Collins v. First Community Bank, NA et al

Filing 31

MEMORANDUM OPINION AND ORDER granting 4 MOTION by Wright National Flood Insurance Company to dismiss plaintiff's claims for negligence, bad faith, consequential damages, attorney's fees and costs, and any damages other than the relief allowed under the Standard Flood Insurance Policy. Signed by Judge John T. Copenhaver, Jr. on 3/19/2018. (cc: counsel of record; any unrepresented parties) (taq)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
JOHN COLLINS,
Plaintiff,
v.

Civil action no. 2:17-cv-03755

FIRST COMMUNITY BANK, NA,
and WRIGHT NATIONAL FLOOD
INSURANCE COMPANY
Defendants.

MEMORANDUM OPINION AND ORDER
Pending is the motion to dismiss plaintiff’s claims
for negligence, bad faith, consequential damages, attorney’s
fees and costs, and other damages, filed by defendant Wright
National Flood Insurance Company on August 11, 2017.
I. Introduction
This civil action arises from a flood that occurred on
June 23, 2016, causing damage to plaintiff John Collins’ home.
Compl. ¶ 4.

At the time of the flood, plaintiff’s home was

insured with a “home owners/flood policy” from defendant Wright
National Flood Insurance (“Wright”) that had been selected by
defendant First Community Bank, NA (“First Community”).
at ¶ 6.

See Id.

Plaintiff alleges that Wright wrongfully denied his

insurance claim for damage to the first floor of his home as a

result of the flood.

Id. at ¶ 8.

Mr. Collins maintains that

First Community “negligently failed to secure a policy which
adequately covered plaintiff’s home and collateral.”
11.

Id. at ¶

He further asserts that Wright “failed to properly insure

the risk of loss,” engaged in bad faith, and breached the
insurance contract by failing to pay damages.
17.

Id. at ¶¶ 12, 16-

Based on these allegations, Mr. Collins seeks damages for

repairs, clean up, and lost contents; expenses for displacement;
annoyance, aggravation, inconvenience, and loss of use
compensation; bad faith and compensatory damages; attorney’s
fees, court costs, and all other relief to which he is entitled.
Id. at p. 3.
On June 28, 2017, Mr. Collins brought this suit in the
Circuit Court of Nicholas County, West Virginia.

With the

consent of First Community, Wright timely removed the action to
this court on August 4, 2017.

Wright invokes this court’s

federal question jurisdiction over the complaint because the
insurance policy in question is a Standard Flood Insurance
Policy issued by a Write-Your-Own Program insurance carrier as
part of the United States Government’s National Flood Insurance
Program (“NFIP”) pursuant to the National Flood Insurance Act of
1968 (“NFIA”), as amended.

Notice of Removal p. 1, ¶ 2; 42

U.S.C. § 4001, et seq.; see 44 C.F.R. § 62.23(f).

2

Wright moves to dismiss plaintiff’s claims for
“negligence, bad faith, consequential damages including relief
for displacement, loss of use, annoyance, aggravation and
inconvenience, attorney’s fees and costs, and other damages
pursuant to state law” under Fed. R. Civ. P. 12(b)(6).
Mot. Dismiss at 1-2.

Def.’s

These state law claims, Wright asserts,

are “preempted and barred under federal statutory, regulatory,
and common law.”

Id. at 2.

Wright does not, at this time, seek

to dismiss plaintiff’s claim for breach of contract under the
Standard Flood Insurance Policy.

Def.’s Reply at 2.

II. Governing Standard
Federal Rule of Civil Procedure 8(a)(2) requires that
a pleading “contain . . . a short and plain statement of the
claim showing that the pleader is entitled to relief.”
Correspondingly, Rule 12(b)(6) provides that a pleading may be
dismissed for a “failure to state a claim upon which relief can
be granted.”
To survive a motion to dismiss, a pleading must recite
“enough facts to state a claim to relief that is plausible on
its face.”

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570

(2007); see also Monroe v. City of Charlottesville, 579 F.3d
380, 386 (4th Cir. 2009) (quoting Giarratano v. Johnson, 521

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F.3d 298, 302 (4th Cir. 2008)).

In other words, the “[f]actual

allegations must be enough to raise a right to relief above the
speculative level.”

Twombly, 550 U.S. at 555 (citation

omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(“A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.”); Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009)
(quoting Twombly, 550 U.S. at 555).
A district court’s evaluation of a motion to dismiss
is underlain by two principles.

First, when considering a

motion to dismiss, the court “must accept as true all of the
factual allegations contained in the [pleading].”

Erickson v.

Pardus, 551 U.S. 89, 94 (2007) (citation omitted); see also
Twombly, 550 U.S. at 555 (“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).”) (citations omitted).

In

doing so, factual allegations should be distinguished from “mere
conclusory statements,” which are not to be regarded as true.
Iqbal, 556 U.S. at 678 (“[T]he tenet that a court must accept as
true all of the allegations contained in a complaint is
inapplicable to legal conclusions.”). Second, the court must

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“draw[] all reasonable factual inferences . . . in the
[nonmovant’s] favor.”

Edwards v. City of Goldsboro, 178 F.3d

231, 244 (4th Cir. 1999); see also Jenkins v. McKeithen, 395
U.S. 411, 421 (1969) (“[T]he complaint is to be liberally
construed in favor of plaintiff.”).
III. Analysis
“The Federal Emergency Management Agency (FEMA)
provides flood insurance under the terms of the [NFIA].”

44

C.F.R. pt. 61 app. A(1), art I. Standard Flood Insurance
Policies “and all disputes arising from the handling of any
claim under the policy are governed exclusively by the flood
insurance regulations issued by FEMA, the [NFIA], and federal
common law.”

44 C.F.R. pt. 61 app. A(1), art. IX. “Federal law

exclusively governs claims made on policies issued under the
[NFIP] and . . . disputes arising out of the handling of those
claims, thus preempting state law.”

Woodson v. Allstate Ins.

Co., 855 F.3d 628, 631 (4th Cir. 2017).

Courts have

consistently held that there is no basis for the recovery of any
state law claim in cases arising from a dispute under the NFIP.
Id. at 637 (“It is not surprising . . . that every other circuit
to have considered this issue has concluded that state-law
claims against write-your-own insurance providers are preempted
by federal law.”); see e.g., Gallup v. Omaha Prop. & Cas. Ins.
5

Co., 434 F.3d 341, 344-45 (5th Cir. 2005); Wright v. Allstate
Ins. Co., 415 F.3d 384, 389-90 (5th Cir. 2005); C.E.R. 1988,
Inc. v. Aetna Casualty and Surety Co., 386 F.3d 263, 268-72 (3d
Cir. 2004); Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d
1113, 1122 (11th Cir. 2004); Gibson v. Am. Bankers Ins. Co., 289
F.3d 943, 948-50 (6th Cir. 2002).
Recovery under a Standard Flood Insurance Policy is
limited to costs for repairing or replacing property damaged by
“direct physical loss by or from flood,” debris removal, loss
avoidance measures, and increased cost of compliance with a
state or local floodplan.

44 C.F.R. pt. 61, app A(1), art. III.

The NFIA permits policyholders to bring suit against insurers
for amounts due under the insurance contract.

42 U.S.C. § 4072;

see Wright v. Allstate Ins. Co., 500 F.3d 390, 394 (5th Cir.
2007).

Consequential damages, including attorney’s fees, are

not the type of loss that is insured under the NFIP and are not
recoverable in a suit based on a breach of a Standard Flood
Insurance Policy.

See Atlas Pallet, Inc. v. Gallagher, 725 F.2d

131, 139 (1st Cir. 1984); Moffett v. Computer Scis. Corp., 457
F. Supp. 2d 571, 589 (D. Md. 2006).

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THOMAS PARKER,
Plaintiff,
v.

Civil Action No. 15-14025

The overwhelming weight DISABILITY indicates that
THE DOW CHEMICAL COMPANY LONG TERMof authority PROGRAM,
an Employee Welfare Benefits Plan,
Mr. Collins’ state law claims are entirely preempted by federal
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,
a Massachusetts Corporation, and
law. 1Furthermore, his recovery for his breach of contract claim
DOES
THROUGH 10, inclusive,
is limited Defendants.
to the relief allowed under the Standard Flood
Insurance Plan, and he cannot seek NOTICE
ORDER AND additional damages for
displacement, loss of use, annoyance, aggravation and that the
Pursuant to L.R. Civ. P. 16.1, it is ORDERED
following dates are hereby fixed as the time by or on which
inconvenience, attorney’s fees and costs, and other such
certain events must occur:
01/28/2016
damages.

Motions under F.R. Civ. P. 12(b), together with
supporting briefs, memoranda, affidavits, or other
such matter in support thereof. (All motions
unsupportedIV. memoranda will be denied without
by Conclusion
prejudice pursuant to L.R. Civ. P. 7.1 (a)).

02/08/2016
Last day for Rule 26(f) meeting.
Based upon the foregoing discussion, it is ORDERED
02/15/2016
Last day to file Report of Parties= Planning
that the defendant’s motion to dismiss P. 16.1.
Meeting. See L.R. Civ. plaintiff’s claims for
negligence, bad faith, consequential damages, attorney’s fees
02/22/2016
Scheduling conference at 4:30 p.m. at the Robert C.
Byrd United States Courthouse in Charleston, before
and costs, and any damages other than the relief allowed under
the undersigned, unless canceled. Lead counsel
directed to appear.
the Standard Flood Insurance Policy be, and hereby is, granted.
02/29/2016
Entry of scheduling order.
03/08/2016The Clerk day directed to transmit copies of disclosures.
Last is to serve F.R. Civ. P 26(a)(1) this
written opinion and order to counsel transmit this Order and
The Clerk is requested to of record and any
Notice to all counsel
unrepresented parties. of record and to any unrepresented
parties.
DATED: January 2018
ENTER: March 19, 5, 2016
John T. Copenhaver, Jr.
United States District Judge

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