United States District Court, E.D. New York
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For the Plaintiff: Kim Tran Britt, Esq., Of Counsel, Nielsen, Carter & Treas, LLC, Metairie, LA.
For the Plaintiff: Michael J. Khader P.C., Yonkers, NY.
For the Plaintiff: The Law Offices of Michael J. Mauro, Esq., P.C., New Rochelle, NY.
For the Defendant Foremost Insurance Company: Michael Raymond Frittola, Esq., Ross T. Herman, Esq., Of Counsel, Maroney O'Connor LLP, New York, NY.
For the Defendant Fairmont Insurance Brokers, LTD.: Jack Babchik, Esq., Jordan Sklar, Esq., Of Counsel, Babchik & Young, LLP, White Plains, NY.
MEMORANDUM OF DECISION & ORDER
ARTHUR D. SPATT, United States District Judge
On March 20, 2014, the Plaintiff Long Beach Road Holdings, LLC (the " Plaintiff" ) commenced this action seeking damages in connection with the decision by the Defendant Foremost Insurance Company (" Foremost" ) to deny coverage for flood-related damages to the Plaintiff's property sustained in Superstorm Sandy.
The Plaintiff asserts common law and New York State consumer law claims against the Defendant Foremost, the insurance carrier on the Plaintiff's Standard Flood Insurance Policy (" SFIP" ), and the Defendant Fairmont Insurance Brokers, LTD. (" Fairmont" ), the Id. broker that helped to procure the SFIP for the Plaintiff. In particular, the Plaintiff asserts: (i) breach of contract claims against both of the Defendants; (ii) a claim against Fairmont under section 349 of the New York General Business Law (" NYGBL" ) for allegedly deceptive and misleading consumer practices; and (iii) a negligence claim against Fairmont.
Presently before the Court is a motion by Fairmont pursuant to Federal Rule of Civil Procedure (" Fed. R. Civ. P." ) 12(b) to dismiss the claims against it. For the reasons set forth below, Fairmont's motion is granted and the complaint is dismissed as against Fairmont.
A. Underlying Facts
Unless otherwise noted, the Court draws the following facts from the Plaintiff's complaint and construes them in the light most favorable to the Plaintiff.
1. Write Your Own Insurance Program
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 statute 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 (" WxYO" ) Program, which gave insurance companies the ability to issue SFIPs, under their own names as insurers, to individuals as fiscal agents of the government. Fletcher v. Standard Fire Ins. Co., No. 13-CV-5463 (ADS), 2015 WL 248595, at *1 (E.D.N.Y. Jan. 17, 2015) (Spatt, J). Under the WYO program, " insurance companies serve as administrators for the federal program, and it is the U.S. government, not the companies, that pays the claims." Id. (citing McGair v. Am. Bankers Ins. Co. of Florida, 693 F.3d 94, 96 (1st Cir. 2012)). In addition, " FEMA provides a standard text for all NFIP policies and forbids WYOP companies from making changes,"
and FEMA's interpretations of the policy bind all WYOP participants." McGair, 693 F.3d 94, 96 (1st Cir. 2012) (quoting Downey v. State Farm Fire & Cas. Co., 266 F.3d 675, 679 (7th Cir. 2001)).
2. The Parties
The Plaintiff is a New York limited liability company that maintains its principal place of business in New Rochelle. (Compl. at ¶ 1.) The Plaintiff owned a commercial property located in Island Park that was insured under the SFIP at issue in the present action. (Id.) The commercial property contained a " commercial space apartment" and a dental office. (Id. Ex. A.)
Foremost is a private insurance company organized under the laws of the State of Michigan and has its principal place of business in Grand Rapids, Michigan. (Id. at ¶ 2.) Foremost is a WYO insurance carrier that issued the SFIP on the Plaintiff's Island Park property. (Id. at ¶ ¶ 2, 11.) Foremost has not joined Fairmont's motion to dismiss presently before the Court.
Fairmont is a New York Corporation that maintains its principal place of business in Brooklyn. (Id. at ¶ 3.) Fairmont is a licensed insurance brokerage company that the Plaintiff engaged to purchase insurance coverage for the Plaintiff on its Island Park property. (Id. at ¶ 5.)
3. The SFIP and Damage to the Plaintiff's Property
Prior to October 1, 2012, the Plaintiff sought to obtain a first mortgage from Westchester Bank on its Island Park property. (Id. at Ex. E.) The loan was originally scheduled to close on October 25, 2012. (Id.)
In an October 1, 2012 letter to the Plaintiff, Westchester Bank notified the Plaintiff that it was required to purchase flood insurance because the Island Park property had been re-categorized as in a flood zone under the NFIP. (Id. at Ex. E.)
After receiving the letter, the Plaintiff retained Fairmont to procure flood insurance for the Plaintiff. (Id. at ¶ 13.) The Plaintiff does not clarify what date it allegedly entered into a broker agreement with Fairmont or what the agreement required of the parties.
According to the complaint, Fairmont had a " long relationship with [the] Plaintiff . . . in consulting" related to " commercial property coverage, assessment of risk, adequacy of coverage and the handling of claims." (Id. at ¶ 12.)
On October 25, 2012, Foremost issued an SFIP to the Plaintiff providing for $450,000 in flood coverage. (Id. at Ex. A.) The complaint does not clarify what efforts Fairmont undertook as the Plaintiff's broker to procure a SFIP from Foremost.
On the same day, the Plaintiff sent a check to Foremost for $2,192 for the SFIP. (Id. at Ex. B.) In addition, Foremost sent the Plaintiff a document entitled, " Flood Policy Declarations." (Id. at Ex. A.) The document defines the policy period as October 25, 2012 to October 25, 2013. (Id.) The document further states, " These Declarations are effective as of: 10/25/2012 at 12:01am" and that, " This Declaration Page, in conjunction with the policy, constitutes your Flood Insurance Policy." (Id.)
On October 25, 2012, Fairmont issued to the Plaintiff a certificate of insurance that indicated that the policy became effective on October 25, 2012. (Compl. at ¶ 23.)
On October 29, 2012, the Plaintiff's property was damaged as a result of flooding caused by SuperStorm Sandy. (Compl. at ¶ 18.)
The Plaintiff's mortgage transaction, which was originally scheduled to close on October 25, 2012, ...