The U.S. District Court for the Southern District of Florida has ruled that a plaintiff was not entitled to recover fees under the Equal Access to Judgment Act in a suit against a flood insurer, rejecting a contrary decision by another federal court in the state.
The Case
After property in Islamorada, Florida, owned by the estate of Raymond K. Hampson was damaged by Hurricane Irma, the estate's personal representative, Timothy R. Hampson, sued Wright National Flood Insurance Company, which had issued a standard flood insurance policy ("SFIP") covering the property.
Mr. Hampson sought entry of a judgment against Wright for breach of contract. He also sought attorneys' fees, costs, and case expenses incurred in filing and prosecuting the action, which he claimed were payable under the Equal Access to Judgment Act ("EAJA").
Wright moved to dismiss the claims for attorneys' fees, costs, and case expenses under the EAJA, arguing that these expenses were not recoverable in a claim under an SFIP against Wright, a write-your-own ("WYO") insurance carrier.
The District Court's Decision
The district court granted the motion.
In its decision, the court explained that a party may recover attorneys' fees and costs under the EAJA as the prevailing party in a case "brought by or against the United States . . . unless the court finds that the position of the United States was substantially justified."
The court added that the statute defined "United States" to include "any agency and any official of the United States acting in his or her official capacity."
The court then ruled that attorneys' fees were not recoverable under the EAJA in cases for breach of an SFIP brought against a WYO program insurance carrier participating in the National Flood Insurance Program ("NFIP") because WYO carriers were "not considered 'agencies' under the EAJA."
The court rejected Mr. Hampson's reliance on Arevalo v. American Bankers Ins. Co. of Florida, No: 2:19-cv-159-FtM-99UAM (M.D. Fla. June 13, 2019), to support his arguments that attorneys' fees and costs were warranted. In Arevalo, the U.S. District Court for the Middle District of Florida found that it was "not so much whether American Bankers is an 'agency' of the United States under the Act. Rather, it seems to matter more whether the government is the source of the funds or who would pay an award of attorney's fees" and concluded that it was "at least plausible at this point in the litigation that attorney's fees may be paid from federal funds." The court in Mr. Hampson's case said that it "disagree[d]" with the Arevalo decision and "decline[d] to depart from the case law" finding that a WYO carrier was not an agency of the United States as required by the EAJA.
Accordingly, the court dismissed Mr. Hampson's claims for attorneys' fees, costs, and case expenses pursuant to the EAJA.
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].