The U.S. District Court for the District of New Jersey has ruled that a Superstorm Sandy-related coverage lawsuit filed under the National Flood Insurance Act (“NFIA”) had been filed 11 days too late and had to be dismissed with prejudice as time-barred.
The Case
Ocean-front property in Lavallette, New Jersey, owned by John Cholankeril, Jr., was damaged by Superstorm Sandy on or around October 29, 2012.
On April 28, 2014, Mr. Cholankeril filed a proof of loss under a standard flood insurance policy issued by Selective Insurance Company of America, claiming that damage to his insured property amounted to $152,242.37.
Selective received the proof of loss on April 29, 2014 and, on April 30, 2014, issued a notice partially denying the proof of loss on account of Mr. Cholankeril's failure to attach “all documentation” (paid receipts, invoices, and/or an itemized (room by room) estimated by a licensed contractor) necessary to support his claim.
For that reason, Selective reduced Mr. Cholankeril's proof of loss to $85,358.34 and mailed the partial denial by certified mail to Mr. Cholankeril's counsel's offices in Tampa, Florida, on the same day.
Mr. Cholankeril filed a lawsuit in federal district court in New Jersey against Selective on May 11, 2015, alleging that the insurer had breached the parties' insurance agreement by failing to appropriately process and pay his insurance claim.
Selective moved to dismiss Mr. Cholankeril's action on timeliness grounds.
Mr. Cholankeril argued that he had never received the denial notice and, therefore, that his complaint should be deemed timely.
The National Flood Insurance Act
The NFIA provides:
the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance by the Administrator, may institute an action against the Administrator on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated
42 U.S.C. § 4072 (emphasis added).
The District Court's Decision
The district court granted Selective's motion.
In its decision, the district court ruled that the NFIA's one-year limitations period was triggered by the mailing of the denial letter, not by when Mr. Cholankeril had actually received it.
The district court noted that Selective had mailed the denial letter to counsel for Mr. Cholankeril on April 30, 2014 and it declared that his action would have been timely only if he had filed it by no later than April 30, 2015. Because Mr. Cholankeril had not filed his action until May 11, 2015, 11 days after the expiration of the statute of limitations, his action was untimely, the district court concluded.
The case is Cholankeril v. Selective Ins. Co. of America, No. 15-3269 (JBS/KMW) (D.N.J. July 14, 2016). Attorneys involved include: Jason Marc Ciofalo, Esq., THE MACKINNON LAW GROUP PA, 238 E. Davis Blvd., Suite 201, Tampa, FL 33606, Attorney for Plaintiff; John Peter Malloy, Esq., ROBINSON & COLE LLP, 280 Trumbull Street, Hartford, CT 06103, Attorney for Defendant.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].