Opinion ID: 77891
Heading Depth: 2
Heading Rank: 1

Heading: Shuford's Complaint for Breach of Contract Fails.

Text: Shuford presents three arguments to excuse her failure to file a proof of loss within one year. First, Shuford argues that the Administrator's waiver dispensed with the proof-of-loss requirement and converted the adjuster's report into a proof of loss, and Shuford contends that she was not required to file a proof of loss because she never knew about the claim adjuster's estimate on which the denial of payment was based. Second, Shuford argues that Fidelity should have been equitably estopped from asserting Shuford's failure to file a proof of loss as a defense. Third, Shuford argues that Fidelity constructively waived the proof-of-loss requirement. Each of these arguments fails.
Fidelity was entitled to summary judgment against Shuford's complaint for breach of contract because Shuford failed to file a proof of loss within a year. Although the Administrator's waiver dispensed with the 60-day deadline for a proof of loss, the waiver provided a new deadline for the filing of a proof of loss. For a contested claim, a policyholder had to file a proof of loss within a year: In the event a policyholder disagrees with the insurer's adjustment, settlement, or payment of the claim, a policyholder may submit to the insurer a proof of loss within one year from the date of the loss. The waiver explained that the rejection of a timely proof of loss was a condition precedent for the filing of a lawsuit: If the insurer rejects the proof of loss in whole or in part, the policyholder may file a lawsuit against the insurer within one year of the date of the written denial. . . . Contrary to Shuford's argument, the permissive term may in the phrase a policyholder may submit to the insurer a proof of loss means that the policyholder had a choice whether to challenge the insurer's decision, not that filing the proof of loss was optional. If filing a proof of loss within a year of the loss were not a requirement for obtaining judicial relief, the clause [i]f the insurer rejects the proof of loss in whole or in part would be superfluous. Shuford argues that the Administrator's waiver converted the report of the claim adjuster into a proof of loss and, in the alternative, that a proof of loss was not required because Shuford never knew about the claim adjuster's estimate on which the denial of payment was based. These arguments fail based on the plain language of the waiver. The problem with Shuford's first argument is that the language in the waiver that payment of the loss will be based on the evaluation of damage in the adjuster's report does not suggest that the adjuster's report is a proof of loss for a contested claim. The waiver dispenses with the need for a proof of loss when the adjuster's report is uncontested, but later language in the waiver establishes that a proof of loss is necessary for a contested claim. The problem with Shuford's alternative argument is that, although Shuford needed to know that her claim had been denied, she did not need to know of the estimate on which the denial was based. The Administrator's waiver allowed a policyholder to submit a proof of loss [i]n the event [she] disagrees with the insurer's adjustment, settlement, or payment of the claim. Because she disagreed with the denial of payment by Fidelity, Shuford was required to file a proof of loss, even if she had no knowledge of the underlying adjuster's report.
Shuford next argues that Fidelity should have been equitably estopped from raising Shuford's failure to submit a proof of loss as a defense because Fidelity sent Shuford a letter erroneously stating that the 60-day proof-of-loss requirement applied. We disagree. Equitable estoppel is not an available argument for Shuford. The Supreme Court has held that equitable estoppel is unavailable in a claim against the government for funds from the public treasury. Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 424-34, 110 S.Ct. 2465, 2471-76, 110 L.Ed.2d 387 (1990). The claimant in Richmond became ineligible for disability benefits when he relied on the erroneous advice of a federal employee and took a job in which he earned more than was permitted by the eligibility requirements of the relevant statute. Id. at 416-18, 110 S.Ct. at 2467-68. The Supreme Court declined to estop equitably the government from finding the claimant ineligible for disability benefits because the Appropriations Clause prohibits monetary payments from the federal treasury that have not been authorized by Congress. Id. at 424-28, 110 S.Ct. at 2471-73. The erroneous advice of a federal employee could not override the requirements that Congress had established for the disbursal of federal funds. Because Fidelity was acting as a fiscal agent of the United States, see 42 U.S.C. § 4071(a)(1), Richmond applies. A suit for benefits under the National Flood Insurance Program raises the same concerns, under the Appropriations Clause, as a suit against a governmental entity because benefits under the National Flood Insurance Program are paid from the federal treasury. Equitably estopping Fidelity from raising the failure to file a proof of loss as a defense would allow the erroneous letter from Fidelity to alter the requirements for the disbursal of federal funds. Under Richmond, equitable estoppel is unavailable to Shuford. Even assuming for the sake of argument that equitable estoppel might be available for a claimant under a Standard Policy, Shuford cannot establish affirmative and egregious misconduct. Sanz v. U.S. Sec. Ins. Co., 328 F.3d 1314, 1319-20 (11th Cir.2003) (per curiam). In Sanz, an insurance provider in the National Flood Insurance Program erroneously informed a policyholder that he had completed all of the necessary paperwork and that the provider would take care of the claim. Id. at 1317. We declined to estop equitably the provider from asserting the proof-of-loss requirement as a defense because, even assuming for the sake of argument that equitable estoppel might be available in limited circumstances, the conduct of the provider did not rise to the level of affirmative and egregious misconduct. Id. at 1320. In the light of Sanz, equitable estoppel is inapplicable because the letter from Fidelity to Shuford, which stated that the 60-day proof-of-loss requirement applied, did not constitute affirmative and egregious misconduct.
Shuford argues that Fidelity constructively waived the proof-of-loss requirement because Fidelity did not base its denial of payment on Shuford's failure to file a proof of loss. Again, we disagree. In Sanz we declined to recognize a constructive waiver when the provider processed the claim without a proof of loss and repeatedly assured the policyholder that all necessary papers had been filed. Id. at 1318-19. We explained that strict compliance with the provisions of federal flood insurance policies is required because payments are drawn from the federal treasury. Id. at 1317-18. We held that failure to file a proof of loss bars recovery absent an express written waiver of the proof-of-loss requirement by the Administrator. See id. at 1317-19.