[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
APRIL 25, 2003
No. 02-14388 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D.C. Docket No. 01-07502-CV-WPD
EDUARDO SANZ,
Plaintiff-Appellant,
versus
U.S. SECURITY INSURANCE COMPANY,
Defendant-Appellee.
__________________________
Appeal from the United States District Court for the
Southern District of Florida
_________________________
(April 25, 2003)
Before TJOFLAT, BIRCH and HULL, Circuit Judges.
PER CURIAM:
Eduardo Sanz, proceeding pro se, filed this action against United States
Security Insurance Company (“Security”) seeking recovery under a federal flood
insurance policy issued pursuant to the National Flood Insurance Program. After a
bench trial, the district court granted Defendant Security’s motion for judgment as
a matter of law because Plaintiff Sanz failed to perform certain conditions
precedent to recovery on the flood insurance policy. Sanz appeals, arguing that
Security either waived certain policy conditions or should be estopped from
asserting them. Upon review, we affirm.
I. BACKGROUND
We first review the terms of Sanz’ policy with Security and then the events
giving rise to this lawsuit.
A. Sanz’ Insurance Policy
In issuing Sanz’ flood insurance policy, Security acts as the fiscal agent of
the United States Government.1 Therefore, Sanz’ flood insurance policy contained
standard terms and conditions mandated by the National Flood Insurance Act of
1968 (“Act”), see 42 U.S.C. § 4001(a), (b), and Code of Federal Regulations, see
1
Congress enacted the National Flood Insurance Act of 1968 (“Act”), see 42 U.S.C.
§ 4001(a), (b), which authorized the establishment of the National Flood Insurance Program. Today,
the program is managed by the Federal Emergency Management Agency (“FEMA”). FEMA uses
private insurers, such as Security, as fiscal agents. Although these fiscal agents issue the flood
insurance policies, their terms and conditions are controlled by the Act and federal regulations.
Furthermore, all claims and expenses are paid out of the National Flood Insurance Fund in the U.S.
Treasury.
2
44 C.F.R. § 61, App. A(1).2 Furthermore, the terms and conditions of the
insurance contract are undisputed in this case.3
Four provisions of the standard flood insurance contract are relevant to this
case. The first is the general no waiver provision in the policy. That provision
states that the “policy cannot be amended nor can any of its provisions be waived
without the express written consent of the Federal Insurance Administrator. No
action we take under the terms of this policy can constitute a waiver of any of our
rights.” 44 C.F.R. § 61, App. A(1), Art. 9D (1998).4
The second is the 60-day proof of loss requirement in Sanz’ policy.
Specifically, the policy states that Sanz is required, “[w]ithin 60 days after the
loss, [to] send [Security] a proof of loss, which is [Sanz’] statement as to the
2
Sanz testified that he purchased his home between six weeks and two months before
Hurricane Irene damaged his home on October 15, 1999. This Court understands that Sanz would
have had to obtain flood insurance before securing a mortgage for his home. Therefore, we shall
apply the version of the regulations in effect at the time Sanz purchased his home. Because all the
relevant terms and conditions of the regulations remained unchanged from the time of Sanz’ home
purchase to the date he filed his lawsuit, it makes little difference whether we apply the regulations
in effect at the time Sanz purchased his home, the time Hurricane Irene damaged his home, or the
time he filed his lawsuit.
3
All trial exhibits, including Sanz’ insurance contract with Security, were released to Sanz,
and he has yet to return those exhibits to the district court or to provide this Court with copies.
Because the terms and conditions of Sanz’ flood insurance contract are undisputed and mandated
by the Act and Federal Regulations, we apply the terms and conditions stated in the Code of Federal
Regulations.
4
All citations to C.F.R. will be the 1998 version unless otherwise noted.
3
amount [he is] claiming under the policy signed and sworn to by [him] and
furnishing” specific information. Id. at Art. 9J(3).
The third relates to the adjustor’s role and states, “[t]he insurance adjuster
whom [Security] hire[s] to investigate [Sanz’] claim may furnish [him] with a
proof of loss form, and she or he may help [Sanz] to complete it. However, this is
a matter of courtesy only, and [Sanz] must still send [Security] a proof of loss
within 60 days after the loss even if the adjuster does not furnish the form or help
[Sanz] complete it.” Id. at Art. 9J(6).
Finally, the policy gives the government the option to waive the proof of
loss requirement. Specifically, the policy states that the federal government “may,
at [its] option, waive the requirement for the completion and filing of a proof of
loss in certain cases . . . .” Id. at Art. 9J(7).
B. Hurricane Irene
After the bench trial, the district court made certain factual findings when
granting Security’s motion for judgment as a matter of law. The following facts
are undisputed by the parties.
On October 15, 1999, Hurricane Irene caused damage to Sanz’ home in
Dania Beach, Florida. During the hurricane, canals on both sides of his
neighborhood converged, causing water to flood the area and enter his home.
4
Although there was no immediate signs of damage, Sanz began to notice cracks in
the walls of his house after approximately two months. Sanz’ repeated efforts to
repair the cracks were unsuccessful. On February 29, 2000, he notified Security,
his insurance carrier, of the damage.
In April of 2000, adjustors and a structural engineer visited Sanz’ home in
an attempt to determine the cause and scope of the damage. Sanz contends that
the adjustors informed him that he needed to submit estimates of the damage to
Security. In June 2000, Sanz followed the advise and sent estimates of repair to
Security. Sanz further contends that Security continued to reassure him that all
paperwork had been filed and that Security would “take care of him.” Sometime
thereafter, Security denied Sanz’ claim.
On September 20, 2001, Sanz filed this lawsuit against Security claiming
that Security breached the insurance contract when it refused to pay. Although
Sanz was represented by counsel when the complaint was filed, he proceeded pro
se during the bench trial.
After the bench trial, the district court granted Security’s motion for
judgment as a matter of law. 5 The district court reasoned that because Sanz did
5
In reviewing a district court’s grant of a motion for judgment as a matter of law pursuant to
Rule 52(c), this Court reviews conclusions of law de novo and findings of fact for clear error.
DeKalb County Sch. Dist. v. Schrenko, 109 F.3d 680, 687 (11th Cir. 1997).
5
not file a proof of loss as required by his insurance policy, his claim must
necessarily fail. The district court relied on decisions from the Eighth and Fifth
Circuits and concluded that individuals insured via federal flood insurance
policies must adhere strictly to all conditions precedent contained in their policies.
II. DISCUSSION
A. Strict Compliance with Policy Conditions
The issue in this case is whether the district court correctly determined that
all conditions precedent must be fulfilled before an individual may receive
benefits under a federal flood insurance contract. Five of our sister circuits that
have address this issue have all concluded that there must be strict compliance
with the terms and conditions of federal flood insurance policies and that the
failure to file a proof of loss prohibits a plaintiff from recovery. Dawkins v. Witt,
318 F.3d 606 (4th Cir. 2003); Mancini v. Redland Ins. Co., 248 F.3d 729 (8th Cir.
2001); Flick v. Liberty Mut. Fire Ins. Co., 205 F.3d 386 (9th Cir. 2000); Gowland
v. Aetna, 143 F.3d 951 (5th Cir. 1998); Phelps v. Fed. Emergency Mgmt. Agency,
785 F.2d 13 (1st Cir. 1986). But see Meister Bros., Inc. v. Macy, 674 F.2d 1174
(7th Cir. 1982).6
6
In Meister, the Seventh Circuit “emphasize[d] that [its] holding is of necessity limited to the
unique circumstances of [the] case.” Meister, 674 F.3d 1177. The Court further stated that it did
“not intend to intimate in any way an appropriate standard for resolution of future cases . . . .” Id.
6
In reaching this conclusion, these circuit courts have all relied on Federal
Crop Ins. Corporation v. Merrill, 332 U.S. 380, 384-85 (1947), where the Supreme
Court held that an insured must comply strictly with all terms and conditions of a
federal insurance policy. In Merrill, the Supreme Court recognized the “duty of all
courts to observe the conditions defined by Congress for charging the public
treasury.” Id. at 385.
In Flick, 205 F.3d at 391, the court recognized that, since Merrill, the
Supreme Court, in Office of Personnel Management v. Richmond, 496 U.S. 414
(1990), further curtailed the ability of those individuals insured via the federal
government to avoid the terms and conditions of their policies. See generally
Dawkins, 318 F.3d at 611; Mancini, 248 F.3d at 735; Gowland, 143 F.3d 954-55.
Richmond concluded that the Appropriations Clause’s fundamental purpose is “to
assure that public funds will be spent according to the letter of the difficult
judgments reached by Congress as to the common good and not according to the
individual favor of Government agents or the individual pleas of litigants.”
Richmond, 496 U.S. at 428. The Supreme Court went on to hold that a plaintiff
The Seventh Circuit even recognized that the Supreme Court had ruled that misinformation from a
government employee does not provide a basis for estoppel. Id. The Seventh Circuit held, however,
that misinformation over several months, when combined with a partial payment of the claim, was
sufficient to estop the insurance company from relying on the fact that a proof of loss had not been
filed. Id. Given Supreme Court precedent decided after Meister and that every circuit court to
address the issue since Meister has reached a contrary conclusion, we decline to follow Meister.
7
who was misinformed about his qualification to collect disability benefits could
not estop the government from collecting overpayments caused by the erroneous
advice of a government employee. Id. at 434.
As the Supreme Court has warned, not even the “temptations of a hard case”
should cause courts to read the requirements of a federal insurance contract with
“charitable laxity.” Merrill, 332 U.S. at 386. We agree with our sister circuits and
conclude that the insured must adhere strictly to the requirements of the standard
federal flood insurance policy before any monetary claim can be awarded against
the government.
B. Waiver
On appeal, Sanz argues that Security waived the 60-day proof of loss
requirement because Security continued to process his claim and repeatedly
assured him that all necessary forms had been filed. Sanz admits, however, that:
(1) he did not submit a proof of loss as required by his policy; and (2) he did not
receive written notice from the Federal Insurance Administrator that the proof of
loss requirement was waived.
In Dawkins, it was undisputed that FEMA accepted the plaintiffs’ first proof
of loss after the 60-day period expired, that the insurance company stated that the
60-day requirement would not be enforced, and that the claim was processed well
8
after the 60 days. Dawkins, 318 F.3d at 610. The Fourth Circuit, however,
concluded that absent an express written waiver from the Federal Insurance
Administrator, there was no waiver of the proof of loss requirement. Id. at 610-11.
In Gowland, the plaintiffs argued that the 60-day proof of loss requirement
was waived because: (1) the insurance company did not originally assert it as a
basis for denying the claim; (2) the insurance company repeatedly reopened their
claim after the 60-day deadline; and (3) the reminder letter regarding the proof of
loss statement failed to specify accurately the information prescribed in the policy.
Gowland, 143 F.3d at 954. The Fifth Circuit, however, held that it was powerless
to grant relief absent a valid, written waiver from the Federal Insurance
Administrator. Id.
Given the directives of Merrill and Richmond, we join the other five circuit
courts that have addressed this issue and hold that Sanz’ failure to file a proof of
loss within 60 days without obtaining a written waiver of the requirement
eliminates the possibility of recovery. See Dawkins, 318 F.3d at 612; Mancini, 248
F.3d at 734 n.2; Flick, 205 F.3d at 391-92; Gowland, 143 F.3d at 954; Phelps, 785
F.2d at 19. But see Meister, 674 F.2d at 1176-77.
C. Estoppel
9
Sanz further argues that even if Security did not waive the proof of loss
requirement, it should be estopped from asserting the proof of loss requirement as
a ground for denying Sanz’ claim. It is true that the Supreme Court has yet to
announce a per se rule that equitable estoppel is never available against the
Government. Richmond, 496 U.S. at 434 (“As for monetary claims, it is enough to
say that this Court has never upheld an assertion of estoppel against the
Government by a claimant seeking public funds.”).
As recognized in Dawkins and the other circuits to address this issue,
however, the Supreme Court consistently has denied efforts by litigants to estop
the Government from raising defenses based on claimants’ failures to comply with
governmental procedures due to misinformation from government agents. See also
Richmond, 496 U.S. at 434 (holding that plaintiff who was misinformed about his
qualification to collect disability benefits could not estop the Government from
collecting overpayments caused by the erroneous advice of a government
employee); Schweiker v. Hansen, 450 U.S. 785, 786 (1981) (holding that
government agent’s advice that misinformed plaintiff that she was not eligible for
social security benefits did not rise to level of affirmative misconduct that might
reach a serious question as to whether the government might be estopped from
insisting on compliance with a valid regulation required to receive benefits);
10
Merrill, 332 U.S. at 384-85 (concluding that farmer could not recover under crop
insurance on a lost crop even though the government agency misinformed the
farmer that his re-seeded wheat crop was covered by government-provided
insurance when, in fact, a statute forbade such coverage).
The Supreme Court’s decisions indicate that even if estoppel is available
against the Government, it is warranted only if affirmative and egregious
misconduct by government agents exists. See INS v. Hibi, 414 U.S. 5, 8 (1973)
(citing Montana v. Kennedy, 366 U.S. 308, 314-15 (1961)); Schweiker, 450 U.S.
at 788-89. Thus, in order for Sanz to demonstrate that he is entitled to assert
equitable estoppel against the Government, he must establish the traditional
requirements for equitable estoppel and that the Government engaged in
affirmative and egregious misconduct; that is, conduct which at least exceeds a
level the Supreme Court already has deemed insufficient to trigger equitable
estoppel. Dawkins, 318 F.3d at 611-12.
In this case, Sanz has failed to allege any misconduct on the part of Security
that rises to the level necessary to overcome the obstacles to equitable estoppel.
The fact that Security failed to inform Sanz of the proof of loss requirement is
insufficient to establish liability. Indeed, the applicable regulations state
specifically that Security is not required to provide Sanz with a proof of loss or
11
assist him in filling one out. See 44 C.F.R. § 61, App. A(1), art. 9J(6). Even
assuming Sanz’ allegation that Security informed Sanz that he had filled out all the
necessary paperwork and that Security would “take care” of his claim, equitable
estoppel remains unavailable. See, e.g., Dawkins, 318 F.3d at 612 (concluding no
equitable estoppel even though insurance company said 60-day proof of loss
requirement did not apply to major disasters and accepted insured’s proof of loss
after 60 days); Gowland, 143 F.3d at 954-55 (concluding no equitable estoppel
even though insurance company went so far as to reopen a claim without a proof
of loss being filed); see also Richmond, 496 U.S. at 428 (“Estoppel would give
this advice the practical force of law, in violation of the Constitution.”); Merrill,
332 U.S. at 384 (“The scope of this authority may be explicitly defined by
Congress or be limited by delegated legislation, properly exercised through the
rule-making power. And this is so even though, as here, the agent himself may
have been unaware of the limitations upon his authority.”).
III. CONCLUSION
The result in this case is mandated by federal regulations and Supreme
Court caselaw. Consequently, we must affirm the district court’s decision.
AFFIRMED.
12