Judd Apatow v. American Bankers Insurance Company of Florida et al

NOTICE OF MOTION AND MOTION to Dismiss Plaintiff's Amended Complaint

C.D. Cal.October 31, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF JUDD APATOW’S AMENDED COMPLAINT ROBINSON & COLE LLP Stuart Rosen (admitted pro hac vice) srosen@rc.com 280 Trumbull Street Hartford, CT 06103 Telephone: 860.275.8200 Facsimile: 860.275.8299 EDISON, MCDOWELL & HETHERINGTON LLP Raymond J. Tittmann (SBN 191298) raymond.tittmann@emhllp.com 1055 E. Colorado Blvd., Suite 500 Pasadena, California 91106 Telephone: 213.631.4059 Facsimile: 510.628.2146 Attorneys for Defendant American Bankers Insurance Company of Florida UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JUDD APATOW, Plaintiff, vs. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA and DOES 1- 10, Defendants. Case No. 2:16-cv-00198-MWF-MRW DEFENDANT AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF JUDD APATOW’S AMENDED COMPLAINT (Memorandum of Points and Authorities, Declarations of Elaine Anderson and Stuart D. Rosen, and [Proposed] Order filed concurrently herewith) Judge: Hon. Michael W. Fitzgerald Hearing: Date: Nov. 28, 2016 Time: 10:00 A.M. Place: Courtroom 1600 Complaint Filed: Dec. 28, 2015 Trial Date: Not Set Case 2:16-cv-00198-MWF-MRW Document 40 Filed 10/31/16 Page 1 of 2 Page ID #:244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFENDANT AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF JUDD APATOW’S AMENDED COMPLAINT TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on November 28, 2016 at 10:00 A.M., or as soon thereafter as may be heard in Courtroom 1600 of the above-referenced Court, located at 312 North Spring Street, Los Angeles, CA 90012, Defendant American Bankers Insurance Company of Florida (“American Bankers”) will, and hereby does, move to dismiss (“Motion”) the amended complaint (“Complaint”) of Plaintiff Judd Apatow (“Plaintiff”), without leave to amend, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. American Bankers’ Motion is based on the grounds that the Court lacks subject-matter jurisdiction over Plaintiff’s Complaint, and that Plaintiff’s Complaint fails to state a claim upon which relief can be granted. This Motion is based upon this Notice of Motion and Motion, the attached Memorandum of Points and Authorities, the Declarations of Elaine Anderson and Stuart D. Rosen, the pleadings and papers on file, and upon such oral argument as may be made at the hearing on this Motion. Counsel for the parties have telephonically conferred a number of times pursuant to L.R. 7-3 – most recently on October 27, 2016 – to discuss American Bankers’ intended Motion. (Declaration of Stuart D. Rosen, ¶ 4). The parties thoroughly discussed the substance of this Motion and any potential resolution. (Id.). However, the parties were unable to resolve the disputes raised in the Motion. (Id.). DATED: October 31, 2016 EDISON, MCDOWELL & HETHERINGTON LLP By: /s/ Raymond J. Tittmann Raymond J. Tittmann Attorneys for Defendant American Bankers Insurance Company of Florida Case 2:16-cv-00198-MWF-MRW Document 40 Filed 10/31/16 Page 2 of 2 Page ID #:245 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS ROBINSON & COLE LLP Stuart D. Rosen (admitted pro hac vice) srosen@rc.com 280 Trumbull Street Hartford, CT 06103 Telephone: 860.275.8200 Facsimile: 860.275.8299 EDISON, MCDOWELL & HETHERINGTON LLP Raymond J. Tittmann (SBN 191298) raymond.tittmann@emhllp.com 1055 E. Colorado Blvd., Suite 500 Pasadena, California 91106 Telephone: 213.631.4059 Facsimile: 510.628.2146 Attorneys for Defendant American Bankers Insurance Company of Florida UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JUDD APATOW, Plaintiff, vs. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA and DOES 1- 10, Defendants. Case No. 2:16-cv-00198-MWF-MRW MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA’S MOTION TO DISMISS PLAINTIFF JUDD APATOW’S AMENDED COMPLAINT Judge: Hon. Michael W. Fitzgerald Hearing: Date: Nov. 28, 2016 Time: 10:00 A.M. Place: Courtroom 1600 Complaint Removed: Jan. 11, 2016 Trial Date: Not Set Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 1 of 16 Page ID #:246 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS TABLE OF CONTENTS Page(s) PRELIMINARY STATEMENT ................................................................................... 1 INTRODUCTION ......................................................................................................... 1 THE NATIONAL FLOOD INSURANCE PROGRAM ............................................... 2 RELEVANT FACTUAL BACKGROUND ................................................................. 3 APPLICABLE LEGAL STANDARDS ........................................................................ 4 A. Federal Rule of Civil Procedure 12(b)(1 .................................................. 4 B. Federal Rule of Civil Procedure 12(b)(6) ................................................. 5 ARGUMENT ................................................................................................................. 6 A. The SFIP Only Waives Sovereign Immunity for Suits Commenced In Federal Court One Year After Disclaimer ............................................ 6 B. The Filing of This Case in State Court Did Not Toll The Policy’s One-Year Statute of Limitations ............................................................... 8 C. Plaintiff Failed to Commence This Action In Federal Court Within One Year After American Bankers’ Denial of His Proof of Loss .......... 11 CONCLUSION ............................................................................................................ 11 Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 2 of 16 Page ID #:247 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009)................................................................................................... 5 Block v. North Dakota, 461 U.S. 273 (1983)............................................................................................. 5, 11 Deutsche Bank Nat. Trust Co. v. F.D.I.C., 784 F. Supp. 2d 1142 (C.D. Cal. 2011) ..................................................................... 6 Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947)................................................................................................... 3 Fino v. La. Citizens Ins. Co., 2008 U.S. Dist. LEXIS 92027 (E.D. La. Nov. 13, 2008) .......................................... 8 Gibson v. Am. Bankers Ins. Co., 289 F.3d 943 (6th Cir. 2002) ................................................................................. 7, 9 Gibson v. American Bankers Ins. Co., 91 F. Supp. 2d 1037 (E.D. Ky. 2000) ........................................................................ 9 Hairston v. Travelers Cas. & Sur. Co., 232 F.3d 1348 (11th Cir. 2000) ................................................................................. 9 In re Van Holt, 163 F.3d 161 (3d Cir. 1998) .................................................................................. 2, 7 James v. Auto Owners Ins. Co., 1998 U.S. Dist. LEXIS 20394 (S.D. Ga. Dec. 10, 1998) ..................................... 9-10 Lionheart Holding Grp. v. Phila. Contributionship Ins. Co., 368 Fed. App’x. 282 (3d Cir. 2010) ....................................................................... 7-8 Marder v. Lopez, 450 F.3d 445 (9th Cir. 2006) .................................................................................. 5-6 McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178 (1936)................................................................................................... 4 Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 3 of 16 Page ID #:248 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS OSU Student All. v. Ray, 699 F.3d 1053 (9th Cir. 2012) ................................................................................... 5 Palmieri v. Allstate Ins. Co., 445 F.3d 179 (2d Cir. 2006) ...................................................................................... 7 Parsons Footwear v. Omaha Prop. & Cas. Co., 19 F. Supp. 2d 588 (N.D. W.Va. 1998) .............................................................. 10-11 Price v. Fugate, 2015 U.S. Dist. LEXIS 84498 (W.D. Tex. June 30, 2015) ....................................... 5 Robbins v. Forgash, 2014 U.S. Dist. LEXIS 106044 (D.N.J. July 31, 2014) ............................... 4-5, 8, 10 Roberti v. OSI Systems, Inc., 2015 U.S. Dist. LEXIS 24761 (C.D. Cal. Feb. 27, 2015) ......................................... 6 Safe Air For Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) ................................................................................... 4 Smith-Pierre v. Fid. Nat’l Indem. Ins. Co., 2011 U.S. Dist. LEXIS 100271 (S.D. Fla. Sept. 7, 2011) ................................... 8, 10 Stone v. Franklin Homeowners Assur., 2014 U.S. Dist. LEXIS 85411 (M.D. Pa. June 3, 2014) ........................................... 8 U.S. v. Corinthian Colleges, 655 F.3d 984 (9th Cir. 2011) ..................................................................................... 5 Wagner v. Dir., Fed Emergency Mgmt., Agency, 847 F.2d 515 (9th Cir. 1988) ..................................................................................... 4 Statutes 42 U.S.C. § 4001 ............................................................................................................. 1 42 U.S.C. § 4001(a) ........................................................................................................ 2 42 U.S.C. § 4072 ........................................................................................................ 7-11 Other Authorities 44 C.F.R. Pt. 61, App. A(1) ........................................................................................ 1, 2 44 C.F.R. Pt. 61, App. A(1), Art. VII.D ......................................................................... 3 Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 4 of 16 Page ID #:249 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS 44 C.F.R. Pt. 61, App. A(1), Art. VII.R ..................................................................... 3, 7 44 C.F.R. Pt. 61, App.(A)(1) Art.(9)(R) ....................................................................... 10 44 C.F.R. Pt. 62, App. A. ................................................................................................ 2 44 C.F.R. § 61.13(d) ....................................................................................................... 3 44 C.F.R. § 62.22(a) ..................................................................................................... 10 Fed. R. Civ. Proc. 12(b)(1) ......................................................................................... 2, 4 Fed. R. Civ. Proc. 12(b)(6) ...................................................................................... 2, 5-6 Fed. R. Evid. 201(b)(2) ................................................................................................... 6 Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 5 of 16 Page ID #:250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Defendant American Bankers Insurance Company of Florida (“American Bankers”), a Write-Your-Own (“WYO”) Program carrier participating in the United States government’s National Flood Insurance Program (“NFIP”) pursuant to the National Flood Insurance Act of 1968 as amended, 42 U.S.C. § 4001, et seq., hereby submits this Memorandum of Points and Authorities in Support of its Motion to Dismiss (“Motion”) Plaintiff Judd Apatow’s (“Plaintiff”) Amended Complaint. PRELIMINARY STATEMENT Plaintiff’s Amended Complaint is time-barred under his Standard Flood Insurance Policy’s one-year time limit to initiate suit in federal court following a denial or partial denial of a flood claim. Accordingly, the Amended Complaint should be dismissed without leave to amend. INTRODUCTION This is an insurance coverage dispute between Plaintiff and American Bankers. American Bankers insured Plaintiff under a Standard Flood Insurance Policy (“SFIP”), the terms of which are set by Congress and are codified at 44 C.F.R. Pt. 61, App. A(1). The dispute turns on the availability of insurance coverage for Plaintiff’s flood claim for alleged damage to his property that occurred on or about October 12, 2014 as a result storm surge and prolonged wave action. After an adjustment of Plaintiff’s claim, and the retention of an independent engineering firm to investigate the specific cause of Plaintiff’s alleged loss, American Bankers denied Plaintiff’s claim by letter dated December 30, 2014. Plaintiff commenced suit in state court on December 11, 2015, claiming that American Bankers failed to fully compensate him for the damage to his property. American Bankers was served with the original complaint on December 28, 2015, and removed the action to this Court on January 11, 2016. (Dkt. No. 1). The operative Amended Complaint was filed on October 14, 2016. (Dkt. No. 38) (the “Complaint”). Under the express terms of Plaintiff’s SFIP, in the event of a disagreement as to amounts owed for flood damage, Plaintiff must bring suit against American Bankers Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 6 of 16 Page ID #:251 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS in federal court, if at all, within one year of the written denial of all or any part of his claim. This action was removed to federal court more than one year after American Bankers’ denial letter. Because this action is untimely, there is no subject matter jurisdiction over this dispute, and this action should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1). Additionally, the complaint fails to state a claim for which relief can be granted, and this action should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) as well. THE NATIONAL FLOOD INSURANCE PROGRAM American Bankers is a Write-Your-Own Program carrier participating in the United States government’s National Flood Insurance Program. In In re Van Holt, 163 F.3d 161 (3d Cir. 1998), the Third Circuit Court of Appeals discussed in detail the NFIP, its purpose and its structure. The NFIP is a federally supervised and guaranteed program administered by the Federal Emergency Management Agency (“FEMA”) and attendant regulations. Id. at 165. “Congress created the program, among other things, to limit the damage caused by flood disasters through prevention and protective measures, spread the risk of flood damage among many private insurers and the federal government, and make flood insurance ‘available on reasonable terms and conditions’ to those in need of it.” Id. (citing 42 U.S.C. § 4001(a)). FEMA created the WYO program in 1983 pursuant to regulatory authority granted to it by Congress. Id. Under the WYO program, “private insurance companies like [American Bankers] write their own insurance policies” and remit the insurance premiums to the Flood Insurance Administration. Id. American Bankers is authorized to issue the SFIP. See 44 C.F.R. Pt. 62, App. A. Claims for flood damage made against a WYO carrier are paid with funds from the United States Treasury, not the WYO carrier’s funds. Van Holt, 163 F.3d at 165. The terms of the SFIP issued by American Bankers are written by the federal government, not American Bankers, and are codified at 44 C.F.R. Pt. 61, App. A(1). American Bankers may not alter, amend, or waive any provision or condition of the Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 7 of 16 Page ID #:252 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS SFIP. 44 C.F.R. Pt. 61, App. A(1), Art. VII.D; 44 C.F.R. § 61.13(d). The sole authority to change a provision or condition of the SFIP lies with the Federal Insurance Administrator, and any such waiver must be express and in writing. Id. The relevant provisions, terms, and conditions of the SFIP must be strictly construed. See Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947) (holding that an insured must strictly comply with all terms and conditions of federal insurance policy and recognizing duty of courts to observe conditions defined by Congress for charging the public treasury). Article VII.R. of the SFIP expressly provides that any suit to recover money under the policy must be commenced in federal court within one year of the written denial of all or part of Plaintiff’s claim. See 44 C.F.R. Pt. 61, App. A(1), Art. VII.R and Plaintiff’s SFIP policy number AB00158539 (the “Policy”) at Art. VII.R (See Plaintiff’s Amended Complaint and Attachments, Dkt. No. 38 at pg. 17). RELEVANT FACTUAL BACKGROUND At all relevant times, American Bankers insured Plaintiff’s property located at 23510 Malibu Colony Road, Malibu, California (the “Property”) under the Policy. (See Complaint at ¶¶ 1, 7 & Exhibit A). On or about October 12, 2014, the Property, and the Property’s concrete slab, bulkhead, and deck, purportedly were damaged by waves and high tides resulting from offshore hurricanes. (Id. at ¶ 13). Plaintiff submitted a claim for flood damage to American Bankers, and American Bankers inspected the property. (Id. at ¶¶ 14-15). American Bankers also retained an engineering firm to investigate the specific cause of the damage. On December 30, 2014, American Bankers denied Plaintiff’s claim (the “Denial Letter”). (Id. at ¶ 16; Declaration of Elaine Anderson, Ex. 1, ¶¶ 2-3). The Denial Letter, which attached a copy of the engineering report, noted that the vast majority of the claimed damage was to property not covered under the terms of the Policy, and that the damage to covered property fell below the Policy’s $4,000 deductible. (Id., Ex. 1 at 1-2). The Denial Letter expressly stated: “You have one (1) year from the date Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 8 of 16 Page ID #:253 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS of the first written denial to file suit in the US District Court in the district in which the insured property was located at the time of the loss.” (Id. at 2) (emphasis added). Plaintiff commenced suit in state court on December 11, 2015, claiming that American Bankers failed to fully compensate him for the alleged damage to his property. (Dkt. No. 1 at 11-14). American Bankers was served with the original complaint on December 28, 2015. (Dkt. No. 1 at 10). American Bankers removed the action to this Court on January 11, 2016, (Dkt. No. 1 at 1-8), and the operative Complaint was filed on October 14, 2016. (Dkt. No. 38). APPLICABLE LEGAL STANDARDS A. Federal Rule of Civil Procedure 12(b)(1) A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) challenges the existence of a federal court’s subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). When subject matter jurisdiction is challenged under Rule 12(b)(1), the plaintiff bears the burden of persuasion. McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936). A motion to dismiss for lack of subject matter jurisdiction may either be facial or factual. Safe Air For Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). For the purposes of this motion, American Bankers challenges the existence of subject matter jurisdiction in fact, apart from the pleadings. In a factual attack such as this, the Court need not presume the truthfulness of the allegations contained in the complaint, and “may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment.” Id. As set forth below, the Denial Letter, and more specifically, the date of the Denial Letter, demonstrates that Plaintiff’s Complaint is untimely. Failure to comply with the Policy’s time limitation to initiate suit divests this Court of subject-matter jurisdiction. See Wagner v. Dir., Fed Emergency Mgmt.. Agency, 847 F.2d 515, 521 (9th Cir. 1988) (dismissing plaintiffs’ lawsuits because they were brought more than one year from initial denial of their claims); Robbins v. Forgash, 2014 U.S. Dist. LEXIS 106044, at *11 n.1 (D.N.J. July 31, 2014) (“Because Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 9 of 16 Page ID #:254 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS plaintiffs’ suit is time-barred [based on plaintiff’s failure to bring suit within a year after the denial of their flood claim], this Court lacks subject matter jurisdiction.”) (emphasis added). “[T]he one-year limitations period for filing suit [under a SFIP]…is more than just a statute of limitations; it is a condition precedent to the United States’ waiver of sovereign immunity,” and that, as a result “the court has no subject matter jurisdiction to consider” a late-filed suit. Price v. Fugate, 2015 U.S. Dist. LEXIS 84498, at *5-6 (W.D. Tex. June 30, 2015) (Report & Recommendation of Magistrate Judge Lane, subsequently accepted and adopted in full by Judge Yeakel on August 4, 2015) (emphasis added); Block v. North Dakota, 461 U.S. 273, 287 (1983) (“The basic rule of federal sovereign immunity is that the United States cannot be sued at all without the consent of Congress. A necessary corollary of this rule is that when Congress attaches conditions to legislation waiving the sovereign immunity of the United States, those conditions must be strictly observed, and exceptions thereto are not to be lightly implied.”). B. Federal Rule of Civil Procedure 12(b)(6) “To avoid dismissal under Federal Rule of Civil Procedure 12(b)(6), a plaintiff must allege sufficient factual matter . . . to state a claim to relief that is plausible on its face.” OSU Student All. v. Ray, 699 F.3d 1053, 1061 (9th Cir. 2012) (internal quotations omitted). “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and alterations omitted). On a motion to dismiss for failure to state a claim upon which relief can be granted, a court may consider unattached evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the document. U.S. v. Corinthian Colleges, 655 F.3d 984, 998-99 (9th Cir. 2011); Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (court may treat such document as part of the complaint Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 10 of 16 Page ID #:255 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS for purposes of a motion to dismiss); Deutsche Bank Nat. Trust Co. v. F.D.I.C., 784 F. Supp. 2d 1142, 1152 (C.D. Cal. 2011) (“[D]ocuments to which a complaint refers and which are not reasonably contested may be considered in ruling on a 12(b)(6) motion.”). In this case, the Court may appropriately consider American Bankers’ Denial Letter in connection American Bankers’ Rule 12(b)(6) motion. Plaintiff’s Complaint specifically refers to the document. (Dkt. No. 1 at 14, ¶ BC-2) (alleging that American Bankers breached the Policy by “[u]nreasonably denying benefits owned under the insurance policy for damages sustained to plaintiff’s insured property. The denial was unreasonable as it ignored abundant evidence provided to the insurer showing that the plaintiff has sustained a covered loss”). The Denial Letter is also central to Plaintiff’s claim as it was that Denial Letter that gave rise to this litigation. Finally, Plaintiff cannot reasonably contest the authenticity of the document.1 ARGUMENT A. The SFIP Only Waives Sovereign Immunity for Suits Commenced In Federal Court One Year After Disclaimer. Plaintiff’s Policy, like all SFIPs issued by WYO carriers, contains a provision requiring Plaintiff to bring suit against American Bankers in federal court, if at all, within one year of the written denial of all or part of Plaintiff’s claim. Specifically, section VII.R. of the Policy states: R. Suit Against Us You may not sue us to recover money under this policy unless you have complied with all the requirements of the policy. If you do sue, you must start the suit within 1 year after the date of the written denial of all or part of the claim, and you must file the suit 1 As the cases cited above make clear, the Denial Letter may be considered without a request to the Court for judicial notice. To the extent that judicial notice is necessary, such judicial notice of the Denial Letter is appropriate under Fed. R. Evid. 201(b)(2). See Roberti v. OSI Systems, Inc., 2015 U.S. Dist. LEXIS 24761 at *16 (C.D. Cal. Feb. 27, 2015). Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 11 of 16 Page ID #:256 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS in the United States District Court of the district in which the insured property was located at the time of loss. This requirement applies to any claim that you may have under this policy and to any dispute that you may have arising out of the handling of any claim under the policy. 44 C.F.R. Pt. 61, App. A(1), Art. VII.R and Policy at Art. VII.R (emphasis added). Additionally, 42 U.S.C. § 4072, governing judicial review of disallowed claims under a SFIP, provides in relevant part: [U]pon the disallowance by the Administrator of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance by the Administrator, may institute an action against the Administrator on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated, and original exclusive jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy. (emphasis added).2 Numerous courts across the country have held that suits commenced after the one-year time limit fail as a matter of law. For example, in Lionheart Holding Grp. v. 2 Although 42 U.S.C. § 4072 specifically references suits against the “Administrator,” a number of Circuits have held that “a suit against a WYO company is the functional equivalent of a suit against FEMA,” and that 42 U.S.C. § 4072 therefore applies to a WYO carrier such as American Bankers. In re Van Holt, 163 F.3d 161, 166-67 (3d Cir. 1998) (noting that “construing 42 U.S.C. § 4072 narrowly to confer jurisdiction only to cases formally against FEMA would cause anomalous results”); Gibson v. Am. Bankers Ins. Co., 289 F.3d 943, 947 (6th Cir. 2002); Palmieri v. Allstate Ins. Co., 445 F.3d 179, 186 (2d Cir. 2006) (“To hold that a suit against a WYO company is not a suit ‘against the Director’ would be to ignore the structure of the NFIA, under which insurance companies act on behalf of the federal government, and the purpose of the Government Program, which is to ensure that private companies may ‘serve as administrators for the federal program.’”). Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 12 of 16 Page ID #:257 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Phila. Contributionship Ins. Co., 368 Fed. App’x. 282 (3d Cir. 2010), the Third Circuit affirmed summary judgment for the defendant insurer when the plaintiff insured initiated the action more than a year after its claim was denied. Similarly, in Robbins v. Forgash, 2014 U.S. Dist. LEXIS 106044 (D.N.J. July 31, 2014), the Court determined that the insured’s claim was time-barred because it was filed in federal court more than a year after the denial. Id. at *9-10 (“[I]gnorance of SFIP procedures is no defense and [] the terms of the SFIP must be strictly construed.”). See also Stone v. Franklin Homeowners Assur., 2014 U.S. Dist. LEXIS 85411 (M.D. Pa. June 3, 2014); Smith-Pierre v. Fid. Nat’l Indem. Ins. Co., 2011 U.S. Dist. LEXIS 100271 (S.D. Fla. Sept. 7, 2011); Fino v. La. Citizens Ins. Co., 2008 U.S. Dist. LEXIS 92027 at *4-5 (E.D. La. Nov. 13, 2008) (“[T]he clear language of the regulation bars a plaintiff from bringing suit more than one year after written denial of their claim, and numerous courts have found the one-year statute of limitations for flood policies stated in article VIII [sic] and 42 U.S.C. § 4072 valid and enforceable.”) (citing cases). B. The Filing of This Case in State Court Did Not Toll The Policy’s One-Year Statute of Limitations The fact that Plaintiff filed suit in state court before the matter was removed to federal court has no bearing on the calculation of the one-year statute of limitations set forth in the Policy and in 42 U.S.C. § 4072. Because federal law grants the federal courts “original exclusive jurisdiction” over matters concerning disputes under the Policy, the filing of an action in state court is a nullity that does not toll the applicable statute of limitations. Numerous courts across the country have addressed situations similar to that presented here in which a WYO-insured brought suit alleging breach of a SFIP in state court within a year following a denial of the claim, only to have suit removed to federal court more than a year following the denial. In each case the actions were dismissed as untimely. Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 13 of 16 Page ID #:258 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS In Hairston v. Travelers Cas. & Sur. Co., 232 F.3d 1348 (11th Cir. 2000), the insured brought suit in state court two days before the statute of limitations was to expire. Id. at 1349. The case was removed to federal court one month after the statute of limitations expired. Id. The lower court granted the insurer’s motion to dismiss, finding that federal courts have exclusive jurisdiction over WYO claims, and that the filing of the suit in state court did not toll the statute of limitations. Id. On appeal, the Eleventh Circuit affirmed the lower court’s dismissal of the suit. The court first found that under 42 U.S.C. § 4072, the federal courts have sole jurisdiction over WYO suits. Id. at 1352 (“[B]oth the language of the statute and the legislative history dictate the conclusion that the federal courts have exclusive jurisdiction.”). The court then found that because 42 U.S.C. § 4072 does not permit concurrent jurisdiction between state and federal courts, state courts are not courts of competent jurisdiction to hear WYO cases. Id. at 1353. Given that, the filing of a WYO case in state court does not toll the applicable statute of limitations. Id. In Gibson v. American Bankers Ins. Co., 91 F. Supp. 2d 1037 (E.D. Ky. 2000), the insured brought suit in state court the day before the one-year statute of limitations expired. Id. at 1039. The case was removed to federal court three weeks after the statute expired. Id. The court granted the insurer’s motion to dismiss, finding that under the language of 42 U.S.C. § 4072, “the only court of competent jurisdiction in an action under the NFIA is the federal district court, which has ‘original exclusive jurisdiction.’” Id. at 1043. The court also concluded that the filing of the action in state court did not toll the Policy’s statute of limitations. Id. at 1043-44. On appeal, the Sixth Circuit affirmed the dismissal of the action. See Gibson v. Am. Bankers Ins. Co., 289 F.3d 943 (6th Cir. 2002). Other federal district courts are in accord. In James v. Auto Owners Ins. Co., 1998 U.S. Dist. LEXIS 20394 (S.D. Ga. Dec. 10, 1998), the court granted the insurer’s motion to dismiss, finding that the claim, filed timely in state court but subsequently removed to federal court after the one year expired, was time-barred. Id. Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 14 of 16 Page ID #:259 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS at *2-4. In response to the insured’s argument that the filing of the complaint in state court (a court without competent jurisdiction), tolled the one-year statute of limitations, the James court held, “[t]he policy (and § 4072) said federal, not State court, so it does not matter where James filed her lawsuit once she concedes she did not file it in federal court within the one-year period.” Id. at *3. In Smith-Pierre v. Fid. Nat’l Indem. Ins. Co., 2011 U.S. Dist. LEXIS 100271, the court found that the statute of limitations barred plaintiff’s claim when the case was removed to federal court more than a year after the denial, noting that “the SFIP statute confers exclusive jurisdiction on federal courts, and a plaintiff's filing in state court does not toll the statute of limitations.” Id. at *12 (Plaintiff’s filing this case in state court was [] improper, and his one-year time limit to file in federal court has now expired.”). In Robbins v. Forgash, 2014 U.S. Dist. LEXIS 106044, the court granted the insurer’s motion for summary judgment, finding that “the statutory language is clear that the claim must be filed in federal court within one year of denial of the claim” when the insured brought suit in state court more than a month before the one year period expired, but the case was removed more than five months after the one year expired. Id. at *10 (stating that “ignorance of SFIP procedures is no defense and that the terms of the SFIP must be strictly construed”). Finally, in Parsons Footwear v. Omaha Prop. & Cas. Co., 19 F. Supp. 2d 588 (N.D. W.Va. 1998), the court granted the insurer’s motion to dismiss, concluding that In addressing whether a plaintiff has timely filed his complaint as required by the SFIP, the general rule is that the filing of an action in a court that clearly lacks jurisdiction will not toll the statute of limitations. Here, the plaintiffs’ filing in the Circuit Court of Tucker County, West Virginia, did not toll the one year statute of limitations in 42 U.S.C. § 4072, 44 C.F.R. § 62.22(a) and the SFIP itself at 44 C.F.R. Pt. 61, App.(A)(1) Art.(9)(R). The state court did not have concurrent jurisdiction over the claim of the plaintiffs; the subsequent removal caused their filing of a claim for property Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 15 of 16 Page ID #:260 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS damages under an SFIP to exceed one year; and thus the claim became time barred. Id. at 592. C. Plaintiff Failed to Commence This Action In Federal Court Within One Year After American Bankers’ Denial of His Proof of Loss. As set forth above, this case was improperly commenced in state court and removed to this Court on January 11, 2016 – twelve days after the one-year statute of limitations ran. The filing of the case in state court – a court without jurisdiction pursuant to federal statute – did not toll the one-year statute of limitations set forth in 42 U.S.C. § 4072. Because this case was removed to federal court more than a year after American Bankers’ denial of the Plaintiff’s claim, this action is time-barred. Given the NFIP’s statutory scheme, and the fact that U.S. Treasury funds are at stake, strict adherence to the conditions for the payment of a claim is constitutionally required. See Block v. North Dakota, 461 U.S. 273, 287 (1983). Applying the strict construction standard employed by courts around the country in similar litigation, Plaintiff’s lawsuit is barred by federal law and by the Policy’s clear terms. Accordingly, this Court lacks subject matter jurisdiction over this action, the Complaint fails to state a claim upon which relief can be granted, and American Bankers’ Motion to Dismiss should be granted without leave to amend. CONCLUSION For the reasons set forth above, American Bankers respectfully requests that the Court grant its motion to dismiss Plaintiff’s Complaint without leave to amend. DATED: October 31, 2016 EDISON, MCDOWELL & HETHERINGTON LLP By: /s/ Raymond J. Tittmann Raymond J. Tittmann Attorneys for Defendant American Bankers Insurance Company of Florida Case 2:16-cv-00198-MWF-MRW Document 40-1 Filed 10/31/16 Page 16 of 16 Page ID #:261 Case 2:16-cv-00198-MWF-MRW Document 40-2 Filed 10/31/16 Page 1 of 2 Page ID #:262 Case 2:16-cv-00198-MWF-MRW Document 40-2 Filed 10/31/16 Page 2 of 2 Page ID #:263 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 1 of 33 Page ID #:264 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 2 of 33 Page ID #:265 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 3 of 33 Page ID #:266 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 4 of 33 Page ID #:267 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 5 of 33 Page ID #:268 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 6 of 33 Page ID #:269 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 7 of 33 Page ID #:270 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 8 of 33 Page ID #:271 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 9 of 33 Page ID #:272 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 10 of 33 Page ID #:273 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 11 of 33 Page ID #:274 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 12 of 33 Page ID #:275 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 13 of 33 Page ID #:276 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 14 of 33 Page ID #:277 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 15 of 33 Page ID #:278 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 16 of 33 Page ID #:279 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 17 of 33 Page ID #:280 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 18 of 33 Page ID #:281 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 19 of 33 Page ID #:282 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 20 of 33 Page ID #:283 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 21 of 33 Page ID #:284 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 22 of 33 Page ID #:285 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 23 of 33 Page ID #:286 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 24 of 33 Page ID #:287 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 25 of 33 Page ID #:288 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 26 of 33 Page ID #:289 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 27 of 33 Page ID #:290 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 28 of 33 Page ID #:291 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 29 of 33 Page ID #:292 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 30 of 33 Page ID #:293 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 31 of 33 Page ID #:294 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 32 of 33 Page ID #:295 Case 2:16-cv-00198-MWF-MRW Document 40-3 Filed 10/31/16 Page 33 of 33 Page ID #:296 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Error! Unknown document property name. [PROPOSED] ORDER GRANTING MOTION TO DISMISS UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JUDD APATOW, Plaintiff, vs. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA and DOES 1- 10, Defendants. Case No. 2:16-cv-00198-MWF-MRW [PROPOSED] ORDER GRANTING DEFENDANT AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA’S MOTION TO DISMISS PLAINTIFF JUDD APATOW’S AMENDED COMPLAINT Judge: Hon. Michael W. Fitzgerald Hearing: Date: Nov. 28, 2016 Time: 10:00 A.M. Place: Courtroom 1600 Complaint Removed: January 11, 2016 Trial Date: Not Set Case 2:16-cv-00198-MWF-MRW Document 40-4 Filed 10/31/16 Page 1 of 2 Page ID #:297 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 [PROPOSED] ORDER GRANTING MOTION TO DISMISS Defendant American Bankers Insurance Company of Florida (“American Bankers”) filed a Motion to Dismiss (“Motion”) Plaintiff Judd Apatow’s (“Plaintiff”) Amended Complaint without leave to amend pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Having considered all of the papers filed in connection with the Motion, and any oral arguments by counsel thereon, and good cause appearing, the Court issues the following order: IT IS HEREBY ORDERED that the Motion is GRANTED in its entirety. Plaintiff’s Complaint is dismissed without leave to amend. DATED: Hon. Michael W. Fitzgerald United States District Judge Case 2:16-cv-00198-MWF-MRW Document 40-4 Filed 10/31/16 Page 2 of 2 Page ID #:298