntsville, Alabama. (Doc. 18-2 at 2); (Doc. 18-3 at 1). The policy provided $200,000 of coverage for the home itself and $80,000 of coverage for its contents. (Doc. 18-3 at 1). The policy was effective from November 2019 to November 2020. Id.

In February 2020, the ground floor of Clement's home—which constitutes a basement under the SFIP³ —flooded. (Doc. 82-2 at 2–3). Clement notified Wright of the flood, and Wright sent Jeannette Bonka, an independent claim adjuster, to Clement's home that same day. Id. After inspecting the basement, Bonka issued a report estimating that the covered damage totaled $13,917.55. (Doc. 18-10 at 1, 11). Clement signed a "proof of loss"⁴ claiming $13,917.55 under the SFIP, and Wright issued Clement checks for the claimed amount. (Doc. 18-5 at 39–40); (Doc. 18-11 at 1–2). Clement deposited the checks and did not submit a supplemental proof of loss for any additional funds. (Doc. 18-2 at 3–4); (Doc. 18-4 at 44–45, 51); (Doc. 18-5 at 39–40).

In March 2020, Clement's basement suffered another flood. (Doc. 18-2 at 4). Bonka revisited the property and, this time, estimated that the covered damage totaled $4,399.65. (Doc. 18-12 at 1, 8). Clement signed a proof of loss claiming $4,399.65 under the SFIP, and Wright issued Clement a check for the claimed amount. (Doc. 18-6 at 51); (Doc. 18-13 at 1). Clement deposited the check and did not submit a supplemental proof of loss for any additional funds. (Doc. 18-2 at 5); (Doc. 18-4 at 51); (Doc. 18-6 at 51).

In May 2020, Clement sued Wright in the Small Claims Court of Madison County, Alabama, seeking to recover an additional $3,000 on his February 2020 and March 2020 claims. (Doc. 1-1 at 2). Wright removed the case to this Court and moved for summary judgment under Federal Rule of Civil Procedure 56. (Doc. 17 at 1–2). Proceeding pro se, Clement filed a brief and evidentiary materials in opposition of Wright's motion. (Doc. 20 at 1–39).

III. LEGAL STANDARDS

The purpose of summary judgment is to identify and dispose of cases where the evidence is insufficient to merit holding a trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Under Federal Rule of Civil Procedure 56, summary judgment is appropriate when a movant "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A material fact is one "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute over a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

To survive summary judgment, a nonmovant must assert facts that make a sufficient showing on every essential element of his case on which he bears the burden of proof. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Factual allegations must cite to specific evidentiary materials in the record. FED. R. CIV. P. 56(c). Unsupported or speculative allegations are insufficient to create a genuine dispute of material fact. Ellis v. England , 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam); Cordoba v. Dillard's, Inc. , 419 F.3d 1169, 1181 (11th Cir. 2005). Finally, a court views the evidence in the light most favorable to the nonmovant and resolves all reasonable doubts about the facts in the nonmovant's favor. Kroma Makeup EU, LLC v. Boldface Licensing + Branding, Inc. , 920 F.3d 704, 707 (11th Cir. 2019).

IV. DISCUSSION

Clement has no cognizable claim against Wright under the National Flood Insurance Program. One cardinal principle of our Constitution is that "no money can be paid out of the Treasury unless it has been appropriated by an act of Congress." Cincinnati Soap Co. v. United States , 301 U.S. 308, 321, 57 S.Ct. 764, 81 L.Ed. 1122 (1937) ; see also U.S. CONST. ART. I, § 9, cl. 7. To that end, an insured must strictly comply with all terms and conditions of a federal insurance policy to recover public funds from the Treasury. See, e.g., Off. of Pers. Mgmt. v. Richmond , 496 U.S. 414, 424, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990) ; Fed. Crop Ins. Corp. v. Merrill , 332 U.S. 380, 384–85, 68 S.Ct. 1, 92 L.Ed. 10 (1947).

For example, the SFIP explicitly states that an insured must fully comply with all policy requirements to recover under the National Flood Insurance Program. 44 C.F.R. pt. 61, app. A(1), art. R. One such requirement is that an insured must file a written proof of loss within 60 days after the loss. 44 C.F.R. pt. 61, app. A(1), art. J(4). Under Eleventh Circuit precedent, failure to satisfy the proof-of-loss requirement bars an insured from bringing suit under the National Flood Insurance Program unless the insured obtains a written waiver of the requirement from FEMA or the insurer-defendant is equitably estopped from raising the requirement as a defense. Sanz v. U.S. Sec. Ins. Co. , 328 F.3d 1314, 1318–20 (11th Cir. 2003) (per curiam).

The Eleventh Circuit, however, has never considered the precise issue presented by this case: whether an insured who files a proof of loss to recover a certain amount on a SFIP claim must file a supplemental proof of loss to recover an additional amount on the same claim. The First, Fifth, and Eighth Circuits have answered the question in the affirmative, holding that failure to file a supplemental proof of loss bars an insured from recovering an additional amount on the same SFIP claim unless the insured obtains a written waiver of the proof-of-loss requirement from FEMA or the insurer-defendant is equitably estopped from raising the requirement as a defense.⁵ District courts within the Eleventh Circuit have adopted the same rule.⁶

These persuasive authorities—and the rule they adopt—are well reasoned and directly aligned with Supreme Court and Eleventh Circuit jurisprudence. Long ago, the Supreme Court observed that "[m]en must turn square corners when they deal with the Government." Rock Island A. & L.R. Co. v. United States , 254 U.S. 141, 143, 41 S.Ct. 55, 65 L.Ed. 188 (1920). This does not reflect a callous outlook by the judiciary; it simply "expresses the duty of all courts to observe the conditions defined by Congress for charging the public treasury." Merrill , 332 U.S. at 385, 68 S.Ct. 1. Federal courts, as a result, must ensure that strict compliance with the SFIP is a prerequisite to bringing suit under the National Flood Insurance Program. Sanz , 328 F.3d at 1318–20. At bottom, the rule adopted by the First, Fifth, and Eighth Circuits aligns with these principles.

Accordingly, the Court joins its sister courts and adopts the rule that, under the SFIP, an insured who files a proof of loss for a certain amount of funds cannot subsequently bring suit for additional funds on the same claim unless: (1) the insured files a supplemental proof of loss for the additional amount; (2) the insured obtains a written waiver of the proof-of-loss requirement from FEMA; or (3) the insurer-defendant is equitably estopped from raising the requirement as a defense.

Turning back to this case, there is no genuine dispute that Clement failed to file a supplemental proof...