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Graham v. Republic Fire and Casualty Insurance Co.

United States District Court, M.D. Louisiana

September 26, 2018

ERIC GRAHAM ET AL.
v.
REPUBLIC FIRE AND CASUAL INSURANCE COMPANY ET AL.

          RULING AND ORDER

          BRIAN A. JACKSON, JUDGE UNITED STATES DISTRICT COURT.

         Before the Court is the Motion for Summary Judgment (Doc. 29) filed by Defendant Republic Fire and Casualty Insurance Company ("Republic") and the Cross Motion for Summary Judgment (Doc. 32) filed by Plaintiffs Caroline Graham and Eric Graham ("Plaintiffs"). For the reasons explained herein, the Motion for Summary Judgment (Doc. 29) is GRANTED IN PART and DENIED, without prejudice, IN PART. The Cross Motion for Summary Judgment (Doc. 32) is DENIED, without prejudice.

         I. BACKGROUND

         Plaintiffs reside in Baton Rouge, Louisiana in a home constructed on piers and beams with crawl spaces underneath. (Doc. 32-2 at p. 3) Between August 12 and August 14 of 2016, East Baton Rouge Parish experienced unprecedented rainfall and flooding. (Doc. 32-2 at p. 3). During this time period, Plaintiffs possessed a homeowners insurance policy with Republic and a flood insurance policy with American Bankers Insurance Company of Florida ("American Bankers"). (Doc. 32-2 at pp. 1-2)

         Plaintiffs' flood insurance policy was a Standard Flood Insurance Policy ("SFIP") provided by American Bankers under the National Flood Insurance Program ("NFIP"). Congress created the NFIP pursuant to the National Flood Insurance Act ("NFIA") of 1968. (Doc. 16-1 at p. 2) The NFIP allows an individual to purchase a Standard Flood Insurance Policy ("SFIP") either directly from the Federal Emergency Management Agency ("FEMA") or from private insurance companies. (Id. at 3) These private insurance companies are known as "Write Your Own" ("WYO") carriers and are authorized by federal regulation to sell SFIPs under their own names. (Id.) The terms of an SFIP are standardized and codified in the federal regulations. 44 C.F.R. pt.61, app. A(1). As such, all flood insurance policies issued by WYO companies, including American Bankers, are identical to the SFIP. (Doc. 16-1 at p. 3)

         Plaintiffs assert that during the August 2016 rainfall, surface water accumulated underneath their home. On or about August 21, 2016, the original wood floors in Plaintiffs' home allegedly began to buckle, which resulted in warped floors rising over five inches in certain locations. (Id.) Plaintiffs claim that on or about September 2, 2016, they timely notified both American Bankers and Republic. (Doc. 1-1 at p. 5)

         American Bankers denied Plaintiffs' claim because its investigation did not "identify evidence of a general condition of flood, nor direct flood damage to their home." (Id.) The SFIP only covers "direct physical loss by or from flood." (Doc. 32-8 at p. 8) The policy defines "flood" as "a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is the insured's) from ... unusual and rapid accumulation or runoff of surface waters from any source." (Id. at 4) Plaintiffs appealed American Bankers' decision to FEMA, which denied their claim on the same basis. (Id.)

         Republic also denied Plaintiffs coverage; however it did so for the opposite reason. Republic asserted that the damage resulted from "high moisture levels from flood or surface water" beneath the home. (Id.) Republic's policy excludes "loss caused directly or indirectly by. . . water." (Doc. 32-6 at p. 14) Water includes "flood [and] surface water." (Id.)

         After American Bankers and Republic denied Plaintiffs' claim, Plaintiffs sued both insurance companies for breach of contract and violations of Louisiana bad faith insurance statutes. (Doc. 1-1 at p. 8)

         II. LEGAL STANDARD

         Pursuant to Rule 56, "[t]he [C]ourt shall grant summary judgment if the 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). In determining whether the movant is entitled to summary judgment, the Court views the facts in the light most favorable to the non-movant and draws all reasonable inferences in the non-movant's favor. Coleman v. Houston Independent School Dist, 113 F.3d 528, 533 (5th Cir. 1997).

         After a proper motion for summary judgment is made, the non-movant must set forth specific facts showing there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). At this stage, the Court does not evaluate the credibility of witnesses, weigh the evidence, or resolve factual disputes. Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263 (5th Cir. 1991), cert, denied, 502 U.S. 1059 (1992). However, if the evidence in the record is such that a reasonable jury, drawing all inferences in favor of the non-moving party, could arrive at a verdict in that party's favor, the motion for summary judgment must be denied. Int'l Shortstop, Inc., 939 F.2d at 1263.

         On the other hand, the non-movant's burden is not satisfied by some metaphysical doubt as to the material facts, or by conclusory allegations, unsubstantiated assertions, or a mere scintilla of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). Summary judgment is appropriate if the non-movant "fails to make a showing sufficient to establish the existence of an element essential to that party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). In other words, summary judgment will he only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law." Sherman v. Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972).

         III. ...


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