Hymel v. Fidelity National Insurance Company et al

Filing 30

ORDER & REASONS: granting 27 Defendant, Fidelity National Insurance Company's Motion for Summary Judgment; FURTHER ORDERED that all of Plaintiff's claims against Defendant, Fidelity National Insurance Company, in this matter are hereby DISMISSED WITH PREJUDICE. Signed by Judge Carl Barbier on 3/6/15. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CLYDE PAUL HYMEL

CIVIL ACTION

VERSUS

NO: 13-5648

FIDELITY NATIONAL INSURANCE
COMPANY, ET AL

SECTION: J(2)

ORDER AND REASONS
Before the Court is a Motion for Summary Judgment (Rec. Doc.
27)

filed

by

Defendant,

Fidelity

National

Insurance

Company

("Fidelity"), and an Opposition (Rec. Doc. 28) by Plaintiff, Clyde
Paul

Hymel

("Plaintiff").

Having

considered

the

motion,

the

parties’ submissions, the record, and the applicable law, the Court
finds, for the reasons expressed below, that the motion should be
GRANTED.
PROCEDURAL AND FACTUAL BACKGROUND
Fidelity serves as a Write-Your-Own ("WYO") Program Carrier
participating in the U.S. Government's National Flood Insurance
Program ("NFIP"). The NFIP was established by the National Flood
Insurance Act of 1968, 42 U.S.C. § 4001, and is administered by the
Federal Emergency Management Agency ("FEMA"). Under the NFIP,
Fidelity acts as a WYO Program Carrier pursuant to an Arrangement
with FEMA ("the Arrangement"), in which Fidelity issues Standard
Flood Insurance Policies ("SFIPs") to claimants insured under the

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NFIP.
Plaintiff's home is insured by Fidelity pursuant to the NFIP.
Specifically, Fidelity issued an SFIP to Plaintiff which provided
coverage for damage incurred by flooding for both Plaintiff's
dwelling itself, as well as the contents of the dwelling. The terms
of Plaintiff's SPIF require that in order to recover on a claim for
flood damage, an insured must submit within sixty (60) days after
the loss is incurred, a proof of loss supported by "specifications
of damaged buildings and detailed repair estimates" (among other
documentation requirements). Fidelity granted a blanket extension
of this requirement for all claimants who sustained flood damage
during Hurricane Isaac, allowing them to file documented proofs of
losses within 240 days of the date the loss was incurred.
Plaintiff alleges that on or about August 29, 2012, as a
result of Hurricane Isaac, he sustained serious damage to his home
and its contents, which were covered by the insurance policy.
Shortly thereafter, Plaintiff notified Fidelity of his intent to
file an insurance claim. Fidelity then arranged for Travis Allman,
an

independent

adjuster,

to

inspect

Plaintiff's

property

and

compile an estimate of damage. After an inspection of the property,
Mr. Allman prepared a report which totaled $55,616.76 in estimated
damage to the main building, $1,695.24 in estimated damage to the
detached garage, and $36,943.73 in estimated damage to the contents
of the property, for a total of $94,255.73 in damage. Plaintiff

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then executed and timely delivered to Fidelity a signed proof of
loss in the amount of $94,255.73. Fidelity did not dispute this
amount of coverage and paid this amount to Plaintiff. Plaintiff
does not dispute that he has received this payment.
After this payment was made, Plaintiff retained the services
of a second adjuster from Michaelson and Messinger Insurance
Specialists, LLC ("M&M") to compile an estimate. This estimate
totaled damage in the amount of $290,041.89. Plaintiff then filed
a supplemental claim with Fidelity for payment of the additional
damage detailed in the M&M report, which Fidelity had not covered
in the original payment. Plaintiff alleges that in support of his
claim for additional benefits, he submitted the estimate report
compiled by M&M. Fidelity refused to make any payments beyond the
amount they originally paid to Plaintiff.
Plaintiff then filed suit against Fidelity before this Court
on August 13, 2013, alleging that Fidelity breached the insurance
contract

and

acted

in

bad

faith

by

refusing

to

tender

the

additional benefits. On October 17, 2013, this Court granted
Fidelity's partial motion to dismiss and dismissed with prejudice
Plaintiff's claims against Fidelity for attorney's fees and bad
faith. Fidelity then filed the instant motion, seeking summary
judgment in its favor and the dismissal of all of Plaintiff's
remaining claims. Fidelity argues that because Plaintiff failed to
satisfy the strict conditions of his SPIF, namely by failing to

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submit

a

signed

proof

of

loss

in

support

of

his

claim

for

additional benefits, Fidelity was not required, and in fact not
permitted, to make payment on these additional benefits. Because of
this failure, Fidelity argues that Plaintiff is procedurally barred
from receiving payment on his claim for additional benefits.
LEGAL STANDARD
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits show
that there is no material issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”

Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing FED. R. CIV. P.
56(c)); See also 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 refrains from making credibility determinations or
weighing the evidence.”

Delta & Pine Land Co. v. Nationwide

Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008).

All

reasonable inferences are drawn in favor of the nonmoving party,
but

a

party

cannot

defeat

summary

judgment

allegations or unsubstantiated assertions.

with

conclusory

Little, 37 F.3d at

1075. A court ultimately must be satisfied that “a reasonable jury
could not return a verdict for the nonmoving party.”

Delta, 530

F.3d at 399.
If the dispositive issue is one on which the moving party will
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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, 1263-64 (5th Cir. 1991)
(citation omitted). The nonmoving party can then defeat the motion
by either countering with sufficient evidence of its own, 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
material issue exists. See id. at 324.

The nonmovant may not rest

upon the pleadings, but must identify specific facts that establish
a material issue for trial.

See, e.g., id. at 325; Little, 37 F.3d

at 1075.
DISCUSSION
Fidelity contends that it is entitled to summary judgment on
Plaintiff's claims because Plaintiff has failed to comply with the
stringent

requirements

of

his

insurance
5

policy.

"Federal

law

governs interpretation of NFIP polices." Kidd v. State Farm Fire &
Cas. Co., 392 F. App'x 241, 243 (5th Cir. 2010). Because payments
on SFIPs ultimately come from the federal treasury, the Fifth
Circuit has repeatedly recognized that conditions of SFIPs, such as
the aforementioned condition, must be "strictly construed and
enforced." Forman v. FEMA, 138 F.3d 543, 545 (5th Cir. 1998);
Richardson v. Am.

Bankers Ins. Co. of Fla., 279 F. App'x. 295, 298

(5th Cir. 2008) (citing Gowland v. Aetna, 143 F.3d 951, 954 (5th
Cir. 1998)). Courts should not, even in "hard cases," allow
plaintiffs to circumvent these regulations, as providing for such
"would disregard 'the duty of all courts to observe the conditions
defined by Congress for charging the public treasury.'" Forman, 138
F.3d at 545 (quoting Office of Pers. Mgmt. v. Richmond, 110 S.Ct.
2465, 2469 (1990)). As such, a rule allowing for claimants to
recover against Fidelity and other WYO Program Carriers despite
only "substantial compliance" with the terms of their SFIP would be
"contrary to [Fifth Circuit] caselaw." Marseilles Homeowners Condo.
Ass'n Inc. v. Fidelity Nat. Ins. Co., 542 F.3d 1053, 1056 (5th Cir.
2008) (citing Richardson, 143 F.3d at 299).
Fidelity argues that Plaintiff is not entitled to payment on
his additional benefits because he has failed to satisfy the "Proof
of

Loss"

requirement.

Article

VII(J)(4)

of

Plaintiff's

SFIP

requires Plaintiff to "within 60 days after the loss, send us a
proof of loss, which is your statement of the amount you are
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claiming under the policy signed and sworn to by you." (Rec. Doc.
27-2, p. 7). Neither party disputes that Plaintiff initially
satisfied this burden by submitting a verified proof of loss for
$94,255.73 in conjunction with his first claim. However, Fidelity
argues that Plaintiff was required to submit the same type of proof
of loss to support his supplemental claim for additional benefits.
Because he failed to do so, and instead submitted only the estimate
report compiled by M&M, Fidelity contends that Plaintiff has failed
to strictly abide by the requirements of his SFIP and is not
entitled to payment for the additional benefits. In his Opposition,
Plaintiff argues that the submission of the M&M estimate to
Fidelity was sufficient to satisfy the proof of loss requirement
for the additional benefits and trigger Fidelity's duty to make
payment on Plaintiff's supplemental claim.
This Court has previously recognized that the duty to submit
a verified proof of loss applies "not only to initial claims made
by policyholders, but also to additional and/or supplemental claims
filed with the policy provider." Fowl, Inc. v. Fidelity Nat.
Property and Cas. Ins. Co., No. 12-283, 2013 WL 392599, at *1 (E.D.
La. Jan. 31, 2013) (Barbier, J.) (citing Richardson, 279 F.App'x at
298 (affirming a grant of summary judgment where the district court
dismissed plaintiff's case for failure to file a proof of loss for
additional

benefits

sought

post-Hurricane

Katrina);

Dogwood

Grocery, Inc. v. S.C. Ins. Co., 49 F.Supp.2d 511, 513 (W.D.La.1999)

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(holding

that

there

is

no

substantive

law

to

support

the

proposition that a subsequent amendment of a claim does not require
a proof of loss)). Indeed, "in cases construing the terms of the
SFIP, we have held that an insured must file a sworn proof of loss
before seeking damages in excess of the amount paid by the insurer.
Kidd, 392 F.App'x at 243 (5th Cir. 2010) (citing Marseilles, 542
F.3d at 1055-56 (5th Cir. 2008)). As such, it is clear that
Plaintiff was required to submit a proof of loss in compliance with
Article VII(J)(4) for his supplemental claim.
The parties dispute whether the estimate compiled by M&M's
adjuster satisfies the requirements imposed by Article VII(J)(4) as
a proper proof of loss. In support of his argument that the
submission

of

this

estimate

acts

as

a

valid

proof

of

loss,

Plaintiff relies on the language of the Appendix to the federal
regulations governing the NFIP, which informs insureds that:
At our option, we may accept the adjuster's report of the
loss instead of your proof of loss. The adjuster's report
will include information about your loss and the damages
you sustained. You must sign the adjuster's report. At
our option, we may require you to swear to the report.
44 C.F.R. § Pt. 61, App. A(1), art VII(J)(9). However, contrary to
Plaintiff's contention, this language is not intended to act as a
waiver of one of the most stringent requirements contained in
SFIPs. As noted by the Eighth Circuit, "we do not interpret this
document to waive one of the policy's most important requirements
when the text plainly says the opposite." McCarty v. S. Farm Bureau

8

Cas. Ins. Co., 758 F.3d 969, 973-74 (8th Cir. 2014). This text
states only that an insurance company may waive the right to accept
formal proof of loss documents and may choose to accept the less
formal adjuster's report. Thus, in order to waive the stringent
proof of loss requirement, affirmative action by the insurance
company is required. The Fifth Circuit has recognized that an
insurance company may execute such a waiver and choose to accept
adjuster's reports either by expressly stating such in the terms of
its policy or by including a statement permitting acceptance of an
adjuster's report as proof of loss in a press release distributed
to all policyholders. See Kidd, 392 F. App'x at 243; Wientjes v.
Am. Bankers Ins. Co. of Fla., 339 F.App'x 483, 484 (5th Cir. 2009).
Here, there is no evidence that Fidelity engaged in either type of
conduct. In fact, in his extremely brief Opposition, Plaintiff
points to absolutely no evidence to support a contention that such
a waiver was executed. As such, the Court finds there is no genuine
issue that Fidelity did not waive its stringent proof of loss
requirement, and submission of an adjuster's report does not meet
the criteria set forth in Article VII(J)(4) of the SFIP.
Additionally, Plaintiff fails to advise the Court regarding
whether he satisfied the requirements which would be imposed if
such a waiver did occur. While Plaintiff argues that he provided
Fidelity with a copy of the M&M estimate "by way of facisimle
[sic]," he makes no mention of whether he signed this report prior

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to its submission. (Rec. Doc. 28, p. 2). When a plaintiff fails to
provide proof that he has signed and sworn to an adjuster's report
in lieu of a proof of loss, this Court has previously held that
such a report fails to comply with the proof of loss requirement.
White v. Allstate Ins. Co., No. 13-5634, 2015 WL 507024, at *3
(E.D. La. Feb. 6, 2015) (Lemmon, J.).
"Because the provisions of an insurance policy issued pursuant
to a federal program must be strictly construed and enforced, . .
. an insured's failure to provide a complete, sworn proof of loss
statement, as required by the flood insurance policy, relieves the
federal insurer's obligation to pay what otherwise might be a valid
claim." Marseilles, 542 F.3d at 1056 (citing Richardson, 143 F.3d
at 299; Gowland, 143 F.3d at 954 (internal quotations omitted)).
Here, the facts are clear that Plaintiff failed to provide Fidelity
with a proof of loss for the additional benefits for which he filed
a

supplemental

claim.

Because

no

genuine

issue

exists

that

Plaintiff's supplemental claim was procedurally barred and that
Fidelity owed no duty under the SFIP to make payment on Plaintiff's
additional benefits, summary judgment on Plaintiff's claims is
appropriate.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that the Motion for Summary Judgment
(Rec. Doc. 27) is GRANTED.
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IT IS FURTHER ORDERED that all of Plaintiff's claims against
Defendant, Fidelity National Insurance Company, in this matter are
hereby DISMISSED WITH PREJUDICE.
New Orleans, Louisiana this 6th day of March, 2015.

________________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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