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Clark v. Wright National Flood Insurance Co.

United States District Court, E.D. Louisiana

January 23, 2019

WILLIAM T. CLARK, III, ET AL.
v.
WRIGHT NATIONAL FLOOD INSURANCE COMPANY

         SECTION “R” (3)

          ORDER AND REASONS

          SARAH S. VANCE UNITED STATES DISTRICT JUDGE

         Before the Court is plaintiffs William Clark's and Michael Pearl's motion for summary judgment.[1] Because plaintiffs did not comply with the requirements of their insurance policy, they are not entitled to summary judgment on their claim against defendant Wright National Flood Insurance Company.

         I. BACKGROUND

         This action arises out of an insurance dispute over property damage caused by two floods in Louisiana during the summer of 2016. Plaintiffs William Clark and Michael Pearl allege property damage to their home after a flood in March 2016 and a second flood in August 2016.[2] At the time of the flooding, plaintiffs' home was insured through a standard flood insurance policy (SFIP) provided by defendant Wright, which participates in the National Flood Insurance Program.[3] Plaintiffs timely reported their losses to Wright, and Wright assigned a claims corporation to inspect the loss and assist plaintiffs in presenting their claim.[4] The claims corporation sent an insurance adjuster, Alan Nunnelley, to inspect the property and prepare damage estimates and a proof of loss.[5] After his inspection, Nunnelley sent plaintiffs a proof of loss estimating $0 for building damages and $89, 643.39 for property contents losses after the application of the policy deductible.[6]Plaintiffs disputed Nunnelley's proof of loss and decided to submit their own.[7] Plaintiffs submitted their proof of loss to Wright on December 7, 2016.[8] Wright did not respond.[9] Nunnelley then created a final proof of loss on September 5, 2017 that reflected a net loss of $63, 663.82.[10] Using Nunnelley's final proof of loss, plaintiffs attempted to file separate claims for the disputed and undisputed portions of their losses, as they had done for an earlier flood that occurred in March 2016.[11] Plaintiffs filed a proof of loss for only the undisputed items-requesting $63, 663.82 based on Nunnelley's proof of loss-on February 7, 2018.[12] Like their original proof of loss, Wright did not respond to plaintiffs' February proof of loss.[13]

         On May 14, 2018, plaintiffs filed this action against Wright, claiming breach of contract.[14] Plaintiff then filed a motion for summary judgment for the allegedly undisputed losses.[15] Wright opposes the motion.[16]

         II. LEGAL STANDARD

         Summary judgment is warranted when “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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 1075. A dispute about a material fact is genuine “if the evidence is such that a reasonable [factfinder] could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonmoving party can then defeat the motion by either countering with evidence sufficient to demonstrate the existence of a genuine dispute of material fact, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

         If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322).

         III. DISCUSSION

         Plaintiffs seek payment of the $63, 663.82 listed as the net loss in Nunnelley's September 5, 2017 final proof of loss.[17] But neither proof of loss they submitted to Wright satisfied the requirements of the SFIP. The December 2016 proof of loss did not specify the amount that plaintiffs claimed under the policy, and the February 2018 proof of loss was untimely.

         Wright issued the plaintiffs' flood policy as part of the National Flood Insurance Program (NFIP). Congress created the NFIP in 1968 to provide affordable flood insurance to flood prone areas. See Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998). FEMA operates the program and issues policies directly or through private insurers, such as Wright, known as “Write Your Own” companies. Id. Whether FEMA or a “Write Your Own” company issues a policy, claims are paid directly from the federal treasury. Id.

         Policies are issued in the form of a SFIP, and no provision of the policy can be altered, varied, or waived without the express written consent of the Federal Insurance Administrator. Id.; 44 C.F.R. ยงยง 61.4(b), 61.13(d). Since pay-outs implicate the federal treasury, provisions of the SFIP must be strictly enforced and ...


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