Moffett et al v. Computer Sciences Corporation, et al

Filing 740

REPORT AND RECOMMENDATIONS of Special Master(Schwartz Claim) re 660 Supplemental MOTION for Summary Judgment for the Claims of Dorothea Reiley, James and Barbara Richmond, John and Frances Schmidt, Edward and Tammy Schwartz, and Gerardo and Debra Simon filed by FEMA Objections to R&R due by 12/15/2011 Responses due by 12/15/2011. Signed by Special Master Dennis M. Sweeney on November 27, 2011. (Sweeney, Special Master)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division

THOMAS L. MOFFETT, II, ET AL.
Plaintiffs,
v.
COMPUTER SCIENCES CORPORATION,
ET AL.
Defendants.

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Civil Action No.
8:05-CV-01547

REPORT AND RECOMMENDATION CONCERNING
WAIVER CLAIM OF EDWARD AND TAMMY SCHWARTZ
This constitutes the Report and Recommendation to the Court concerning the
waiver claim of Edward and Tammy Schwartz pursuant to Part 1.f of the
Memorandum Order of the Court (Document 467). In preparing this report, the
Special Master reviewed the motions, memoranda, affidavits and exhibits
provided in connection with the process specified in the Memorandum Order. As
necessary, the Special Master also reviewed other documents that are part of the
Court filings in this case. The Special Master was also provided by the Federal
Emergency Management Agency (“FEMA”) the computer disc of the
“appropriate documents of record” for this claim, as specified in Part 1.a of the
Memorandum Order. In this case, the documents consist of 465 pages labeled
FEMA-000001 to 000465.

I.

Background
Plaintiffs’ property located at 3519 Glenwood Road1

in Pasadena,

Maryland, was insured under a Standard Flood Insurance Program (“SFIP”)
issued by FEMA as Policy Number 3000272814 with a coverage limit of
$200,000.00 for their building and $50,000.00 for their contents, each subject to a
$500.00 deductible. Id. at ¶¶50 through 52.
!

On September 19, 2003, Hurricane Isabel struck the Middle Atlantic

States, including Maryland, which caused flooding resulting in damage to
Plaintiffs’ home.
Plaintiffs submitted Proofs of Loss Proofs of Loss for $117,674.54 and
$17,416.04. Id. at ¶¶ 54 through 58. FEMA paid Plaintiffs in full on their timely
submitted Proofs of Loss. Id.
Plaintiffs did not submit any other timely Proof of Loss. Id. at ¶59.
II.

Waiver Claim and Denial
On December 3, 2007, this Court permitted Plaintiffs to submit

applications for waivers to FEMA. See Order of December 4, 2007, Doc. No. 196
and Doc. No. 197.

On February 25, 2008, Plaintiffs submitted to FEMA a

document entitled “PLAINTIFFS EDWARD AND TAMMY SCHWARTZ’S
INDIVIDUAL APPLICATION FOR WAIVER OF PROOF OF LOSS
REQUIREMENTS.”

The waiver application requested that FEMA compensate

Plaintiffs an additional $71,655.29. See FEMA-000005.

1

Plaintiffs also reference 1071 Locust Drive as the damaged property, but it appears they also
identify the property as 3519 Glenwood Road as the damaged property. The record identifies
3519 Glenwood Road as the proper insured property.

2

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Plaintiffs’ waiver application provided:
Applicants were paid $93,710.71 in benefits for damages to the
structure located at 1071 Locust Drive, Pasadena, MD and incurred
a deductible of $500.00. They were further paid in full for their
contents loss. Applicants built a larger new construction and
calculations were made to determine costs of rebuilding a home to
the former square footage. To rebuild the same size structure,
Applicants would have spent $165,876.00. Applicant's shortfall is
$71,665.029.

See FEMA-00005.
Plaintiffs provided a shortfall itemization and documents related to the Gagnon
claim[ another claim that was before the Court].
FEMA-000041 through FEMA-000053.

See Doc. No. 257-4 or

Nevertheless, Plaintiffs' waiver

application clearly states "calculations have been made to determine the price per
square foot that would have been needed to build a home of the same size." See
FEMA-000005.

FEMA denied the request for a waiver of the proof of loss

requirements in an undated letter. See FEMA-000134 to 000135.
III.

Reasons for Waiver Denial
The reasons for the denial of the Waiver Claim are found at ¶¶47-50 of the

Supplemental Declaration of Karen Christian for the Claims of Dorothea Reilly,
James and Barbara Richmond, John and Frances Schmidt, Edward and Tammy
Schwartz, and Gerardo and Debra Simon. It states:
Plaintiffs' method of calculating their damages by taking the square
footage of their original structure and multiplying it by the cost per
square foot of their new upgraded structures fails to account for the
SFIP's coverage limits and exclusions.
Plaintiffs' "Shortfall
Itemization" lists do not actually include any detailed itemization
that could be used for a meaningful comparison to the adjusters'
estimates.
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Plaintiffs presented no evidence challenging the repair estimates
provided by their insurers. The SFIP only covers direct physical
loss caused by or from flooding. Plaintiffs' supplemental claims
are based on the square footage cost of a new upgraded dwelling
without regard to the actual physical loss caused by or from the
flooding. In addition to only insuring against physical loss by or
from flooding, the SFIP excludes coverage for upgrades and
requires the use of material that is of like kind and quality, which
Plaintiffs' formula based claims disregard.
See General
Declaration of Karen Christian, Exhibit A at ¶¶ 16 and 17, Doc.
No. 474-1. Finally, the SFIP has a policy limit of $30,000.00 for
Increased Cost of Compliance expenses and Plaintiffs' formula
based claims make it impossible to separate out those expenses.
Plaintiffs failed to demonstrate they met any of the
criteria used to determine whether to grant a waiver.
They failed to demonstrate any additional damages they sought were
actually covered by their SFIP. They all based their supplemental
claims on a formula that took the cost per square foot of a
substantially improved home to calculate their loss that did not take
into account the coverages and exclusions found within their SFIPs.
Accordingly, each of the aforementioned Plaintiffs' claims received
a comprehensive review as a result of their waiver application.
FEMA determined none of these Plaintiffs were entitled to
additional compensation.
Plaintiffs' waiver applications were
denied for a multitude of reasons, but primarily because they all
failed to document any physical loss by or from flood covered
under their SFIPs for which they did not receive full compensation
for.

IV.

Plaintiffs’ Assertions

Plaintiffs in their Opposition (Document 735) at pages 12 to 14 set out
their contentions as to why summary judgment should not be granted to
FEMA and why they should receive summary judgment in their favor.
They note that Baltimore County government twice found that the house
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sustained substantial damage and was in excess of fifty percent of the
assessed value of the property. Id at page 13. According to Plaintiffs they
chose to demolish and rebuild their home because that option “made better
financial, structural, non-dangerous and hygienic sense.” Id.
Plaintiffs concede that various errors were made in the shortfall
itemization, but believe they have corrected the record in the attachments
submitted with their Opposition memorandum as Attachment A. They ask
that summary judgment should be granted to them in the full shortfall
amount of $71,665.29.

V.

Special Master’s Analysis 2

In its Reply (Document 736) at page 4, FEMA states that these Plaintiffs
relied on a cost per square foot formula as the basis for their waiver
application.

FEMA notes

that “[t]he simplistic formula approach has

been repeatedly rejected by the Special Master and this Court.” Reply at
page 4. FEMA is correct. The approach taken by these Plaintiffs has been
firmly and completely rejected as has been explained in detail by both the
Special Master and the Court’s earlier memoranda. The Special Master

2

In their Oppositions at Document No. 735 at Pages 3 to 8, Group Seven Plaintiffs have raised
what they term to be twenty-four “common issues” that the Court has previously considered or
resolved in consideration of prior groups. To the extent that these issues are not further cited in the
individual Plaintiffs’ discussion of their particular cases, the Special Master will not specifically
address these issues in this Report and Recommendation, but will incorporate and rely on the
Court’s prior rulings on these issues (see Documents 594, 596, 597 and 679) and the previouslyfiled Memorandum on Role of the Special Master and Report and Recommendation of the Special
Master on General Issues Raised by Plaintiffs and Defendants (Document 563).

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does not read the Opposition as making any other argument and thus
further discussion is not necessary. FEMA is entitled to summary
judgment on this claim.

VI.

Recommendation of the Special Master
After a review and a consideration of the matter and the arguments

presented by the parties, it is the recommendation of the Special Master that the
Defendants’ Motion for Partial Summary Judgment affirming FEMA’s
determination of Plaintiff’s waiver application be granted; and it is further
recommended that Plaintiff’s Motion for Summary Judgment be denied.

November 27 , 2011
Date

/S/
Dennis M. Sweeney
Special Master

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