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3608 Sounds Avenue Condominium Association v. South Carolina Insurance Company

July 26, 1999

3608 SOUNDS AVENUE CONDOMINIUM ASSOCIATION, C/O JOHN MULLEN, PLAINTIFFS,
v.
SOUTH CAROLINA INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Rodriguez, District Judge

FOR PUBLICATION

Hon. Joseph H. Rodriguez

OPINION

This matter is before the court on motion of defendant South Carolina Insurance Company to dismiss paragraph 6 of plaintiff 3608 Sounds Avenue Condominium Association's complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim for which relief can be granted. For reasons stated herein, defendant's motion will be granted.

Facts and Procedural History

Plaintiff is 3608 Sounds Condominium Association located in Sea Isle City, New Jersey, and consists of two units owned by Mr. and Mrs. John Mullen and Mr. and Mrs. Ronald Williams. Defendant is an insurance company which issued a flood insurance policy to plaintiff covering the Sea Isle property for loss due to flood.

On January 28, 1998, while the policy was in effect, plaintiff alleges that its Sea Isle property sustained extensive loss and damage in the amount of $26,600 due to a flood, and thereafter the owners made a claim against the insurance policy to recover the loss. The insurance company refused to cover the loss.

On December 1, 1998, plaintiff filed a complaint in this Court against the insurance company for its failure to reimburse pursuant to the insurance policy, thereby breaching the flood insurance contract. Specifically, plaintiff's prayer for relief included the $26,600 in damages, as well as a request for punitive damages, interest, costs and attorneys fees. Defendant has now moved for dismissal of plaintiff's claims for punitive damages and attorney's fees pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted because plaintiff's state law based claims are barred and preempted in cases involving claims against a National Flood Insurance Program policy, and because federal law does not provide for such a recovery.

Standard for Dismissal

When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6), the court must accept all well pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Schrob v. Catterson, 948 F.2d 1402 (3d Cir. 1991); Rogin v. Bensalem Twp., 616 F.2d 680,685 (3d Cir. 1980), cert. denied, 450 U.S. 1029 (1981). A court may not dismiss the complaint for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41,45-46 (1957)(citations omitted); D.P. Enterprises, Inc. v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir. 1984).

It is well-settled that a pleading is sufficient if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Under the liberal federal pleading rules, a complaint need not spell out the theory of liability under which the plaintiff hopes to recover. See Evans Products Co. v. West Am. Ins. Co., 736 F.2d 920, 923 (3d Cir. 1984). It is not necessary to plead evidence, and it is not necessary to plead all the facts that serve as a basis for the claim. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977), cert. denied, 434 U.S. 1086 (1978).

However, as stated above, the Federal Rules of Civil Procedure do require that a complaint set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). See also Baldwin County Welcome Center v. Brown, 466 U.S. 147, 149-50 n.3 (1984)("Although the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings `give defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.'")(quoting Conley, 355 U.S. at 47).

History of the National Flood Insurance Program

The National Flood Insurance Act (NFIA) of 1968 was created to make flood insurance available through a program in which both the national government and the private insurance industry play a large role. 42 U.S.C.A. § 4001(b), (d). This program was instituted because insurance companies could not afford to offer flood insurance at competitive or affordable rates due to the high cost of covering flood losses. Gowland v. Aetna, 143 F.3d 951 (5th Cir. 1998). Thus, the National Flood Insurance Program (NFIP) was instituted to provide a unified national program to reduce and avoid future losses due to floods by creating a reasonable method to share the risk of flood losses. 42 U.S.C.A. ยงยง 4001(a), (c), 4002(b). As a result, the NFIP provides low cost flood insurance to homeowners ...


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