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Fletcher v. Standard Fire Insurance Co.

United States District Court, E.D. New York

January 17, 2015

STEPHEN C. FLETCHER and KAREN C. FLETCHER, Plaintiffs,
v.
THE STANDARD FIRE INSURANCE COMPANY, Defendant

For the Plaintiffs: Norman H. Dachs, Esq., Of Counsel, Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola, NY.

For the Defendant: Judith A. Lockhart, Esq., Leonardo Trivigno, Esq., Of Counsel, Carter, Ledyard & Milburn, LLP, New York, NY.

For the Defendant: Gina M. Stowe, Esq., Of Counsel, Stradley Ronon Stevens & Young LLP, Philadelphia, PA.

MEMORANDUM OF DECISION & ORDER

ARTHUR D. SPATT, United States District Judge.

On October 2, 2013, the Plaintiffs Stephen C. Fletcher and Karen C. Fletcher (collectively, the " Plaintiffs" ) commenced this action pursuant to 42 U.S.C. § 4072 seeking to recover flood-related damages to their residence from Superstorm Sandy pursuant to a Standard Flood Insurance Policy issued by the Defendant Standard Fire Insurance Company (the " Defendant" ) under the National Flood Insurance Program.

Presently before the Court are (i) the Defendant's motion pursuant to Federal Rule of Civil Procedure (" Fed. R. Civ. P." ) 56 to dismiss the Plaintiffs' claim; and (ii) the Plaintiffs' cross-motion pursuant to Fed.R.Civ.P. 56 for summary judgment on their claim. For the foregoing reasons, the Court grants the Defendant's motion and dismisses the Plaintiffs' claim.

I. BACKGROUND

Unless stated otherwise, the following facts are drawn from the parties' Rule 56.1 statements. Triable issues of fact are noted.

The Plaintiffs are citizens of New York who owned a one-family residence located in Massapequa, New York. The parties do not make clear when the Plaintiffs purchased their home. The mortgagee of the Plaintiffs' property was CitiMortgage, Inc. ISOA ATIMA (" CityMortgage" ). The parties do not make clear the meaning of " ISOA ATIMA" in their papers.

The Defendant is an insurance company authorized to do business in the State of New York. (Answer at ¶ 1.) As relevant to the instant dispute, Congress created the National Flood Insurance Program (" NFIP" ) by passing the National Flood Insurance Act of 1968, 42 U.S.C. § 4001, et seq. (Id. at ¶ 4.) The purpose of the statutes was to provide adequate flood insurance in at-risk areas by offering subsidized flood insurance. Id. at § 4001(b). On April 1, 1979, the Federal Emergency Management Agency (" FEMA" ) became the agency responsible for operating the NFIP. See 42 U.S.C. § 4071.

In 1983, FEMA created the Write Your Own (" WYO" ) Program, which gave insurance companies the ability to issue, under their own names as insurers, Standard Flood Insurance Policies (" SFIPs" ) to individuals as " fiscal agent[s] of the Federal Government." (See Answer at ¶ 1.) In other words, the insurance companies serve as administrators for the federal program, and it is the U.S. government, not the companies, that pays the claims. McGair v. Am. Bankers Ins. Co. of Florida, 693 F.3d 94, 96 (1st Cir. 2012) (citation omitted).

WYO companies, such as the Defendant, must issue SFIPs whose terms are set by regulation and cannot be " altered, varied, or waived other than by the express written consent" of FEMA. 44 C.F.R. § 61.13.

The Defendant provided the Plaintiffs with a SFIP consistent with the FEMA regulations. 44 C.F.R. § Pt. 61, App. A(1), (2); Fletcher Aff., Ex. A. In that regard, a section of the SFIP entitled, " Policy Renewal," states: (1) " This policy will expire at 12:01 a.m. on the last day of the policy term" ; and (2) " We must receive the payment of the appropriate renewal premium within 30 days of the expiration date." 44 C.F.R. § Pt. 61, App. A(1), (2); Fletcher Aff., Ex. A, at 16. The policy further states:

3. If we find, however, that we did not place your renewal notice into the U.S. Postal Service, or if we did mail it, we made a mistake, e.g., we used an incorrect, incomplete, or illegible address, which delayed its delivery to you before the due date for the renewal premium, then we will follow these procedures:
a. If you or your agent notified us, not later than one year after the date on which the payment of the renewal premium was due, of non-receipt of a renewal notice before the due date for the renewal premium, and we determine that the circumstances in the preceding paragraph apply, we will mail a second bill providing a revised due date, which will be 30 days after the date on which the bill is mailed.

Id.

The Plaintiffs' SFIP became effective on September 2, 2002. (Holmes Decl., Ex. A.) Prior to September 19, 2010, CitiMortgage submitted premium payments ...


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