Alice Ginart, et al v. State Farm Fire & Casualty Co

Filing 920100902

Opinion

Case: 09-30342

Document: 00511223904

Page: 1

Date Filed: 09/02/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
September 2, 2010 N o . 09-30342 Lyle W. Cayce Clerk

A L I C E GINART, wife of/and; MICHAEL C. GINART, JR., P la in t iffs - Appellants v. S T A T E FARM FIRE & CASUALTY COMPANY, D e fe n d a n t - Appellee

A p p e a l from the United States District Court for the Eastern District of Louisiana U S D C No. 2:07-CV-06841

B e fo r e STEWART, DENNIS, and HAYNES, Circuit Judges. P E R CURIAM:* P la in t iffs seek reimbursement under their Standard Flood Insurance P o lic y (SFIP) for costs they incurred in raising their property from its required B a s e Flood Elevation (BFE) to an Advisory Base Flood Elevation (ABFE). The d is t r ic t court granted summary judgment in favor of Defendant, concluding that P la in t iffs ' claim did not fall within the coverage of their SFIP. Plaintiffs appeal. W e AFFIRM.

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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Case: 09-30342

Document: 00511223904

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Date Filed: 09/02/2010

No. 09-30342 BACKGROUND " T h e Federal Emergency Management Agency (FEMA) operates the [N a t io n a l Flood Insurance Program (NFIP)], which is supported by the federal t r e a s u r y ." Marseilles Homeowners Condo. Ass'n, Inc. v. Fid. Nat'l Ins. Co., 542 F .3 d 1053, 1054 (5th Cir. 2008). "A policy issued under the NFIP is called a . . . S F I P ." Id. "A SFIP is `a regulation of [FEMA], stating the conditions under w h ic h federal flood-insurance funds may be disbursed to eligible policyholders.'" I d . (alteration in original) (quoting Mancini v. Redland Ins. Co., 248 F.3d 729, 7 3 3 (8th Cir. 2001)). "SFIPs may be issued directly by FEMA or through private in s u r e r s ," like Defendant. Id. P la in t iffs own a rental property insured under a SFIP written by D e fe n d a n t . In 2006, following Hurricane Katrina, Plaintiffs elevated that p r o p e r t y from its existing BFE to a proposed ABFE. They claimed this expense u n d e r their SFIP and Defendant disallowed the claim, leading to the instant lit ig a t io n . P la in t iffs concede that there is only one provision of their SFIP, known as t h e "Increased Cost of Compliance" (ICC) provision, that could cover their c la im e d costs. It states that the SFIP will "pay[] you to comply with State or lo c a l floodplain management laws or ordinances that meet the minimum s t a n d a r d s of the National Flood Insurance Program. . . . We pay for compliance a c t iv it ie s that exceed these standards under [certain] conditions." Those c o n d itio n s include, in relevant part: E le v a tio n or floodproofing in any risk zone to preliminary or a d v is o r y base flood elevations provided by FEMA which the State o r local government has adopted and is enforcing for flood-damaged s t r u c t u r e s in such areas. (This includes compliance activities in B, C , X, or D zones which are being changed to zones with base flood e le v a t io n s . This also includes compliance activities in zones where b a s e flood elevations are being increased, and a flood-damaged

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Date Filed: 09/02/2010

No. 09-30342 s t r u c t u r e must comply with the higher advisory base flood e le v a t io n .) P la in t iffs also concede that the St. Bernard Parish Council, the controlling lo c a l government authority for the property, did not adopt the proposed ABFEs a s the elevation levels required of property within the Parish until April 2007, w h e n it passed an ordinance providing that the ABFEs would only be enforced s t a r t in g June 2007. Plaintiffs note, however, that the Parish Council began c o n s id e r in g whether to adopt the ABFEs in 2006. Moreover, they emphasize that w h ile they were in the process of elevating their property, the Parish issued a " S u b s t a n t ia l Damage Determination" for the property. That document indicated t h a t the Parish found that the property had been "substantially damage[d] due t o flooding" and thus it "may be required to be demolished or rebuilt." It further s t a t e d that "[a]ll substantially damaged structures which do not meet Base F lo o d Elevations (BFE) established by FEMA will be required to meet certain B F E standards." B a s e d on the foregoing, the district court granted summary judgment in fa v o r of Defendant. It stated that "[t]he policy language unequivocally restricts a u t h o r iz e d coverage for compliance activities when the local government is c u r r e n t ly , not prospectively, enforcing the ABFEs." Because, at the time P la in t iffs elevated their property, the Parish Council had not adopted the A B F E s , the court concluded that the SFIP did not cover Plaintiffs' expenses. The c o u r t acknowledged that the policy's parenthetical statement, indicating that it w o u ld cover compliance activities in zones "where base flood elevations are being i n c r e a s e d ," suggested coverage might exist in some circumstances even if the A B F E s had not yet been adopted. However, that same parenthetical indicated t h a t such coverage could only extend to property that "must comply with the h ig h e r advisory base flood elevation." Plaintiffs, the court explained, introduced n o evidence indicating they were made to comply with the ABFE. In fact, the 3

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No. 09-30342 S u b s t a n t ia l Damage Determination indicated that they only needed to comply w it h the current BFE. Lest there be any doubt regarding these conclusions, the c o u r t pointed to a November 15, 2005 memorandum from FEMA, which stated, " I f the community adopts and enforces the FEMA provided ABFEs, [ICC] b e n e fits will be available to elevate buildings to the ABFEs. If the community d o e s not adopt and enforce the ABFEs, ICC benefits will only pay to elevate to t h e BFE." P la in t iffs filed a Rule 59(e) motion to alter or amend the judgment. The d is t r ic t court denied that motion, finding no manifest error of law or fact. It r e it e r a t e d that "the unambiguous language of the SFIP" indicates Plaintiffs are n o t entitled to reimbursement. STANDARD OF REVIEW T h is court reviews grants of summary judgment de novo. Shaw C o n s tr u c to r s v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538 (5th Cir. 2004). " [E ]a c h movant bears the burden of establishing that no genuine issue of m a t e r ia l fact exists and that it is entitled to judgment as a matter of law." Id. at 538-39. "We must review the evidence, as well as the inferences that may be d r a w n from the evidence, in the light most favorable to the party that opposed t h e motion for summary judgment." Little v. Liquid Air Corp., 952 F.2d 841, 847 (5 t h Cir. 1992). D IS C U S S IO N I n Hanvor Building Materials, Inc. v. Guiffrida, this court stated that w h e n disputes arise regarding the "interpretation of flood-insurance policy p r o v is io n s [,] . . . they are resolved under federal law `by drawing upon standard in s u r a n c e law principles.'" 748 F.2d 1011, 1013 (5th Cir. 1984) (quoting West v. H a r r is , 573 F.2d 873, 881 (5th Cir. 1978)). These principles include "that, `if the la n g u a g e of a policy is clear and unambiguous, it should be accorded its natural

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No. 09-30342 m e a n in g .'" Id. (quoting Landress Auto Wrecking Co., Inc. v. U.S. Fid. & Guar. C o ., 696 F.2d 1290, 1292 (5th Cir. 1983)). B e c a u s e we conclude that the SFIP provision at issue unambiguously e x c lu d e s coverage for Plaintiffs' claim, we affirm the judgment below largely for t h e reasons stated by the district court. For elevation expenses to fall within the p o l i c y coverage for compliance with "the minimum standards of the National F lo o d Insurance Program" or for "[e]levation . . . to preliminary or advisory base flo o d elevations," the policy clearly states that "State or local floodplain m a n a g e m e n t laws or ordinances" must first have begun to enforce those e le v a t io n levels. At the time Plaintiffs' insurance claim for raising their home fr o m the BFE to the ABFE accrued, they acknowledge, the local government a u t h o r it y had not adopted the ABFE. To the extent that the policy can be read a s providing coverage "where base flood elevations are being increased" by the lo c a l government authority, it also unambiguously limits such coverage to in s t a n c e s where the local government required the policy holder to "comply with t h e higher advisory base flood elevation." That is clearly not the case here. The S u b s t a n t ia l Damage Determination introduced by Plaintiffs demonstrates that t h e y only needed to comply with the BFE. Plaintiffs--whose property is in Zone B--imply that because the ICC p r o v is io n 's parenthetical statement indicates coverage exists for "compliance a c t iv it ie s in B, C, X, or D zones which are being changed to zones with base flood e le v a t io n s " and does not link that coverage with those elevations being adopted o r enforced, at the very least this statement encompasses their claim. However, t h e cited parenthetical sentence clearly and specifically references the earlier t e r m s and conditions of the ICC provision. The cited sentence begins with the p h r a s e "[t]his includes," the "this" referring back to the scope of coverage e s t a b lis h e d earlier in the paragraph, which was limited to where the "local g o v e r n m e n t has adopted and is enforcing" the elevation levels. Therefore, as we 5

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No. 09-30342 fin d the SFIP language unambiguous, we must afford it that meaning, and c o n c lu d e that Plaintiffs' claim, by their own admission, does not fall within the p o lic y 's terms. P la in t iffs make much of the fact that in 2008, well after they elevated their h o m e and filed the instant suit, they obtained a letter from David Paysse, Legal C o u n s e l to the Parish President, stating that the Substantial Damage D e t e r m in a t io n required Plaintiffs "to meet or exceed the ABFEs." This a ft e r -t h e -fa c t conclusory assertion does not alter the plain language of the 2006 S u b s t a n t ia l Damage Determination, also relied upon by Plaintiffs, which states t h a t Plaintiffs were only "required to meet current BFE standards." Therefore, w e conclude that the Paysse letter is insufficient to establish a genuine issue of m a t e r ia l fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986) ("The m e r e existence of a scintilla of evidence in support of the plaintiff[s'] position will b e insufficient [to establish a genuine issue of material fact]; there must be e v id e n c e on which the jury could reasonably find for the plaintiff[s]."). P la in t iffs also suggest that they are entitled to coverage because they c o m p lie d with the FEMA directions for obtaining such coverage. Plaintiffs' Br. 2 2 -2 3 . However, again, the evidence introduced by Plaintiffs, the directions, u n d e r m in e s this argument. The form indicates that to obtain "Increased Cost of C o m p lia n c e " coverage the expenses incurred must be to "mitigat[e]" a S u b s t a n t ia l Damage Determination. In other words, the costs must be required b y the Substantial Damage Determination in order to avoid the consequences of t h e determination, namely demolition. Here, the Substantial Damage D e t e r m in a t io n did not require Plaintiffs to raise their property to the ABFE, but r a t h e r only to the BFE. Thus, Plaintiffs did not in fact comply with the directions a n d their argument must fail.

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Document: 00511223904

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Date Filed: 09/02/2010

No. 09-30342 C O N C L U S IO N F o r e the foregoing reasons we AFFIRM the grant of summary judgment in favor of Defendant.

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