The opinion of the court was delivered by: BROTMAN
This property damage action arises under the National Flood Insurance Act of 1968 (hereinafter "NFIA"), 42 U.S.C. §§ 4001 et seq.1 Plaintiffs seek to recover losses sustained as a result of a flood which allegedly occurred on March 3, 1994 and damaged plaintiffs' properties in Avalon, New Jersey. Plaintiffs claim that these losses are covered by an insurance policy issued pursuant to section 4053 of the NFIA by defendant The Omaha Property and Casualty Insurance Company.
Presently before the court is Defendant's Motion for Summary Judgment pursuant to Fed. R. Civ. P. 56. Defendant argues that plaintiffs' non-compliance with the policy--namely, their failure to file a sworn proof of loss form within 60 days from the date of the loss--bars the present action to recover under the insurance policy and entitles defendant to summary judgment. Plaintiffs, in turn, contend that they complied substantially with the requirements of the policy and that defendant waived both the requirement of filing a proof of loss form and the time requirement set forth in the policy. As a result, plaintiffs argue that defendant is estopped from relying on the policy defense.
On December 21, 1993, The Omaha Property and Casualty Insurance Company (hereinafter "Omaha") issued two one-year flood insurance policies to the plaintiffs covering two separate properties at 2475 Ocean Drive in Avalon, New Jersey. Both policies are Standard Flood Insurance Policies (hereinafter "SFIPs") as set forth at 44 C.F.R. § 61 App. A(1) (1997). On March 3, 1994, a storm caused flooding which, in turn, damaged plaintiffs' insured properties. Pursuant to the Notice of Loss provisions in the policies, plaintiffs advised defendant of their flood-related losses.
A representative of Omaha's adjusting company, Valco-U.S.A., inspected plaintiffs' properties on March 13, 1994. Thereafter, plaintiffs received proof of loss forms and final reports for their signature. Because plaintiffs disputed the adjuster's calculation of their losses, they did not sign or return to Omaha the proof of loss forms. To date, in fact, plaintiffs have not submitted to Omaha a proof of loss form.
The policies in question require an insured to submit to the carrier within 60 days after the loss a proof of loss statement detailing the items and amounts claimed, as well as other specific information as listed in the policy. (D. Brief Exh. C at 6-7.) In plaintiffs' case, the Gagliardis had until on or about May 3, 1994 to submit their proof of loss to Omaha.
On April 21, 1994, the defendant mailed to plaintiffs a letter reminding plaintiffs of their obligation to file a formal proof of loss within 60 days from the date of the loss. (D. Brief Exh. E.) Ten days later, on May 2, 1994, defendant's adjuster (Valco-U.S.A.) mailed to plaintiffs a similar letter advising plaintiffs that their claim could not proceed unless they forwarded to Omaha a signed proof of loss. (D. Brief Exh. F.) Plaintiffs did not file a proof of loss; rather, Joan Marie Gagliardi notified Omaha on May 5, 1994 that plaintiffs required 45 additional days to file the required documentation. (D. Brief Exh. G.) On June 9, 1994, Omaha advised plaintiffs that it had still not received a proof of loss, but that it would consider payment of their claim if plaintiffs forwarded the loss statement by June 20, 1994. (D. Brief Exh. H.)
On July 14, 1994, the defendant advised plaintiffs that Omaha had closed plaintiffs' file without payment for lack of interest and failure to comply with the policy's requirements regarding proof of loss. (D. Brief Exh. I.) The defendant sent plaintiffs another letter on September 6, 1994 advising them that their file had been closed because plaintiffs had never submitted a final proof of loss to either the adjuster or Omaha. (D. Brief Exh. J.)
Defendants have denied plaintiffs' claim for insurance coverage on the grounds that they did not comply with the provisions in the policies requiring them to submit documentation regarding proof of loss, as detailed in Article VIII, para. I of the policies. (See D. Brief Exh. C at 6-7.) Further, according to Article VIII, para. Q of the policies, plaintiffs may not file a lawsuit to recover monies unless they have complied with all policy requirements. (See D. Brief Exh. C at 7.) In light of plaintiffs' non-compliance with the proof of loss requirements, after plaintiffs brought the instant action, the defendants filed the present motion for summary judgment.
A. The Summary Judgment Standard
The standard for granting summary judgment is a stringent but not insurmountable one. A court may grant summary judgment only when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Serbin v. Bora Corp., 96 F.3d 66, 69 n.2 (3d Cir. 1996). In deciding whether there is a disputed issue of material fact, the court must grant all reasonable inferences from the evidence to the non-moving party. Serbin, 96 F.3d at 69 n.2. The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder ...