American Bankers Insurance then moved to dismiss.

Timing is everything

The SFIP issued by American Bankers Insurance provided:

If you do sue, you must start the suit within one year after the date of the written denial of all or part of the claim, and you must file the suit in the United States District Court of the district in which the covered property was located at the time of loss. This requirement applies to any claim that you may have under this policy and to any dispute that you may have arising out of the handling of any claim under the policy.

The district court granted the motion to dismiss filed by American Bankers Insurance.

In its decision, the district court pointed out that the SFIP explicitly stated that, in the event of a disagreement as to amounts owed due to flood damage, the insured (Apatow) had to bring a lawsuit against the issuer of the policy (American Bankers Insurance) within one year of the denial, and that the insured's lawsuit had to be brought in federal court.

The failure to file suit in federal court within one year of a denial under an SFIP was “cause for dismissal,” the district court explained.

It rejected Apatow's contention that his filing in a California state court was enough to give the district court jurisdiction, deciding that the language of the SFIP was “more consistent with a requirement that a lawsuit be filed both within one year and in the appropriate district court.”

Moreover, the district court ruled, Apatow's filing in state court had not stopped the limitations period from running. The district court reasoned that the policy's “clear language” demanded that suit be filed in federal court and did “not allow for tolling in this situation.”

The district court also was not persuaded by Apatow's contention that American Bankers Insurance had reopened his case in the course of responding to several letters concerning the damage and insurance coverage and, therefore, that the limitations period had been enlarged. It said that once American Bankers Insurance had denied each of Apatow's claims, he had been “put on notice that a suit would need to be filed within one year in federal court.”

The case is Apatow v. American Bankers Ins. Co. of Florida (subscription required).