A federal district court in New Jersey, in a Superstorm Sandy insurance coverage case, has denied an insurer's motion for summary judgment on the ground that the insured homeowner had not timely filed a proof of loss as required by his flood insurance policy.
The Case
On or about October 29, 2012, Thomas Tennis' home in Brick, New Jersey, was damaged by Superstorm Sandy. On November 1, 2012, Mr. Tennis made a claim to Selective Insurance Company of America, from which he had acquired a standard flood insurance policy (“SFIP”) issued under the National Flood Insurance Program (“NFIP”), which was managed by the Federal Emergency Management Administration (“FEMA”).
An independent adjuster hired by Selective inspected Mr. Tennis' home on November 28, 2012 and Selective made payments of $10,000 on December 11, 2012 and $111,381.55 on February 12, 2013 for his claim.
Subsequently, Mr. Tennis sought additional reimbursement for amounts he claimed he had incurred in repairing the Superstorm Sandy damage.
Selective denied his requests for additional reimbursement on February 13, 2014.
On December 16, 2014, Mr. Tennis wrote to Selective to report cracks in the foundation of his home that he attributed to Sandy.
On April 2, 2015, Selective denied his December 16 claim.
On July 27, 2015, Mr. Tennis filed a one-count complaint in New Jersey federal district court against Selective, asserting breach of contract.
On November 30, 2015, Selective answered and, on November 18, 2016, Selective moved for summary judgment, asserting that Mr. Tennis had:
failed to comply with the federally-mandated terms of his … Policy by not submitting a signed, sworn, Proof of Loss within the time permitted by the terms of the [P]olicy
and, therefore, that his complaint was:
time-barred under the applicable … Policy's one-year time limit to initiate suit.
The District Court's Decision
The district court denied Selective's motion.
In its decision, the district court explained that the policy provided that, in the event of flood loss, Mr. Tennis had to send Selective a signed and sworn proof of loss within 60 days of his alleged loss. The district court noted that, at his deposition, Mr. Tennis had testified that he could not remember if he had submitted a proof of loss, and that Selective claimed that it was “unable to find a signed and sworn” proof of loss in its files.
Taken together, the district court declared, these facts suggested that Mr. Tennis had breached his contractual obligations.
The district court then pointed out, however, that Selective's corporate representative, Stephen Weber, had testified at his deposition that “it was possible that the file was incomplete.”
In addition, the district court continued, Selective's April 2, 2015 letter denying Mr. Tennis' claim stated that if Mr. Tennis appealed the denial, he would need to submit “a copy of the completed Proof of Loss form [Mr. Tennis had] submitted to the insurer.”
The district court also pointed out that the proof of loss section of Selective's “Dwelling Form Claim Checklist” for Mr. Tennis' claim filled in as “yes,” suggesting that Selective had received acceptable proof.
Finally, the district court observed, Mr. Weber also had testified that Mr. Tennis' claim had not been denied “due to a lack of proof of loss.”
The district court concluded that, giving all favorable inferences to Mr. Tennis, there was a genuine issue of material fact as to whether Mr. Tennis had complied with the policy provision regarding proof loss, making summary judgment in favor of Selective inappropriate at this stage.
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].