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denying summary judgment and finding that plaintiff's responses were not inadequate despite the fact that plaintiff wrote " ‘to be determined’ instead of an actual dollar amount in the categories ‘Actual Cash Value,’ ‘Whole Loss and Damage,’ and ‘Amount Claimed.’ "
Summary of this case from Cothern v. Am. Strategic Ins. Corp.Opinion
C.A. NO. 02-6714
January 17, 2003
MEMORANDUM OPINION AND ORDER
The plaintiffs brought this action against the defendant, Director of the Federal Emergency Management Agency ("FEMA") under the National Flood Insurance Act of 1968, 42 U.S.C. § 4001-4129, seeking declaratory relief and payment under FEMA-written Standard Flood Insurance Polices for extensive flood damage to five commercial properties owned by the plaintiffs as a result of Tropical Storm Allison in June of 2001. FEMA has moved to have the action dismissed, or in the alternative for summary judgment on the basis that plaintiffs did not timely file Proofs of Loss and even if they did, the Proofs of Loss were incomplete because each stated that the "Actual Cash Value", "Whole Loss and Damage," and "Amount Claimed" for the five properties was "to be determined" rather than an actual amount.
It is undisputed that the date plaintiffs sustained flood damage to their five commercial properties was June 17, 2001. It is also undisputed that plaintiffs' insurance policy required them to submit a sworn statement with the amount they claimed under the policy within 60 days after the loss. It is further undisputed that FEMA sent letters to plaintiffs dated July 12, 2001 and July 27, 2001 reminding them that based on the date of the flood loss, the deadline for filing a Proof of Loss was August 15, 2001.
FEMA contends that it did not receive the Proofs of Loss until September 25, 2001, over one month past the deadline. Indeed, Exhibit 8 to defendant's motion shows that the five Proofs of Loss, although sworn to on August 13, 2001, were not received by defendant's agent, Stephen P. Mistro until September 25, 2001. Exhibit 8 also includes a forwarding letter sent from Bruce Swerling who was retained by plaintiffs to document their losses in this case, dated August 13, 2001 which stated:
In accordance with the requirement to file a Proof of Loss within 60 days of the date of loss, enclosed please find Proofs of Loss on the above-captioned matters. Please note that we have inserted "to be determined" on Lines #6, #7 and #10. As soon as we have the claims completed, we shall file new Proofs of Loss reflecting the claimed amounts.
On October 15, 2001, FEMA rejected the five Proofs of Loss because they did not comply with the policy provisions.
In response, plaintiffs have submitted the affidavit of Mr. Swerling who avers, inter alia, that on August 13, 2001, he sent to defendant's agent Stephen P. Mistro, via overnight mail, A Sworn Statement in Proof of Loss for each of the plaintiffs' five damaged properties. He further avers that this overnight mailing included a forwarding letter dated August 13, 2001 from himself to Mistro, a letter of representation from the Insureds and the five Proofs of Loss executed by plaintiff Gerard M. Martin. Affidavit of Bruce Swerling, Exhibit 2 of Plaintiffs Response to Defendant's motion for summary judgment.
Defendant has not filed a counter-affidavit to rebuke the averments of Mr. Swerling, but claims in its reply brief that the affidavit is deficient because it was not taken until November 27, 2002 and does not include any evidence to substantiate Mr. Swerling's averments such as a Federal Express Sender's Copy, Express Mail Confirmation Slip or any evidence that the letter actually reached FEMA by August 15, 2001.
At the very least the record contains a factual dispute as to whether plaintiff submitted the Proofs of Loss in a timely fashion. Thus defendant is not entitled to summary judgment, at least at this stage of the proceedings, on the basis that plaintiffs' Proof of Loss was untimely filed.
Plaintiff has also submitted the affidavit of Jim Harlor, who was the adjustor responsible for documenting and estimating the losses sustained by the plaintiffs. In his affidavit, Mr. Harlor essentially avers that because of the extensive damage sustained to plaintiffs' five commercial properties, it was physically impossible for the plaintiffs to have determined the "Actual Cash Value", "Whole Loss and Damage" and "Amount Claimed" within 60 days of the flood. Mr. Harlor also averred that "[i]t is a commonly accepted industry practice to submit a proof of loss with the dollar amount as `to be determined' if submission is required before actual numbers can be ascertained." Affidavit of Jim Harlor, Exhibit 3 to plaintiffs response to Defendant's Motion fort Summary Judgment.
Once again, the defendant has not submitted a counter-affidavit to rebuke the averments of Mr. Harlor, but rely on what it contends are an "unbroken line of authority" for the proposition that a Proof of Loss which does not contain any quantification of the loss does not satisfy the requirements of the Policy of the type issued here.
None of the cases cited by defendant, however, stand for the proposition that submitting a Proof of Loss stating that the amount of damages was still "to be determined" is inadequate.
In Gowland v. Aetna, 143 F.3d 951 (5th Cir. 1998), the Court of Appeals for the Fifth Circuit found against the insureds because they, unlike the plaintiffs here, never filed a proof of loss.
In Forman v. Federal Emergency Management Agency, 138 F.3d 543 (5th Cir. 1998), the Court of Appeals for the Fifth Circuit found that the Proof of Loss form filed by the claimants was inadequate where insured wrote "these figures are unacceptable" next to listed amounts by adjustor and failed to provide an acceptable alternate estimate of damages. The Court did not rule explicitly or implicitly that submitting a proof of loss stating that the amount of damages was still to be determined was inadequate. Forman also involved a claim made on a single residential property whereas the case sub judice involves claims made on five commercial properties.
In Smith v. NFIP, 156 F. Supp.2d 520 (E.D.Pa. 2001), this court actually denied the defendant's motion to dismiss or for summary judgment, finding that the Smith's "mere failure" to document their proof of loss with bills and receipts did not warrant dismissal of their claim.
Finally, in Palagruto v. Director. FEMA-NFIP, 1999 U.S. Dist. LEXIS 1915 (E.D. Pa. 1999), this court dismissed plaintiffs suit solely on the basis that plaintiff had never filed a sworn proof of loss with FEMA. The Court did not rule explicitly or implicitly that submitting a proof of loss stating that the amount of damages was still to be determined was inadequate.
The motion to dismiss or for summary judgment is denied.
ORDER
The motion of the defendant to dismiss is DENIED.
The alternative motion of the defendant for summary judgment is DENIED.
IT IS SO ORDERED.