United States District Court, W.D. Louisiana, Alexandria Division
REPORT AND RECOMMENDATION
L. HORNSBY U.S. MAGISTRATE JUDGE.
Marks Real Estate Company, LLC (“Marks”)
contacted insurance agent Richard Jewell about placing a
flood insurance policy on a structure in Rapides Parish.
Jewell obtained a policy through Wright National Flood
Insurance Company (“Wright National”). The
structure suffered flood damage, but Wright National denied
the claim on the grounds the structure was built entirely
over water and, therefore, ineligible for insurance.
filed suit against Wright National and Mr. Jewell in state
court, and Wright National removed the case based on an
assertion of federal question jurisdiction. Before the court
is Marks' Motion to Remand (Doc. 17) that argues the
court lacks federal question jurisdiction. Marks makes the
alternative argument that, even if the court has jurisdiction
over the claims against Wright National, it should sever and
remand the state law claims against Mr. Jewell. For the
reasons that follow, it is recommended that the motion to
remand be denied.
contacted Mr. Jewell in December 2016 about placing a flood
insurance policy on property owned by Marks in Boyce,
Louisiana. Complaint, ¶ 3. The property is built with
three of its four walls suspended above the Kincaid
Reservoir, with the fourth wall built and secured on shore.
¶ 4. Jewell indicated to Marks that he would place a
flood insurance policy on the property, and he applied for a
Standard Flood Insurance Policy (“SFIP”) written
by Wright National, a “write your own” carrier
that participates in the National Flood Insurance Program.
application “was completed solely by Jewell, ”
and he indicated on the application that the property was
built partially over water. Wright National accepted the
application, Marks paid the premium, and a policy was issued
for a term of one year. ¶¶ 5-6. A few months later,
a strong system of storms, with associated flooding, struck
the area. The property sustained significant flood damage.
informed Mr. Jewell of the damage, and Jewell initiated the
claims process with Wright National. A third-party claims
adjuster inspected the property and told Marks that it was
his opinion that the property was constructed entirely over
water so should have never been covered by the policy. Wright
National then hired an engineering firm to create a report,
and the firm wrote that all of the building was situated over
water with the exception of one wall, which was supported by
a bulkhead on the shore. Wright National then sent Marks a
denial of claim letter. It stated that the property was not
covered by the policy because reports and photos indicated
that the structure was built directly over the water, and the
policy does not cover a building or contents is the building
is located entirely, in, on, or over water. ¶¶
7-14; Doc. 1, Ex 4.
alleges that Wright National's denial of its claim
“represents a breach of the contract entered into
between Marks Real Estate and Wright to provide flood
insurance coverage under the policy pursuant to La. Civ. Code
art. 1994.” ¶ 15. Marks also alleges that it
relied on Wright National's contractual agreement to its
detriment, and it asserts that Wright National was negligent
in providing a putative flood insurance policy on property
that Wright now says was not insurable from the inception of
the policy. ¶¶ 16-17. Marks alleges that Wright
National, by its breach of contract, negligence, and promise
to Marks, is liable to Marks for damages including those
covered under the policy, less any applicable deductible,
plus attorney's fees, penalties, and other damages.
alleges similar claims against Mr. Jewell. The petition
alleges that Jewell was negligent in relation to his
procurement of the policy and breached his fiduciary duty to
secure the requested coverage. He is also accused of making a
negligent misrepresentation that he had procured valid flood
insurance, and Marks alleges that it relied to its detriment
on Mr. Jewell's promise to procure a valid policy. Marks
seeks similar damages and penalties from Mr. Jewell.
¶¶ 18-20, 22.
National Flood Insurance Act
National Flood Insurance Act (NFIA) was established to make
flood insurance available on reasonable terms. FEMA
administers the program, but private insurers (known as
“write our own” or WYO insurers) issue flood
insurance policies in their own names. The WYO insurers
perform the administrative functions, including adjusting and
settling of claims, but the government ultimately pays a
claim. Campo v. Allstate Ins. Co., 562 F.3d 751, 754
(5th Cir. 2009).
carriers must issue policies that contain the exact terms and
conditions of the Standard Flood Insurance Policy
(“SFIP”) set forth in FEMA regulations. The SFIP
includes a provision that: “This policy and all
disputes arising from the handling of any claim under the
policy are governed exclusively by the flood insurance
regulations issued by FEMA, the National Flood Insurance Act
of 1968, as amended (42 U.S.C. 4001, et seq.), and Federal
common law.” 44 C.F.R. Part 61, App. A(1), art. IX
(What Law Governs). The federal court for the district where