Opinion
CIVIL ACTION Nos. 02-2930 C/W, 02-3006, SECTION "A" (1).
July 11, 2003.
MINUTE ENTRY
Before the Court are a Motion for Summary Judgment (Rec. Doc. 22) filed by defendant Allstate Insurance Company ("Allstate") and a Motion to Exclude or Limit Testimony of Defendant's Expert (Rec. Doc. 25) filed by plaintiff, Richard A. Thalheim, Jr. Both motions are opposed. The motions, set for hearing on July 2, 2003, are before the Court on the briefs without oral argument. For the reasons that follow, both motions are DENIED.
Allstate requested oral argument on its motion for summary judgment. The Court has determined that oral argument is not necessary.
Background
Plaintiff brought these consolidated law suits against Allstate following flood damage sustained to his property during tropical storm Allison in June 2001. Allstate participates as a Write-Your-Own Carrier ("WYO") in the U.S. Government's National Flood Insurance Program ("NFIP"). Allstate ultimately paid Plaintiff $90,125.09, a sum far below what he alleges his claim was worth. In addition to alleging a breach of contract claim for additional funds owed pursuant to the policy, Plaintiff sought various other elements of extra-contractual damages, i.e., penalties and attorneys fees under Louisiana law, general damages (inconvenience, annoyance, upset, worry, anxiety, concern and displacement), and prejudgment interest. On January 27, 2003, the Court granted Allstate's motion to dismiss all extra-contractual damages with the exception of prejudgment interest. Rec. Doc. 15.Allstate now moves for summary judgment on a single issue — whether Plaintiff has met the Proof of Loss requirement under the Standard Flood Insurance Policy ("SFIP"). Allstate contends that Plaintiff failed to submit a timely, properly signed and sworn Proof of Loss with a sum certain as to the net amount claimed as required by Article 9(J)(3) of the SFIP. Allstate argues that Plaintiff, an attorney, intentionally placed caveats and other legalese in his Proof of Loss statement so as not to be subjected to a sum certain. Citing Forman v. FEMA, 138 F.3d 543 (5th Cir. 1998), and Gowland v. Aetna, 143 F.3d 951 (5th Cir. 1998), Allstate asserts that the law in the Fifth Circuit bars a claim for damages where plaintiff fails to submit a timely and complete Proof of Loss statement.
In opposition, Plaintiff contends that he has complied with the Proof of Loss requirements of the SFIP. He points to two sworn Proof of Loss statements, one dated October 1, 2001, and the other dated November 20, 2001. (Exhibits 5 7 to Thalheim deposition).
Discussion
The National Flood Insurance Act of 1968 makes flood insurance available through a program with large-scale participation by the federal government. West v. Harris, 573 F.2d 873, 880 (5th Cir. 1987) (citing 42 U.S.C. § 4001(b), (d)). This program is carried out to the maximum extent practicable by the private insurance industry. Id. The flood insurance program is a "child of Congress" conceived to achieve policies of a national scope. Id. at 881. Because the federal government participate so extensively in the program, both supervisory and financially, federal law will apply to most claims arising out of the federally-backed flood insurance policy. See id. But see Spence v. Omaha Idem. Ins. Co., 996 F.2d 793 (5th Cir. 1993) (allowing a state law fraudulent misrepresentation claim).
Under Federal Emergency Management Agency regulations, strict adherence is required to all terms of the SFIP. Forman v. FEMA, 138 F.3d 543, 545 (5th Cir. 1998) (citing 44 C.F.R. § 61.13(a), (d), (e)). The SFIP, as set forth in the Code of Federal Regulations, provides that within sixty days of a loss, the insured must submit a sworn proof of loss, which is the amount the insured is claiming under the policy. Id.; 44 C.F.R. Pt. 61, App. A(1), art. 9(J)(3)(d) (2000). An insured's failure to provide a complete, sworn proof of loss statement relieves the federal insurer's obligation to pay what otherwise might be a valid claim. Gowland v. Aetna, 143 F.3d 951, 954 (5th Cir. 1998). The law in this circuit requires this Court to dismiss Plaintiff's complaint if he has in fact failed to comply with the Proof of Loss requirement of the SFIP. See Forman and Gowland, supra.
The Proof of Loss requirements applicable to this case are as follows:
Should a flood loss occur to your insured property, you must: Within 60 days after the loss, send us a proof of loss, which is your statement as to the amount you are claiming under the policy signed and sworn to by you and furnishing us with the following information:
a. The date and time of the loss;
b. A brief explanation of how the loss happened;
c. Your interest in the property damaged (for example, "owner") and the interest, if any, of others in the damaged property;
d. The actual cash value or replacement cost, whichever is appropriate, of each damaged item of insured property and the amount of damages sustained;
e. Names of mortgagees or anyone else having a lien, charge or claim against the insured property;
f. Details as to any other contracts of insurance covering the property, whether valid or not;
g. Details of any changes in ownership, use, occupancy, location or possession of the insured property since the policy was issued;
h. Details as to who occupied any insured building at the time of loss and for what purpose; and
i. The amount you claim is due under this policy to cover the loss, including statements concerning:
(1) The limits of coverage stated in the policy; and
(2) The cost to repair or replace the damaged property (whichever costs less).44 C.F.R. Pt. 61, App. A(1), art. 9(A)(3) (2000) (emphasis added).
Attached as exhibits 5 7 to Plaintiff's deposition are sworn proof of loss statements dated October 1, 2001, and November 20, 2001. Plaintiff prepared the November 20th statement following a reinspection of the property after Allstate increased its original damage estimates in response to objections from Plaintiff. The November 20th statement incorporates a revised Proof of Loss prepared by Allstate as well as a supplement prepared by Plaintiff. (Exhibit 7 to Thalheim deposition). The Allstate Proof of Loss indicates a net amount claimed of $144,950.42 (including contents). (Allstate Exhibit B). Plaintiff's supplement contains a net increase of $9,231.30, plus applicable overhead and profit. Id. Plaintiff's supplement is documented and explained in detail. Thus, the signed and sworn Proof of Loss document attached as Exhibit B to Allstate's motion could not be clearer as to the amount claimed.
The Court finds no merit to Allstate's contention that Plaintiff's handwritten notation regarding applicable overhead and profit is confusing. Allstate asserts confusion as to whether the claimed overhead and profit was intended to apply to Plaintiff's supplement or to the total amount claimed, including Allstate's proposal. Plaintiff's supporting documentation leaves but one conclusion: that the 35 percent overhead claim pertains only to the $9,231.30 supplemental claim.
Allstate complains that the following paragraph in the statement creates doubt as to the actual sum claimed:
The actual loss which I sustained due to the flood is at least the amount of my previously submitted proof of loss of October 1, 2001 of dwelling $139,677.77 and contents $125,431.77, which is incorporated by reference herein in its entirety,; however, without limiting or waiving any right to claim the full extent of my actual loss for any other purposes, such as but not limited to any casualty loss under any income tax law, I am submitting herewith and claiming under the flood policy as my proof of loss the combined amounts of (1) the Allstate redone proof of loss attached hereto . . . and (2) the addendum and supplement to proof of loss included herein and made part hereof.
(Exhibit 7 to Thalheim deposition) (emphasis added).
Notwithstanding Plaintiff's protestations and assertions about his actual losses, the emphasized language in the paragraph above, as well as the signed and sworn Allstate proof of loss statement, leaves but one conclusion: Plaintiff's sworn proof of loss is the sum of (1) 144,950.42 [the total from the Allstate re-done proof of loss], and (2) 12,462.25 [$9,231.30 + 35% OP], or $157,412.67. This total includes the payment for contents because that amount was included in the Allstate figure. (Allstate Exhibit B).
Allstate's confusion is not wholly unfounded given that Plaintiff had previously claimed $139,677.77 in dwelling damages alone. However, the November 20, 2001, statement says what it says. For Plaintiff to now claim otherwise would only lend merit to Allstate's argument that he had failed to comply with FEMA requirements by intentionally obfuscating his claimed damages.
At this time the Court need not express any opinion as to the legal efficacy of any of the other language contained in the statement except to opine that it does not negate the sworn claim for $157,412.67. Plaintiff, as a licensed attorney, obviously understood that federal law required him to alight on a damage quantum or else face denial of his claim. That he did so begrudgingly is of no moment.
Further, the Court does not find that the Forman andGowland cases, relied upon by Allstate, are determinative of whether Plaintiff's Proof of Loss statement complies with the law. The Plaintiffs in Gowland had not submitted any statement whatsoever and the Plaintiffs in Forman had merely written "unacceptable" next to all of the insurer's proposed figures. Plaintiff herein was not nearly as delinquent as those plaintiffs.
Finally, Plaintiff seeks to strike all or part of the testimony of Allstate's expert Doug Branham. Plaintiff complains that Branham is not a contractor and has no experience with construction in the Thibodaux area. Plaintiff also complains that Branham is attempting to render legal opinions. However, given that this case will be tried to the Court sitting without a jury, the Court sees no reason to strike or limit Branham's testimony at this time.
Accordingly;
IT IS ORDERED that the Motion for Summary Judgment (Rec. Doc. 22) filed by defendant Allstate Insurance Company should be and is hereby DENIED; IT IS FURTHER ORDERED that the Motion to Exclude or Limit Testimony of Defendant's Expert (Rec. Doc. 25) filed by plaintiff, Richard A. Thalheim, Jr., should be and is hereby DENIED.