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Brusco v. Harleysville Insurance Co.

United States District Court, D. New Jersey

June 26, 2014

JAMES F. BRUSCO, Plaintiff,
v.
HARLEYSVILLE INSURANCE COMPANY, Defendant.

Audwin F. Levasseur, Esq., HARBATAKIN AND LEVASSEUR, P.A., Fort Lee, New Jersey. and Scott G. Hunziker, Esq., THE VOSS LAW CENTER, The Woodlands, Texas, Counsel for Plaintiff.

Catherine S. Straggas, Esq., MARGOLIS EDELSTEIN, Philadelphia, Pennsylvania, Counsel for Defendant.

OPINION

JOSEPH E. IRENAS, Senior District Judge.

Plaintiff James Brusco brings this breach of contract claim with two counts, one pursuant to state law and one pursuant to the National Flood Insurance Act of 1968, 42 U.S.C. §§ 4001-4129, against Harleysville Insurance Company, referred to here as Nationwide Mutual Fire Insurance Company ("Nationwide").[1] Pending before the Court is Nationwide's motion to dismiss both claims as barred by the statute of limitations. In the alternative, Nationwide moves to dismiss Brusco's prayer for consequential damages and attorney's fees. Nationwide's motion is unopposed. For the following reasons, Nationwide's motion to dismiss both claims will be granted.

I.

This suit concerns the adjustment of an insurance claim under a policy placed through the National Flood Insurance Program. (Compl. ¶¶ 5, 7.) The National Flood Insurance Program ("NFIP") is a federally supervised insurance program established by the National Flood Insurance Act of 1968 ("NFIA") and administered by the Federal Emergency Management Agency ("FEMA"), which guarantees and subsidizes flood insurance. See 44 C.F.R. §§ 59-79 (2013). All subsidized flood insurance must be sold as a standard, unaltered policy, and the terms of the policy are governed by the NFIA and its corresponding regulations.[2] Id. FEMA authorizes private insurance companies, such as Nationwide, to participate in the program as Write-Your-Own ("WYO") Companies, administering standard form policies, paying any excess from premiums to the federal government, and acting as "fiscal agents" of the United States. 44 C.F.R. § 62 app. A (2013). Ultimately the United States Treasury bears the financial risk of these policies and pays any insured's claims extending beyond the value of premiums paid. Id.

According to the Complaint, Plaintiff James Brusco purchased a Standard Flood Insurance Policy ("SFIP"), policy number XXXXXXXXXXXXXX, for his residential property located at 8 South Barclay Avenue, Margate City, New Jersey. (Compl. ¶ 5.) Harleysville issued the standard policy in accordance with the NFIA. (Id.) Within the policy period, on October 29, 2012, Hurricane Sandy struck New Jersey, severely damaging the covered property. (Id.) Following the storm, Brusco submitted a claim for the damages to the insured property in order to "begin the rebuilding process." (Id.) Brusco states that he had paid all premiums on time. (Id. ¶ 6) As a result, Brusco asserts that his claim was improperly adjusted and that he did not receive the appropriate payment for his covered property. (Id. ¶ 7.)

On February 12, 2014, Brusco filed suit in this Court bringing two breach of contract claims, one under state law and one under the NFIA. (Id. ¶¶ 13, 16.) Nationwide now seeks dismissal of both claims as barred by the statute of limitations, or, in the alternative, dismissal of Brusco's demand for consequential damages and attorney's fees as not covered by the policy and preempted by the NFIA. Brusco did not oppose the motion.

II.

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss, a complaint must allege facts that raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also FED.R.CIV.P. 8(a)(2).

When considering a Rule 12(b)(6) motion, the reviewing court must accept as true all allegations in the complaint and view them in the light most favorable to the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). In reviewing the allegations, a court is not required to accept sweeping legal conclusions cast in the form of factual allegations, unwarranted inferences, or unsupported conclusions. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Instead, the complaint must state sufficient facts to show that the legal allegations are not simply possible, but plausible. Phillips, 515 F.3d at 234. "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Finally, the Court considers "only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Cir. 2004). A document forms the basis of a claim when it is "integral to or explicitly relied upon in the complaint." Id. (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)).

III.

Before proceeding to the substance of Plaintiff's claims, the Court reviews the basis for subject matter jurisdiction.[3] Under the NFIA, federal district courts hold original, exclusive subject-matter jurisdiction over all suits concerning the handling of an SFIP brought "against the [FEMA] Administrator." 42 U.S.C. § 4072. This statute apparently only concerns suits against the Administrator, not a WYO insurance company, but the Third Circuit has previously held that the provision ...


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