UDDOH v. SELECTIVE INSURANCE COMPANY OF AMERICA
Filing
67
OPINION. Signed by Judge Esther Salas on 12/29/2014. (nr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
HUMPHREY O. UDDOH,
Plaintiff,
Civil Action No. 12-419 (ES)
v.
OPINION
SELECTIVE INSURANCE COMPANY OF
AMERICA,
Defendant.
SALAS, DISTRICT JUDGE
This matter comes before the Court on Defendant Selective Insurance Company of
America’s motion for summary judgment, (D.E. No. 57), and pro se Plaintiff Humphrey O.
Uddoh’s1 cross-motion for summary judgment, (D.E. No. 58). The Court has considered the
parties’ submissions and decides the motions without oral argument pursuant to Federal Rule of
Civil Procedure 78(b). Based on the reasons discussed below, Defendant’s motion for summary
judgment is hereby GRANTED and Plaintiff’s motion for summary judgment is hereby
DENIED. The Court dismisses the case without prejudice.
1
Although Plaintiff Humphrey O. Uddoh is appearing pro se, the record indicates that he holds a law
degree and is a licensed attorney. (See D.E. No. 40 at 3; D.E. No. 50 at 1; D.E. No. 63 at 5).
1
I.
FACTUAL BACKGROUND & PROCEDURAL HISTORY2
Plaintiff Humphrey O. Uddoh owns property located at 282 ½ 6th Street, Jersey City, New
Jersey, 07302 (the “Property”). (D.E. No. 57-1, Defendant’s Memorandum of Law in Support
of Motion for Summary Judgment (“Def. Mov. Br.”) at 3). Defendant Selective Insurance
Company of America issued Plaintiff a flood insurance policy for the Property pursuant to the
Standard Flood Insurance Policy (“SFIP”) codified in 44 C.F.R. Pt. 61, App. A(1). (Id.). In
2010, Plaintiff filed suit against Defendant seeking damages for flood losses that occurred on
February 28, 2009, November 8, 2009, and March 14, 2010. (Id.).
Judge William J. Martini of the United States District Court for the District of New Jersey
dismissed Plaintiff’s first lawsuit with prejudice. In pertinent part, Judge Martini found that
Plaintiff did not strictly comply with the conditions precedent to payment set forth in the SFIP
because he failed to timely file proof of loss. Uddoh v. Selective Ins. Co. of Am., No. 10–1804,
2012 WL 2979051, at *3 (D.N.J. July 20, 2012). Judge Martini also held that Plaintiff’s state
law claims were preempted by the National Flood Insurance Act of 1968. Id.
Following a lapse in the previous policy, Defendant issued Plaintiff another flood
insurance policy for the Property, with effective coverage dates from November 11, 2010 to
November 11, 2011, pursuant to the terms codified in the SFIP. (Def. Mov. Br. at 3). Plaintiff
made two claims pursuant to this policy for damage that allegedly occurred on August 9, 2011
and August 27, 2011. (D.E. No. 58, Plaintiff’s Cross Motion for Summary Judgment, (“Pl.
2
The facts in this section have been collectively gathered from the parties’ submissions. Neither party
properly complied with Local Rule of Civil Procedure 56.1, which requires the party filing a summary
judgment motion to furnish a Statement of Material Facts Not in Dispute in a separate document, not as
part of the brief. L. Civ. R. 56.1. Moreover, Rule 56.1 directs the nonmoving party to submit a
responsive statement with his opposition papers. Id. Defendant’s Statement of Material Facts Not in
Dispute appears within its brief, rather than in a separate document. (See D.E. No. 57-1). Furthermore,
Plaintiff did not submit a responsive statement until he submitted his reply brief for his cross-motion for
summary judgment. (See D.E. No. 66). Nevertheless, based on the documents submitted in support of
the instant motions, the Court can clearly ascertain which facts are undisputed.
2
Opp. Br.”) ¶ i). In support of each claim, Plaintiff mailed Defendant a proof of loss submission.
(Pl. Opp. Br. ¶¶ i, ii).
For his August 9, 2011 claim, it is undisputed that Plaintiff submitted the following
documents: (1) a cover letter written and signed by Plaintiff that referenced an estimate of
$6,250.00 in flood damage and an undocumented amount of $20,000.00 in structural damage3;
(2) a construction estimate prepared by a third-party company for repairs totaling $6,250.00; (3)
a proof of loss form4 signed by Plaintiff; and (4) a report prepared by an independent adjuster.
(D.E. No. 58-1, Ex. A). Although Plaintiff signed and notarized the proof of loss form, Plaintiff
states that the form was prepared by the independent adjuster who issued the report. (D.E. No.
66, Plaintiff’s Reply Brief in Further Support of Cross-Motion for Summary Judgment (“Pl.
Reply Br.”) ¶ 6). The proof of loss form, based on the adjuster’s report, estimated that the
Property suffered $1,072.13 in flood damage. (Ex. A).
For his August 27, 2011 claim, it is undisputed that Plaintiff submitted the following
documents: (1) a cover letter written and signed by Plaintiff that referenced $15,000.00 in
damage to his kitchen, $3,000.00 in clean-up costs, and $1,250.00 in replacement costs; (2) a
proof of loss form signed by Plaintiff; (3) a report prepared by an independent adjuster; and (4)
emails, photographs, and receipts. (D.E. No. 58-2, Ex. B). Similar to his August 9th claim, the
proof of loss form, prepared by the adjuster in conjunction with the adjuster’s report, estimated
that the Property suffered $1,072.13 in flood damage.
3
Plaintiff’s submission for his August 9, 2011 claim did not include any documentation, adjustment
evaluation, or estimate that substantiated his claim that the Property suffered $20,000 in structural
damage.
4
For the purposes of clarification, a proof of loss form is one manner in which an insured may submit
proof of loss for flood damage. See 44 C.F.R. Pt. 61, App A(1), Art. VII(J)(7). Adjusters may provide
insureds with a proof of loss form as a matter of courtesy only. Id. The onus remains on the insured to
submit proof of loss, either by form or some other manner.
3
Both parties agree that Plaintiff submitted these documents in a timely fashion.5 (Pl.
Opp. Br. ¶ xiv; Def. Mov. Br. at 9). Plaintiff only signed the proof of loss forms and cover
letters. The record does not indicate that Plaintiff submitted any further documentation for his
August 9th and August 27th claims.
As evidenced in both proof of loss forms, the independent adjusters assigned to evaluate
Plaintiff’s flood loss claims estimated that the Property suffered $1,072.13 in damage, which
did not exceed Plaintiff’s $5,000.00 deductible. (Def. Mov. Br. at 4; see Ex. A, Ex. B).
Because the estimated damage did not exceed the deductible, the Net Amount Claimed for each
flood loss claim was $0.00. (See Ex. A, Ex. B). Plaintiff’s cover letters contested these claims.
(Id.). According to Plaintiff, he suffered more than $1,072.13 in damage and believed that
Defendant should reimburse him based upon the amount contained in the cover letters, not
based upon the estimates contained in the proof of loss forms. (Pl. Opp. Br. ¶ ii). Defendant
subsequently denied Plaintiff’s claims based upon the estimate and information contained in the
proof of loss forms. (Def. Mov. Br. at 4).
On January 23, 2012, Plaintiff filed a civil action against Defendant alleging that
Defendant breached the flood insurance policy by failing to cover his flood damage and rerating the Property to a basement. (D.E. No. 1, Complaint (“Compl.”) ¶¶ 9, 10).6 Plaintiff also
alleged New Jersey state law bad faith, consumer fraud, and estoppel causes of action. (Id. ¶ 9).
On February 7, 2012, Defendant filed its Answer to Plaintiff’s Complaint. (D.E. No. 3, Answer
to Complaint).
Following discovery, on May 23, 2014, Defendant filed the instant motion for summary
judgment. (D.E. No. 57). Defendant argues that because Plaintiff failed to comply with the
5
For the August 27, 2011 claim, the Federal Emergency Management Agency extended the normal
sixty-day deadline for submitting proof of loss.
6
Plaintiff’s Complaint was incomplete. Paragraphs 2–8 were missing.
4
proof of loss requirements for the amounts he seeks in damages, he did not meet the conditions
precedent to bringing suit. Accordingly, Defendant argues that summary judgment must be
entered in its favor. (Def. Mov. Br. at 11). Essentially, Defendant believes that the only proof
of loss that Plaintiff properly filed were the proof of loss forms for the $1,072.13 in flood
damage, which did not result in a payment to Plaintiff because the damages did not exceed his
deductible. (Def. Mov. Br. at 9). On June 2, 2014, Plaintiff filed an opposition and a crossmotion for summary judgment. (D.E. No. 58). In his cross-motion, Plaintiff seeks an order of
declaratory judgment stating that Defendant intentionally and deliberately interfered with the
adjustment process of his two claims. (Pl. Opp. Br. ¶ a). The parties’ motions are now ripe for
adjudication.
II.
LEGAL STANDARD
A court shall grant summary judgment under Rule 56 of the Federal Rules of Civil
Procedure, “if the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits . . . show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247 (1986). The mere existence of an alleged disputed fact is not enough.
Rather, the opposing party must prove that there is a genuine issue of a material fact. Id.
An issue of material fact is genuine if “the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id. at 248. A fact is material if under the governing
substantive law, a dispute about the fact might affect the outcome of the lawsuit. Id. Factual
disputes that are irrelevant or unnecessary will not preclude summary judgment. Id.
On a summary judgment motion, the moving party must first show that no genuine issue
of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then
5
shifts to the nonmoving party to present evidence that a genuine issue of material fact compels a
trial. Id. at 324. To meet its burden, the nonmoving party must offer specific facts that
establish a genuine issue of material fact, not just “some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986).
Thus, the nonmoving party cannot rely on unsupported assertions, bare allegations, or
speculation to defeat summary judgment. See Ridgewood Bd. of Educ. v. N.E. ex rel. M.E., 172
F.3d 238, 252 (3d Cir. 1999). The Court must, however, consider all facts and their reasonable
inferences in the light most favorable to the nonmoving party. See Pa. Coal Ass’n v. Babbitt, 63
F.3d 231, 236 (3d Cir. 1995).
III.
DISCUSSION
A.
National Flood Insurance Program
The National Flood Insurance Act of 1968, 42 U.S.C. §§ 4001–4129, established the
National Flood Insurance Program (“NFIP”). The NFIP is a federal insurance program that is
administered by the Federal Emergency Management Agency (“FEMA”). See 44 C.F.R. §§
59.1–77.2.
Pursuant to its authority granted under the NFIP, FEMA created a “Write-Your-Own”
(“WYO”) program where private insurance companies write their own flood insurance policies.
44 C.F.R. Pt. 62, App. A. Although FEMA allows WYO companies to write their own policies,
the terms and conditions of the policies must comply with the SFIP codified in 44 C.F.R. Pt. 61,
App. A. See Suopys v. Omaha Property & Cas., 404 F.3d 805, 807 (3d Cir. 2005). A WYO
carrier is not allowed to modify, alter, or amend the terms and conditions of the SFIP without
the express written consent of the Federal Insurance Administrator. 44 C.F.R. Pt. 61, App.
A(1), Art. VII(D); see Suopys, 404 F.3d at 807. The United States Treasury underwrites the
6
NFIP, and all flood loss claims that WYO companies issue are paid directly with Treasury
funds. 44 C.F.R. Pt. 62, App. A(1).
Because the U.S. Treasury underwrites all claims paid by WYO companies, strict
adherence to the terms and conditions set forth by FEMA is required. Federal Crop. Ins. Corp.
v. Merrill, 332 U.S. 380, 384 (1947); see e.g., Suopys, 404 F.3d 805, 809 (3d Cir. 2005)
(“Because any claim paid by a WYO Company is a direct charge to the United States Treasury,
strict adherence to the conditions precedent to payment is required.”); DeCosta v. Allstate Ins.
Co., 730 F.3d 76, 83 (1st Cir. 2013) (reiterating its holding that “federal law mandates strict
compliance with the SFIP”); Flick v. Liberty Mutual, 205 F.3d 386, 394 (9th Cir. 2000) (“[A]
claimant under a standard flood insurance policy must comply strictly with the terms and
conditions that Congress has established for payment.”). The SFIP sets forth the following
terms and conditions in case of a flood loss:
Within 60 days of loss, send us proof of loss, which is your
statement of the amount you are claiming under the policy signed
and sworn by you . . . with the following information:
(a) The date and time of loss;
(b) A brief explanation of how the loss happened;
...
(f) Specifications of damaged buildings and detailed repair
estimates;
...
(i) The inventory of damaged personal property . . . .
44 C.F.R. Pt. 61, App. A(1), Art. VII(J)(4).
Furthermore, an insured must “[p]repare an
inventory of damaged property showing the quantity, description, actual cash value, and amount
of loss . . . [and] [a]ttach all bills, receipts, and related documents.” Id. at Art. VII(J)(3).
Insurance adjusters may furnish the insured with a proof of loss form as a courtesy only, but the
onus remains on the insured to timely submit proof of loss. See Id. at Art. VII(J)(7); see also
7
Suopys, 404 F.3d at 810. Strictly construed, the SFIP clearly requires an insured to submit proof
of loss within sixty days of the claimed flood loss. Suopys, 404 F.3d at 810.
Since strict adherence to the SFIP is required, filing proof of loss is a condition
precedent to bringing suit under the statute. The SFIP states that “[y]ou may not sue us to
recover money under this policy unless you have complied with all the requirements of the
policy.” 44 C.F.R. Pt. 61, App. A(1), Art. VII(R). Thus, an insured’s failure to submit proof of
loss for the money he seeks to recover in damages bars recovery. Suopys, 404 F.3d at 810
(“Thus, we join a number of other Courts of Appeals in holding that strict adherence to SFIP
proof of loss provisions . . . is a prerequisite to recovery under the SFIP.”); see also DeCosta,
730 F.3d at 82; Dickson v. Am. Bankers Ins. Co. of Florida, 739 F.3d 397 (8th Cir. 2014).
B.
Breach of Standard Flood Insurance Policy
With these principles in mind, the Court turns to the parties’ arguments. Defendant
claims that it is entitled to summary judgment because Plaintiff failed to provide proper proof of
loss for the amount in damages he now seeks. (Def. Mov. Br. at 11). Plaintiff contends that his
statement of the amount he is claiming under the policy does not have to be contained within
the proof of loss form. (Pl. Opp. Br. ¶ xv). According to Plaintiff, an insured can include his
statement in additional documents attached to the proof of loss form. (Id.). The parties agree
that the two signed proof of loss forms and the adjusters’ reports that the Property suffered
$1,072.13 in damage were timely filed. (Def. Mov. Br. at 4; Pl. Opp. Br. ¶ i). Rather, the
dispute arises from the supplemental claims Plaintiff asserts in his cover letters. Thus, the Court
will address whether Plaintiff’s cover letters and accompanying documents comply with the
SFIP requirements.
8
1. August 9, 2011 Claim
In support of his opposition to Defendant’s motion, Plaintiff filed a copy of the materials
he submitted to Defendant as his proof of loss for the two claims. (Ex. A; Ex. B). For his
August 9th claim, Plaintiff submitted: (1) a signed cover letter; (2) a construction estimate; (3)
a signed and notarized proof of loss form; and (4) an independent adjuster’s report of the flood
damage. (Ex. A). Plaintiff contended in his cover letter that the Property suffered $26,250.00
in damage, rather than the $1,072.13 reported on the proof of loss form and adjuster’s report.7
(See id.). In his cover letter, Plaintiff states: “I have enclosed a copy of my actual damage
sustained during this flood incident totaling $6250, not including structural damage to my home
totaling about Twenty-Thousand Dollars ($20,00.00).” (Id.).
Even if the Court were to accept Plaintiff’s cover letter as a form of proof of loss, it still
fails to comply with the requirements under the SFIP. First, the Court doubts whether the letter
was sworn. The SFIP requires the insured to provide a “signed and sworn” proof of loss. 44
C.F.R. Pt. 61, App. (A)(1), Art. VII(J)(4). Although the SFIP does not define the term sworn,
many courts have interpreted it to require notarization or something beyond just a signature.
See Mancini v. Redland Ins. Co., 248 F.3d 729, 735 (8th Cir. 2001) (holding that even if the
plaintiffs’ printed names qualified as signatures, the fax transmittal was not sworn); Debartolo
v. Capitol Preferred Ins. Co., No. 13-01695, 2014 WL 5307493, at *3 (M.D. Fla. Oct. 16, 2014)
(finding that “‘sworn’ requires notarization and a signature does not suffice”); McKee v. USAA
Ins. Agency, Inc., No. 06-156, 2007 WL 1229107, at *3 (N.D. Fla. Apr. 26, 2007) (denying the
7
The Court notes that the figures in Plaintiff’s brief and the figures in Plaintiff’s exhibits are not the
same. In his opposition brief, Plaintiff contends that the Property suffered $36,915.83 in damages, but
the cover letter he submitted for his August 9th claim only states $26,250.00 in damage. Furthermore,
Plaintiff’s reply brief asserts $36,250.00 in damage for the August 9th claim. Because the parties do not
dispute that the materials attached in Plaintiff’s Exhibit A were the documents submitted in furtherance
of Plaintiff’s August 9th claim, the Court will defer to the figures contained therein.
9
plaintiff’s letter as proof of loss for “lacking an insured’s signature and not being sworn”
(emphasis added)). There is no doubt that the proof of loss form Plaintiff submitted for
$1,072.13 in damage was signed and sworn because the form bears Plaintiff’s signature and it
was notarized. However, Plaintiff’s cover letter seeking an additional $26,250.00 was only
signed, not notarized. Therefore, the Court finds that the cover letter was not sworn.
Second, even if the Court were to consider Plaintiff’s signature as sufficient proof that
the letter was sworn, he has still failed to comply with the remaining proof of loss requirements.
Insureds are not required to submit every bill, receipt, and related document to an insurer.
However, they must submit enough support so that an insurer can evaluate their claim. See
Forman v. Fed. Emergency Mgmt. Agency, 138 F.3d 543, 545 (5th Cir. 1998); Sun Ray Vill.
Owners Ass’n v. Old Dominion Ins. Co., 546 F. Supp. 2d 1283, 1291 (N.D. Fla. 2008). The
onus remains on the insured to provide proof of loss. See 44 C.F.R. Pt. 61, App. A(1), Art.
VII(J)(7). Plaintiff did not submit any estimates or reports documenting structural damage in
the amount of $20,000.00, thus making it impossible for Defendant to evaluate his claim for
$20,000.00. Furthermore, the only report Plaintiff submitted in furtherance of his claim for
$6,250.00 was a one-page construction estimate for repairs completed by J.P. New
Construction. (Ex. A). The only information contained on the estimate is as follows: “[r]eplace
backyard drain and reset brick paver patio . . . [r]eplace broken floor tiles on ground floor
kitchen.” (Ex. A).
Moreover, the independent adjuster’s report that was submitted with the proof of loss
form undermines the repair estimate for $6,250.00. In the report, the adjuster stated that it was
unclear whether the damage to the kitchen floor tiles was the result of the flood. (Ex. A).
Furthermore, the adjuster stated that coverage was not applicable to the patio. (Ex. A); see also
10
44 C.F.R. Pt. 61, App. A(1), Art. IV(9) (listing patios as property not covered under the SFIP).
The proof of loss form that Plaintiff properly submitted seemingly excluded the damage that
Plaintiff was asserting in his cover letter and that was documented in the repair estimate.
However, he failed to provide proper support to contradict the adjuster’s exclusion of this
damage. Accordingly, the adjuster’s report highlights the fact that the repair estimate does not
support Plaintiff’s claim for damages.
Even more so, the repair estimate that Plaintiff submitted in furtherance of his claim for
$6,250.00 cannot be considered a detailed repair estimate within the meaning of Article VII(J)
of the SFIP. The estimate is completely devoid of any details as to how the damage occurred,
whether the damage was caused by the flood (which the adjuster’s report questioned), and how
much of the $6,250.00 was attributed to each repair.
Because Plaintiff failed to provide any support for his $20,000.00 claim, and failed to
provide detailed support for his $6,250.00 claim, Plaintiff has not met the conditions precedent
necessary to sue for these amounts. Thus, Defendant is entitled to summary judgment. See
Markey v. Louisiana Citizens Fair Plan, No. 06-5473, 2009 WL 23858, at *3 (E.D. La. Jan. 5,
2009) (granting summary judgment for the defendant insurance company because it “did not
receive any specifications of damaged buildings or detailed repair estimates, invoices, receipts
any other supporting documentation to substantiate the Proof of Loss”); Otallah v. State Farm
Fire and Cas. Co., 2008 WL 3539667, at *4 (E.D.La. July 31, 2008) (granting summary
judgment because “[t]here was no verifying documentation provided in conjunction with the
POL, and the POL form by itself is insufficient to meet the burden imposed on insureds by the
SFIP regulations”).
11
2. August 27, 2011 Claim
For his August 27th claim, Plaintiff submitted: (1) a signed cover letter; (2) a signed and
notarized proof of loss form; (3) emails containing price quotes for kitchen countertops and
cabinetry; and (4) blurred photographs and receipts. (Ex. B). In his cover letter, Plaintiff states,
“the total damage caused to the subject premises is . . . $19,250.” (Ex. A). The cover letter also
references a structural engineer’s report that was not included in the submission itself. (See Ex.
A; D.E. No. 58-4, Ex. D).
The Court grants Defendant summary judgment for the same reasons outlined above.
Again, even if the Court were to accept the signed cover letter as a sworn document, the letter
still fails to comply with Article VII(J) of the SFIP because Plaintiff did not provide any support
for the loss claimed in the letter. Although Plaintiff’s letter references an engineer’s report, the
report was not included in Plaintiff’s submission, nor does the report include a detailed repair
estimate pursuant to Article VII(J). Because Plaintiff failed to provide any support for his
claim, including a detailed repair estimate, he did not comply with the SFIP’s proof of loss
requirement. Thus, he is barred from recovery and Defendant is entitled to summary judgment.8
See Otallah, 2008 WL 3539667, at *4 (granting summary judgment because “[t]here was no
verifying documentation provided in conjunction with the POL”).
C.
Plaintiff’s Breach of Contract Claim for Re-Rating of Basement & State
Law Causes of Action
In addition to his claim that Defendant breached the SFIP by failing to reimburse him
for the damage caused to the Property following floods, Plaintiff asserts a claim of estoppel and
alleges that Defendant breached the SFIP because the insurer re-rated the Property to a
8
The Court notes that Plaintiff also submitted receipts for the refrigerator and dryer that he allegedly
replaced. (Ex. B). Even if the Court found that Plaintiff was entitled to reimbursement for these
appliances, Plaintiff still has not met his $5,000 deductible.
12
basement, acted in bad faith, violated the New Jersey Consumer Fraud Act, and engaged in
fraud.
(Compl. ¶ 9). Defendant addresses Plaintiff’s re-rating claim by arguing that Judge
Martini already adjudicated the issue in the first lawsuit between the parties. (Def. Mov. Br. at
12). Defendant also contends that federal law preempts Plaintiff’s remaining state law causes of
action. (Def. Mov. Br. at 18).
In his opposition and reply briefs, Plaintiff failed to address Defendant’s arguments
regarding the re-rating claim and state law causes of action. The Court deems these claims to be
abandoned as a result. See Angle v. United States, No. 12–2495, 2012 WL 6708165, at *3
(D.N.J. Dec. 21, 2012) (“the Court construes Plaintiffs’ silence as abandonment of those
claims”); Cicchiello v. Beard, 726 F. Supp. 2d 522, 531 (M.D. Pa. 2010) (“Plaintiff’s failure to
address this claim in her brief in opposition constitutes an abandonment of the claim.”).
Because Plaintiff has abandoned these claims, Defendant is entitled to summary judgment on
Plaintiff’s re-rating claim and remaining state law causes of action.
D.
Plaintiff’s Cross-Motion for Summary Judgment
In his cross-motion for summary judgment, Plaintiff seeks a declaratory judgment ruling
that Defendant breached the SFIP and violated FEMA guidelines and NFIP rules by interfering
with the adjustment process of his flood claims. (Pl. Opp. Br. ¶ a). According to Plaintiff,
Defendant interfered with the independent adjuster process by impermissibly imparting
information on the independent adjusters, micromanaging them, and working directly with them
to reach a mutual evaluation. (Id. ¶¶ xxix, xxxi, xxxv).
Under the Declaratory Judgment Act (“DJA”), “any court of the United States . . . may
declare the rights and other legal relations of any interested party.” 28 U.S.C. § 2201. The DJA
“confers a ‘unique and substantial discretion’ on federal courts to determine whether to declare
13
litigants’ rights.” Reifer v. Westport Ins. Corp., 751 F.3d 129, 139 (3d Cir. 2014) (quoting
Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995)).
Accordingly, district courts are
authorized to exercise their discretion when deciding whether to stay or dismiss an action
seeking declaratory judgment. Id.
The Third Circuit has enumerated a non-exhaustive list of factors for district courts to
consider when making this determination. The four general factors for a district court to
consider are: (1) the likelihood that a federal declaration will resolve the uncertainty of
obligation which gave rise to the controversy; (2) the convenience of the parties; (3) the public
interest in the declaration; and (4) the availability and relative convenience of other remedies.
Id. at 140. In the insurance context, district courts are also instructed to consider the following
factors: “(1) general policy of restraint when the same issues are pending in a state court; (2) an
inherent conflict of interest between an insurer’s duty to defend in a state court and its attempt
to characterize that suit in federal court as falling within the scope of a policy exclusion; [and]
(3) avoidance of duplicative litigation.” Id.
Based upon the factors enumerated by the Third Circuit, the Court decides to exercise
jurisdiction over Plaintiff’s declaratory judgment claim. The Court is unaware of any action
between the parties pending in state court. Therefore, there is no concern about duplicative
litigation, nor does Defendant have a conflict regarding its duty to defend. Moreover, a federal
declaration would resolve the uncertainty between the parties, and there is no other remedy
available.
However, the Court denies Plaintiff’s declaratory judgment claim because he has failed
to establish that he is entitled to relief.
In furtherance of his declaratory judgment claim,
Plaintiff argues that “there is no justification in the case law decisions . . . enabling Selective to
14
micro-manage the Adjuster(s) during the claims administration/adjustment process.” (Pl. Opp.
Br. ¶ xxxviii). Moreover, Plaintiff argues that Defendant “is indeed not required to do anything
in so far as overseeing and/or micro-managing the independent adjusters . . . there is no
mandatory language in this statute at all.” (Id. ¶ xxxv). In response, Defendant contends that
the declaratory judgment claim is redundant because the results of the breach of contract claim
will resolve the declaratory judgment issue. (D.E. No. 63, Defendant’s Reply Brief in Further
Support of Motion for Summary Judgment at 5).
The Court agrees that the facts underlying Plaintiff’s declaratory judgment claim are
similar to the facts asserted in Plaintiff’s breach of contract claims. However, even if the Court
considers Plaintiff’s declaratory judgment claim separately from his breach of contract claims,
Plaintiff’s declaratory judgment claim fails because he has not established that he is entitled to
relief under the SFIP, the NFIP, or FEMA guidelines. While Plaintiff argues that there is no
legal support for Defendant’s actions, the absence of law does not mean that an action is illegal.
Defendant has not pointed the Court to any law, case, or guideline that clearly prohibits
Defendant’s conduct. As such, Plaintiff has failed to meet his burden of establishing that
Defendant’s actions were impermissible under the SFIP, the NFIP, or FEMA guidelines.
Accordingly, the Court denies Plaintiff’s cross-motion for summary judgment.
IV.
CONCLUSION
For the reasons stated above, Defendant’s motion for summary judgment is GRANTED
and Plaintiff’s cross-motion for summary judgment is DENIED. An appropriate Order shall
accompany this Opinion.
/s/Esther Salas
Esther Salas, U.S.D.J.
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