Clark et al v. GeoVera Specialty Insurance Company et al

Filing 37

ORDER granting 23 Motion to Dismiss for Failure to State a Claim or, alternatively, for Summary Judgment. Party Federal Emergency Management Agency dismissed. Signed by Judge Martin L.C. Feldman on 2/7/2014. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
RICHARD H. CLARK, SR., ET AL.

CIVIL ACTION

v.

13-5232

FEMA, ET AL.

SECTION "F"
ORDER AND REASONS

Before the Court is The Federal Emergency Management Agency's
motion to dismiss for failure to state a claim or, alternatively,
for summary judgment.

For the reasons that follow, the motion is

GRANTED.
Background
Richard Clark purchased a Standard Flood Insurance Policy for
his home issued directly through FEMA pursuant to the National
Flood Insurance Program. The policy provided building and contents
coverage for Clark's home in Braithwaite, Louisiana, and was in
effect at the time of Hurricane Isaac.
After Hurricane Isaac, Clark notified FEMA of his losses, and
FEMA sent an independent adjuster to Clark's home to survey the
damage.

After completing the inspection, the independent adjuster

completed an Interim Closing Report confirming flood damage to
Clark's

home

and

estimating

losses

of

$265,587.49,

including

$165,587.49 in building losses and $100,000 in contents losses.
The independent adjuster prepared a proof of loss form in that
amount, which Clark signed, swore to, and timely submitted to FEMA
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on October 23, 2012.
On November 21, 2012, Clark obtained an estimate from a
contractor for the cost of repairs to his home.
valued the repairs at $428,903.28.

The contractor

On December 28, 2012, Clark

submitted a letter to FEMA making a supplemental claim for losses
based on the difference between the repair estimate and the initial
payment on his building claim.

Clark never received a response to

his letter or any additional payment from FEMA.
In August 2013, Clark filed suit against FEMA for breach of
contract and for declaratory relief.1

FEMA now seeks to dismiss

for failure to state a claim or, alternatively, for summary
judgment.
I.
A.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.

Such a motion is rarely

granted because it is viewed with disfavor.

See Lowrey v. Tex. A

& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).

In considering a Rule 12(b)(6)

motion, the Court “accepts ‘all well-pleaded facts as true, viewing

1

Clark also filed suit against his wind insurer, GeoVera
Specialty Insurance Company; however, GeoVera is not a party to
this motion.
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them in the light most favorable to the plaintiff.’” See Martin K.
Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir.
2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.
1999)). But, in deciding whether dismissal is warranted, the Court
will not accept conclusory allegations in the complaint as true.
Kaiser, 677 F.2d at 1050.

Indeed, the Court must first identify

allegations that are conclusory and, thus, not entitled to the
assumption of truth.
(2009).

Ashcroft v. Iqbal, 556 U.S. 662, 678-79

A corollary: legal conclusions “must be supported by

factual allegations.” Id. at 678.

Assuming the veracity of the

well-pleaded factual allegations, the Court must then determine
“whether they plausibly give rise to an entitlement to relief.”
Id. at 679.
“‘To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.’” Gonzalez v. Kay, 577 F.3d
600, 603 (5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal
quotation marks omitted).

“Factual allegations must be enough to

raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact).”

Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555 (2007) (citations and footnote omitted). “A claim has facial
plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is

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liable for the misconduct alleged.”

Iqbal, 556 U.S. at 678 (“The

plausibility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defendant has
acted

unlawfully.”).

This

is

a

“context-specific

task

that

requires the reviewing court to draw on its judicial experience and
common sense.”

Id. at 679.

“Where a complaint pleads facts that

are merely consistent with a defendant’s liability, it stops short
of the line between possibility and plausibility of entitlement to
relief.” Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).

“[A] plaintiff’s obligation to provide the

‘grounds’ of his ‘entitle[ment] to relief’”, thus, “requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”

Twombly, 550 U.S. at

555 (alteration in original) (citation omitted).
In deciding a motion to dismiss, the Court may consider
documents that are essentially “part of the pleadings.”

That is,

any documents attached to or incorporated in the plaintiff’s
complaint that are central to the plaintiff’s claim for relief.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th
Cir. 2004) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498-99 (5th Cir. 2000)).

Also, the Court is permitted to

consider matters of public record and other matters subject to
judicial notice without converting a motion to dismiss into one for
summary judgment.

See United States ex rel. Willard v. Humana

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Health Plan of Tex. Inc.,

336 F.3d 375, 379 (5th Cir. 2003).

However, if the Court considers matters outside of the pleadings,
it must convert a motion to dismiss into a motion for summary
judgment.

Burns v. Harris Cnty. Bail Bond Bd., 139 F.3d 513, 517

(5th Cir. 1998).
B.
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine issue as to
any material fact such that the moving party is entitled to
judgment as a matter of law.

No genuine issue of fact exists if

the record taken as a whole could not lead a rational trier of fact
to find for the non-moving party.

See Matsushita Elec. Indus. Co.

v. Zenith Radio., 475 U.S. 574, 586 (1986).

A genuine issue of

fact exists only "if the evidence is such that a reasonable jury
could return a verdict for the non-moving party."

Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a
factual dispute does not defeat an otherwise properly supported
motion.

See

id.

Therefore,

"[i]f

the

evidence

is

merely

colorable, or is not significantly probative," summary judgment is
appropriate.

Id. at 249-50 (citations omitted).

Summary judgment

is also proper if the party opposing the motion fails to establish
an essential element of his case.
477 U.S. 317, 322-23 (1986).

See Celotex Corp. v. Catrett,

In this regard, the non-moving party

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must do more than simply deny the allegations raised by the moving
party.

See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d

646, 649 (5th Cir. 1992).

Rather, he must come forward with

competent evidence, such as affidavits or depositions, to buttress
his claims.

Id.

Hearsay evidence and unsworn documents do not

qualify as competent opposing evidence.

Martin v. John W. Stone

Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987). Finally, in
evaluating the summary judgment motion, the Court must read the
facts

in

the

light

most

favorable

to

the

non-moving

party.

Anderson, 477 U.S. at 255.
II.
The law governing recovery for flood loss under the National
Flood Insurance Program is well-settled: the conditions precedent
to filing suit to recover for flood damage are strictly enforced.
See,

e.g.,

Marseille

Homeowners

Condominium

Assoc.,

Inc.

v.

Fidelity Nat’l Ins. Co., 542 F.3d 1053 (5th Cir. 2008); Wright v.
Allstate Ins. Co., 415 F.3d 384, 387-88 (5th Cir. 2005); Gowland v.
Aetna, 143 F.3d 951, 954 (5th Cir. 1998); Forman v. FEMA, 138 F.3d
543, 545-46 (5th Cir. 1998).
“A NFIP participant [like the plaintiff] cannot file a lawsuit
seeking

further

participant

federal

can

requirements.”

show

benefits
prior

under

the

compliance

SFIP
with

unless
all

the

policy

Richardson v. Am. Bankers. Ins. Co., 279 F. App'x

295, 298 (5th Cir. 2008) (citing 44 C.F.R. pt. 61, app. A(1) art.

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VII®). “In case of a flood loss to insured property, [the insured]
must” satisfy several requirements before bringing a lawsuit.
C.F.R. pt. 61, app. A(1) art. VII(J).

44

Foremost, the insured must

provide a signed and sworn Proof of Loss within 60 days after the
loss, “or within any extension authorized by FEMA.”
F.3d at 545.

Forman, 138

The failure to submit a complete, sworn proof of loss

with supporting documentation is fatal to a plaintiff’s claim for
flood damage.

Marseilles, 542 F.3d at 1053.

Between October 23, 2012 and March 19, 2013, the Acting
Federal Insurance Administrator issued several written orders
extending the proof of loss submission deadline for Hurricane Isaac
related claims, resulting in the deadline being extended from 60
days to 240 days.

These extensions meant that plaintiff had until

April 28, 2013 to submit his completed proof of loss.
FEMA insists that plaintiff never submitted a complete, sworn
proof of loss for his supplemental claim.
his

December

28,

2012

letter

was

a

Plaintiff counters that

complete

proof

of

loss.

Plaintiff notes that the letter was dated, signed, and included
supporting documentation.

Although plaintiff concedes that his

letter "does not expressly state that it is true and correct," he
argues that the Court should construe it as a sworn proof of loss
because he was "legally obligated to submit truthful information to
FEMA" and "the fact that he signed his statement commits and swears
to its veracity."

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Plaintiff's arguments are foreclosed by the well-settled law.
Federal regulations insist that the failure to timely submit a
complete, sworn proof of loss is fatal to a plaintiff's claim for
flood damages.

See Marseilles, 542 F.3d at 1055-56.

The Fifth

Circuit has repeatedly held that submission of a sworn proof of
loss is a "strict" requirement. See, e.g., id.; Richardson, 279 F.
App'x at 298.

Indeed, the Fifth Circuit has consistently observed

that no other facts are material to a defendant’s motion for
summary judgment based on the plaintiff’s failure to comply with
the conditions precedent to filing suit, and, accordingly, no
benefits are payable under the plaintiff's SFIP.

See, e.g.,

Wientjes v. Am. Bankers Ins. Co., 339 F. App'x 483, 485 (5th Cir.
2009); Richardson, 279 F. App'x at 298; Forman, 138 F.3d at 545.
The record plainly reveals that plaintiff failed to timely submit
a complete, sworn proof of loss in support of his claim for
supplemental damages.

Accordingly, plaintiff's claims are barred

as a matter of law.
Plaintiff seeks to avoid dismissal by insisting that summary
judgment is premature and that he should first be allowed to
participate in discovery.

See Fed. R. Civ. P. 56(d).

Rule 56(d)

continuances are not granted unless the nonmoving party shows how
the additional discovery will defeat the summary judgment motion.
Plaintiff has failed to show how additional discovery will create
a

genuine

dispute

as

to

a

material

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fact:

summary

relief

is

appropriate where, as here, the law clearly bars recovery when an
insured fails to submit a timely proof of loss.

No further

discovery will change the fact that plaintiff failed to submit a
complete, sworn proof of loss in support of his supplemental claim.
Accordingly, defendant's motion to dismiss or, alternatively,
for summary judgment is GRANTED.
New Orleans, Louisiana, February 7, 2014

____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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