issues that properly can be resolved only by a finder of fact because they may reasonably resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
Supreme Court decisions mandate that a summary judgment motion must be granted unless the party opposing the motion "provides evidence 'such that a reasonable jury could return a verdict for the nonmoving party.'" Lawrence v. National Westminster Bank of New Jersey, 98 F.3d 61, 65 (3d Cir. 1996) (quoting Anderson, 477 U.S. at 248). Moreover, once the moving party has carried its burden of establishing the absence of a genuine issue of material fact, "its opponent must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). The non-moving party must "make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial." Serbin, 96 F.3d at 69 n.2 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)); see also Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir.), cert. denied, 502 U.S. 940, 116 L. Ed. 2d 327, 112 S. Ct. 376 (1991) (declaring that non-movant may not "rest upon mere allegations, general denials, or . . . vague statements"). Thus, if the non-movant's evidence is merely "colorable" or is "not significantly probative," the court may grant summary judgment. Anderson, 477 U.S. at 249-50.
B. Failure to File a Proof of Loss
Plaintiffs admit that they never filed a formal proof of loss as required by the insurance policy covering their properties. Thus, there is no genuine issue of material fact as to plaintiffs' failure to submit a sworn proof of loss to the defendant.
Plaintiffs argue, however, that they substantially complied with the policy's requirements by submitting to defendant detailed estimates regarding their losses. (Pl. Aff. PP 7, 8, 12; Pl. St. of Facts P 18.) They contend that holding them to the strict letter of the law--here, the precise language of the policy--would promote "form over substance" and create an unjust result. The law, however, counsels otherwise. Insurance policies issued under federal programs must be strictly construed. See Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 92 L. Ed. 10, 68 S. Ct. 1 (1947); Wagner v. FEMA, 847 F.2d 515, 518 (9th Cir. 1988) (citing 332 U.S. 380, 92 L. Ed. 10, 68 S. Ct. 1) (conditions of insurance policy offered pursuant to congressionally mandated program must be strictly observed); Cross Queen, Inc. v. FEMA, 516 F. Supp. 806, 809 (D.V.I. 1980).
Moreover, any injustice that may result from summary judgment will derive from the plaintiffs' own knowing inaction in pressing and presenting properly their claim.
Plaintiffs themselves aver that the defendant and its adjuster notified them several times of the need to file a proof of loss form according to the terms of the insurance policy. These notices also informed plaintiffs of the ramifications of failure to file such proof forms--namely, that plaintiffs could not bring suit against the defendant without complying with the policy's requirements. In the face of abundant notice, then, plaintiffs should have known that the estimates they claim to have submitted to the defendant did not suffice to comply with the policy requirements. Put another way, defendant's repeated written notifications should have alerted plaintiffs that defendant lacked information otherwise contained in a proof of loss statement but evidently not provided by plaintiffs' submissions.
At all events, this court's obligation to construe strictly the terms of a federally sponsored insurance policy requires it to reject plaintiffs' substantial compliance argument.
Plaintiffs contend that despite their failure to submit a formal proof of loss statement, defendant cannot rely on this complete defense because defendant waived the requirement. Plaintiffs assert that the defendant's representatives advised plaintiffs, both orally and in writing, that their claim would be reopened and considered if plaintiffs would submit more detailed information regarding their claim. Plaintiffs also emphasize that their file in fact remained open beyond both the 60 day period set forth in the policy and the extended deadline set by the defendant in its June 9, 1994 letter. They argue that this establishes that Omaha waived the time limit that would have required the Gagliardis to file the proof of loss statement on or about May 3, 1994.
The Third Circuit has not yet ruled on whether plaintiffs' failure to file a proof of loss bars completely their subsequent claim against a private insurance company that issued a federally sponsored insurance policy. A review of countless opinions from courts in this circuit and others, moreover, indicates widespread disagreement on this issue. Compare Schumitzki v. FEMA, 656 F. Supp. 430, 432 (D.N.J. 1987) (Gerry, J.) (citations omitted) ("Numerous courts [in this circuit] have held . . . failure to comply with the proof of loss requirement of a federal insurance policy bars a subsequent action . . . .") with Conrad v. Omaha Property & Cas. Ins. Co., 1995 U.S. Dist. LEXIS 7907, No. CIV. A. 94-4087, 1995 WL 350418, *4 (E.D. Pa. 1995) (concluding that failure to comply strictly with proof of loss requirement does not bar claim). Similarly, courts are not in unison in determining whether a private insurer, by its representatives' conduct, can waive a federally sponsored insurance policy provision such as the proof of loss requirement. This court's analysis will begin with a plain reading of the plaintiffs' SFIP, the federal statute pursuant to which it was issued, and the regulations promulgated in furtherance of the federal statute.
As a preliminary matter, the SFIP establishes that federal law governs this action. In specific, Article X of plaintiffs' policy provides that "this policy is governed by the flood insurance regulations issued by FEMA, the National Flood Insurance Act of 1968, as amended (42 U.S.C. § 4001, et seq.) and Federal common law." (See D. Brief Exh. C at 8.) The regulations corresponding with the NFIA also indicate that federal law applies in this matter. See, e.g., 44 C.F.R. § 61.4 (1997) (all flood insurance made available under National Flood Insurance Program [hereinafter "NFIP"] subject to (1) statutes authorizing NFIP, their Amendments, and Regulations issued under them; (2) terms and conditions of SFIP); Id. § 61.5(e) (1997) (SFIP authorized only under terms and conditions established by Federal statute, NFIP's regulations, Administrator's interpretations, and express terms of policy).
Addressing plaintiffs' argument that defendant waived the requirement to file a proof of loss, the court notes first that general doctrines of waiver do not apply when the insurer is an agency of the United States. Cross Queen, Inc., 516 F. Supp. at 809 (noting that non-compliance with requirement of policy issued under federal program almost always bars recovery); Continental Imports, Inc. v. Macy, 510 F. Supp. 64, 66 (E.D. Pa. 1981) (rejecting waiver argument, granting summary judgment). While the court recognizes that the defendant is not such an agency, it cannot ignore that the flood insurance policy Omaha issued to plaintiffs provides federally sponsored coverage pursuant to federal law. Thus, where that policy and the federal law from which it derives delimit waiver, the court must conclude that general waiver doctrine usually applicable in insurance cases is inapposite here.
In this case, plaintiffs' SFIP states clearly that the policy "cannot be amended nor can any of its provisions be waived without . . . express written consent." (See D. Brief, Exh. C, at 5.) Moreover, that section of the policy also advises the insured that actions of the insurer will not constitute a waiver of the insurer's rights. Id. The regulations, too, make clear that oral assurances or actions of the insurer's representatives or agents cannot operate to waive a provision of the policy. See, e.g., 44 C.F.R. § 61.5(e) (representations regarding extent and scope of coverage not consistent with NFIA or SFIP are void); Id. § 61.13(d-e) (no provision of SFIP shall be altered, varied, or waived other than by the express written consent of the Administrator . . . . no oral binder or contract shall be effective; no written binder effective unless issued with express authorization of Administrator).
Plaintiffs point to the defendant's September 6, 1994 letter as written proof of waiver. (Pl. Brief Exh. A. Cf. D. Brief Exh. J.) Plaintiffs admit that the letter itself clearly informed them (again) that they had not submitted a proof of loss and that Omaha was closing the file. They argue, however, that the letter's enclosures--in particular a computer printout of an "Examiner Notepad Screen"--led plaintiffs to believe the opposite and established a waiver by the defendant.
In fact, the enclosure to the September 6 letter contains information consistent with its cover letter and reflects that (1) plaintiffs never submitted a proof of loss, and (2) the insurer therefore closed plaintiffs' file "due to lack of interest by [the] insured." (Pl. Exh. A.) Moreover, the regulations provide specifically that "no provision [of an SFIP such as the plaintiffs'] shall be altered, varied, or waived other than by . . . express written consent . . . through the issuance of an appropriate amendatory endorsement . . . ." 44 C.F.R. § 61.13(d). The policy itself, too, permits a waiver of the proof of loss requirement only if the insured signs and swears to a detailed adjuster's report of the loss and damages. (See D. Brief, Exh. C, at 7.) This plaintiffs never did. Further, the enclosure to defendant's September 6, 1994 letter cannot reasonably represent the type of express written consent or "amendatory endorsement" that the law requires. Finally, the court notes that in each of defendant's letters to plaintiffs reminding them of their obligation to file a proof of loss, Omaha expressly advised plaintiffs that it was not waiving any rights or defenses under the policy.
Like the waiver argument, plaintiffs' reliance on principles of estoppel fails. Again, courts generally do not permit claims of estoppel to be raised against the government unless the party alleges "affirmative, serious misconduct by a government agent that was reasonably relied upon to a party's detriment." Diamond v. FEMA, 689 F. Supp. 163, 169 (E.D.N.Y. 1988) (citing Heckler v. Community Health Servs., 467 U.S. 51, 81 L. Ed. 2d 42, 104 S. Ct. 2218 (1983)); Schumitzki, 656 F. Supp. at 434 (citations omitted).
Even where a court allows a litigant to assert estoppel, however, that litigant must first satisfy the traditional elements of estoppel. To that end, the plaintiffs must show that (1) the defendant knew the true facts (that the policy required timely submission of a proof of loss); (2) the defendant intended that the plaintiffs would rely on and act upon the defendant's acts or representations to the contrary; (3) they did not know the true facts (that the policy required timely submission of a proof of loss); and (4) they reasonably relied to their detriment on defendant's acts or representations. See Maloney v. FEMA, 1996 U.S. Dist. LEXIS 16284, Civ. A. No. 96-1879, 1996 WL 626325, *3 (E.D. La. Oct. 24, 1996); McCrary v. FEMA, 642 F. Supp. 544, 547 (E.D.N.C. 1986); Restatement (Second) of Torts § 894(1) (1979).
Plaintiffs cannot satisfy the third part of the traditional estoppel test; that is, they cannot demonstrate that they did not know that the insurance policy required an insured to file a proof of loss statement within 60 days of the date of loss. The evidence before the court demonstrates clearly that defendant and defendant's adjuster notified plaintiffs repeatedly through written correspondence of their obligations under the insurance policy. Regardless of other oral advice to the contrary, plaintiffs should have been aware of the actual requirements of the policy. Furthermore, both the plain language of the policy itself as well as defendant's repeated reminders render plaintiffs' reliance on the alleged oral assurances unreasonable. Schumitzki, 656 F. Supp. at 435. Thus, plaintiff's argument regarding estoppel fails as a matter of law. See Serbin, 96 F.3d at 69 n.2 (quotation omitted) (non-movant must establish sufficiently every element essential to his case).
As a final note, the court recognizes that Congress established the National Flood Insurance Program to help alleviate the kind of economic hardship caused by flood damage suffered by plaintiffs. By involving the private insurance industry in the implementation of a federal insurance program, Congress made available insurance coverage that potential insureds otherwise could not obtain easily from private carriers. See 42 U.S.C.A. § 4001(b) (West 1994) ("many factors have made it uneconomic for the private insurance industry alone to make flood insurance available to those in need of such protection on reasonable terms and conditions ") (emphasis added). Congress did not, however, provide for unconditional coverage. By upholding defendant's policy-based defense in this instance, the court does not violate the purpose of the NFIP; rather, it merely enforces the terms and conditions of a federal insurance program made available to parties such as plaintiffs who, but for their persistent non-compliance with the policy's clear provisions, may very well have benefited from the NFIP as envisioned by its creators.
For the reasons set forth, the court finds that there are no genuine issues of material fact as to plaintiffs' failure to comply with the proof of loss requirement of their flood insurance policy. The court finds further that (1) the lack of a formal proof of loss statement bars plaintiffs' present action as a matter of law, and (2) plaintiffs cannot assert claims of waiver or estoppel against the defendant as a matter of law.
The court will grant defendant's Motion for Summary Judgment. The court will enter an appropriate order.
Dated: February 3, 1997
STANLEY S. BROTMAN
UNITED STATES DISTRICT JUDGE
THIS MATTER having come before the court on Defendant The Omaha Property and Insurance Company's Motion for Summary Judgment pursuant to Fed. R. Civ. P. 56;
The court having reviewed the record and the submissions of the parties;
For the reasons set forth in the court's opinion of this date;
IT IS this 3rd day of February, 1997 HEREBY
ORDERED that Defendant's Motion for Summary Judgment is GRANTED.
STANLEY S. BROTMAN
UNITED STATES DISTRICT JUDGE