Court Opinion

ID: 4105123
Source: CourtListenerOpinion
Date Created: 2016-12-07 01:01:06.967379+00
Date Added: 2024-06-11T07:46:05.866288
License: Public Domain

Case: 16-30251      Document: 00513786652         Page: 1    Date Filed: 12/06/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                      United States Court of Appeals
                                                                               Fifth Circuit

                                      No. 16-30251                           FILED
                                                                      December 6, 2016
                                                                        Lyle W. Cayce
JAMES MILLER; VICTORIA MILLER,                                               Clerk

              Plaintiffs–Appellants,

v.

AMERICAN STRATEGIC INSURANCE CORPORATION; LIGGIO
INSURANCE AGENCY, INCORPORATED,

              Defendants–Appellees.

                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 6:13-CV-2658

Before KING, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
       James and Victoria Miller (the Millers) appeal the district court’s
dismissal of their claims against American Strategic Insurance (American
Strategic) and Liggio Insurance Agency (Liggio). We affirm.
                                             I
       The Millers obtained an insurance policy from Liggio that American
Strategic had issued pursuant to the National Flood Insurance Program

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 16-30251    Document: 00513786652      Page: 2   Date Filed: 12/06/2016

                                 No. 16-30251
(NFIP). The Millers’ house was partially built on piers, leaving a “crawlspace”
underneath the floor of the home. While the insurance policy was still in effect,
a heavy rain caused flood water to enter a crawlspace beneath the Millers’
house, but the water stopped rising before reaching the house’s threshold. The
Millers contacted Liggio, which advised the Millers that they had not
experienced a flood event. A few months later, Victoria Miller fell through the
floor of her house. The Millers again contacted Liggio, which advised the
Millers that foundation issues were not covered under the policy. After repairs
to the floor were made, the Millers, believing that the damage to the house was
“consistent with flood damage,” filed a flood-damage claim with American
Strategic. American Strategic sent an adjuster, who, after inspecting the
property, prepared a proof of loss for the Millers for post-flood cleaning only.
      The Millers did not sign nor submit this proof of loss, and, as a result,
American Strategic closed their claim on September 13, 2012. The Millers
submitted a proof of loss a month and a half later in support of their flood-
damage claim. American Strategic acknowledged receipt of this proof of loss
but reiterated that the Millers’ only covered loss was for cleaning expenses.
American Strategic did not reopen the Millers’ claim. The Millers appealed
this determination to the Director of Claims for the NFIP, who upheld
American Strategic’s determination that the Millers’ loss was limited to
cleaning expenses.
      On September 13, 2013, the Millers filed suit against American Strategic
in the Western District of Louisiana. American Strategic asserted, among
other defenses, that the Millers had failed to comply with the policy’s proof of
loss requirement and moved for summary judgment. While this motion was
pending, the district court, on January 29, 2015, allowed the Millers to amend
their complaint to join Liggio as a defendant.       Liggio promptly moved to
dismiss for failure to state a claim. The district court first granted American
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                                      No. 16-30251
Strategic’s summary judgment motion on the basis that the Millers submitted
an inadequate proof of loss and then granted Liggio’s motion to dismiss,
holding that the applicable peremptive period under Louisiana law barred the
Millers’ claim. The Millers moved for a rehearing or new trial regarding
American Strategic on the basis that the district court did not address the
Millers’ equitable estoppel claim that they had raised in their summary
judgment briefing. After the district court denied this motion, the Millers
appealed all three decisions.
                                             II
                                              A
      “We review a grant of summary judgment de novo, applying the same
standard that the district court applied.” 1 We will affirm a grant of summary
judgment if, construing the facts in the light most favorable to the non-moving
party, “the pleadings, the discovery and disclosure material on file, and any
affidavits show that there is no genuine dispute as to any material fact and
that the movant is entitled to judgment as a matter of law.” 2
      The Millers have limited their appeal as it pertains to American
Strategic to two issues: (1) whether American Strategic violated a purported
right conferred by 42 U.S.C. § 4072, and (2) whether equitable estoppel
precludes summary judgment. The Millers, however, did not argue before the
district court that America Strategic violated a right conferred by § 4072, and
they may not assert it for the first time on appeal. 3 Accordingly, we limit our
review to the second issue presented.

      1 Smith v. Reg’l Transit Auth., 827 F.3d 412, 417 (5th Cir. 2016).
      2 EEOC v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).
      3 See, e.g., Wilcox v. Wild Well Control, Inc., 794 F.3d 531, 539 (5th Cir. 2015).

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                                       No. 16-30251
                                              B
       American Strategic issued this insurance policy pursuant to the NFIP,
which Congress established “to provide insurance coverage at or below
actuarial rates.” 4 The NFIP empowers the Federal Emergency Management
Agency (FEMA) to issue an insurance policy, called a Standard Flood
Insurance Policy (SFIP), either directly or, as here, through private issuers
known as “Write Your Own” (WYO) companies, which are statutorily
authorized to act as fiscal agents of the United States. 5                 FEMA, through
regulation, creates the Standard Flood Insurance Policy, which establishes
“the conditions under which federal flood-insurance funds may be disbursed to
eligible policyholders” 6 and cannot “be altered, varied, or waived without the
express written consent of [FEMA’s] Federal Insurance Administrator.” 7
Because any payment of a claim under a Standard Flood Insurance Policy is “a
direct charge on the public treasury,” 8 “[a]n insured’s failure to strictly comply
with the SFIP’s provisions—including the proof-of-loss requirement—relieves
the federal insurer’s obligation to pay the non-compliant claim.” 9 Notably, the
Standard Flood Insurance Policy allows suit only if the claimant has “complied
with all the requirements of the policy.” 10

       4 Marseilles Homeowners Condo. Ass’n v. Fidelity Nat’l Ins. Co., 542 F.3d 1053, 1054
(5th Cir. 2008) (per curiam).
       5 42 U.S.C. § 4071(a)(1); Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998).
       6 Marseilles, 542 F.3d at 1054 (internal quotation marks omitted) (quoting Mancini v.

Redland Ins. Co., 248 F.3d 729, 733 (8th Cir. 2001)); see also 44 C.F.R. § 61.4(b) (stipulating
that the Federal Insurance Administrator promulgates “the terms and conditions of the
Standard Flood Insurance Policy”); 44 C.F.R. pt. 61 app. A(1) (containing the SFIP).
       7 Gowland, 143 F.3d at 953; accord 44 C.F.R. § 61.13(d); see also 42 U.S.C. § 4129

(noting that the Federal Insurance Administrator is part of FEMA).
       8 Ferraro v. Liberty Mut. Fire Ins. Co., 796 F.3d 529, 531-32 (5th Cir. 2015) (internal

quotation marks omitted) (quoting Gowland, 143 F.3d at 955).
       9 Id. at 534.
       10 44 C.F.R. pt. 61 app. A(1) art. VII pt. ¶ R (emphasis added).

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                                       No. 16-30251
       The Millers do not challenge the district court’s holding that they
provided an inadequate proof of loss.               Instead, they argue that American
Strategic is estopped from asserting that their proof of loss is inadequate
because American Strategic considered the merits of the Millers’ proof of loss.
Even if we assume that the Millers have presented facts that would estop a
private litigant, we are “powerless to uphold a claim of estoppel” against a
Write Your Own company “because such a holding would encroach upon the
appropriation power granted exclusively to Congress by the Constitution.” 11 In
fact, we have foreclosed the Millers’ argument with even more specificity,
holding that “there can be no estoppel of the Proof of Loss requirement.” 12
       Because the Millers do not contest that they have not complied with all
the requirements of the Standard Flood Insurance Policy, and because we
cannot estop American Strategic from asserting the Millers non-compliance
with the Standard Flood Insurance Policy as a defense, there is no genuine
dispute of material fact, and American Strategic is entitled to judgment as a
matter of law.
                                              III
                                              A
       “We review a district court’s grant of a motion to dismiss de novo.” 13 We
accept the plaintiff’s well-pleaded facts and view those facts in the light most
favorable to the plaintiff. 14 If the facts alleged do not state a claim that is

       11  Gowland, 143 F.3d at 955; see also Office of Pers. Mgmt. v. Richmond, 496 U.S. 414,
434 (1990) (“As for monetary claims, it is enough to say that this Court has never upheld an
assertion of estoppel against the Government by a claimant seeking public funds. In this
context there can be no estoppel . . . .”).
        12 Forman v. FEMA, 138 F.3d 543, 546 (5th Cir. 1998).
        13 Reece v. U.S. Bank Nat’l Ass’n, 762 F.3d 422, 424 (5th Cir. 2014) (internal quotation

marks omitted) (quoting Haase v. Countrywide Home Loans, Inc., 748 F.3d 624, 630 (5th Cir.
2014)).
        14 Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507, 510 (5th Cir. 2016).

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                                        No. 16-30251
plausible on its face, then dismissal is proper. 15 “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.” 16
A statute of limitations defense is an adequate basis for dismissal if “it is
evident from the plaintiff’s pleadings that the action is barred and the
pleadings fail to raise some basis for tolling or the like.” 17
                                               B
       The Millers have asserted only a state-law negligence claim against
Liggio, a claim which is constrained by a one-year peremptive statute of
limitation. 18 The peremptive period expires “within one year from the date
that the alleged act, omission, or neglect is discovered or should have been
discovered.” 19 The peremptive period “may not be renounced, interrupted, or
suspended,” 20 and “relation back of an amended or supplemental pleading is
not allowed.” 21 Although the Louisiana Supreme Court has not yet determined
what suffices to trigger the peremptive period for a claim against an insurance
agent, it has done so for the legal malpractice peremptive period, 22 holding that
“the date of discovery is the date the negligence was discovered or should have
been discovered by a reasonable person in the plaintiff’s position.” 23                     The

       15 Id.
       16 Gearlds v. Entergy Servs., Inc, 709 F.3d 448, 450 (5th Cir. 2013) (internal quotation
marks omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009)).
       17 King–White v. Humble Indep. Sch. Dist., 803 F.3d 754, 758 (5th Cir. 2015) (internal

quotation marks omitted) (quoting Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2003)).
       18 LA. STAT. ANN. § 9:5606.
       19 § 9:5606(A).
       20 § 9:5606(D).
       21 Udomeh v. Joseph, 103 So. 3d 343, 348 (La. 2012) (internal quotation marks and

alterations omitted) (quoting Naghi v. Brener, 17 So. 3d 919, 925 (La. 2009)).
       22 LA. STAT. ANN. § 9:5605.
       23 Jenkins v. Starns, 85 So. 3d 612, 621 (La. 2012); see also Hemphill v. State Farm

Mut. Auto. Ins. Co., 805 F.3d 535, 538 (5th Cir. 2015) (noting that in the absence of controlling
precedent from a state’s highest court, federal courts must “determine . . . how that court
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                                     No. 16-30251
Louisiana court has held that a peremptive period commences “when a
claimant knew or should have known of the existence of facts that would have
enabled him to state a cause of action.” 24
       The Millers maintain that their claim is timely because they filed the
claim against Liggio within one year of discovering that Liggio’s actions—its
statements that the Millers had not experienced a flood event and that the
Standard Flood Insurance Policy did not cover foundation damage or failures—
would likely harm them. This discovery, the Millers assert, occurred on
September 3, 2014, when American Strategic allegedly “first indicated its
position that the Millers’ flood claim [was] untimely and that untimeliness is
dispositive to the claim.”
      Nevertheless, the Millers should have known of Liggio’s alleged
negligence earlier.      The Millers admit in their complaint that American
Strategic closed their claim on September 13, 2012 “for failure to provide a
proof of loss.” 25 This event demonstrates that the Millers should have known
that the untimely provision of a proof of loss could preclude their recovery. The
Millers should also have been aware of any cause of action for negligence that
it could assert against Liggio for allegedly causing the delay that resulted in
the Millers failure to file the proof of loss at that time. Even if the Millers did
not comprehend, as they should have, that Liggio might have caused their
delayed filing when American Strategic closed their claim, the Millers
articulated the facts underlying their cause of action against Liggio in their
initial complaint on September 13, 2013. Because it is clear that, at least by
this point, a reasonable person would have discovered that Liggio might have

would resolve the issue if presented with the same case” (internal quotation marks omitted)
(quoting In re Katrina Canal Breaches Litig., 495 F.3d 191, 206 (5th Cir. 2007))).
       24 Jenkins, 85 So. 3d at 621.
       25 The Millers acknowledge in their complaint that their claim “remain[ed] closed”

even after filing the proof of loss that the district court held was inadequate.
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                                    No. 16-30251
been negligent in giving advice that caused a delayed filing, the peremptive
period expired before the Millers initiated suit against Liggio on January 29,
2015. Accordingly, the Millers have failed to assert a plausible claim for relief,
and dismissal is appropriate.
                                *        *         *
      For the foregoing reasons, we AFFIRM the district court’s judgment.

                                         8