DeCosta v. Allstate Insurance Co.

United States Court of Appeals
For the First Circuit

No. 13-1176

WAYNE DECOSTA,

Plaintiff-Appellee,

v.

ALLSTATE INSURANCE COMPANY,

Defendant-Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND

[Hon. John J. McConnell, U.S. District Judge]

Before

Lynch, Chief Judge,
Torruella, Circuit Judge,
and Stearns,* District Judge.

Gerald J. Nielsen, with whom Joseph J. Aguda, Jr., Nielsen,
Carter & Treas, LLC, David W. Zizik, and Zizik, Powers, O'Connell,
Spaulding, & Lamontagne, PC were on brief, for appellant.
Patrick F. Dowling, Jr., with whom D'Amico Burchfield, LLP was
on brief, for appellee.

September 20, 2013

*
Of the District of Massachusetts, sitting by designation.
 LYNCH, Chief Judge. This appeal concerns the special

requirements that policyholders, by federal law, must follow to

recover their covered losses under flood insurance policies issued

as part of the government's National Flood Insurance Program

(NFIP). See McGair v. Am. Bankers Ins. Co. of Fl., 693 F.3d 94,

100-01 (1st Cir. 2012).

Plaintiff Wayne DeCosta's property in Warwick, Rhode

Island is insured by a Standard Flood Insurance Policy (SFIP)

issued by Allstate Insurance Company (Allstate), a private insurer

participating in the NFIP. Allstate issued DeCosta's SFIP on

behalf of the Federal Emergency Management Agency (FEMA), the

agency that administers the NFIP. DeCosta's insured property was

damaged by a flood, Allstate promptly paid him for some claims, and

he successfully sued Allstate for what he said were the remaining

unpaid covered losses. Allstate appeals from the final judgment in

favor of DeCosta.

On appeal, Allstate argues that the court erred because

DeCosta's failure to comply with the SFIP's requirement that he

timely file a proof of loss as to all of the damages sought bars

recovery under his policy for those damages and requires dismissal.

Allstate argues, in addition, that the court erred when it invoked

the SFIP's appraisal clause to resolve disputes not suited for

appraisal.

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 We agree that DeCosta cannot recover under the SFIP

because of his failure to comply with its proof-of-loss

requirements as to the sums sued on. We reverse and direct the

district court to enter summary judgment in Allstate's favor.

I.

A. Background

The parties agree on the following facts. A flood

damaged DeCosta's property on or about March 31, 2010, with sixteen

to eighteen inches of water accumulated on the main floor of his

house. His policy covers flood damage to the building, as well as

damaged personal property.

DeCosta notified Allstate of the flood damage, and

Allstate hired an independent adjuster, Kim Stevens, to assess

DeCosta's damages and process his claim. DeCosta also hired an

adjuster to represent him in filing his claim for loss. Stevens

visited DeCosta's property twice in April to assess the flood

damages. After completing a report about DeCosta's loss, Stevens

forwarded two proof-of-loss forms to DeCosta on or about May 8,

2010, which listed the costs that Stevens found to be covered.

A "proof of loss" is an insured's "official claim of

damages," which states, inter alia, the amount of money that an

insured is claiming under his flood insurance policy, accompanied

by detailed information about the property and damages. Nat'l

Flood Ins. Program, Flood Insurance Claims Handbook 6 (Feb. 2009),

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available at http://www.fema.gov/media-

library-data/20130726-1540-20490-5312/f687_claimshandbook_feb09.pdf

[hereinafter NFIP Handbook]; see 44 C.F.R. pt. 61, app. A(1), art.

VII(J)(4). A copy of a model form is available online.

Importantly, the SFIP requires the proof of loss to be signed and

sworn by policyholders and filed within sixty days of the flood

loss. 44 C.F.R. pt. 61, app. A(1), art. VII(J)(4).

As a matter of federal law, it is the policyholder's

responsibility to submit timely proofs of loss regardless of

whether his insurer's adjuster provides him with a form. Id.

While it is common for insurance adjusters to send policyholders

proof-of-loss forms, as Stevens did, the policy explicitly warns

policyholders that such adjusters furnish those forms as "a matter

of courtesy only." Id. art. VII(J)(7); NFIP Handbook at 6.

The first proof-of-loss form that Stevens sent DeCosta,

and which DeCosta executed and filed, was for building damages of

$95,119.05. The second was for recoverable depreciation of

$7,539.98. On or about May 29, 2010, Allstate received those two

executed proofs of loss with the term "Undisputed" handwritten on

each by DeCosta.

In addition to submitting the two executed proofs of loss

that were prepared by Allstate, DeCosta also included a separate

sixteen-page document from one of his adjusters, Richard Juchnik.

That document estimated that DeCosta's building damages were

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$212,071.32, which is about double the amount of damages included

in the executed proofs of loss. That document was not from

DeCosta, nor was it sworn or signed by him.

Within days, by May 31, 2010, Allstate had paid DeCosta

$102,659.03. That amount is the total amount claimed in the two

original executed proof-of-loss forms for building damages.

DeCosta accepted and cashed that check.

DeCosta's adjuster sent Allstate another estimate of

building damages on June 14, 2010, that pointed out building

damages that were not included in Allstate's proof-of-loss forms

and also disputed the valuation of some damages in those forms. As

a result, a different Allstate adjuster, Yarri Soteros, met with

DeCosta and his adjuster on June 28, 2010, on Allstate's third

visit to DeCosta's flood-damaged property.

Soteros's notes from the site visit indicate that she

disagreed with Juchnik, DeCosta's adjuster, as to the scope of

damages that the SFIP covered;1 she concluded that DeCosta's policy

did not cover many of the items for which he sought compensation.

At the site visit, Juchnik informed Soteros that he would appeal to

1
In "claim activity" notes documenting Allstate's adjusters'
handling of DeCosta's claim, Soteros indicated that the inspection
of DeCosta's property would only determine the scope of damages
that the SFIP covers; resolution of any pricing disputes would
require further documents, such as the receipts from repairs to the
property.

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FEMA if Allstate denied coverage of various building repairs he

listed.2

The day after the site visit, Soteros called an Allstate

agent to "discuss the . . . claim issues and partial denials for

[DeCosta's claim for additional damages]." Soteros's notes

indicate that DeCosta's claim remained "pending" while she awaited

additional "documentation" from Juchnik. Between July and November

of 2010, Soteros left at least 14 messages for Juchnik requesting

that he submit additional documents that she needed to process

DeCosta's claim for supplemental damages.

While Soteros received a couple of emails from Juchnik in

late September, she eventually transferred DeCosta's claim to

another adjuster on November 15, 2010, because she had not received

all of the documents required to finish processing it. In mid-

November, Juchnik sent Allstate a list covering the amount of loss

for personal property.

Allstate's adjuster finished reviewing DeCosta's claim

for personal property loss, as well as his claim for additional

building damages, and sent DeCosta two more proof-of-loss forms in

late November. The first was largely for damaged contents -- or

2
FEMA offers three mechanisms that policyholders can use to
dispute the handling of their flood insurance claims: 1) appeal to
FEMA; 2) seek an appraisal if the dispute concerns "actual cash
value" or "replacement cost" of damaged property; and 3) file suit
in a United States District Court. See 44 C.F.R. § 62.20 (appeal
to FEMA); 44 C.F.R. pt. 61, app. A(1), art. VII(P), (R) (appraisal
and lawsuit, respectively).

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personal property -- totaling $41,221.52; however, $126.78 of that

amount covered additional building damages. The second was for

recoverable depreciation of $7,539.98.

Allstate received back from DeCosta those two executed

proofs of loss on or about December 15, 2010, more than sixty days

after the flood damaged DeCosta's property at the end of March

2010. Those proofs of loss were untimely. See 44 C.F.R. pt. 61,

app. A(1), art. VII(J)(4) (requiring policyholder to submit proof

of loss within sixty days after flood).

Allstate requested a waiver of the sixty-day time limit

for these two proofs of loss from FEMA on December 22, 2010. FEMA

approved the proof-of-loss waiver that same day, and Allstate also

paid the $48,761.50 claimed in the second set of proofs of loss on

December 22, 2010. This appeal concerns only claims for additional

building damages; DeCosta does not seek any further compensation

for damaged personal property.

As a matter of law, a flood insurance claim is not

payable until both: 1) the policyholder and insurer agree on the

amount of damages; and 2) the insurer receives the policyholder's

"complete, accurate, and signed Proof of Loss." NFIP Handbook at

6.3

3
Other cases involving federal flood insurance policies
indicate that claims filed without a proof of loss can be "closed
without payment consistent with the terms of the policy." Jacobson
v. Metro. Prop. & Cas. Ins. Co., 672 F.3d 171, 173 (2d Cir. 2012)
(internal quotation mark omitted).

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 DeCosta acknowledges that his adjuster, Juchnik, and

Allstate never agreed on the amount of building damages he was owed

under the policy. What is clear is that Allstate only sent DeCosta

proof-of-loss forms for the amount of damages to which it agreed

DeCosta was entitled. These were the only documents that DeCosta

submitted which met the requirements of a proof of loss.

Because DeCosta believed he could recover around

$200,000.00 in building damages under the policy, but Allstate paid

him only about half that amount -- or $102,785.81 -- DeCosta sued

Allstate in March 2011 for the difference.4

B. District Court Proceedings

DeCosta filed suit against Allstate in Rhode Island

Superior Court on March 18, 2011, alleging among other things that

Allstate's actions constituted a breach of contract. Allstate

removed the case to the Rhode Island U.S. District Court. DeCosta

then sought an appraisal.

In opposing DeCosta's motion to compel appraisal and in

its own summary judgment motions, Allstate made two arguments.

First, DeCosta's claim for additional recovery under the policy for

building damages is barred because he failed to comply with the

4
DeCosta never pursued an appeal of Allstate's final claim
determination to FEMA. Any such appeal must be filed within sixty
days of the date of the decision being appealed, 44 C.F.R.
§ 62.20(e)(1), whereas a lawsuit can be filed as late as one year
from the date of decision, see 44 C.F.R. pt. 61, app. A(1), art.
VII(R). DeCosta sued Allstate on March 18, 2011, which is just
over sixty days after Allstate issued its final payment to DeCosta.

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SFIP's proof-of-loss requirement as to those damages. Second,

DeCosta could not invoke the SFIP's appraisal clause because the

parties disagreed about the scope of damages covered under the

SFIP, not just the value of those damages. Indeed, these themes

were consistently sounded by Allstate throughout the litigation,

and DeCosta does not contend otherwise.

The district court rejected Allstate's arguments and

granted DeCosta's motion to compel appraisal, saying that it

thought the parties' dispute concerned the "value of loss" rather

than what the policy covers. In so concluding, the district court

ignored substantial evidence, including claim processing notes from

Allstate's adjusters, which reveals the parties' disagreement as to

the scope of coverage under DeCosta's policy. However, the

district court retained jurisdiction to give Allstate an

opportunity to seek judicial determination of any "overall coverage

issue prior to the appraisal process." Thereafter, the district

court also denied Allstate's summary judgment motion and rejected

its proof-of-loss argument in one sentence, stating only that it

"finds that [DeCosta] timely filed the proof of loss [as] required

by the policy."

The district court directed the parties to proceed to

appraisal, ordering them to "instruct the appraisal panel to

separate in any award any damages [alleged] by [Allstate] to be

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beyond the[] policy coverage . . . so as to preserve such for later

Court review if necessary."

The three appraisers on the panel concluded that

DeCosta's building damages totaled $205,000.00. After deducting

the $102,785.81 that Allstate had already paid DeCosta for building

repairs, as well as other related costs, the final award came out

to $99,805.67. Allstate filed a second summary judgment motion and

moved to strike the appraisal award. DeCosta moved to confirm that

award.

The district court confirmed the appraisal award.

Although the appraisers' signed memorandum stated that they would

"solely [determine] the actual cash value/replacement cost" of

DeCosta's property, thereby disclaiming any decision over policy

coverage determinations, the district court found significant that

the "appraisers did not specifically separate any . . . out-of-

scope damages." The court rejected Allstate's argument that the

appraisers implicitly made decisions about the scope of damages

covered under the policy -- in violation of the SFIP -- because the

damages they included in their loss calculations were much broader

than the type of damages included in Allstate's pre-appraisal

estimate.

The district court also denied Allstate's second summary

judgment motion and stated in a footnote that Allstate had waived

its argument that DeCosta had not preserved his claim for

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additional damages by failing to comply with the SFIP's proof-of-

loss requirement "[b]ecause Allstate did pay on the allegedly

improperly filed claim." Notably, neither party argued that

Allstate had waived this requirement, nor does DeCosta so contend

on appeal. In a final judgment, the district court ordered

Allstate to pay DeCosta the appraisal award of $99,805.67.

Allstate timely appealed.

II.

This court reviews a denial of summary judgment de

novo, viewing the evidence in the light most favorable to the

nonmoving party. Colon v. Tracey, 717 F.3d 43, 49 (1st Cir.

2013). Neither party suggests that there are disputed material

facts that would warrant remand.

A. Strict Compliance with the SFIP's Proof-of-Loss
Provision

Under the NFIP, the federal government provides

subsidized flood insurance to fill a gap in the private insurance

market. See 42 U.S.C. § 4001(b). In administering the NFIP, FEMA

creates regulations that govern the process of adjusting,

approving, and paying claims for flood loss. Id. § 4019. In 1983,

FEMA created the Write-Your-Own (WYO) program by which private

insurers, such as Allstate, can and do issue flood insurance

policies under the NFIP. McGair, 693 F.3d at 96. These private

insurers are often called "WYO companies." See id. Although FEMA

can issue policies directly, currently about ninety-five percent of

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the NFIP's flood insurance policies are issued by WYO companies.

See Mun. Ass'n of S.C. v. USAA Gen. Indem. Co., 709 F.3d 276, 280

(4th Cir. 2013).

FEMA has promulgated regulations under 44 C.F.R. pt. 61

that dictate the terms of the standard flood insurance policies, or

SFIPs, which private insurers can issue on its behalf. McGair, 693

F.3d at 96. By regulation, WYO companies must issue identical

SFIPs, and "no provision of [an SFIP] shall be altered, varied, or

waived other than by the express written consent of the Federal

Insurance Administrator." Id. (quoting 44 C.F.R. § 61.13(d))

(internal quotation mark omitted).

Under the SFIP, the first step that policyholders must

take to recover their loss from flood damages is give their insurer

"prompt written notice" of that flood loss. 44 C.F.R. pt. 61, app.

A(1), art. VII(J)(1). This initial notice provision is distinct

from the requirement that policyholders timely submit a signed and

sworn proof of loss. Gowland v. Aetna Flood Ins. Program, 143 F.3d

951, 954 (5th Cir. 1998); compare 44 C.F.R. pt. 61, app. A(1), art.

VII(J)(1), with id. art. VII(J)(4).

This dispute centers on whether DeCosta, as to the sums

he seeks, complied with the SFIP's proof-of-loss requirement, which

states:

In case of a flood loss to insured property,
you [insured] must: [. . .]

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 4. Within 60 days after the loss, send us a
proof of loss, which is your statement of the
amount your are claiming under the policy
signed and sworn to by you, and which
furnishes us with the following information:

a. The date and time of loss;
b. A brief explanation of how the loss
happened;
c. Your interest (for example, "owner")
and the interest, if any, of others in the
damaged property;
d. Details of any other insurance that may
cover the loss;
e. Changes in title or occupancy of the
covered property during the terms of the
policy;
f. Specifications of damaged buildings and
detailed repair estimates;
g. Names of mortgages or anyone else
having a lien, charge, or claim against
the insured property;
h. Details about who occupied any insured
building at the time of loss and for what
purpose; and
i. The inventory of damaged personal
property described in J.3 above.

44 C.F.R. pt. 61, app. A(1), art. VII(J)(4) (emphasis added).

Notably, under the SFIP, insurance companies can reject

policyholders' proofs of loss in favor of their own adjusters'

estimate of damages. Id. art VII(J)(9). Where there is

disagreement about the amount of flood damages or coverage, the

SFIP allows policyholders to appeal to FEMA from any denial of

their claims or to contest it in federal court. See 44 C.F.R.

§ 62.20; id. pt. 61, app. A(1), art. VII(R). However, to invoke

either procedure for review of the denial of a flood insurance

claim, a policyholder must have first filed a timely and compliant

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proof of loss. See 44 C.F.R. § 62.20; id. pt. 61, app. A(1), art.

VII(R).

On appeal, the parties dispute whether DeCosta's

submissions to Allstate complied with the SFIP's proof-of-loss

requirement such that he is eligible to both bring suit and recover

under his policy.

Allstate argues that under the SFIP every "dollar sought

must be supported by a proof of loss." Allstate paid DeCosta the

amounts of money he claimed, signed, and swore to in four proof-of-

loss forms. In doing so it did not, and as a matter of law could

not, waive the requirement of a timely proof of loss for additional

sums sought. DeCosta's failure to submit a signed proof of loss

for the money he seeks to recover in this lawsuit bars his

recovery.

DeCosta argues that he complied with his SFIP when he

submitted Allstate's proof-of-loss forms as to the amounts paid,

writing "undisputed" on each form, and simultaneously submitted a

separate sixteen-page estimate from his adjuster, which listed

total building damages of $212,071.32, albeit not signing and

swearing to it. He claims that the submission of his adjuster's

estimate, along with the completed proofs of loss, "preserv[ed] a

claim for the value of loss in excess" of the $102,659.03 signed

and sworn to in an executed proof-of-loss form. This argument

fails as a matter of law.

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 DeCosta's SFIP is not an ordinary insurance policy;

rather, his SFIP's provisions are also embodied in FEMA's codified

regulations, see McGair, 693 F.3d at 96, and interpretation of

DeCosta's SFIP is a matter of federal law, id. at 99. The SFIP

states, "You may not sue us to recover money under this policy

unless you have complied with all the requirements of the policy."

44 C.F.R. pt. 61, app. A(1), art. VII(R). We have already held

that federal law mandates strict compliance with the SFIP,

including its proof-of-loss requirement. McGair, 693 F.3d at 100-

01. So have other circuits. See Jacobson v. Metro. Prop. & Cas.

Ins. Co., 672 F.3d 171, 175 (2d Cir. 2012) (enforcing strict

compliance with SFIP in accordance with its sister circuits that

"have uniformly held that [SFIP's proof-of-loss requirement] must

be strictly construed and enforced").

A number of reasons compel strict compliance with the

SFIP terms even where a lesser form of compliance might suffice

under state law governing other insurance disputes. As we have

said,

The NFIP is administered by [FEMA] and backed
by the federal treasury, which is responsible
for paying claims that exceed the revenue
generated by premiums paid under policies
issued pursuant to the program. . . . Thus,
when private companies [in the WYO program
issue SFIPs], they "act as fiscal agents of
the United States, but they are not general
agents. . . . In essence, the insurance
companies serve as administrators for the
federal program. It is the [g]overnment, not
the companies, that pays the claims."

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McGair, 693 F.3d at 95-96 (second omission in original) (citations

omitted) (quoting Palmieri v. Allstate Ins. Co., 445 F.3d 179, 183-

84 (2d Cir. 2006)) (internal quotation marks omitted); see also 42

U.S.C. § 4017(a) (establishing the National Flood Insurance Fund,

located in the Treasury, to make payments required to carry out the

NFIP).

Because the federal government is liable for claims

brought under SFIPs issued by private insurers,5 the Constitution

mandates strict compliance with the SFIP. The Supreme Court has

"recognized that the Appropriations Clause prohibits the judiciary

from awarding claims against the United States that are not

authorized by statute." Flick v. Liberty Mut. Fire Ins. Co., 205

F.3d 386, 391 (9th Cir. 2000) (citing Office of Personnel Mgmt. v.

Richmond, 496 U.S. 414, 424, 434 (1990)); see U.S. Const. art. I,

§ 9, cl. 7 ("No Money shall be drawn from the Treasury, but in

Consequence of Appropriations made by Law").

5
It is not just a theoretical possibility that the
government might incur liability for flood losses that exceed
revenue from written premiums. See Felicity Barringer, Eric Lipton
& Mary Williams Walsh, Flood Insurance, Already Fragile, Faces New
Stress, N.Y. Times, Nov. 12, 2012,
h t t p : / / w w w . n y t i m e s . c o m / 2 0 1 2 / 1 1 / 1 3 /
nyregion/federal-flood-insurance-program-faces-new-stress.html?pa
gewanted=all&_r=0 (documenting the "giant debt" that the NFIP owes
the Treasury); Raymond Hernandez, Congress Passes a $9.7 Billion
Storm Relief Measure, N.Y. Times, Jan. 4, 2013,
http://www.nytimes.com/2013/01/05/nyregion
/house-passes-9-7-billion-in-relief-for-hurricane-sandy-victims.h
tml (reporting that Congress adopted a bill authorizing the NFIP to
borrow $9.7 billion needed to pay claims caused by Hurricane Sandy
and other disasters).

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 Here, "Congress, through a valid act of delegation to

FEMA, has authorized payment of flood insurance funds to only those

claimants that submit a timely sworn proof of loss." Flick, 205

F.3d at 394. As a result, it would "usurp Congress's exclusive

power to appropriate money were [federal courts] to award an

unauthorized money claim based on a theory of substantial

compliance" with the SFIP's proof-of-loss requirement. Id. at 391.

Enforcing strict compliance with the SFIP also arises

from the doctrine of sovereign immunity. Given that it is the

government's liability at stake in any suit against a WYO insurer,

compliance with the proof-of-loss provision serves as a

"condition[] precedent to a waiver by the federal government of its

sovereign immunity." Wagner v. Dir., Fed. Emergency Mgmt. Agency,

847 F.2d 515, 518 (9th Cir. 1988). As we have explained, "[i]t has

long been established that the [government] is not subject to suit

without a waiver of sovereign immunity, and that any such waiver is

to be strictly construed." Progressive Consumers Fed. Credit Union

v. United States, 79 F.3d 1228, 1230 (1st Cir. 1996). Where waiver

depends on compliance with the terms of a federal insurance policy,

it follows that the terms of that policy must also be strictly

construed and enforced. See Mancini v. Redland Ins. Co., 248 F.3d

729, 734-35 (8th Cir. 2001).

In Phelps v. Federal Emergency Management Agency, 785

F.2d 13 (1st Cir. 1986), we upheld strict compliance with the

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SFIP's written proof-of-loss requirement and refused to apply the

equitable estoppel doctrine against the government although

"elements of traditional estoppel [were] plainly present." Id. at

16-17, 19. "[C]onsiderations of sovereign immunity and

constitutional grounds -- [such as] the potential for interference

with the separation of governmental powers" - motivated our refusal

to apply equitable estoppel against the government, "no matter how

compelling the circumstances." Id. at 17.

The need for uniformity in federal law also supports

strict construction of the SFIP. Such uniformity provides clarity

to the numerous insurance companies issuing the bulk of insurance

policies under the NFIP, as well as the diverse jurisdictions

inundated with flood insurance disputes in the aftermath of

national disasters. Insurance companies and policyholders need

clear rules to ensure a fast response to policyholders' claims

after these disasters. Relatedly, we noted in Phelps that Congress

established the NFIP because many factors made it uneconomical for

private insurance companies to offer affordable flood insurance.

785 F.2d at 14; see also 42 U.S.C. § 4001(a), (b). "[A] rule of

strict compliance . . . avoid[s] disturbing the delicate balance,

which FEMA has sought to strike, between the need to pay claims and

the need to ensure the long term sustainability of the NFIP" in

this economically fraught area. Flick, 205 F.3d at 396.

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 Strictly construing the SFIP's proof-of-loss provision,

see McGair, 693 F.3d at 100-01, it is clear that DeCosta did not

sign and swear to claiming $212,071.32 on a proof of loss, as

required. Merely attaching his adjuster's estimate of damages to

two executed proof-of-loss forms claiming a smaller amount does not

comply. See 44 C.F.R. pt. 61, app. A(1), art. VII(J)(4). The law

on this is clear, as we describe.

In Mancini, an insurance company sent the Mancinis a

proof-of-loss form documenting their flood damages under the SFIP.

248 F.3d at 732. The Mancinis did not sign or notarize the proof

of loss, but faxed it to their insurance company with a hand-

printed cover sheet that included a note with their names on the

bottom. Id. The insurance company conceded that the fax

submission "contained the relevant information" but disputed

whether it conformed to the SFIP's requirement of a statement of

the amount claimed under the policy that is "signed and sworn by

the insured." Id. at 734 (emphasis added). The Eighth Circuit

held that the Mancinis did not comply with the SFIP's proof-of-loss

provision, observing that their "signature does not appear on a

statement by the Mancinis as to the amount they claimed under the

policy." Id. Thus, they failed to sign and swear to the amount

they sought to recover.

In Evanoff v. Standard Fire Insurance Co., 534 F.3d 516,

520-21 (6th Cir. 2008), the Sixth Circuit adopted the Eighth

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Circuit's reasoning in Mancini. It held that a policyholder failed

to comply with the SFIP where he submitted all of the supporting

documentation required in the proof-of-loss provision, along with

a letter that contained his signature. Id. The Evanoff court

explained that the policyholder was "required to do more than

merely submit a set of figures together with a signed statement not

rejecting or nullifying those figures. [He] had to submit a signed

statement as to the amount claimed under the policy. [He] simply

did not do so." Id. at 520 (quoting Mancini, 248 F.3d at 734-35)

(internal quotation mark omitted).

Here, DeCosta's signature on Allstate's two proof-of-loss

forms for building damages claims only the amounts listed in those

forms. His policy made clear that these forms are provided only as

a courtesy, warning policyholders that they are responsible for

submitting a timely proof of loss if their insurer's adjuster does

not supply them with a form.6 44 C.F.R. pt. 61, app. A(1), art.

VII(J)(7).

While the SFIP does not require that a proof of loss

follow any particular format, it "define[s] a proof of loss as a

statement of the insured, not of some third party, and it does

6
The model proof-of-loss form that FEMA published online
leaves blank spaces for policyholders to indicate the "full cost of
repair or replacement (Building and Contents)", as well as the "net
amount claimed under the . . . policy." Fed. Emergency Mgmt.
Agency, Proof of Loss (Rev. Oct. 2010), available at
http://www.fema.gov/media-library-data/20130726-1601-20490-7838/0
86_0_9_previously_ff81_42.pdf [hereinafter Proof of Loss].

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require that the insured sign and swear to that statement."

Mancini, 248 F.3d at 734. That was not done here as to the sums

claimed in the litigation. See id. at 735 ("[I]t is the insured,

not the adjuster, who must swear to the proof of loss."); 44 C.F.R.

Pt. 61, App. a(1), Art. VII(J)(5) (requiring policyholders to "use

[their] own judgment concerning the amount of loss" when completing

the proof of loss).

At oral argument, DeCosta's counsel explained that he was

not arguing that equitable estoppel or waiver barred enforcement of

the proof-of-loss requirement. Nor was he arguing that DeCosta

substantially complied with the SFIP. Instead he asserted that the

estimate claiming $212,071.32 in damages from DeCosta's adjuster

satisfied the SFIP's proof-of-loss requirement under a stringent,

strict construction standard because it was contemporaneously

submitted with two proof-of-loss forms. He suggests this case is

different from other cases finding noncompliance with the SFIP's

proof-of-loss provisions because the adjuster's estimate of

disputed damages accompanied timely, executed proof-of-loss forms

as to undisputed amounts. Not so. It does not matter that the

estimate from DeCosta's adjuster was submitted at the same time and

along with compliant proof-of-loss forms claiming undisputed sums

because, under the plain terms of the SFIP, DeCosta still had to

sign and swear to the amount in that estimate, which he did not do.

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 As counsel for Allstate argued, the attestation serves

the purpose of reducing fraud.7 This is a common-sense conclusion

drawn from the language of FEMA's model proof-of-loss form itself.8

Even if equitable considerations could play some role, we

reject DeCosta's plaint of lack of notice.9 The fact that Allstate

7
The NFIP's Adjuster Claims Manual notifies adjusters that
"[f]raud or misrepresentation is a continuing problem in the
[NFIP]." Nat'l Flood Ins. Program, Adjuster Claims Manual x-1
( R e v . J u n . 2 0 1 0 ) , a v a i l a b l e a t
https://www.nfipservices.com/uploads/AdjusterClaimsManual.pdf. The
Federal Bureau of Investigations has also examined flood insurance
fraud, commenting that of the $80 billion in government funding
that was appropriated to reconstruction after Hurricane Katrina,
"it is estimated that [i]nsurance [f]raud . . . accounted for as
much as $6 billion." Fed. Bureau of Investigations, Reports and
P u b l i c a t i o n s : I n s u r a n c e F r a u d ,
http://www.fbi.gov/stats-services/publications/insurance-fraud
(last visited Sep. 17, 2013).
8
FEMA's model proof-of-loss form warns policyholders in bold
lettering that willfully making false answers or factual
misrepresentations in a proof of loss is punishable by a fine or
imprisonment. It also includes an attestation whereby
policyholders "declare under penalty of perjury" that the
information in their proof of loss is "true and correct." Proof of
Loss.
9
The NFIP's Flood Insurance Claims Handbook was created by
FEMA to explain the process of filing a flood insurance claim to
policyholders. See NFIP Handbook. The handbook not only tells
policyholders that they are the ones responsible for submitting a
"signed" proof of loss, see NFIP Handbook at 6, but it also details
the process for seeking additional damages beyond those sought in
an initial claim, stating:

If you notice additional damage to your Building Property
or Personal Property after filing your claim, you may
file a Supplemental Claim. This means, essentially, that
you must repeat the documentation and filing process for
your original claim, including a Proof of Loss -- but
only for the newly discovered damage.

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provided DeCosta with two separate proof-of-loss forms for building

damages and the cost of related depreciation, if anything, should

have put DeCosta on additional notice that he needed to sign and

swear to every dollar he claimed under the SFIP.

"[W]here federal funds are implicated, the person seeking

those funds is obligated to familiarize himself with the legal

requirements for receipt of such funds." McGair, 693 F.3d at 100

(emphasis added) (quoting Jacobson, 672 F.3d at 175) (internal

quotation marks omitted). Other circuits enforcing strict

compliance with the SFIP have noted the Supreme Court's mandate:

"Protection of the public fisc requires that those who seek public

funds act with scrupulous regard for the requirements of the law."

Jacobson, 672 F.3d at 175 (quoting Heckler v. Cmty. Health Servs.

of Crawford Cnty., Inc., 467 U.S. 51, 63 (1984)) (internal

quotation mark omitted).

Thus, the district court erred as a matter of law in

holding that DeCosta had filed a proof of loss that complied with

his SFIP for the additional payment he seeks to recover.

NFIP Handbook at 7 (emphasis added). This explains that the
insured must provide a signed proof of loss for every dollar
sought.
Allstate's adjusters' notes indicate that DeCosta was given
this handbook at the first site visit to his insured property, and
DeCosta does not say otherwise. The adjuster who visited DeCosta's
property in response to his request for more building damages also
discussed the handbook with him and confirmed that he had received
it at the initial site visit.

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B. Waiver under the SFIP

In ruling on Allstate's second summary judgment motion,

the district court noted in a footnote:

Allstate also argues . . . that Mr. DeCosta
failed to preserve his claim for further
damages above the amounts Allstate has already
paid by failing to submit a signed proof of
loss for such additional amounts as required
by SFIP Art VII(J)(4) so therefore his claim
is barred. Because Allstate did pay on the
allegedly improperly filed claim, the Court
finds that this argument has been waived.

This was also an error of law. To the extent that the district

court considered all documents filed to relate to a single claim,

and thereby reasoned that payment of the properly filed sums, as a

portion of DeCosta's total "claim," could serve to waive any

dispute as to the remainder, we reject this interpretation. Mere

payment of claims properly submitted in a proof of loss does not

waive objections to further sums not submitted as required by the

SFIP's proof-of-loss provision. Even DeCosta agrees that Allstate

did not waive the proof-of-loss requirement for the additional

amount he seeks to recover in this suit.

FEMA must provide express written consent for Allstate to

waive any of the requirements outlined in DeCosta's SFIP. The

SFIP's waiver provision states, "[t]his policy cannot be changed

nor can any of its provisions be waived without the express written

consent of the Federal Insurance Administrator. No action we take

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under the terms of this policy constitutes a waiver of any of our

rights." 44 C.F.R. pt. 61, App. a(1), Art. VII(D).

The SFIP's stringent waiver provision reflects the fact

that private insurers are "fiscal agents of the United States," 42

U.S.C. § 4071(a)(1), as opposed to general agents. See McGair, 693

F.3d at 96. Thus, consistent with their duty to strictly enforce

the SFIP, private insurance companies can "[vary] the terms of a

policy only with FEMA's express written consent." Jacobson, 672

F.3d at 175. This circuit has previously enforced the written

waiver requirement, noting that the SFIP "explicitly preclude[s]

oral waiver or waiver by conduct." Phelps, 785 F.2d at 19. The

district court's reasoning violates Phelps.

Where Allstate did pay claims for damaged personal

property that DeCosta submitted in untimely proof-of-loss forms,

Allstate solicited the required written waiver from FEMA before

paying on those noncompliant proofs of loss. No such express

written consent from FEMA waived the proof-of-loss requirement for

the unsigned and unsworn estimate from DeCosta's adjuster.

As a result, DeCosta cannot sue to recover the difference

between his adjuster's estimate and the amount of money that

Allstate has already paid him for flood damages to his building.

See Phelps, 785 F.2d at 19 ("[F]ailure to submit a written proof of

loss, coupled with the absence of a waiver of this requirement by

FEMA, constitutes a valid defense to recovery on the [flood]

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insurance policy."); 44 C.F.R. pt. 61, app. A(1), art. VII(R)

(requiring that policyholders fully comply with SFIP before they

file suit).

Because DeCosta's failure to comply with the SFIP bars

any recovery under his policy, it is clear that the district court

should not have ordered the parties to proceed to appraisal.

Given our resolution of this appeal, we need not address

whether the parties' dispute over coverage issues precluded DeCosta

from invoking the SFIP's appraisal clause. Nor need we decide

whether the district court abused its discretion in denying

Allstate discovery.

III.

Accordingly, we reverse with instructions that the

district court enter summary judgment in Allstate's favor and

vacate any orders that are inconsistent with this opinion. No

costs are awarded.

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