The U.S. Court of Appeals for the Fifth Circuit, affirming a decision by the U.S. District Court for the Northern District of Texas, has ruled that an insured was not entitled to recover additional payments under his standard flood insurance policy where he did not submit a proof-of-loss form for those payments as required by the policy – even if he had otherwise provided all the information required by the form.
The Case
A heavy storm passed Fort Worth, Texas, in June 2016 and flooded Andre Yanez's property.
American Strategic Insurance Corporation (“ASIC”) insured the property through a standard flood insurance policy (“SFIP”) issued under the National Flood Insurance Program.
Mr. Yanez filed a claim with ASIC for damages caused by the flood. ASIC then assigned Mr. Yanez's claim to an adjusting firm, FKS Insurance Services.
As part of FKS's claim process, Mr. Yanez completed a flood field survey.
After FKS's evaluation, ASIC paid Mr. Yanez $1,315.20 for property damage caused by the June 2016 flood.
Mr. Yanez disagreed with ASIC and FKS's assessment but provided no proof of loss for the additional sum he claimed; ASIC denied this additional claim request.
After losing an administrative appeal, Mr. Yanez sued ASIC and FKS for breach of contract and breach of the duty of good faith and fair dealing.
The Texas district court held that federal law barred Mr. Yanez's breach of good faith and fair dealing claim. After ASIC and FKS moved for summary judgment, the district court found that Mr. Yanez had failed to submit the required proof-of-loss form for additional benefits, and it dismissed his lawsuit.
Mr. Yanez appealed the district court's grant of summary judgment concerning his breach of contract claim to the Fifth Circuit.
The Fifth Circuit's Decision
The Fifth Circuit affirmed.
In its decision, the circuit court explained that the provisions of a flood insurance policy issued pursuant to a federal program “must be strictly construed and enforced.” To receive additional benefits under his policy, the Fifth Circuit continued, Mr. Yanez “was required to sign and submit a supplemental proof-of-loss form within 60 days of the flood.”
Mr. Yanez, however, never sent ASIC or FKS this additional proof of loss, the Fifth Circuit added.
The circuit court then declared that even if Mr. Yanez's flood field survey contained all the relevant information, it was “insufficient.”
At base, the Fifth Circuit concluded, Mr. Yanez had “never submitted the required signed proof of loss for additional benefits.”
The case is Yanez v. American Strategic Ins. Corp., No. 18-10943 (5th Cir. March 13, 2019).
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].