RUTH et al v. SELECTIVE INSURANCE COMPANY OF AMERICA

Filing 27

OPINION. Signed by Chief Judge Jerome B. Simandle on 2/14/2017. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

HERBERT RUTH AND DANNA RUTH,

HONORABLE JEROME B. SIMANDLE

Plaintiffs,
Civil Action
No. 15-2616 (JBS/JS)

v.
SELECTIVE INSURANCE COMPANY OF
AMERICA,

OPINION

Defendant.

APPEARANCES:
Verne A. Pedro, Esq.
Merlin Law Group
125 Half Mile Road
Suite 200
Red Bank, NJ 07701
Attorney for Plaintiffs
Adam Joseph Petitt, Esq.
Stradley, Ronon, Stevens & Young LLP
2005 Market Street
Suite 2600
Philadelphia, PA 19103
-andFrancis X. Manning, Esq.
Stradley, Ronon, Stevens & Young LLP
457 Haddonfield Road
Suite 100
Cherry Hill, NJ 08002
Attorneys for Defendant

SIMANDLE, Chief Judge:
INTRODUCTION
In this declaratory judgment action, Plaintiffs Herbert and
Danna Ruth seek a declaration that they are entitled to

insurance coverage and compensatory damages arising from
Defendant Selective Insurance Company of America’s alleged
mishandling of their flood claim stemming from Superstorm Sandy.
This matter comes before this Court on Defendant’s unopposed
motion for summary judgment [Docket Item 26]. For the following
reasons, the Court grants Defendant’s motion.
BACKGROUND 1
Plaintiffs Herbert and Danna Ruth own a home in Oceanport,
New Jersey (“the Property”) and hold a Standard Flood Insurance
Policy (“SFIP”) covering their home with Selective Insurance
Company (“Selective”), an insurer who participates in the
Federal Emergency Management Agency’s (“FEMA”) “Write Your Own”
(“WYO”) flood insurance program. (Certification of Stephen Weber
(“Weber Cert.”) [Exhibit 1 to Defendant’s Statement of Material
Facts (“Def. SMF”)] at ¶ 5; Flood Declarations Page [Ex. A to
Weber Cert.]) The SFIP includes building coverage of $250,000
with a $1,000 deductible, and contents coverage of $11,600 with
a $1,000 deductible. (Weber Cert. at ¶ 5; Flood Declarations

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The Court distills this undisputed version of events from
Defendant’s Statement of Uncontested Material Facts and the
certifications and exhibits accompanying its pending motion for
summary judgment. Because Plaintiffs failed to oppose the
motion, all facts contained within Defendant’s Statement of
Uncontested Material Facts [Docket Item 26-1] are deemed
admitted for the purposes of this motion. See L. Civ. R. 56.1(a)
(“[A]ny material fact not disputed shall be deemed undisputed
for the purposes of the summary judgment motion.”)
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Page.) Plaintiffs’ home is a single-family home with an
unfinished basement. (Weber Cert. at ¶ 8; Flood Declarations
Page; Deposition of Herbert Ruth (“Ruth Dep.”) [Exhibit A to
Certification of Adam J. Petitt] at 27:20-28:2.) Plaintiffs
allege, and Defendants do not dispute, that Plaintiffs paid all
premiums when due while the SFIP was in effect. (Complaint at ¶
13.)
Plaintiffs notified Selective of damage to their home
caused by flooding from Superstorm Sandy on or about October 29,
2012. (Weber Cert. at ¶ 6; Selective Activity Log [Exhibit B to
Weber Cert.].) The basement flooded with approximately five feet
of water during the storm. (Ruth Dep. at 21:12-15.) Selective
sent an independent adjuster to inspect the Property on November
23, 2012. (Weber Cert. at ¶ 7.) That same day, Plaintiffs
requested an advance payment from Selective for $5,000 in
building damage, which request Selective granted. (Weber Cert.
¶¶ 9-10; Advance Payment Request [Ex. D to Weber Cert.];
Selective’s 12/6/12 Check [Ex. E to Weber Cert.].)
The independent adjuster submitted a report to Selective on
January 27, 2013, recommending that Selective make a payment of
$17,175.83 in covered building damage and $1,344.96 in covered
contents damage to Plaintiffs. (Weber Cert. ¶ 11; Independent
Adjuster Report [Ex. C to Weber Cert.].) Selective issued two
checks to Plaintiffs for $12,176.83 in covered building damage
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(the adjuster’s recommendation, less the $5,000 advance payment)
and $1,344.96 in covered contents damage on February 7, 2013,
“representing payment in full under the policy.” (Weber Cert. ¶¶
12-13; Selective’s 2/7/13 Checks [Ex. F to Weber Cert.].)
On April 26, 2014, Plaintiffs submitted to Selective
additional documentation claiming covered losses to their
property in the amount of $45,780.14, including a sworn proof of
loss for covered building damage and an estimate from B.C. Moye
Consulting, LLC for repairs to the Property that differed from
the estimate provided by Selective’s independent adjuster.
(Weber Cert. ¶ 14; Proof of Loss Submission [Ex. G to Weber
Cert.].) On May 22, 2014, Selective sent a letter to Plaintiffs
denying their request for additional recovery because Plaintiffs
had not submitted adequate supporting documents per the NFIP,
including itemized room-by-room contractor’s estimates, a signed
contract of repair with a contractor, or paid receipts or
invoices for repairs. (Weber Cert. ¶ 15; May 22, 2014 Letter
from Selective to Plaintiffs [Ex. H to Weber Cert.].) It appears
that Plaintiffs never submitted further proof of loss.
Plaintiffs filed this case on April 10, 2015, claiming that
Selective “unjustifiably failed and/or refused to perform its
obligations under the Policy and wrongfully or unfairly limited
coverage and payment on Plaintiffs’ claims” and seeking a
declaration that they are entitled to insurance coverage and
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compensatory damages arising from Selective’s mishandling of
their flood claim. (See generally Compl.) The crux of the
parties’ dispute at this stage is whether Plaintiffs are
entitled to coverage under the SFIP for (1) the cost of
replacing two compressors to the central air conditioning system
located outside the house, and (2) damage to personal property
in their garage and basement. Defendant filed the instant motion
for summary judgment [Docket Item 26] arguing that Plaintiffs
are not entitled to coverage under the SFIP for either claim
because the compressors were not damaged by flood waters and
because Plaintiffs did not submit a sworn proof of loss for the
personal property. For the reasons that follow, Defendant’s
motion is granted.
STANDARD OF REVIEW
Where, as in the instant case, a summary judgment motion is
unopposed, Rule 56(e)(3), Fed. R. Civ. P. still requires the
Court to satisfy itself that summary judgment is proper because
there are no genuine disputes of material fact and the movant is
entitled to judgment as a matter of law. 2

See also Anchorage

2

Rule 56(e), Fed. R. Civ. P. was amended in 2010 to address the
situation where a party fails to oppose a motion for summary
judgment. Rule 56(e) gives the court options when considering a
summary judgment motion that is unopposed in whole or in part,
providing:
If a party fails to properly support an assertion of fact
or fails to properly address another party’s assertion of
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Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 175
(3d Cir. 1990) (interpreting prior version of Rule 56). Federal
Rule of Civil Procedure 56(a) generally provides that the “court
shall grant summary judgment if the movant shows that there is
no genuine dispute as to any material fact” such that the movant
is “entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). A “genuine” dispute of “material” fact exists where a
reasonable jury’s review of the evidence could result in “a
verdict for the non-moving party” or where such fact might
otherwise affect the disposition of the litigation.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Anderson v.

Disputes over

fact as required by Rule 56(c), the court may: (1) give an
opportunity to properly support or address the fact; (2)
consider the fact undisputed for the purposes of the
motion; (3) grant summary judgment if the motion and
supporting materials – including the facts considered
undisputed – show that the movant is entitled to it; or (4)
issue any other appropriate order.
Under Rule 56(e)(3), one of those options is to grant summary
judgment if the motion and supporting materials show that the
movant is entitled to it. The Advisory Committee Notes for Rule
56(e) (2010 Amendments) explain that granting summary judgment
on the unopposed motion is not automatic, as “[c]onsidering some
facts undisputed does not of itself allow summary judgment . . .
. Once the court has determined the set of facts – both those it
has chosen to consider undisputed for want of a proper response
or reply and any that cannot be genuinely disputed despite a
procedurally proper response or reply – it must determine the
legal consequences of these facts and permissible inferences
from them.” Notes of the Advisory Committee, Rule 56(e)(2010
Amendments). Thus, the suggested practice is to make an
independent determination whether the unopposed record warrants
awarding summary judgment to the movant.
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irrelevant or unnecessary facts, however, fail to preclude the
entry of summary judgment. Id.

Conclusory, self-serving

submissions cannot alone withstand a motion for summary
judgment. Gonzalez v. Sec’y of Dept. of Homeland Sec., 678 F.3d
254, 263 (3d Cir. 2012) (internal citations omitted).
Further, in an unopposed motion, a movant who files a
proper Local Civil Rule 56.1 statement of undisputed material
facts (“SMF”) receives the benefit of the assumption that such
facts are admitted for purposes of the summary judgment motion.
See L. Civ. R. 56.1 (providing that “any material fact not
disputed shall be deemed undisputed for the purposes of the
summary judgment motion”).

Accordingly, where a properly filed

and supported summary judgment motion is unopposed, it would be
an exceptional case where the court concludes that summary
judgment should nonetheless be denied or withheld, although the
Court has discretion to do so if unsatisfied that the law and
facts point to judgment as a matter of law.
DISCUSSION
Defendant contends that it is entitled to summary judgment
because Plaintiffs cannot recover any additional amounts under
the SFIP for two reasons: first, because the compressors to the
central air conditioning system did not suffer direct physical
damage by or from flood, and second, because Plaintiffs did not
submit a proof of loss and documentation in support of their
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claim for additional contents damage. The Court agrees with both
points.
Plaintiff holds a SFIP issued by Selective, a WYO flood
insurance carrier pursuant to the National Flood Insurance
Program (“NFIP”). As the Third Circuit has explained, the NFIP
is “a federally supervised and guaranteed insurance program
presently administered by the Federal Emergency Management
Agency (‘FEMA’) pursuant to the [National Flood Insurance Act]
and its corresponding regulations.” Van Holt v. Liberty Mut.
Fire Ins. Co., 163 F.3d 161, 165 (3d Cir.1998) (citing 44 C.F.R.
§§ 59.1–77.2). FEMA promulgated the SFIP, set forth in 44 C.F.R.
Pt. 61, App. A(1), (2), and (3), and provided for claims
adjustment of the SFIP by private insurers operating as WYO
companies. Messa v. Omaha Property & Cas. Ins. Co., 122 F. Supp.
2d 513, 519 (D.N.J. 2000). “It is well settled that federal
common law governs the interpretation of the SFIP at issue
here.” Torre v. Liberty Mut. Fire Ins. Co., 781 F.3d 651, 653
(3d Cir. 2015). As with other insurance policies issued under
federal programs, the terms and conditions of the SFIP must be
strictly construed because they are direct claims on the Federal
Treasury. Suopys v. Omaha Property & Cas., 404 F.3d 805, 809 (3d
Cir. 2005); Kennedy v. CNA Ins. Co., 969 F. Supp. 931, 934
(D.N.J. 1997) aff’d, 156 F.3d 1225 (3d Cir. 1998).

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First, Plaintiffs cannot recover under the SFIP for alleged
damage to the compressors to their central air conditioning
system because the compressors did not suffer direct physical
damage by or from flood. The plain language of the SFIP insures
only “against direct physical loss by of from flood,” which
requires “evidence of physical changes to the property” caused
by a flood. 44 C.F.R. Pt. 61, App. A(1), Art. II-B(12). Mr. Ruth
testified that the compressors were outside and not damaged by
flood. (Ruth Dep. at 47:10-48:21.) Nonetheless, Plaintiffs seek
to have Selective pay to replace the compressors because they
must replace another component of the central air conditioning
system that was damaged by floodwaters in the basement, and the
air conditioning system will only work if the entire system is
replaced all at once. (Id.) Despite this representation, Mr.
Ruth’s admission makes clear that the compressors are not
covered losses under the terms of the SFIP. Therefore, Selective
is entitled to summary judgment on this part of Plaintiffs’
claim.
Second, Plaintiffs cannot recover for damage to personal
property in the garage and basement caused by the flood because
they did not file proof of loss or any other documentation for
these losses. The Third Circuit has unambiguously held that
“strict adherence to SFIP proof of loss provisions . . . is a
prerequisite to recovery under the SFIP.” Suopys, 404 F.3d at
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810. Mr. Ruth conceded at his deposition that he did not
“declare” or “report” these losses at the time “because it was
insignificant compared to the other items” and that he did not
even think to seek recovery for them until this action. (Ruth
Dep. at 80:5-10, 91:19-23; see also Weber Cert. at ¶ 16.)
Plaintiffs’ failure to follow the NFIP requirement of submitting
a sworn proof of loss for these claims bars recovery under the
SFIP. Therefore, Selective is entitled to summary judgment on
this part of Plaintiffs’ claim, as well.
CONCLUSION
An accompanying Order will be entered.

February 14, 2017
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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