REVISED SEPTEMBER 26, 2008
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 10, 2008
No. 07-31005 Charles R. Fulbruge III
Clerk
MARSEILLES HOMEOWNERS CONDOMINIUM ASSOCIATION INC.
Plaintiff-Appellant
v.
FIDELITY NATIONAL INSURANCE COMPANY
Defendant-Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana, New Orleans
Before BARKSDALE, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:
This suit stems from extensive damage wrought by Hurricane Katrina to
property located on Lake Marina Drive, New Orleans. The plaintiff-appellant,
Marseilles Homeowners Condominium Association (Marseilles) was the insured
pursuant to a flood insurance policy issued under the National Flood Insurance
Program by the defendant-appellee, Fidelity National Insurance Company
(Fidelity). Fidelity paid Marseilles $973,246.75. Marseilles submitted a claim
for additional damages, which was denied by Fidelity. Marseilles subsequently
filed suit, and the district court, ruling that the insured’s failure to submit a
No. 07-31005
proof of loss precluded the claim, granted summary judgment in Fidelity’s favor.
We affirm.
I. BACKGROUND
This case involves the National Flood Insurance Program (NFIP) that
Congress created to provide insurance coverage at or below actuarial rates.
Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998). The Federal Emergency
Management Agency (FEMA) operates the NFIP, which is supported by the
federal treasury. A policy issued under the NFIP is called a Standard Flood
Insurance Policy (SFIP). A SFIP is “a regulation of [FEMA], stating the
conditions under which federal flood-insurance funds may be disbursed to
eligible policyholders.” Mancini v. Redland Ins. Co., 248 F.3d 729, 733 (8th Cir.
2001). FEMA sets the terms and conditions of all SFIPs. Gowland, 143 F.3d at
953. SFIPs may be issued directly by FEMA or through private insurers, which
are called “Write Your Own” (WYO) companies. Id. Pursuant to statute, WYO
insurance companies are fiscal agents of the United States. Id. (citing 42 U.S.C.
§ 4071(a)(1)). Here, Fidelity, as a WYO company, issued the policy to Marseilles.
The property was insured for $12,000,000.
After Hurricane Katrina, the insured property suffered damage due to
flood water. Marseilles filed a claim under its policy with Fidelity. Fidelity sent
an independent adjuster to inspect and adjust the flood loss under the terms of
the SFIP. Fidelity ultimately determined that the damages were $973,246.75,
and paid that amount to Marseilles. Marseilles submitted further information
to Fidelity requesting an additional $642,000 in losses. Fidelity issued a writing
denying coverage of the additional claim.
Marseilles subsequently filed suit in district court. During the course of
the proceedings, Fidelity asserted for the first time that the suit should be
barred because Marseilles had not submitted a sworn proof of loss as required
by the regulations. Fidelity filed a motion for summary judgment based on this
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No. 07-31005
assertion, and the district court granted summary judgment. Marseilles filed a
motion to alter or amend the judgment, arguing that new evidence showed that
Fidelity had obtained waivers of the proof-of-loss requirement in other cases.
The district court denied the motion. Marseilles appeals.
II. ANALYSIS
A. Standard of Review
This Court reviews a district court’s grant of summary judgment de novo,
applying the same standards as the district court. E.g., Hanks v.
Transcontinental Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992).
Summary judgment is proper if the record reflects “that there is no genuine
issue as to any material fact and that the movant is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c).
B. Waiver of Proof-of-Loss Requirement
Marseilles contends that the district court erred in granting summary
judgment because Fidelity waived the proof-of-loss requirement. The
regulations state that no provision of a SFIP can be waived without the express
written consent of the Federal Insurance Administrator. 44 C.F.R. § 61, app.
A(2), art. VII(D). Under this program, an insured cannot file a lawsuit seeking
further federal benefits under the policy unless the insured can show prior
compliance with all policy requirements. 44 C.F.R. § 61, app. (A)(1), art. VII(R).
Here, Marseilles failed to submit a sworn proof of loss, which is a condition
precedent to bringing the instant litigation. See 44 C.F.R. § 61, app. A(2), art.
VII(J)(4). Generally, the deadline for filing a proof of loss is 60 days. Id.
However, in a August 31, 2005 memo after Hurricane Katrina, the Acting
Federal Insurance Administrator changed the 60-day deadline to a one-year
deadline.
In its initial brief, Marseilles contends that the district court exalted form
over substance in granting summary judgment based on Marseilles’s failure to
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No. 07-31005
submit a proof of loss. Marseilles states that it provided adequate claim
information sufficient to allow Fidelity to adjust the claim prior to suit being
filed. Marseilles points out that Fidelity paid Marseilles based on the initial
claim without a sworn proof of loss being filed. Further, Marseilles asserts that
the Fifth Circuit precedent relied on by the district court did not consider
whether a proof of loss is required after the insurer has accepted the claim
information and issued payment to the insured without a proof of loss. However,
shortly after Marseilles filed its initial brief, this Court issued a decision
considering just such a fact pattern.
In Richardson v. American Bankers Ins. Co., 2008 WL 510518 (5th Cir.
Feb. 27, 2008) (unpublished), the insured, Richardson, filed a claim pursuant to
his SFIP and received $16,125.50 for damage to his property after Hurricane
Katrina. Richardson later sought additional benefits and provided invoices and
estimates but he never submitted a sworn proof of loss for the additional sum.
The insurance company denied his coverage. Richardson contended that the
insurance company’s lawyer told him over the phone that “proof of loss was not
and would not be an issue in this lawsuit.” Id. at *1. Richardson filed suit, and
the district court granted the insurer’s motion for summary judgment based
solely on the ground that Richardson had not submitted a sworn proof of loss
with respect to the denied claims. This Court affirmed the grant of summary
judgment, stating that “Richardson’s position is contrary to federal statutory
law, the Administrator’s Waiver, and our precedent.” Id. at *2. The panel
referred to the submission of a sworn proof of loss within one year as a “strict”
requirement. Id. The regulations provide that an insured in the NFIP “cannot
file a lawsuit seeking further federal benefits under the SFIP unless the
[insured] can show prior compliance with all of the policy’s requirements,
including the [proof-of-loss] requirement.” Id. (emphasis in opinion) (citing 44
C.F.R. § 61, app. (A)(1), arts. VII(J), VII(R)).
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No. 07-31005
This Court rejected Richardson’s theory of “substantial compliance” as
contrary to our caselaw, explaining that:
because “the provisions of an insurance policy issued pursuant to a
federal program must be strictly construed and enforced, . . . an
insured’s failure to provide a complete, sworn proof of loss
statement, as required by the flood insurance policy, relieves the
federal insurer's obligation to pay what otherwise might be a valid
claim.”
Id. at *3 (quoting Gowland, 143 F.3d at 954). This Court also rejected
Richardson’s estoppel argument, which was based on the insurer’s attorney’s
alleged representation that no proof of loss was needed, recognizing that the
Supreme Court “‘has never upheld an assertion of estoppel against the
Government by a claimant seeking public funds.’” Id. (quoting Office of Pers.
Mgmt. v. Richmond, 496 U.S. 414, 434 (1990)).1
We follow the persuasive analysis in Richardson, which simply applies
controlling precedent in a manner consistent with prior precedent. See Shuford
v. Fidelity Nat’l Prop. & Cas. Ins. Co., 508 F.3d 1337 (11th Cir. 2007) (rejecting
insured’s claim that insurer was equitably estopped from arguing failure to
submit proof of loss); Wright v. Allstate Ins., 415 F.3d 384 (5th Cir. 2005)
(holding that insurer was not equitably estopped from raising insured's failure
to file an adequate proof of loss); Forman v. FEMA, 138 F.3d 543 (5th Cir. 1998)
(explaining that inadequate proof of loss precluded suit and that the conditions
Congress imposes for disbursing the federal treasury cannot be estopped).
Because Marseilles’s argument is unavailing in light of this Court’s precedent,
we conclude that the district court properly found that the proof-of-loss
requirement precluded the claim.
C. Interpretation of FEMA Memo
1
Marseilles states that Fidelity’s adjuster had written “proof waived” on the bottom of
a form submitted to Fidelity. Our above-cited precedent precludes this estoppel argument.
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No. 07-31005
Marseilles next contends that FEMA waived the proof-of-loss requirement
in its August 31, 2005 memo that extended the 60-day deadline to a one-year
deadline. As set forth previously, in the aftermath of Hurricane Katrina, the
Acting Federal Insurance Administrator changed the 60-day deadline to a
one-year deadline. In pertinent part, the memo provides that:
I am waiving the requirement in VII.J.4 of the SFIP . . . for the
policyholder to file a proof of loss prior to receiving insurance
proceeds. Instead, payment of the loss will be based on the
evaluation of damage in the adjuster’s report. . . .
In the event a policyholder disagrees with the insurer’s adjustment,
settlement, or payment of the claim, a policyholder may submit to
the insurer a proof of loss within one year from the date of the loss.
The proof of loss must meet the requirements of VII.J.4 of the SFIP.
. . . The insurer will then process the policyholder’s proof of loss in
its normal fashion. If the insurer rejects the proof of loss in whole or
in part, the policyholder may file a lawsuit against the insurer
within one year of the date of the written denial of all or part of the
claim as provided in VII.R of the SFIP. . . .
(emphasis added).
Marseilles contends that the memo’s use of the word “may” renders
permissive the previously mandatory requirement of a proof of loss. The
Eleventh Circuit has rejected such an argument in the context of a memo issued
by the Federal Insurance Administrator after Hurricane Ivan. Shuford, 508
F.3d 1337. The relevant language in the memo issued by the Administrator
after Hurricane Ivan appears identical to the language at issue in the instant
memo. In Shuford, the insured similarly claimed that the permissive term
“may” indicated that submitting a proof of loss was not a mandatory
requirement. Id. at 1342. The Eleventh Circuit disagreed, opining that the
memo meant that the “policyholder had a choice whether to challenge the
insurer’s decision, not that filing the proof of loss was optional.” Id. Indeed, “[i]f
filing a proof of loss within a year of the loss were not a requirement for
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No. 07-31005
obtaining judicial relief, the clause ‘[i]f the insurer rejects the proof of loss in
whole or in part’ would be superfluous.” Id. (second alteration in original). The
Eleventh Circuit’s reading of the memo is logical and more sound than the
interpretation posited by Marseilles. Thus, we agree that the memo in question
does not render permissive the requirement to file a proof of loss prior to filing
suit.2
D. Compliance with NFIP Regulations
Marseilles contends that the district court erred in granting summary
judgment because there was a genuine issue of material fact with respect to its
compliance with the NFIP regulations. More specifically, Marseilles contends
that because it submitted information regarding its loss to Fidelity, there is a
fact issue with respect to the adequacy of the proof of loss.
To sustain this contention would be in direct contravention of our
precedent. “Under FEMA regulations, strict adherence is required to all terms
of the SFIP.” Forman, 138 F.3d at 545 (5th Cir. 1998) (citing 44 C.F.R. §§
61.13(a), (d), (e)) (footnote omitted). Marseilles does not dispute the district
court’s finding that the documents relied upon do not meet the requirements of
44 C.F.R. § 61, app. A(2), art. VII(J)(4). Thus, the district court correctly found
no genuine issue of material fact with respect to whether Marseilles submitted
a sworn proof of loss.
E. Motion to Alter or Amend Judgment
Finally, Marseilles contends that the district court abused its discretion
by denying its motion to alter or amend the judgment. A motion to alter or
amend the judgment under Rule 59(e) “must clearly establish either a manifest
2
It is undisputed that Marseilles filed suit on August 22, 2006, which is within one
year from the date of loss. Marseilles repeatedly asserts that, at the time it filed suit, a proof
of loss was not required. It is of no moment that the deadline for filing a proof of loss had not
yet passed because Marseilles subsequently did not file a proof of loss within the one-year
deadline. Moreover, as set for previously, under the regulations of the NFIP, the proof-of-loss
was a condition precedent for filing suit.
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No. 07-31005
error of law or fact or must present newly discovered evidence.” Simon v. United
States, 891 F.2d 1154, 1159 (5th Cir. 1990). Rule 59(e) “motions cannot be used
to raise arguments that could, and should, have been made before the judgment
issued.” Id. (internal citation and quotation marks omitted).
Marseilles’s motion was primarily based on Fidelity’s alleged past history
of seeking waivers of the proof-of-loss requirement in other similarly situated
cases. Marseilles believed that it was inequitable for Fidelity to seek a waiver
of the proof-of-loss requirement in other cases but not extend such an offer to it.3
Marseilles wanted the option of seeking a waiver from FEMA regarding the
proof-of-loss requirement and then asking the district court to determine the
coverage dispute.4
In support of its position that Fidelity sought and obtained from FEMA
waivers of the sworn proof-of-loss requirement in other cases, Marseilles
attached to its motion an affidavit executed by Martha Y. Curtis, an attorney
who represented other plaintiffs in cases involving the failure to submit a proof-
of-loss, and who is also an attorney with the law firm representing Marseilles
in this case.
In its order, the district court rejected Marseilles’s “‘new’ argument that
it should be allowed to seek a waiver from FEMA regarding the proof of loss
requirement based on evidence of Fidelity (in other cases) obtaining waivers of
the sworn proof of loss requirement to permit the payment of claims.” The
district court concluded that Marseilles “could and should have made this ‘new’
3
This argument strikes us as hollow given our holding that the filing of the proof-of-loss
requirement is a condition precedent and the doctrine of equitable estoppel is not an available
remedy against the government.
4
We note that Fidelity did not deny the additional claim based on the failure to file
a proof of loss; instead, Fidelity denied coverage because it concluded that the additional claim
was not a covered loss. Fidelity’s determination that coverage did not exist for the additional
claim would be incongruous with seeking a waiver of the proof-of-loss requirement.
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No. 07-31005
argument before summary judgment was entered in favor of Fidelity, and [that]
Plaintiff has not argued, much less shown, that it could not have submitted any
of the documents it now attaches to its Motion, before the court ruled on
Fidelity’s Motion for Summary Judgment.”
Marseilles’s claim of disparate treatment was not raised prior to entry of
judgment. It is clear from the evidence supporting the motion that this
argument “could, and should, have been made before the judgment issued.”
Simon, 891 F.2d at 1159 (internal citation and quotation marks omitted). The
district court did not abuse its considerable discretion in denying Marseilles the
opportunity to raise the claim after judgment.5
III. CONCLUSION
For the above reasons, the district court’s judgment is AFFIRMED.
5
Marseilles contends that the district court erred in its analysis because it failed to
consider the appropriate factors with respect to altering a judgment based on untimely
presented evidence. See Hale v. Townley, 45 F.3d 914, 921 (5th Cir. 1995) (setting forth the
factors to be considered when a party seeks to amend a judgment with untimely evidence).
Here, however, the untimely evidence Marseilles submitted was not in support of a claim made
prior to the issuance of judgment. The untimely evidence Marseilles submitted was in support
of its new argument. As set forth above, the district court did not abuse its discretion in
denying the motion to alter or amend the judgment based on a new theory that could have
been raised prior to judgment. We find no error.
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