     Case: 14-31125      Document: 00513344986         Page: 1    Date Filed: 01/15/2016




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals

                                      No. 14-31125
                                                                                   Fifth Circuit

                                                                                 FILED
                                                                          January 15, 2016

ELVIN CUMMINGS,                                                             Lyle W. Cayce
                                                                                 Clerk
              Plaintiff - Appellee

v.

FIDELITY NATIONAL INDEMNITY INSURANCE COMPANY,

              Defendant - Appellant




                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:13-CV-5301


Before OWEN, GRAVES, and HIGGINSON, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:*
       The issue before the court is whether Plaintiff and Appellee, Elvin
Cummings, is entitled to recover damages pursuant to his National Flood
Insurance Program (“NFIP”) Standard Flood Insurance Policy (“SFIP”). The
district court entered a judgment in favor of Cummings. For the following
reasons, we REVERSE.




       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                No. 14-31125
                              BACKGROUND
      In August 2012, Hurricane Isaac caused damage to Cummings’s home in
LaPlace, Louisiana. Thereafter, Cummings submitted a flood loss claim to the
Defendant-Appellant, Fidelity National Indemnity Insurance Company
(“Fidelity”), who assigned an independent adjuster, Chris Beauvais, to inspect
the flood damage.
      Cummings’s SFIP required him to submit a proof of loss. On March 6,
2013, with the assistance of Beauvais, Cummings signed a proof of loss in the
amount of $42,140.21. That figure was based upon the recommended payment
suggested by Beauvais as part of his inspection. On March 11, 2013, Fidelity
paid Cummings pursuant to Coverage A of his policy for building damage in
the amount of $42,140.21―the exact amount he requested on his proof of loss.
      Along with the March 6, 2013 proof of loss, Cummings also submitted a
four-page list to Fidelity detailing the contents that he claims were damaged
in the flood and claiming a total replacement cost of $104,390.00. Cummings,
however, never submitted a proof of loss for the claimed damage to the contents
of his home and he did not include the amount of $104,390.00 on the front page
of his proof of loss. Fidelity denied Cummings’s claim for content loss and has
not made any payments to Cummings under Coverage B. The letter partially
denying Cummings’s claim states that Fidelity required “additional proof (i.e.
photos or receipts) which [would] assist in proof of damage and ownership of
the contents being claimed.” The letter did not tell Cummings to submit an
additional signed and sworn proof of loss, but directs him to review his
Standard Flood Insurance Policy Dwelling Form and the Insuring Agreement
of his policy.
      Cummings filed suit for the contents he claimed were damaged in the
flood. After a bench trial, the district court awarded Cummings $25,000.00 plus
interest for contents loss. The district court determined that Cummings had
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                                  No. 14-31125
submitted sufficient proof regarding his loss in the form of photographs,
testimony, and a written statement. Thereafter, Fidelity appealed the district
court’s judgment.
                          STANDARD OF REVIEW
      The NFIP is controlled by federal regulations. See 44 C.F.R. § 61.4. This
court’s review of a district court’s interpretation of a statute or regulation is de
novo. Monistere v. State Farm Fire & Cas. Co., 559 F.3d 390, 393 (5th Cir. 2009)
(citing Teemac v. Henderson, 298 F.3d 452, 456 (5th Cir. 2002)).
                                   ANALYSIS
      Federal law governs claims under the NFIP and the program is
administered by the Federal Emergency Management Agency (“FEMA”).
Wright v. Allstate Ins. Co., 415 F.3d 384, 386 (5th Cir. 2005) (citing 44 C.F.R.
§§ 61.4(b), 61.13(d)). The federal treasury ultimately makes payments on SFIP
claims. Id. (citing Gowland v. Aetna, 143 F.3d 951, 954 (5th Cir. 1998)). The
SFIP requires the insured to notify the insurer of the loss and submit a
complete signed and sworn proof of loss setting out the nature, cause, and value
of the loss. Gowland, 143 F.3d at 954. Specifically, the SFIP’s proof of loss
requirement states:
      In case of a flood loss to insured property, you [insured] must: [. .
      .]
      4. Within 60 days after the loss, send us a proof of loss, which is
      your statement of the amount you 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;


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                                  No. 14-31125
      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. § 61, app. A(1), art. VII(J)(4) (emphasis added). Moreover, 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. § 61, app. A(1), art.
VII(R) (emphasis added).
      The issue before the court is whether Cummings’s failure to submit a
signed and sworn proof of loss for damages to the contents of his home prevents
him from recovering an additional amount. This court recently noted in
Ferraro v. Liberty Mutual Fire Insurance Company, that“[w]hether an insured
must submit an additional proof of loss to recover an additional amount on a
preexisting claim is a question of first impression in this circuit.” 796 F.3d 529,
532 (5th Cir. 2015) (citing Rogers v. S. Fid. Ins. Co., No. 13–5695, 2014 WL
3587379, at *4 (E.D. La. July 18, 2014) (“As this Court has previously pointed
out, the Fifth Circuit has not directly addressed this issue.”)). In Ferraro, the
insured parties signed a proof of loss and handwrote on their form that they
would send a supplement at a later date. 796 F. 3d at 530. They then hired a
public adjuster who issued a report valuing their loss at over three times the
amount included in their initial proof of loss. Id. They submitted the report to
their insurance carrier, but they failed to submit a second signed and sworn
proof of loss. Id. The court determined that the insureds were required to
submit an additional proof of loss to recover an additional amount on a
preexisting claim under a SFIP. Id. at 532. The court concluded that “[a]n
insured’s failure to strictly comply with the SFIP’s provisions—including the
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                                       No. 14-31125
proof-of-loss requirement—relieves the federal insurer’s obligation to pay the
non-compliant claim.” Id. Therefore, because the insured’s additional claim
was neither signed nor sworn-to, it could not serve as a proof of loss under the
plain terms of the SFIP. Id. 1
       The Fifth Circuit stated in a similar case that “it is clear that giving
notice of loss and providing a sworn proof of loss statement are separate and
distinct requirements of the policy.” Gowland, 143 F.3d at 954. The court
stated:
       As the provisions of an insurance policy issued pursuant to a
       federal program must be strictly construed and enforced, we hold
       that 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 954.
       The court is sympathetic to Cummings’s plight. Nevertheless, “a policy
of ‘insurance issued pursuant to a federal program must be strictly construed
and enforced. . . .’” Monistere, 559 F.3d at 394 (citing Gowland, 143 F.3d at
954). “Because insurance companies act as ‘fiscal agents’ of the government
under the National Flood Insurance Program, all policy awards deplete
federally allocated funds.” Id. (citing In re Estate of Lee, 812 F.2d 253, 256 (5th
Cir. 1987)). Accordingly, “‘not even the temptations of a hard case’ will provide



       1  The court agreed with the approach taken by both the First and Eighth Circuit Court
of Appeals. The First Circuit Court of Appeals rejected the argument that simply providing
an insurance company with notice of a claim satisfies the condition precedent to suit. DeCosta
v. Allstate Ins. Co., 730 F.3d 76, 85 (1st Cir. 2013) (citing Evanoff v. Standard Fire Ins. Co.,
534 F.3d 516, 520–21 (6th Cir. 2008); Mancini v. Redland Ins. Co., 248 F.3d 729, 734–35 (8th
Cir. 2001)). Likewise, the Eighth Circuit Court of Appeals determined that a second proof of
loss is required in scenarios akin to this case. See Gunter v. Farmers Ins. Co., 736 F.3d 768,
773 (8th Cir. 2013) (insured parties failed to file a supplemental proof of loss and thus did
not satisfy the prerequisites for suing on their additional claim because of the language of
the SFIP).
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                                 No. 14-31125
a basis for ordering recovery contrary to the terms of a regulation, for to do so
would disregard ‘the duty of all courts to observe the conditions defined by
Congress for charging the public treasury.’” Id. (quoting Forman v. Fed.
Emergency Mgmt. Agency, 138 F.3d 543, 545 (5th Cir. 1998)). See generally
Richmond Printing LLC v. Dir. Fed. Emergency Mgmt. Agency, 72 F. App’x 92,
97 (5th Cir. 2003) (citing Kerr v. FEMA, 113 F.3d 884 (8th Cir. 1997) (finding
that completion of the proof of loss is the insured’s own responsibility and “any
reliance on statements made by the adjuster that contradicted the terms of the
SFIP was unreasonable as a matter of law; the insured had a duty to read the
policy and acted unreasonably in relying on adjusters provided only as a
‘courtesy’”); see also Gowland, 143 F.3d at 955 (quoting Fed. Crop Ins. Corp. v.
Merrill, 332 U.S. 380, 385, 68 S.Ct. 1, 3-4, 92 L.Ed. 10 (1947) (“Requiring
[insured parties] to turn square corners when dealing with the Treasury ‘does
not reflect a callous outlook. It merely expresses the duty of all courts to
observe the conditions defined by Congress for charging the public treasury.’”).
      Accordingly, since Cummings failed to submit a signed proof of loss for
damages sustained to the contents of his home, it was improper for the district
court to award him damages. Therefore, the court also finds that the district
court’s award of pre-judgment interest was also in error.
                                CONCLUSION

      For the above described reasons, we REVERSE.




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