United States District Court, D. Vermont
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DOC. 30)
GEOFFREY W. CRAWFORD, District Judge.
This is a dispute over a claim for flood insurance coverage under a National Flood Insurance Standard Insurance Policy ("SFIP") issued by Defendant National Grange Mutual Insurance Company ("NGM"). NGM has moved for summary judgment (Doc. 30) on the grounds that it has already paid the full amount of coverage available, and Plaintiff Abend Family Limited Partnership ("Abend") failed to submit the required proof of claim for the amount it now seeks and also waited too long to file suit. A hearing on the motion was held on October 29, 2014. Plaintiff appeared pro se through general partners Norman and Sydney Abend. Defendant appeared through local counsel John Paul Faignant, Esq. and William T. Treas, Esq., admitted pro hac vice.
I. Procedural History and Factual Background.
A. Factual Background.
The following facts drawn from the parties' pleadings and exhibits filed with the court are not in dispute. See, e.g., Doc. 41 at 1 ("The Plaintiff does not dispute the chronology of events."). Abend owns a commercial building in Waitsfield, Vermont ("the building") that suffered flood damage on August 28, 2011 as a result of Hurricane Irene. Since 2007, Abend has purchased SFIP coverage on the building ("the policy") from NGM. NGM issued and administered the policy on behalf of the Federal Emergency Management Agency ("FEMA"), serving as a "Write Your Own" or "WYO" insurance program carrier, pursuant to the National Flood Insurance Act of 1968, 42 U.S.C. § 4001, et seq., ("NFIA"). The SFIP issued to Abend is the General Property Form SFIP, the text of which is codified at 44 C.F.R. Pt. 61, app. A (pt. 2) (2011).
Following the notice of the loss, NGM assigned an independent adjuster-Sweet Claims Service-to adjust the claim. Abend also retained a public adjuster-James Harlor of Swerling Milton Winnick-to represent its interests. On October 5, 2011, NGM sent Abend an advance payment of $10, 000. (Doc. 30-5.) On November 4, 2011, plaintiff executed a Proof of Loss statement ("Original Proof of Loss") on a FEMA form, prepared by the independent adjuster. (Docs. 30-6 and 34-5.) The Original Proof of Loss lists $61, 818.50 as the full cost of repair or replacement. Mr. Harlor forwarded the executed Original Proof of Loss to the independent adjuster on November 8, 2011. In his cover letter, Mr. Harlor stated in part:
Enclosed is a copy of the signed Proof of Loss that you provided to the insured. As you are aware, the insured is not in agreement with the figures on the Proof of Loss and are only signing the Proof of Loss, so they can get paid the undisputed payment of $50, 218.39. Please alert the insurer that the insured is not in agreement with your proposed settlement. On November 1, 2011, we sent you a list of the items which we were disputing.
(Doc. 34-5.) On November 30, 2011, NGM paid Abend $40, 218.39. (Doc. 30-6 at 3.) This payment covered damages approved by the independent adjuster totaling $55, 218.39, less the $10, 000 advance payment, the $5, 000 policy deductible, and depreciation. (Doc. 30-4 at 2.)
NGM issued a letter to Abend dated November 30, 2011, stating the following:
The adjuster's final report indicates the insured building has a basement. We are denying all non-covered items located in the basement, pursuant to the Standard Flood Insurance Policy... [.]
(Doc. 30-4 at 2.) The letter quotes the provisions of the SFIP relating to building property coverage, which in general terms, excludes surfaces and limits coverage of damage in basement areas to heating and cooling equipment, other utilities, and structural damage. See 44 C.F.R. Pt. 61, app. A (pt. 2), Paragraph III(A)(8) (2011).
On December 30, 2011, Abend executed a second, supplemental Proof of Loss ("Supplemental Proof of Loss") on a FEMA form prepared by the independent adjuster. (Doc. 30-7.) The Supplemental Proof of Loss covered a supplemental payment of $25, 648.09 after depreciation, which NGM paid on January 12, 2012. (Doc. 30-7 at 3.)
On January 31, 2012, Mr. Harlor wrote a letter to NGM stating that he and the independent adjuster were at an "impasse" concerning the status of the ground floor of the building. (Doc. 34-4.) Mr. Harlor argued that the ground floor could not be considered a basement because the entrance and retail space were at grade level. He attached photos to support Abend's position. He also questioned NGM's reliance on an "elevation certificate" dated May 10, 2006, which described a 2.4-5.2 foot difference between the ground floor and the exterior elevation. He argued that a minimum difference of 2.4 feet is impossible, since there are no steps at the ground floor entrance. He concluded by advising that Abend:
[H]as exhausted $120, 280.36 on repairs and still needs to perform more but for monetary reasons, they have deferred certain repairs for now. All expenses to date are enclosed. This policy of insurance has a limit of $125, 000, which the insured will clearly exhaust. It is our position that the insured should be entitled to the entire limit of liability.
(Doc. 34-4 at 2.) On March 5, 2012, NGM wrote Abend a second letter denying portions of the claim, stating in part:
The adjuster's final report indicates the insured building has a basement. We are denying all non-covered items located in the basement, including the radiant baseboard heaters, condensate piping and antifreeze, ...