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Brown v. State Farm Insurance Company

United States District Court, D. New Jersey

March 13, 2015

CHRISTOPHER BROWN, et al., Plaintiffs,

Rachel B. Drake, Esq. West Orange, NJ, Attorney for Plaintiffs Christopher Brown and Felicia Brown.

Charles M. Fisher, Esq., WINDELS, MARX, LANE & MITTENDORF, LLP, Princeton, NJ, Attorney for Defendant State Farm Insurance Company.

Erin Elizabeth Nulty, Esq., CLARK & FOX, Cherry Hill, NJ, Attorney for Defendant Colonial Claims Corporation.


JEROME B. SIMANDLE, Chief District Judge.


This matter comes before the Court on motions to dismiss by Defendant State Farm Insurance Company ("State Farm") [Docket Item 23] and Defendant Colonial Claims Corporation ("Colonial") [Docket Item 24]. Plaintiffs' claims in this action, arising from damage to their home in Monmouth County, New Jersey caused by Hurricane Sandy, formed the basis of two nearly identical lawsuits by Plaintiffs against State Farm in the District of New Jersey. The other, earlier case, originally filed in the Superior Court of New Jersey, was removed by State Farm and docketed in the District of New Jersey as Christopher Brown, et al. v. State Farm Fire and Casualty Company, Civil No. 14-3375, and assigned to the Honorable William H. Walls in Newark. Having purportedly been dismissed with prejudice by stipulation between the parties, the Newark action is now closed.

In the instant motions, State Farm and Colonial each raise distinct arguments. State Farm contends that Plaintiffs' claims must be dismissed based on res judicata, failure to comply with the contractual limitations period, lack of privity of contract, and failure to comply with Rule 4(m), Fed.R.Civ.P. regarding timely service. Colonial seeks dismissal because Plaintiffs' claims are preempted by federal law.

The motions are decided without oral argument pursuant to Rule 78, Fed. R. Civ. P.[1]

For the reasons discussed below, the Court will grant both motions to dismiss.


A. Factual background

The Court accepts as true the following facts from Plaintiffs' Complaint. [Docket Item 1.] Plaintiffs Christopher and Felicia Brown own real property located at 227 2nd Street, Keyport, New Jersey, which was their primary residence at all relevant times. (Compl. ¶ 20.) Defendant State Farm sold Plaintiffs a homeowners insurance policy and a flood insurance policy as part of a comprehensive package of insurance. (Id. ¶ 9.) Plaintiffs believe they purchased a flood insurance policy from State Farm as a third-party "Write Your Own" ("WYO") carrier for the Federal Emergency Management Agency ("FEMA") under the National Flood Insurance Program ("NFIP"). (Id. ¶¶ 9-11.) As such, Plaintiffs were the named insureds of a homeowners insurance policy (No. 30-CV-0372-1) commencing June 29, 2012 and expiring June 29, 2013 which provided coverage for wind damage. (Id. ¶ 15.) Plaintiffs also held a flood insurance policy (No. SF00475324) commencing June 17, 2012 and expiring June 17, 2013. (Id. ¶ 16.) Defendant Colonial is an insurance adjusting company that contracted with FEMA and State Farm to assist in processing insurance claims for damages resulting from Hurricane Sandy. (Id. ¶ 12.) Defendant CJ Hester Inc. allegedly subcontracted with Colonial to provide claim adjusting services. (Id. ¶ 24.)

On or around October 29, 2012, Hurricane Sandy made landfall in New Jersey and caused severe damage to Plaintiffs' property. (Id. ¶ 21.) The damage was caused by multiple concurrent conditions, including rising flood waters, driving rain, high force winds, wave action, power failures, and collisions with unsecured debris. (Id.) On November 19, 2012, the Borough of Keyport inspected Plaintiffs' property and declared it uninhabitable due to health and safety conditions. (Id. ¶ 23.) On or around January 4, 2013, Plaintiffs submitted a claim for damages exceeding $200, 000. (Id. ¶ 26.) Paul Neier, an employee of CJ Hester, was assigned to Plaintiffs' claim. (Id. ¶ 25.) However, the claims filed by Neier with the other defendants only reported damages of $12, 034.64. (Id. ¶ 26.) On or around January 15, 2013, Plaintiffs submitted claims directly to State Farm for damages caused by rain, wind, tides, and other concurrent causes, which State Farm denied with the exception of a $2, 900 payment for roof damages. (Id. ¶¶ 27-28.) On or around April 5, 2013, Plaintiffs received a letter from FEMA denying that the damages claimed were caused by a covered peril. (Id. ¶ 29.) Plaintiffs filed a formal appeal of FEMA's findings on April 29, 2013. (Id. ¶ 30.)

Plaintiffs filed supplemental claims with FEMA through Mr. Neier of CJ Hester. (Id. ¶ 31.) While some of these claims were denied, others remain unresolved. (Id.) In addition, Plaintiffs have tried to contact Neier ...

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