United States District Court, E.D. North Carolina, Northern Division
TERRENCE W. BOYLE, UNITED STATES DISTRICT JUDGE.
cause comes before the Court on defendant Long's motion
to dismiss. Plaintiff has responded, defendant Long has
replied, and a hearing on the matter was held before the
undersigned on December 6, 2017, at Elizabeth City, North
Carolina. In this posture, the motion is ripe for ruling. For
the reasons that follow, defendant Long's motion is
granted and this action is dismissed.
Robert and Minerva Shearer are residents of Dare County,
North Carolina and at the time relevant to the complaint
resided at a home in Kill Devil Hills which was insured under
a Federal Emergency Management Agency (FEMA)-issued National
Flood Insurance Program Dwelling form Standard Flood
Insurance Policy (SFIP). Hurricane Irene struck the Outer
Banks of North Carolina on or about August 27, 2011, causing
substantial damage and flooding throughout Dare County. As a
result of the storm, plaintiffs' home was flooded by
waters from the Albemarle Sound. Plaintiffs timely submitted
to defendants a proof of loss, attaching invoices and
estimates submitted by a licensed general contractor, McNair
Inc., doing business as Outer Banks Heating and Cooling
(OBHC) and also trading as Doctor Energy Saver. Invoices
totaling $12, 259.59 and $9, 248 were paid by plaintiffs to
OBHC and Doctor Energy Saver and plaintiffs were reimbursed
for those amounts by defendants pursuant to plaintiffs'
SFIP. The amounts paid covered replacement of plaintiffs'
HVAC system and ductwork within the crawlspace as well as
labor and materials associated with removal of all
insulation, placement of seals in and around electrical and
plumbing work, biochemical treatment of the crawl space,
installation of new insulation between floor joints and
foundation girders, cleaning of wood surfaces in and around
the subfloor and foundation, and painting the same wood
surfaces with a biochemical paint designed to stop fungal
growth. Plaintiffs allege that neither their general
contractor nor the FEMA adjuster recommended that the
subfloor of plaintiffs' home be aerated and dried.
allege that in July 2016, they noticed that the floor in
their home was sagging and later discovered that the wooden
girders painted by Doctor Energy Saver during the flood
remediation process had rotted and were failing. Plaintiffs
allege that the failure of their foundation system was due to
the 2011 flood event and the actions of the general
contractor taken immediately after the flood, which trapped
the moisture from the floor into the wooden foundation of
plaintiffs' home. Plaintiffs provided notice to FEMA of
the damage, an alleged additional covered loss from Hurricane
Irene, along with reports from an engineer and costs
estimates for the repair. By letter dated July 7, 2016, FEMA
denied the claim and advised plaintiffs of their right to
seek administrative review of the denial. Plaintiffs did seek
review, and the original denial was affirmed by letter dated
October 31, 2016.
filed this action on July 3, 2017, seeking a declaration that
defendants are obligated to pay the cost of repairing damage
to plaintiffs' home foundation system. Plaintiffs allege
that at the time their home was damaged, they relied on the
representation of the general contractor and the FEMA
adjuster that the scope of work performed was consistent with
industry standards and practices for floor remediation and
restoration. A stipulation of dismissal dismissing defendant
State Farm Fire and Casualty without prejudice was filed on
July 25, 2017. Defendant Long (herein after FEMA), moved to
dismiss plaintiffs' complaint pursuant to Rules 12(b)(1)
and 12(b)(6) of the Federal Rules of Civil Procedure on
October 12, 2017. The government argues that plaintiffs'
claim is barred by sovereign immunity and that plaintiffs
have further failed to state a claim upon which relief can be
Rule of Civil Procedure 12(b)(1) authorizes dismissal of a
claim for lack of subject matter jurisdiction. When subject
matter jurisdiction is challenged, the plaintiff has the
burden of proving jurisdiction to survive the motion.
Evans v. B.F. Perkins Co., 166 F.3d 642, 647-50 (4th
Cir. 1999). "In determining whether jurisdiction exists,
the district court is to regard the pleadings'
allegations as mere evidence on the issue, and may consider
evidence outside the pleadings without converting the
proceeding to one for summary judgment." Richmond,
Fredericksburg & Potomac R.R. Co. v. United States,
945 F.2d 765, 768 (4th Cir. 1991). To this end, "the
nonmoving party must set forth specific facts beyond the
pleadings to show that a genuine issue of material fact
exists." Id. (citing Trentacosta v.
Frontier Pacific Aircraft Indus., 813 F.2d 1553, 1558-59
(9th Cir. 1987)). The movant's motion to dismiss should
be granted if the material jurisdictional facts are not in
dispute and the movant is entitled to prevail as a matter of
12(b)(6) motion tests the legal sufficiency of the complaint.
Papasan v. Allain, 478 U.S. 265, 283 (1986). When
acting on a motion to dismiss under Rule 12(b)(6), "the
court should accept as true all well-pleaded allegations and
should view the complaint in a light most favorable to the
plaintiff." Mylan Labs., Inc. v. Matkari, 7
F.3d 1130, 1134 (4th Cir.1993). A complaint must allege
enough facts to state a claim for relief that is facially
plausible. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007). Facial plausibility means that the facts
pleaded "allow the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged, " and mere recitals of the elements of a cause
of action supported by conclusory statements do not suffice.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
complaint must be dismissed if the factual allegations do not
nudge the plaintiffs claims "across the line from
conceivable to plausible." Twombly, 550 U.S. at
National Flood Insurance Program (NFIP) was enacted to
"make federally subsidized flood insurance available
in flood-prone areas and  encourage  states and
localities to adopt land use policies and regulations that
reduce the risk of flood damage." Studio Frames Ltd.
v. Standard Fire Ins. Co., 483 F.3d 239, 243 (4th Cir.
2007). The NFIP is governed by the National Flood Insurance
Act and its implementing regulations and is overseen by FEMA.
42 U.S.C. §§ 4001-4129. In this matter, FEMA
directly issued an SFIP to plaintiffs; the regulations also
permit FEMA to authorize private insurance companies to issue
SFIPs under their own name, commonly referred to as Write
Your Own companies. The federal common law governs
interpretation of federal flood insurance policies, and thus
courts are to rely on standard insurance law principles to
resolve disputes over coverage under an SFIP. Studio
Frames, 483 F.3d at 244-45; see also AA C.F.R.
§ Pt. 61, App. A(1), art. IX. Plain and unambiguous
policy language will be directly applied, and ambiguous
policy language will be construed to the insured's
benefit. Studio Frames, 483 F.3d at 245.
SFIP issued to plaintiffs specifically provides that an
insured "may not sue [the government] to recover money
under this policy unless [the insured] ha[s] complied with
all the requirements of the policy." 44 C.F.R. §
Pt. 61, App. A(2), art. VII(R). The SFIP Dwelling Form, at
issue here, also provides that FEMA will pay an insured for
direct physical loss by or from a flood if the insured has,
inter alia, complied with all terms and conditions
of the policy. 44 C.F.R. § Pt. 61, App. A(1), art. I. An
insured must submit to FEMA proof of loss within sixty days
after the loss, unless that time is extended by FEMA.
Id. at art. VII (J)(4).
NFIP operates as a waiver of the government's sovereign
immunity. 42 U.S.C. § 4072; see also Ferraro v.
Liberty Mut. Fire Ins. Co., 796 F.3d 529, 531 (5th Cir.
2015) ("Because the NFIP puts at stake the
government's liability, its regulations implicate
sovereign immunity."). A waiver of the government's
sovereign immunity "will be strictly construed, in terms
of its scope, in favor of the sovereign." Sossamon
v. Texas, 563 U.S. 277, 278 (2011) (quoting Lane v.
Pena, 518 U.S. 187, 192 (1996)). Thus, "strict
compliance with the regulations is a necessary condition for
waiver of sovereign immunity in [the NFIP] context."
Admiralty Condo. Ass'n, Inc. v. Dir., Fed. Emergency
Mgmt. Agency, 594 Fed.Appx. 738, 740 (3d Cir. 2014).
parties agree that the deadline for filing claims related to
Hurricane Irene was extended by FEMA to January 23, 2012.
See also Greene v. Nationwide Mut. Fire Ins. Co.,
No. 4:13-CV-255-D, 2014 WL 6694049, at *3 (E.D. N.C. Nov. 26,
2014) (citing FEMA Bulletin W-11120, November 22, 2011).
There is no dispute that plaintiffs' claim for $12,
259.59 and $9, 248 for damage caused by Hurricane Irene was
timely submitted and paid. Plaintiffs' claim which is at
issue in this complaint, however, was not submitted until
July 2016 - more than four years after the Hurricane Irene
claims deadline has passed. Plaintiffs' claim is plainly
outside the time for filing Hurricane Irene claims, and they
have thus failed to comply with the requirements of the SFIP.
Plaintiffs' failure to comply with the requirements of
the SFIP results in a finding that the government's
sovereign immunity has not been waived. See DeCosta v.
Allstate Ins. Co., 730 F.3d 76, 84 (1st Cir. 2013)
("compliance with the proof-of-loss provision serves as
a 'condition[ ] precedent to a waiver by the federal
government of its sovereign immunity.'") (citation
omitted); Admiralty Condo, 594 Fed.Appx. at 740.
plaintiffs have failed to state a claim upon which relief can
be granted, as they have failed to comply with the
requirements of the policy. The "failure to file a
timely Proof of Loss is dispositive, and subsequent
suit on the claim is barred." Mason v. Liberty Am.
Select Ins. Co., Inc., No. 3:08CV218-MW/EMT, 2014 WL
11511672, at *3 (N.D. Fla. Aug. 15, 2014); see also
Dogwood Grocery, Inc. v. S.C Ins. Co.,49 F.Supp.2d 511,
513 (W.D. La. 1999) ("[A] claim which has been adjusted