DONALD L. HOLEMAN, PETITIONER V. DIRECTOR, FEDERAL EMERGENCY
MANAGEMENT AGENCY FOR THE NATIONAL FLOOD INSURANCE PROGRAM

   No. 88-891

   In The Supreme Court Of The United States

   October Term, 1988

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Fifth Circuit

   Memorandum For The Respondent In Opposition

   Petitioner contends that the appeals court erred in upholding the
Federal Emergency Management Agency's (FEMA) denial of petitioner's
flood insurance policy claim on the basis of petitioner's failure to
file a sworn and signed proof of loss statement.

   1. a. FEMA directs and manages the National Flood Insurance Program
(NFIP), which provides insurance for property damage caused by flood.
See 42 U.S.C. 4001 et seq.  Petitioner insured his property in Wichita
Falls, Texas, through NFIP (Pet. 4-5).

   Petitioner's NFIP insurance policy expressly stated that, in the
event of flood loss, the policy holder must, among other things,
"(w)ithin 60 days after the loss, send us a proof of loss which is
your statement as to the amount you are claiming under the policy,
signed and sworn to by you" (Pet. App. C11).  The policy also stated
that the NFIP claims adjuster "may furnish you with a proof of loss
form," but warned that such provision was a "matter of courtesy only"
and that the insured "must still send us a proof of loss within 60
days * * * even if the adjuster does not furnish the form" (ibid.).
Thus, the policy did not require a claimant to use a particular proof
of loss "form," as long as the document submitted contained all the
required information.  The federal regulations governing the NFIP
policies set forth identical conditions.  See 44 C.F.R. 61.14;  44
C.F.R. Pt. 61 App. A(1), Art. VIII Section I.  The policy and
regulations also provide that no policy requirement can be waived
without the "express written consent" of the Federal Insurance
Administrator.  See Pet. App. C10;  44 C.F.R. Pt. 61 App. A(1), Art.
VIII Section D.

   b. Petitioner's property suffered flood damage in 1985.  After
petitioner timely filed signed and sworn proof of loss statements that
were witnessed and signed by the claims adjuster, /1/ the government
paid petitioner's claim (Pet. 4).  On or about June 10, 1986,
petitioner's property was again flooded (ibid.).  Thereafter,
petitioner received three letters reminding him of the need to file
certain materials (App., infra, 1a-5a).  On June 26, 1986, a FEMA
claims adjuster wrote to remind him of the need to fully document the
loss from the 1986 flood by verifying repairs on property damaged in
the 1985 flood (id. at 1a-2a).  This was followed by a letter dated
July 8 and signed by a FEMA claims examiner and a FEMA claims
supervisor.  It called petitioner's attention "to the policy provision
which states that you must file a formal Proof of Loss," and warned
him that failure to comply with this condition might result in denial
of his claim (id. at 3a).  On July 28, a claims adjuster again wrote
to remind petitioner that the requisite proof of loss had not yet been
received (id. at 4a-5a).

   On August 11, 1986, the day petitioner's time for filing a proof of
loss expired, his counsel wrote FEMA to claim $24,806 in losses on
petitioner's property resulting from the June 1986 flood.  The letter
was not sworn to by anyone and not signed by petitioner (Pet. 5;  Pet.
App. B2-B3).  Petitioner never filed a sworn, signed proof of loss
(ibid.).  On September 18, 1986, a letter signed by FEMA claims
examiners informed petitioner that his claim had been denied for
failure to provide a proof of loss statement and the requested
receipts (id. at D1).  The letter also stated that petitioner's policy
prescribed a one year period within which to file suit and that "this
office waives no policy provision other than as outlined above and
reserves all rights under the above referenced policy" (ibid.).

   Petitioner filed the present action in the United States District
Court for the Northern District of Texas.  The court granted the
government's motion for summary judgment, holding that petitioner's
failure to provide a sworn proof of loss statement justified the
denial of his claim (Pet. App. B1-B3).  In an unpublished per curiam
opinion, the Fifth Circuit affirmed the judgment for the reasons
stated in the district court's opinion (id. at A2).

   2. Petitioner claims that FEMA waived its right to insist on a
sworn proof of loss statement and that it should be estopped from
demanding compliance with this condition.  He contends that this Court
should grant review to resolve the "continuing conflict and confusion"
among the circuits in the law of estoppel against the government (Pet.
18) and to correct the appeals court's failure to find waiver or to
apply the state law of "substantial compliance" (Pet. 10-11).  Because
there is no uncertainty concerning the correct application of the law
of estoppel or waiver to these facts, this case does not present an
issue that warrants further review by this Court.

   a. This Court has recently reiterated that a party invoking the
doctrine of equitable estoppel against the government must, at a
minimum, demonstrate (1) that there was a misrepresentation, and (2)
that he reasonably relied on that misrepresentation to change his
position for the worse.  Heckler v. Community Health Services of
Crawford County, Inc., 467 U.S. 51, 59 (1984).  Petitioner has not met
either of these basic requirements.  The requirement of filing a sworn
proof of loss was clearly indicated by both his policy and federal
regulations.  See Pet. App. C11;  44 C.F.R. Pt. 61 App. A(1), Art.
VIII Section I.  FEMA officials never misled him as to his duty or
misinformed him as to the prerequisites for a valid claim.  To the
contrary, petitioner was repeatedly apprised of his legal duty and at
least twice advised of the proof of loss requirements under the "terms
and conditions of (his) policy" (App., infra, 3a;  App., infra, 4a,
(July 28 letter)).  Petitioner's suggestion (Pet. 10, 12) that his
claim of estoppel is justified by FEMA's failure to immediately
acknowledge his August 11 letter, or to object to its contents, is
frivolous, since petitioner's time to perfect his proof of loss
expired on that day.  Thus, petitioner's position could not have
changed for the worse before the FEMA letter of September 16.  Cf.
Heckler v. Community Health Services of Crawford County, Inc., supra,
467 U.S. at 59.  And that letter did advise petitioner that FEMA was
rejecting his claim for failing to meet the policy requirements (Pet.
App. D1).  In sum, the record indicates no direct or indirect
misrepresentation by the government or its agents and no detrimental
reliance by petitioner.

   b. Petitioner implies (Pet. 13-18) that there is a conflict among
the circuits concerning the correct application to this case of
standards for estopping the government.  But any disagreement among
the circuits has no bearing on this case, as estoppel would not be
available to petitioner under the law of any circuit.

   Petitioner attempts to manufacture a circuit conflict by noting the
lack of harmony between a First Circuit post-Community Health Services
case, Phelps v. Federal Emergency Management Agency, 785 F.2d 13
(1986), and a Seventh Circuit pre-Community Health Services case,
Meister Bros. v. Macy, 674 F.2d 1174 (1982).  In Meister, the Seventh
Circuit estopped the government from asserting the untimeliness of a
sworn and signed proof of loss form which was made available,
completed, and submitted by the FEMA agent out of time, and on which
FEMA based partial payment of the claim.  However, the Seventh Circuit
limited its ruling to the "quite unique (set of) facts" of the case
before it.  Meister, supra, 674 F.2d at 1177.  The court expressly
declined "to intimate (the) appropriate standard (for estoppel in)
future cases." Ibid.  Thus, the Seventh Circuit's holding has no
application to petitioner's case, which is factually distinguishable
in a number of respects.  Moreover, the Seventh Circuit's recent
application, in Edgewater Hosp. Inc. v. Bowen, 857 F.2d 1123 (1988),
of this Court's decision in Community Health Services indicates quite
clearly that the Seventh Circuit would not find estoppel here.  The
court in Edgewater stated that not only must the party asserting
estoppel be ignorant of the facts and demonstrate reasonable reliance
on the government's agent, but the government's action must amount to
"affirmative misconduct." Id. at 1138.

   In Phelps, a case involving a misstatement by a FEMA agent about
the sufficiency of a claim of loss, the First Circuit ruled that,
although "(t)he elements of traditional estoppel are plainly present
in this case," 785 F.2d at 16, estoppel was not available, despite the
federal agent's misstatement, because all citizens are expected to
know the law.  Thus, in both Phelps and Edgewater, the courts sought
to apply the standards outlined in Community Health Services and held,
although for different reasons, that the government could not be
estopped.  Plainly, the inability of petitioner in this case to
demonstrate the threshold elements of estoppel would preclude his
success on estoppel in either circuit.  /2/

   c. Petitioner asserts (Pet. 10) that FEMA waived conditions plainly
set forth in the regulations and petitioner's policy.  His contention
that the swearing requirement was waived by FEMA's supposed
"Soliciting Proof of Loss in letter form" (ibid.) is unsupported by
the plain language of the policy and regulations.  The very provisions
that make clear that the claimant need not submit the proof of loss on
an official form also stress that the proof of loss must be signed and
sworn to by the claimant and contain all required information.  See
Pet. App. C11;  44 C.F.R. 61 App. A(1), Art. VIII Section I.

   Petitioner also contends (Pet. 10) that the September 16 letter
rejecting his claim and reminding him of the one year statute of
limitations waived the requirement of a proof of loss.  However, the
pertinent regulation and the policy itself plainly inform the claimant
that "(y)ou may not sue us to recover money under this policy unless
you have complied with all the requirements of the policy." 44 C.F.R.
Pt. 61 App. A(1), Art. VIII Section Q;  Pet. App. C12.  The condition
that a claimant comply with all the requirements can be waived only
expressly and in writing.  44 C.F.R. Pt. 61 App. A(1), Art. VIII
Section D.  The September 16 letter could not possibly be regarded as
such a waiver, since it made no reference to a waiver of proof of loss
and in no way addressed petitioner's substantive rights to maintain or
to prevail on any claim.  Indeed, the letter stated that it waived no
provision "except as outlined above." The preceding text did not grant
forgiveness of the proof of loss requirement;  on the contrary, it
stressed petitioner's failure to meet that requirement.  A letter that
merely advises petitioner of his right to sue cannot constitute a
concession that petitioner has satisfied all the prerequisites to
suit.

   d. Petitioner argues (Pet. 10-12, 19) that this Court should adhere
to Texas state law holding that substantial compliance with proof of
loss provisions is sufficient.  See Turrill v. Life Ins. Co. of North
America, 753 F.2d 1322, 1326 (5th Cir. 1985).  However, petitioner
concedes (Pet. 19), in accordance with this Court's rulings, that
construction of NFIP policies is a matter of federal law.  See, e.g.,
United States v. Kimbell Foods, Inc., 440 U.S. 715, 726 (1979) ("This
Court has consistently held that federal law governs questions
involving the rights of the United States arising under nationwide
federal programs.").  Petitioner is bound by the terms of the policy
and the federal regulations controlling the policy, Texas law
notwithstanding.

   It is therefore respectfully submitted that the petition for a writ
of certiorari should be denied.

   WILLIAM C. BRYSON

      Acting Solicitor General

   JANUARY 1989

   /1/ The proof of loss forms submitted by petitioner, see Complaint
for Breach of Insurance, Attachment at 21 et seq., indicate that they
were "subscribed and sworn to" before the claims adjuster, Mark
McCarthy, on June 21, 1985, and thus belie petitioner's statement
(Pet. 4) that the forms "were not sworn."

   /2/ Petitioner's claim (Pet. 17) that the standard in the Fifth
Circuit is unclear is without basis, see Fano v. O'Neill, 806 F.2d
1262, 1265 (1987), and Moody v. United States, 783 F.2d 1244,
1246-1247 (1986), and the Fifth Circuit's decision in Reeves v.
Guiffrida, 756 F.2d 1141 (1985), cited by petitioner (Pet. 17-18),
lends no support to his argument.  Finding that there were issues of
fact bearing on whether estoppel might be available against FEMA, the
court in that case reversed the district court's dismissal of a
complaint on a flood insurance policy.  It stated, however, that "(w)e
express no view on whether the plaintiff can, based on the facts of
this case, estop the government from asserting the failure to file the
proof of loss as a defense." Reeves, 756 F.2d at 1145.  Thus, Reeves
neither presented nor applied a standard for estoppel against the
government, and in fact expressly declined to do so.  Moreover, the
Reeves court's decision to reinstate the claim turned on the
government agent's misrepresentation, and therefore is factually
distinguishable from the present case.

   APPENDIX