FILED

United States Court of Appeals

Tenth Circuit

May 17, 2012

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

 

EDVIN C. REMUND,

Plaintiff-Appellant,

No. 10-4107

(D.C. No. 2:07-CV-00448-CW)

(D. Utah)

v.

STATE FARM FIRE AND

CASUALTY COMPANY,

Defendant-Appellee.

ORDER AND JUDGMENT*

Before BRISCOE, Chief Judge, BALDOCK, and HOLMES, Circuit Judges.

Plaintiff-Appellant Edvin C. Remund appeals the district court’s order

granting summary judgment to Defendant-Appellee State Farm on Mr. Remund’s

state-law claims for breach of warranty and estoppel. Mr. Remund alleges that

the State Farm insurance agent who sold him a Standard Flood Insurance Policy

(“SFIP”) under the National Flood Insurance Program (“NFIP”) misled him about

the scope of coverage under the policy. After Mr. Remund suffered damage that

he thought was covered under the policy, he filed a claim. State Farm denied it, 

* This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,

however, for its persuasive value consistent with Federal Rule of Appellate

Procedure 32.1 and Tenth Circuit Rule 32.1. 
and Mr. Remund sued. The district court entered summary judgment in favor of

State Farm, and Mr. Remund filed this timely appeal. Exercising jurisdiction

under 28 U.S.C. § 1291, we affirm the judgment of the district court. 

I. BACKGROUND

Mr. Remund owns property in Salt Lake City, Utah, on which is built his

primary residence and a cabin at the back of the property. Red Butte Creek runs

directly beneath the cabin, which rests on concrete piers that support the cabin as

it spans the creek. Channel walls made out of rock direct the flow of the creek

under and away from the cabin and piers.

In April 2005, Mr. Remund bought flood insurance from State Farm under

the NFIP. Before buying the SFIP, Mr. Remund alleges that he explained to

Vickie Tuua, a State Farm insurance agent, that he wanted to get insurance

against any damage to the channel walls, the piers supporting the cabin, and to the

cabin itself caused by high spring runoff down Red Butte Creek. Ms. Tuua

allegedly told Mr. Remund that the SFIP would cover any damage or loss to his

property caused by high spring runoff down Red Butte Creek. 

Mr. Remund received a copy of the SFIP from State Farm. He read the

SFIP and understood that the federal government was the underwriter of the

policy. The SFIP says that State Farm “provides flood insurance under the terms

of the National Flood Insurance Act of 1968 and its amendments, and Title 44 of

the Code of Federal Regulations (CFR).” Aplt. App. at 120 (SFIP, attached as

-2-
Ex. 2 to Mem. Supp. Mot. for Summ. J., filed May 12, 2009).

Established under the National Flood Insurance Act of 1968, the NFIP is

designed to make flood insurance available “on a nationwide basis through the

cooperative efforts of the Federal Government and the private insurance industry”

by “pooling risks, minimizing costs, and distributing burdens equitably among

those who will be protected by flood insurance and the general public.” 42

U.S.C. § 4001(d). FEMA administers the program, Exec. Order No. 12127, 44

Fed. Reg. 19,367 (Mar. 31, 1979), reprinted in 15 U.S.C. § 2201 (making

effective Reorganization Plan No. 3 of 1978, 43 Fed. Reg. 41,943 (Sept. 19,

1978), reprinted in 15 U.S.C. § 2201), writes the SFIP, 44 C.F.R. § 61.4(b), and

makes the rules as to claims made under the SFIP, id. NFIP insurance is

marketed either directly by FEMA or through “Write-Your-Own” (“WYO”)

carriers, like State Farm, who act as “fiscal agents” of the United States and

service the policies. See 42 U.S.C. § 4071(a)(1); 44 C.F.R. §§ 61.4(b),

61.13(d)–(f), 62.23(c)–(d). 

As part of the foregoing scheme, and pertinently for this case, 44 C.F.R. §

61.5(e) reads:

The standard flood insurance policy is authorized only under

terms and conditions established by Federal statute, the

program’s regulations, the Administrator’s interpretations and the

express terms of the policy itself. Accordingly, representations

regarding the extent and scope of coverage which are not

consistent with the National Flood Insurance Act of 1968, as

amended, or the Program’s regulations, are void, and the duly

-3-
licensed property or casualty agent acts for the insured and does

not act as agent for the Federal Government, the Federal

Emergency Management Agency, or the [WYO carrier].

Under “Property Not Covered,” the SFIP lists: “[f]ences, retaining walls,

seawalls, bulkheads, wharves, piers, bridges, and docks.” Aplt. App. at 128; see

also 44 C.F.R. Pt. 61, App. A(1) § IV.12.

In May 2005, rising water levels damaged the channel walls in Red Butte

Creek and began to undermine the foundation of Mr. Remund’s cabin. In 2006,

additional runoff water further undermined the walls and structural support for his

cabin. State Farm denied coverage for Mr. Remund’s claims to recover for the

damage under the SFIP. It is undisputed that, by its terms, the SFIP does not

cover Mr. Remund’s damage. See Aplee. Supp. App. at 438 (Stipulation, filed

Apr. 9, 2009) (embodying Mr. Remund’s stipulation that the SFIP “purchased by

[Mr. Remund] through State Farm Fire and Casualty Company does not provide

coverage for the damages to his property as alleged in his Complaint”); Aplt.

App. at 257 n.1 (Dist. Ct. Order and Mem. Decision, filed May 18, 2010) (“Mr.

Remund does not dispute that the coverage he now seeks i[s] inconsistent with the

scope of coverage provided.”); see also Aplt. Reply Br. at 14 (“Remund does not

dispute the scope of coverage. He seeks to recover for misrepresentations made

prior to the time he purchased an SFIP.”). 

Mr. Remund filed suit against State Farm in Utah state court alleging

breach of contract, breach of warranty, estoppel, and bad faith. Mr. Remund did

-4-
not name Ms. Tuua, the United States, or FEMA as a defendant. 

State Farm removed the case to federal court, and following removal Mr.

Remund voluntarily dismissed all of his claims except the breach of warranty and

estoppel claims. On those two claims, the district court granted summary

judgment for State Farm. Specifically, the district court determined that those

two claims are preempted by federal law under both express and conflict

preemption.

II. ANALYSIS

A. Standard of Review

We review the district court’s order granting summary judgment de novo,

and we draw all reasonable inferences in favor of the nonmoving party—in this

case, Mr. Remund. See Trentadue v. Integrity Comm., 501 F.3d 1215, 1226 (10th

Cir. 2007). “[S]ummary judgment is appropriate ‘if the movant shows that there

is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.’” Morris v. City of Colo. Springs, 666 F.3d 654, 660

(10th Cir. 2012) (quoting Fed. R. Civ. P. 56(a)). 

B. Estoppel and Breach of Warranty under Utah Law

Although the parties discuss both of Mr. Remund’s claims—estoppel and

breach of warranty—together as “policy-procurement claims,” we take a different

approach. To determine whether Mr. Remund’s claims are preempted we review

each claim individually, comparing the elements of the state-law claim to the

-5-
mandates of federal law. See PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2573

(2011) (“Pre-emption analysis requires us to compare federal and state law.”) 

Accordingly, our discussion of whether Mr. Remund’s claims are federally

preempted begins with a basic understanding of estoppel and breach of warranty

under Utah law.

1. Estoppel

Utah law “holds insurance agents to accurately representing policy

provisions and honestly answering consumer questions.” Youngblood v. AutoOwners Ins. Co., 158 P.3d 1088, 1096 (Utah 2007). “Agents who are not trained

to act with complete honesty and integrity in their interactions with consumers, or

who simply refuse to do so, place themselves and their principals at risk. The

law will hold both principal and agent liable for misrepresentations upon which

consumers reasonably rely.” Id. (emphasis added).

Estoppel may be applied to modify terms of an insurance policy

when (1) an agent makes material misrepresentations to the

prospective insured as to the scope of coverage or other

important policy benefits, (2) the insured acts with prudence and

in reasonable reliance on those misrepresentations, and (3) that

reliance results in injury to the insured.

Id. at 1094 (emphasis added).

2. Breach of Warranty

Under Utah law, “[a] warranty is an assurance by one party to a contract of

the existence of a fact upon which the other party may rely.” Groen v. Tri-O-

-6-
Inc., 667 P.2d 598, 604 (Utah 1983) (emphasis added). 

A person may warrant the occurrence of future events or of

events which could not possibly happen. The substance of such

a warranty is in effect a promise to respond in damages

proximately caused by the nonexistence of a represented fact, or

the failure of a promised event to occur. . . . It is sufficient if

there is a misrepresentation of an existing fact or a promise that

a specified event will occur in the future, if such representation

or promise has a natural tendency to induce another in reliance

thereon to purchase, sell or exchange his property.

Welchman v. Wood, 353 P.2d 165, 167 (Utah 1960) (footnote omitted).

C. Conflict Preemption

We conclude that Mr. Remund’s state-law claims are preempted under the

conflict-preemption doctrine. “Even where Congress has not completely

displaced state regulation in a specific area, state law is nullified to the extent that

it actually conflicts with federal law.” Hillsborough Cnty., Fla. v. Automated

Med. Labs., Inc., 471 U.S. 707, 713 (1985); see also PLIVA, Inc., 131 S. Ct. at

2579 (“[T]he text of the [Supremacy] Clause—that federal law shall be supreme,

‘any Thing in the Constitution or Laws of any State to the Contrary

notwithstanding’—plainly contemplates conflict pre-emption by describing

federal law as effectively repealing contrary state law.”).

“[A]ny state law, however clearly within a State’s acknowledged power,

which interferes with or is contrary to federal law, must yield.” Felder v. Casey,

487 U.S. 131, 138 (1988) (quoting Free v. Bland, 369 U.S. 663, 666 (1962))

(internal quotation marks omitted); see Perez v. Campbell, 402 U.S. 637, 652

-7-
(1971) (“[A]ny state legislation which frustrates the full effectiveness of federal

law is rendered invalid by the Supremacy Clause.”); see also Boggs v. Boggs, 520

U.S. 833, 844 (1997) (“Conventional conflict pre-emption principles require preemption ‘where compliance with both federal and state regulations is a physical

impossibility, . . . or where state law stands as an obstacle to the accomplishment

and execution of the full purposes and objectives of Congress.’” (quoting Gade v.

Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 98 (1992))). 

We do not “assume[] lightly that Congress has derogated state regulation,

but instead . . . address[] claims of pre-emption with the starting presumption that

Congress does not intend to supplant state law.” N.Y. State Conference Of Blue

Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654 (1995). 

“Since pre-emption claims turn on Congress’s intent, we begin as we do in any

exercise of statutory construction with the text of the provision in question, and

move on, as need be, to the structure and purpose of the Act in which it occurs.” 

Id. at 655 (citation omitted).

In performing this preemption inquiry here, we need look no further than

one of the NFIP’s implementing regulations,1

 which states:

[R]epresentations regarding the extent and scope of coverage

[under the SFIP] which are not consistent with the National

1 “[The Supreme Court has] held repeatedly that state laws can be preempted by federal regulations as well as by federal statutes.” Automated Med.

Labs., 471 U.S. at 713.

-8-
Flood Insurance Act of 1968, as amended, or the Program’s

regulations, are void, and the [insurance] agent acts for the

insured and does not act as agent for the Federal Government, the

Federal Emergency Management Agency, or the [WYO carrier].

44 C.F.R. § 61.5(e) (emphasis added). 

By creating the legal fiction that an insurance agent “acts for the insured,”

instead of for her employer (the private insurance company), § 61.5(e) shields the

private insurance company from liability for certain of the agent’s tortious acts.2

Whether this is good public policy because it makes participation in the NFIP

more attractive to private insurance companies, or bad public policy because it

may result in injustice for some insureds, is not for us to decide. The objective of

2 The NFIP does not, however, similarly shield agents from liability

for their own delict. See 42 U.S.C. § 4081(c) (“The Administrator of the Federal

Emergency Management Agency may not hold harmless or indemnify an agent or

broker for his or her error or omission.”). As previously mentioned, Mr. Remund

did not elect to sue Ms. Tuua for any alleged wrongdoing. Furthermore, we pause

to note that Mr. Remund’s reliance on the Fifth Circuit’s reading of identical

language from an earlier version of FEMA’s regulation to support his argument

against preemption is unavailing. See Spence v. Omaha Indem. Ins. Co., 996 F.2d

793, 796 (5th Cir. 1993) (construing 44 C.F.R. § 61.5(i) and appearing to “decline

to accept a reading of that provision immunizing WYO companies from liability

for the tortious conduct of their agents”); see also National Flood Insurance

Program, 58 Fed. Reg. 62,420, 62,422 (Nov. 26, 1993) (noting that “paragraph (i)

is . . . redesignated as paragraph (e)”). In a subsequent decision, the Fifth Circuit

made clear that Spence is inapposite because its focus was the operation of the

state-law statute of limitations, not federal preemption. See Wright v. Allstate

Ins. Co., 415 F.3d 384, 389 (5th Cir. 2005) (“A careful reading of Spence,

however, reveals that Spence does not hold that state law tort claims are not

preempted by the [National Flood Insurance Act].” (emphasis added)).

-9-
federal law, as evinced by 44 C.F.R. § 61.5(e), is clear, and we cannot ignore it.3

3 We recognize that, in deciding that so-called procurement-related

claims were not preempted, the Fifth Circuit reached a different conclusion

regarding the impact of such claims on Congress’s purposes and objectives. See

Campo v. Allstate Ins. Co., 562 F.3d 751, 758 (5th Cir. 2009). Having considered

Campo, however, we are not persuaded by its reasoning. Campo’s holding rests

in part on a narrow reading of the preemptive scope of FEMA’s regulations

promulgated to effectuate the NFIP, construing those regulations to exclude from

preemption procurement-related claims. Id. (“[U]nlike in handling-based cases,

permitting prosecution of procurement-related state-law tort suits does not impede

the full purposes and objectives of Congress. . . . FEMA extensively regulates the

management of existing coverage while demonstrating no such interest in

procurement.”). In particular, Campo relied on the view that “FEMA does not

reimburse carriers for procurement-related judgments. . . . [Thus,] state-law tort

claims related to procurement do not interfere with Congress’s objectives.” Id. 

However, prior to Campo, FEMA expressly rejected that view in litigation before

the district court in Moffett v. Computer Scis. Corp., 457 F. Supp. 2d 571, 587 (D.

Md. 2006). And, relying in part on that rejection, the district court in Moffett was

persuaded that “federal funds may very well be at stake in connection with

procurement fraud claims.” Id. We find the reasoning of Moffett on this specific

point to be persuasive. See id. at 587–88. Moreover, in a subsequent regulatory

bulletin, FEMA expressly rejected Campo’s reading of the preemptive scope of its

regulations implementing the NFIP and of the impact of contrary state laws on

Congress’s purposes and objectives. See Edward L. Connor, Acting Fed. Ins.

Adm’r, Nat’l Flood Ins. Program, WYO Program Bulletin No. W–09038, Notice

of FEMA’s Intent to Adopt, by Regulation, a Clarification of the Current Express

Preemption Clause of the Standard Flood Insurance Policy (July 16, 2009),

attached as Ex. A to Dist. Ct. Doc. No. 56, available at

http://www.nfipiservice.com/stakeholder/pdf/bulletin/w-09038.pdf (“FEMA

previously understood and intended its regulations to preempt state law claims

related to policy formation, renewal and administration arising from allegations of

WYO Company error as distinct from agent error . . . . To the extent there are

conflicts between Federal and state law, FEMA recognizes that application of

state laws would interfere with the implementation of the National Flood

Insurance Program and would frustrate the national purpose and scope of the

program.”). We need not decide whether such an interpretative pronouncement of

FEMA, as found in the bulletin, is entitled to any deference—an issue that is

complicated by the fact that the pronouncement at issue directly pertains to the

(continued...)

-10-
Thus, we must accept that Ms. Tuua acted as Mr. Remund’s agent under

federal law, and not as State Farm’s agent, and that any false representations she

made regarding the extent and scope of the SFIP’s coverage are void. Against

that legal backdrop, we specifically must examine whether there is a direct

conflict—that stands as an obstacle to the accomplishment and execution of the

full purposes and objectives of Congress—between, on the one hand, the

mandates of § 61.5(e), and, on the other, Mr. Remund’s claims under Utah law for

estoppel and breach of warranty. We conclude that there is such a conflict. 

Accordingly, the claims are preempted.

3 (...continued)

subject of preemption. See Colo. Pub. Util. Comm’n v. Harmon, 951 F.2d 1571,

1579 (10th Cir. 1991) (“We defer to an administrator’s construction of his own

regulations unless it is ‘plainly erroneous or inconsistent with the regulation.’ . . . 

However, a preemption determination involves matters of law—an area more

within the expertise of the courts than within the expertise of the [administrator].” 

(citations omitted) (quoting Robertson v. Methow Valley Citizens Counsel, 490

U.S. 332, 359 (1989))); see also Charles Alan Wright & Charles H. Koch, Jr.,

Federal Practice and Procedure § 8353, at 233, 243 (2006) (collecting cases

offering different perspectives on “[o]ne of the most venerable doctrines in

administrative law” that provides for deference to an administrative agency’s

interpretation of its own regulations, and noting that “[b]ecause of the federalism

concerns, a court might give less deference to an interpretation that results in

preemption of state law”). (Curiously, the Fifth Circuit has recently looked to

this exact FEMA bulletin in discerning the agency’s regulatory intent on another

matter, without acknowledging the bulletin’s dim view of Campo’s reading of the

preemptive scope of FEMA’s regulations relative to procurement-related claims. 

See Grissom v. Liberty Mut. Fire Ins. Co., --- F.3d ----, 2012 WL 1383069, at *3

n.2 (5th Cir. Apr. 23, 2012).) Suffice it to say that FEMA’s pronouncement in the

bulletin concerning the preemptive scope of its regulations—specifically, reading

them to preempt so-called procurement-related claims—provides additional

support for our independent assessment of the import of these regulations. 

-11-
1. Estoppel

Mr. Remund’s estoppel claim is really a claim that “State Farm . . . is

estopped from [asserting] that [Mr. Remund’s] claims [under the SFIP] are

barred.” Aplt. Reply Br. at 5. In other words, it is a claim that State Farm is

estopped from denying Mr. Remund coverage under the SFIP. Success on Mr.

Remund’s estoppel claim would have the effect of expanding coverage under the

policy. See Youngblood, 158 P.3d at 1094; see also id. at 1090 (“[A]n insured

may [under some factual circumstances] rely upon principles of equitable estoppel

to enlarge the scope of an insurance policy’s coverage where the company’s

agent materially misstates the scope of coverage prior to the purchase of the

policy.” (emphasis added)). 

But under federal law, Ms. Tuua acted as Mr. Remund’s agent and not as

the insurance company’s agent. See 44 C.F.R. § 61.5(e). In other words, Mr.

Remund and Ms. Tuua were, together, one party to the insurance contract while

State Farm, as fiscal agent of the United States, was the other party. Under Utah

law, estoppel is only available to a party who has relied to his detriment on

misrepresentations made by another party. See Youngblood, 158 P.3d at 1092. 

Consequently, State Farm cannot be held liable under a Utah state-law estoppel

claim for misrepresentations made by Mr. Remund’s own agent. As far as State

Farm is concerned, it is as though Mr. Remund made these alleged

misrepresentations to himself. 

-12-
Utah law, on the other hand, views insurance agents as agents of the

insurance company, not as agents of the insured.4

 See id. at 1096. Therefore

there is an irreconcilable conflict between federal and state law. The only way

that Mr. Remund could succeed on his estoppel claim is if federal law were

ignored, and state law accepted instead. Accordingly, Mr. Remund’s estoppel

claim is preempted.

Furthermore, there is a separate and independent ground evincing conflict

preemption here. The remedy for an estoppel claim under Utah state law—the

expansion of coverage under the insurance policy—is unavailable to Mr. Remund. 

Under federal law, the scope of the SFIP’s coverage cannot be expanded by

misrepresentations about the policy’s coverage. Again, to the extent that Utah

law would mandate a different result—in other words, one that contemplates

expansion of coverage under the SFIP—the state law is preempted. 

Mr. Remund’s claim under Utah law for estoppel cannot coexist with the

plain mandates of § 61.5(e); instead, it stands as an obstacle to the

4 In fact, counsel for Mr. Remund acknowledged this conflict between

state and federal law at oral argument but asked us to effectively read into the

statute additional language that would exclude from consideration any preprocurement activity. See Oral Arg. 7:08–8:18 (“[That under federal law the

insurance agent acts as the insured’s agent] is completely in conflict with

common law agency. . . . My position is that the federal scheme does not extend

back before the time the policy is purchased and signed.”). However, we decline

that invitation. See Moffett, 457 F. Supp. 2d at 588–89 (“The distinction between

claims handling and procurement fraud . . . appears to this Court to be a

distinction without a difference.”).

-13-
accomplishment and execution of Congress’s intent to shield WYO carriers like

State Farm from liability under certain circumstances. Accordingly, Mr.

Remund’s estoppel claim is preempted.

2. Breach of Warranty

To prevail on a breach of warranty claim against State Farm under Utah

law, Mr. Remund must show that Ms. Tuua acted as State Farm’s agent, because

“[a] warranty is an assurance by one party to a contract of the existence of a fact

upon which the other party may rely.” Groen, 667 P.2d at 604 (emphasis added). 

Under Utah law, an insurance agent does act as the agent of the insurance

company. See Youngblood, 158 P.3d at 1096. But under federal law, State

Farm’s insurance agent acted as Mr. Remund’s agent and not as State Farm’s

agent. See 44 C.F.R. § 61.5(e). Again, Mr. Remund’s state-law claim stands as

an obstacle to the accomplishment and execution of Congress’s intent to shield

WYO carriers like State Farm from liability under certain circumstances. 

Therefore, there is a direct conflict between state and federal law, and Mr.

Remund’s state-law breach of warranty claim is preempted.

-14-
III. CONCLUSION

Because both of Mr. Remund’s state-law claims are preempted, we

AFFIRM the judgment of the district court.5

ENTERED FOR THE COURT

Jerome A. Holmes

Circuit Judge

5 Because we conclude that both of Mr. Remund’s claims are

preempted under the doctrine of conflict preemption, we do not reach the question

of whether they are also preempted under express preemption, or whether they

otherwise fail as a matter of law. See, e.g., US Airways, Inc. v. O’Donnell, 627

F.3d 1318, 1324 (10th Cir. 2010) (concluding that aviation safety is subject to

field preemption, and, accordingly, that the court need not reach the question of

whether aviation safety is also subject to express preemption).

-15-