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					                                                                          Page 1
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *




            JILL FAYARD VERSUS STATE FARM FIRE AND CASUALTY INSURANCE
                   COMPANY and NATIONAL FLOOD INSURANCE PROGRAM

                        CIVIL ACTION NO. 07-4631 SECTION M

            UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
                         LOUISIANA, NEW ORLEANS DIVISION

          2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions
                                   LEXIS 26080

                                   July 10, 2008

                            Motion for Summary Judgment


COUNSEL: [*1] NIELSEN LAW FIRM, L.L.C., Douglas K. Foster, # 28909, Kim Huong A.
Tran, # 24896, Gerald J. Nielsen, # 17078, Metairie, Louisiana, Attorneys for State
Farm Fire and Casualty Company.

TITLE: MOTION FOR SUMMARY JUDGMENT

TEXT: NOW INTO COURT, through undersigned counsel, comes Defendant, State Farm Fire
and Casualty Company ("State Farm"), a Write-Your-Own Program carrier participating
in the U.S. Government's National Flood Insurance Program pursuant to the National
Flood Insurance Act of 1968, as amended, n1 appearing herein in its "fiduciary" n2
capacity as the "fiscal agent of the United States," n3 which hereby files this Rule
56 Motion for Summary Judgment.

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n1 42 U.S.C. § 4001, et seq.
n2 44 C.F.R. § 62.23(f).
n3 42 U.S.C. § 4071(a)(1); Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998).

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   Defendant respectfully submits that the Plaintiff is not entitled to recover any
U.S. Treasury benefits [*2] pursuant to the Standard Flood Insurance Policy (SFIP)
because Plaintiff does not have proper standing to bring a claim for further benefits
as the claim was not properly assigned pursuant to the anti-assignment of claims act.
31 U.S.C. §3727
   Further, Plaintiff failed to comply with the conditions precedent to the filing
of this lawsuit under binding and controlling U.S. Fifth Circuit precedents.
Specifically, Plaintiff failed to timely file a Proof of Loss for any proceeds under
the SFIP. State Farm submits that this issue alone is dispositive of the entire case
and warrants a dismissal of the case with prejudice.
   Finally, Plaintiff seeks penalties pursuant to La.R.S. §§22:1220 and 22:658 and
legal interest as a result of State Farm's alleged bad faith handling of his flood
loss claim. However, these claims are preempted and barred by federal law.
   In support of this Motion for Summary Judgment, State Farm files herewith a
supporting Memorandum of Law, setting forth the particulars of this Motion and the
points and authorities that demonstrate that summary judgment is appropriate. State
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  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


Farm incorporates the accompanying Memorandum of Law and Exhibits by [*3]   reference,
as if fully set forth herein.
   WHEREFORE, the Defendant, State Farm Fire and Casualty Company, respectfully
requests this Court to enter a summary judgment in its favor, and for such other and
further relief as this Court deems appropriate.

Respectfully submitted,

NIELSEN LAW FIRM, L.L.C.

/s/ Douglas K. Foster
   Douglas K. Foster, # 28909
Kim Huong A. Tran, # 24896
Gerald J. Nielsen, # 17078
3838 North Causeway Blvd., Ste 2850
Metairie, Louisiana 70002
Tel: (504) 837-2500
Fax: (504) 832-9165

Attorneys for State Farm Fire and Casualty
Company
   CERTIFICATE OF SERVICE
   I hereby certify that on this 8th day of July, 2008, a copy of the foregoing Motion
for Summary Judgment was filed electronically with the Clerk of Court using the CM/ECF
system. Notice of this filing will be sent to all counsel of record by operation of
the Court's electronic filing system.

/s/ Douglas K. Foster
Douglas K. Foster, # 28909
   MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

MAY IT PLEASE THE COURT:
   Defendant, State Farm Fire and Casualty Company ("State Farm"), a Write-Your-Own
("WYO") Program carrier [*4] participating in the U.S. Government's National Flood
Insurance Program ("NFIP") pursuant to the National Flood Insurance Act of 1968, as
amended ("NFIA"), n1 appearing herein in its "fiduciary" n2 capacity as the "fiscal
agent of the United States," n3 files the following Memorandum in Support of its Motion
for Summary Judgment. Based on the points to be raised within this memorandum, the
Plaintiff's claims against State Farm fail, because there is no genuine issue of
material fact; and, thus, summary judgment is proper as a matter of law.

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n1 42 U.S.C. §4001, et seq.
n2 44 C.F.R. § 62.23(f).
n3 42 U.S.C. §4071(a)(1); Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998).

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   LEGAL STRUCTURE OF THE NFIP
   The NFIP is a creature of the U.S. Congress, administered by the Federal Emergency
Management Agency ("FEMA") and the Federal Insurance Administration ("FIA"), and
underwritten by the U.S. Treasury. [*5] All flood loss claims presented under the
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     2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


NFIP are paid directly with U.S. Treasury funds, regardless of whether the policy
is issued by the government directly, or by a WYO Program carrier. n4

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n4 See 44 C.F.R. Pt. 62, App. A, Art. III(D)(1) and Gowland, 143 F.3d TX 955.

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   The Standard Flood Insurance Policy ("SFIP") is written by the federal government.
State Farm is a WYO Program carrier authorized to issue the SFIP under its logo
pursuant to the "Arrangement" n5 between itself and FEMA. As a matter of federal law,
State Farm may not alter, amend, or waive any provision or condition of the SFIP.
The sole authority is the Federal Insurance Administrator and the waiver must be
expressed and in writing. n6 Due to the statutory scheme of the NFIP and the fact
that U.S. Treasury funds are at stake, strict adherence to the conditions precedent
for the payment of a claim is constitutionally required. n7 To make payments not in
strict compliance with the SFIP would be contrary to Congress's mandate and would
[*6] violate the Appropriations Clause of the Constitution. n8

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n5   44 C.F.R. Pt. 62, App. A.
n6   See 44 C.F.R. Pt. 61, App. A(1), Art. VII(D) and 44 C.F.R. §61.13(d).
n7   Gowland, 143 F.3d at 953.
n8   Id. at 955.

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     FACTS
   On or about August 29, 2005, Hurricane Katrina made landfall in Louisiana causing
widespread damage to homes, including the subject property of this dispute, which
is located at 103 Amanda Drive, Slidell, Louisiana 70458 ("dwelling"). n9 At the time
that Hurricane Katrina struck, the dwelling was owned by Keith Cole and Rose Cole,
who was an insured under the SFIP issued through State Farm. n10 At this time, the
coverage limits under the Plaintiff's SFIP (Policy Number 98-RR-3064-5) were $
195,400.00 for the building, subject to a $ 1000.00 deductible and $ 53,400.00 for
contents, subject to a $ 1000.00 deductible. (Id.). n11 At the time of the storm,
the Declaration Page for the SFIP at issue listed [*7] Rose Cole, 103 Amanda Drive,
Slidell, Louisiana 70458 as the named insured. n12 After the storm, Ms. Cole contacted
State Farm and submitted a claim for flood damage under her SFIP. n13 The property
damage was inspected. After the inspection, Sate Farm determined that there was $
78,498.85 in building damages. n14 On November 17, 2005, State Farm forwarded the
draft in the amount of $ 78,498.85 to Ms. Cole. n15

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n9 See Complaint P V and VIII.
n10 See Complaint P XII.
n11 Exhibit 2 P 16.
n12 Exhibit 2 P 10.
n13 Exhibit 2 P 17.
n14 Exhibit 2 P 19.
n15 Exhibit 2 P 20.

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  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


   On December 15, 2006, the dwelling was sold to Jill Fayard ("Plaintiff"). n16 At
the same time, the SFIP was transferred from Ms. Cole to the Plaintiff. n17 In
connection with the sale of the property, Ms. Cole further assigned to the Plaintiff
the previously tendered benefits in the amount of $ 78,498.85 "together with [*8]
any supplemental sums, if any, from State Farm." n18

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n16 See Complaint P XIV.
n17 See Complaint P V.
n18 See Complaint P XVI.

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   LAW AND ARGUMENT

I. Summary Judgment Standard
   Summary judgment is appropriate when there is no genuine issue as to any material
facts, and the moving party is entitled to judgment as a matter of law. n19 In the
instant case, an examination of the pleadings and evidence presented shall
demonstrate that there are no genuine issues as to any material facts, and State Farm
is entitled to judgment as a matter of law.

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n19 FRCP 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986).

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II. Proof of Loss
   The proof of loss provision is found at Article VII(J)(4) which provides as
follows:
   J. Requirements [*9]    in Case of Loss.
   In case of a flood loss to insured property, you must:


     4. Within 60 days after the loss, send us a proof of loss, which is your
     statement of the amount you are claiming under the policy signed and sworn
     to by you, and which furnishes us with the following information:


          a. The date and time of loss;
          b. A brief explanation of how the loss happened;
          c. Your interest (for example, "owner") and the interest, if any,
          of others in the damaged property;
          d. Details of any other insurance that may cover the loss
          (emphasis added);
          e. Changes in title or occupancy of the covered property during
          the term of the policy;
          f. Specifications of damaged buildings and detailed repair
          estimates;
          g. Names of mortgagees or anyone else having a lien, charge, or
          claim against the insured property;
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  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


          h. Details about who occupied any insured building at the time
          of loss and for what purpose; and
          i. The inventory of damaged personal property described in J.3.
          above.
   Two underlying precepts govern how the courts have consistently approached the
analysis of the NFIP Proof of Loss requirement. The first is "uniformity of decision."
Since 1978, when the original [*10] Fifth Circuit decided West v. Harris, 573 F.2d
873 (5th Cir. 1978), cert. denied, 440 U.S. 946, 99 S.Ct. 1424 (1979), the courts
have consistently recognized the importance of a nationally-uniform rule of law
governing claims disputes involving the NFIP:


     Since the flood insurance program is a child of Congress, conceived to
     achieve policies which are national in scope, and since the federal
     government participates extensively in the program both in a supervisory
     capacity and financially, it is clear that the interest in uniformity of
     decision present in this case mandates the application of federal law.
        * * *

     In sum, federal law controls disputes over the coverage of insurance
     policies issued pursuant to the National Flood Insurance Act of 1968
     regardless of whether the district court exercises jurisdiction under 42
     U.S.C.A. §4053 n20 or under 28 U.S.C.A. §1332. Congress has undertaken to
     establish a comprehensive flood insurance program under the control of the
     department of HUD to achieve policies national in scope, and the interest
     in uniformity of decisions compels the application of [*11] federal law.
     Id. at 881-82 n21


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n20 West was announced while the Program was operating under Part A of the Act via
an insurance pool operation. From 1978 to the present, the Program has been operating
under Part B. Accordingly, the correct jurisdictional predicate is 42 U.S.C. §4072.
Webb v. Aetna, 1997 WL 433500, FN2 (E.D. La. July 31, 2007)(Fallon, J.).
n21 See Flick v. Liberty Mutual Fire Ins. Co., 205 F.3d 386, 390 (9th Cir. 2000),
cert denied 531 U.S. 927 (2000), noting, based upon West, supra, that "there is a
compelling interest in assuring uniformity of decision in cases involving the NFIP."

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   The second precept arises from the Supreme Court's holdings concerning the
Appropriations Clause in Office of Personnel Mgmt. v. Richmond, 496 U.S. 414, 110
S.Ct. 2465, 110 L.Ed.2d 387 (1990). Richmond was the foundation of the Fifth Circuit's
1998 holding in Gowland [*12] , wherein the court held that the federal judiciary
was without power to order a disbursement of funds under an SFIP issued by a private
insurance company where the proof of loss requirement had not been complied with by
the insured:


     Although the Gowlands' policy was written by Aetna, a private insurance
     company, payments made pursuant to that policy are "a direct charge on the
     public treasury." [FN7] When federal funds are involved, the judiciary is
     powerless to uphold a claim of estoppel because such a holding would
     encroach upon the appropriation power granted exclusively to Congress by
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  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


     the Constitution. "Any exercise of a power granted by the Constitution to
     one of the other branches of government is limited by valid reservation
     of congressional control over funds in the Treasury." [FN8] n22 To date,
     the Supreme Court has not upheld an estoppel claim resulting in the payment
     of money out of the Treasury.


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n22 Footnote 8 in Gowland refers to OPM v. Richmond.

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   CONCLUSION


     We [*13] find that the theories of substantial compliance, waiver, and
     equitable estoppel are inapplicable to the facts presented herein. While
     this result may seem harsh in light of the Gowlands' ongoing negotiations
     with Aetna, we must remind that the National Flood Insurance Program is
     federally subsidized and enable consumers to obtain flood insurance which
     virtually would be impossible to purchase in the marketplace. Requiring
     the Gowlands to turn square corners when dealing with the Treasury "does
     not reflect a callous outlook. It merely expresses the duty of all courts
     to observe the conditions defined by Congress for charging the public
     Treasury." [FN9] Accordingly, the judgment of the district court must be
     and is AFFIRMED. n23


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n23 Gowland, 143 F.3d at 955.

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   The constitutional predicate to the federal judiciary's unwavering strict
enforcement of the NFIP proof of loss requirement was discussed by the Ninth Circuit
in Flick v. Liberty Mutual Fire Ins. Co., 205 F.3d 386 (9th Cir. 2000) [*14] as
follows:


     It is an axiomatic principle of constitutional law that the judiciary's
     power is limited by a valid reservation of congressional control over
     public funds. See Richmond, 496 U.S. at 425, 110 S.Ct. 2465. 'Any exercise
     of a power granted by the Constitution to one of the other branches of
     Government is limited by a valid reservation of congressional control over
     funds in the Treasury.' Indeed, we would equally usurp Congress's exclusive
     power to appropriate money were we to award an unauthorized money claim
     based on a theory of substantial compliance or notice prejudice. We
     therefore interpret Richmond to preclude a court from granting a remedy
     that draws funds from the Treasury in a manner that is not authorized by
     Congress. n24


In addition to Gowland, the Fifth Circuit has held that the proof of loss requirement
must be strictly construed and that failure to do so bars recovery. n25
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n24 Flick, 205 F.3d at 391.
n25 See Forman v. FEMA, 138 F.3d 543 (5th Cir. 1998); 4-Mail, LLC v. Bankers Ins.
Co., 82 Fed.Appx. 970, 2003 WL 22945736 (5th Cir. (La.) Dec. 11, 2003); and Wright
v. Allstate Ins. Co., 415 F.3d 384 (5th Cir. 2005).

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   Recently, the Fifth Circuit, in Richardson v. American Bankers Ins. Co., 2008 WL
510518 (5th Cir. Feb. 27, 2008), addressed a Hurricane Katrina flood claim and the
one (1) year extension by FEMA to submit a proof of loss. In Richardson, the plaintiff
was insured by an SFIP through American Bankers Insurance Company and sustained flood
damage to his property. n26 The plaintiff filed a claim under his flood policy and
was paid $ 16,125.50 by American's adjuster. n27 The plaintiff disagreed with
American's payment and submitted invoices and estimates to American requesting in
writing that he be paid an additional $ 12,900.00. n28 However, the plaintiff never
submitted a proof of loss for the additional payments and American denied any
additional payment. n29 As a result, the plaintiff filed suit against American and
American subsequently moved for summary judgment on the ground that the plaintiff
did not support his claim for additional benefits with a sworn proof of loss. n30
The lower court granted American's summary judgment and the plaintiff appealed.

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n26 2008 WL 510518 at *1. [*16]

 n27 Id at *1.
n28 Id.
n29 Id.
n30 Id.

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   On appeal, the plaintiff argued that the district court erred in applying the
strict proof of loss requirement in a case in which he submitted a claim for losses
under his policy, the insurer paid the claim, and the only issue in dispute is the
amount of payment. n31 The Fifth Circuit ultimately affirmed the lower court's
decision and dismissed plaintiff's arguments by holding:


     Richardson's position is contrary to federal statutory law, the Ad-
     ministrator's Waiver, and our precedent. Pursuant to the waiver, after
     Katrina, insureds with SFIP coverage could receive payment for losses based
     on an adjuster's report without submitting a sworn POL within the normal
     60-day statutory period. But if the policyholder disagreed with the
     insurer's calculation of the amount owed, the policyholder had to submit
     to the insurer a sworn POL within one year of the date of loss.

     This is a strict requirement. The regulations say that a NFIP participant
     cannot file a lawsuit seeking further federal benefits under the [*17]
     SFIP unless the participant can show prior compliance with all of the
     policy's requirements, including the POL requirement. 44 C.F.R. Pt.61,
     App.(A)(1), arts. VII(J), VII(R). In Gowland, we explained that the POL
     requirement contained in a provision of an insurance policy issued pursuant
     to a federal program must be 'strictly construed and enforced.' 143 F.3d
     at 954. n32 (emphasis added).
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  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *




Likewise, every circuit that has addressed the proof of loss issue has strictly
construed and enforced the proof of loss requirement and uniformly held that failure
to timely submit a proof of loss bars recovery. n33

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n31 Id. at *2.
n32 Id.
n33 See Suopys v. Omaha Prop. and Cas. Ins. Co., 404 F.3d 805 (3d Cir. 2004); Dawkins
v. Witt, 318 F.3d 606 (4th Cir. 2003), cert. denied, 539 U.S. 960, 123 S.Ct. 2653
(2003); Neuser v. Hocker, 246 F.3d 508 (6th Cir. 2001); Mancini v. Redland Ins. Co.,
248 F.3d 729 (8th Cir. 2001); Flick, supra; Sanz v. U.S. Security Ins. Co., 328 F.3d
1314 (11th Cir. 2003); and Shuford v. Fidelity National Prop. & Cas. Ins. Co., 508
F.3d 1337 (11th Cir. 2007).

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   More importantly, this Honorable Court in Eugene Jefferson v. Allstate Insurance
Company, Case No. 07-4836, Dkt. No. 11 (E.D.La. Jun. 25, 2008), granted Allstate's
motion for summary judgment based on the failure to timely submit a signed and sworn
proof of loss. n34

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n34 There was no opposition filed by the plaintiff. However, in granting the MSJ,
this Honorable Court noted that the motion appeared "meritorious."

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   In the instant matter, Plaintiff failed to timely submit a signed and sworn proof
of loss in support of her claim for flood damages. n35 Thus, based on established
Fifth Circuit jurisprudence in Gowland, Forman, 4-Mali, Wright and Richardson and
this Honorable Court's decision in Jefferson, Plaintiff is barred from recovery.

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n35 Exhibit 2, P 24.

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III. Documentation
   In addition to timely submitting [*19] a signed and sworn proof of loss, Plaintiff
is required to submit documentation in support of the amount claimed pursuant to
Articles VII(J)(3) and VII(J)(4)(f) of the SFIP. Articles VII(J)(3) and VII(J)(4)(f)
require that the claimant must document the loss with "all bills, receipts and related
documents... and with detailed building repair estimates." It is the insured's burden
to document the amount of the insured's loss. n36 State Farm is required to verify
that "any taxpayer funds are accounted for and appropriately expended." n37

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n36 Durkin v. State Farm Mut. Ins. Co., 3 F.Supp.2d 724, 727 (E.D.La.1997), aff'd
141 F.3d 1163 (5th Cir. 1998) and Mahood v. Omaha Prop. and Cas. Ins. Co., 174 F.Supp.2d
284, 293 (E.D.Pa. 2001).
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  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


n37 44 C.F.R. §62.23(f).

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   In Eichaker v. Fidelity National Prop. and Cas. Ins. Co., Case No. 2:07-cv-04485,
Dkt. No. 37, (E.D.La. Jun. 3, 2008)(Africk, J.), the plaintiff filed suit against
Fidelity [*20] asserting that Fidelity breached the SFIP by failing to properly
compensate the plaintiff for his flood loss. The plaintiff also submitted a proof
of loss to Fidelity. Fidelity subsequently filed a motion for summary judgment
asserting that the plaintiff is barred from asserting SFIP claims because he failed
to (1) attach specifications of damaged buildings and detailed repair estimates to
his proof of loss as required by Article VII(J)(4)(f); and (2) provide Fidelity with
supporting documentation of his losses as required by Article VII(J)(3). The
plaintiff argued in opposition that the SFIP does not require that supporting
documentation of losses be attached to a proof of loss, nor does it require that
supporting documentation of losses be submitted prior to filing a lawsuit. The
plaintiff further argued that he provided Fidelity with a timely sworn proof of loss
and thereafter provided Fidelity supporting documentation of losses, i.e., a public
adjuster's estimate, and claims he satisfied the SFIP's requirements and is therefore
not barred from asserting SFIP claims.
   The court ultimately rejected the plaintiff's arguments and granted summary
judgment in favor of Fidelity by ruling [*21] as follows:


     Mere notice of the claim on the proof of loss form is insufficient to satisfy
     the insured's obligations under the SFIP. See Sun Ray Village Owners Assoc.
     v. Old Dominion Ins. Co., 2008 WL 846123, at *5 (N.D. Fla. 03/28/08). An
     insured must provide his insurer with some means by which to verify the
     amounts claimed in the insured's proof of loss. Id. Article VII(J)(4)(f)
     of the SFIP requires the insured to submit detailed repair estimates with
     his proof of loss. Id. (emphasis added)
        * * * *

     Although the quality and character of an insured's estimate will vary
     depending on the facts of each case, the language of the SFIP indicates
     that, at a minimum, insureds must identify the components of the insured
     building which have been damaged and then estimate the cost of repairing
     each damaged component. These estimates may consist of contractors'
     estimates or the insured's own valuation of the cost of repair based on
     his personal knowledge or research.
        * * * *

     Deborah Price ("Price"), vice president of claims for Fidelity, states in
     her own sworn affidavit that, although Eichaker provided Fidelity with a
     proof of loss, he failed [*22] to attach any additional proper supporting
     information and/or documentation to support his request for additional
     benefits. Considering the fact that Eichaker fails to present sufficient
     summary judgment evidence to refute Price's statement and establish that
     he complied with Article VII(J)(4) of the SFIP, Eichaker is barred from
     asserting SFIP claims and Fidelity is entitled to judgment as a matter of
     law. (emphasis added). n38


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n38 Eichaker, Case No. 2:07-cv-04485, Dkt. No. 37, at pp. 9-11. See also, Durkin v.
State Farm Mut. Ins. Co., 3 F. Supp. 2d 724, 727 - 28 (E.D. La. 1997); Paulsen v.
State Farm Ins. Co., 2008 WL 397772 (E.D.La. 2008)(Africk, J.); Matthews v. State
Farm Fire and Cas. Co., 2007 WL 2127581 (E.D. La. July 24, 2007)(Africk, J.); and
Guillot v. Allstate Ins. Co., 2008 WL 45359 (E.D.La. Jan. 2, 2008)(Vance, J.).

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   Here, Plaintiff has neither timely submitted a sworn proof of loss nor submitted
any documents [*23] in connection with the proof of loss to support that any amounts
paid by State Farm were insufficient. n39 Thus, Plaintiff has failed to comply with
Articles VII(J)(3) and VII(J)(4)(f) of the SFIP. Such failure bars recovery.

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n39 Exhibit 2, PP 24 and 25.

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   Article VII(R) of the SFIP requires the insured to comply with "all" of the SFIP's
requirements before filing the lawsuit. Failure to comply with "all" of the SFIP's
requirements, including the proof of loss and documentation requirements "divests"
the insured of the right to even bring the lawsuit. n40 In the instant matter,
Plaintiff has failed to comply with Articles VII(J)(4), VII(J)(3) and VII(J)(4)(f).
Further, Plaintiff's claim is invalid as it arises from an improper assignment of
a flood insurance claim. Thus the Plaintiff doesn't have standing to bring the instant
lawsuit. Finally, all state law based extra-contractual and tort claims arising out
of the handling of the flood claims are preempted and barred by federal law.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n40 Mancini v. Redland Ins. Co., 248 F.3d. 729, 735 (8th Cir. 2001).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*24]

IV. Federal Assignment of Claims Act - 31 U.S.C. §3727.
   In the instant matter, Plaintiff's standing to bring this lawsuit arises from an
assignment of the claim of the previous property owner, Rose Cole. However, the
assignment of the claim is wholly improper and violates the Federal Assignment of
Claims Act (the "Act") found at 31 U.S.C. 3727. The Act provides in pertinent part:


     (b) An assignment may be made only after a claim is allowed, the amount
     of the claim is decided, and a warrant for payment of the claim has been
     issued. The assignment shall specify the warrant, must be made freely, and
     must be attested to by 2 witnesses. The person making the assignment shall
     acknowledge it before an official who may acknowledge a deed, and the
     official shall certify the assignment. The certificate shall state that
     the official completely explained the assignment when it was acknowledged.
     An assignment under this subsection is valid for any purpose.
   Here, Plaintiff's claim violates the Act for several reasons. First, the Act
clearly provides that in order for an assignment to be made, the claim must be
"allowed." Plaintiff [*25] failed to meet the conditions precedent to bringing the
claim by failing to timely submit a sworn proof of loss and failing to submit documents
to support any further amounts claimed, all as required under the terms of the SFIP.
Therefore, Plaintiff's claim is not "allowed" as contemplated under the Act.
                                                                         Page 11
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


   Second, the amount of the claim must be "decided" and a warrant for payment of
the claim must be issued. Plaintiff's assignment is completely undecided as
contemplated under the Act. The Act clearly contemplates that a sum be specified with
certainty and the language of the assignment at issue is both vague and ambiguous.
The assignment provides that Plaintiff is entitled to the previous tender to Ms. Cole
along with "supplemental sums, if any, from State Farm Insurance Company resulting
from damage to the premises by Hurricane Katrina and/or Rita." n41 Thus, the
"supplemental" amount sought by the Plaintiff in bringing this claim is unspecified
and indeterminable. Further, the amount could include benefits owed from damages
associated with Hurricane Rita, an entirely different disaster than that associated
with the assigned claim. Moreover, no warrant for payment was issued by State [*26]
Farm. At no time did State Farm warrant any supplemental payment to Plaintiff and
neither was a warrant of payment specified in the assignment as required by the Act.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n41 Exhibit 3.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
   Finally, the assignment is required to be certified and the official providing
the certification must include in the certificate a statement that the assignment
was completely explained when it was acknowledged. A review of the assignment at issue
clearly doesn't include such a certificate or language that any such explanation was
completed, which may have prevented the instant lawsuit being brought on the
assignment.
   In Diamond v. Federal Emergency Management Agency, 689 F. Supp.163 (E.D.N.Y.
1988), the court addressed res nova the applicability of the Federal Assignment of
Claims Act to policies of flood insurance issued pursuant to the NFIP. The court
explained:
        The legal principles applicable to the Act are fairly straightforward.
     Designed, in part, to alleviate the government from the burden of de-
     termining with [*27] whom it must deal, the statute applies to all
     voluntary transfers or assignments of claims against the United States with
     two exceptions: transfers by will and general assignments for the benefit
     of creditors. See U.S. v. Shannon, 342 U.S. 288, 72 S.Ct. 281, 96 L.Ed.
     321 (1952); U.S. v. Aetna Surety Co., 338 U.S. 366, 70 S.Ct. 207, 94 L.Ed.
     171 (1949); Naartex Consulting Corp. v. Watt, 722 F.2d 779 (D.C.Cir.1983).
     By contrast, involuntary transfers, such as subrogations effected as a
     matter of law, do not fall within the purview of the Act. Aetna Surety Co.,
     supra. Where the Act applies, noncompliance with its terms will defeat the
     assignment. Shannon, supra..
        ... No case has come to our attention in which § 3727 has been applied
     to an insurance policy issued by FEMA or one of its subdivisions.
     Nevertheless, the Act has been applied to claims arising in contexts
     analogous to the instant one. See, e.g., Bernert Towboat Co. v. USS
     Chandler, 666 F.Supp. 1454 (D.Or.1987) (Act applies to bar assignment of
     claim to cargo bailee by bailor regarding goods damaged by U.S. Navy ship,
     who then [*28] sued government for damages); Farm Bureau Mut. Ins. Co.
     v. U.S., 5 Cl.Ct. 142 (1984) (government employee's assignment to insurance
     company of any and all rights arising out of assignor's automobile accident
     while acting within the scope of his employment void for noncompliance with
     the Act). In view of the broad construction that § 3727 has been given by
     other courts, and the facial applicability of that statutory section to
                                                                         Page 12
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


     the voluntary assignment made here, it follows that the Act does apply to
     the instant case.
   Here, the Act has similar applicability as in Diamond. Plaintiff seeks additional
benefits under the NFIP pursuant to a claim brought by the previous property owner
and insured. As explained above, the purpose of the Act is to alleviate the
government's burden of determining with whom it must deal. In failing to comply with
the conditions of the Act, Plaintiff attempts to burden the government with de-
termining whether benefits are payable as contemplated under the original claim or
to the Plaintiff and any subsequent assignee. However, because the conditions of the
Act were not met, the assignment of the claim is barred as a matter of law with [*29]
respect to its applicability for obtaining "supplemental sums" as articulated in the
assignment at issue. Therefore, Plaintiff lacks the proper standing to bring a lawsuit
pursuant to the invalid assignment of the flood insurance claim and as such,
Plaintiff's suit should be dismissed with prejudice.

V. Preemption of State Law Based Claims
   In the Plaintiff's Petition, as a result of State Farm's alleged bad faith handling
of his flood loss claim, Plaintiff seeks penalties pursuant to La.R.S. §§22:1220 and
22:658 and legal interest. n42 Plaintiff further seeks damages for intentional
infliction of emotional distress n43 and mental anguish n44; however, these claims
are preempted and barred by federal law.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n42 Docket # 1-2, of Case No. 07361, P IX and Prayer for Relief.
n43 See Complaint P XX(b).
n44 See Complaint P XXII.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
   Congress, at 42 U.S.C. §4019 delegated exclusive authority to FEMA to determine,
by regulation, the rules that would govern the [*30] adjustment of NFIP claims. n45
FEMA promulgated pervasive regulations governing this topic decades ago, and these
regulations are found throughout 44 C.F.R. Pts. 61 and 62. Notably, it was §4019 and
the regulations adopted pursuant to it that the Fifth Circuit examined in West when
it held that an attorney's fees claim arising from Louisiana state law could not be
allowed even where the plaintiff was successful in an NFIP claims dispute. n46

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n45 West, 573 F. 2d at 880.
n46 Id. at 880-81.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
   More recently, in 2005, the Fifth Circuit ended all possible debate over the
question of preemption in the context of NFIP claims handling disputes. As per Wright
and Gallup v. Omaha Prop. and Cas. Ins. Co., 434 F.3d 341 (5th Cir. 2005), all such
state-law based tort and extra-contractual claims are indeed preempted and barred.
n47 Further, because U.S. Treasury funds are used to pay claims made under the SFIP,
any claim for interest is preempted. n48

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n47 Wright is based on pre-2000 flood policies and the theory of conflict preemption.
Gallup is based on post-2000 policies and the theory of express preemption. [*31]
                                                                         Page 13
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *




 n48 See In re Estate of Lee, 812 F.2d 253 (5th Cir. 1987); Newton v. Capital Assur.
Co., Inc., 245 F3d 1306 (11th Cir. 2001), rehearing en banc denied, 263 F.3d 172 (11th
Cir. 2001); and Sandia Oil Co., Inc. v. Beckton, 889 F.2d 258 (10th Cir. 1989).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

VI. Claims not covered.
   Finally, Plaintiff has also asserted claims for loss of use, additional living
expenses ("ALE"), loss of enjoyment, diminution and business interruption. n49 These
claims are specifically excluded under the policy. n50 Because the claims are
specifically excluded under the SFIP, Plaintiff's claims for these listed damages
are barred as a matter of law. Therefore, Defendant requests that Plaintiff's claims
that are specifically excluded under the policy be dismissed with prejudice at
Plaintiff's costs.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n49 See Complaint PXXII.
n50 See SFIP PV.A (3) - (6).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*32]
   CONCLUSION
   For the reasons contained herein, State Farm respectfully prays that Plaintiff's
suit be dismissed with prejudice and at the Plaintiff's costs.

Respectfully submitted,

NIELSEN LAW FIRM, L.L.C.

/s/ Douglas K. Foster
Douglas K. Foster, # 28909
Kim Huong A. Tran, # 24896
Gerald J. Nielsen, # 17078
3838 North Causeway Blvd., Ste 2850
Metairie, Louisiana 70002
Tel: (504) 837-2500
Fax: (504) 832-9165
dfoster@nielsenlawfirm.com
Attorneys for State Farm Fire and Casualty
Company
   CERTIFICATE OF SERVICE
   I hereby certify that on this 8th day of July, 2008, a copy of the foregoing Motion
for Summary Judgment was filed electronically with the Clerk of Court using the CM/ECF
system. Notice of this filing will be sent to all counsel of record by operation of
the Court's electronic filing system.

/s/ Douglas K. Foster
Douglas K. Foster, # 28909
dfoster@nielsenlawfirm.com
   STATEMENT OF UNDISPUTED FACTS
                                                                         Page 14
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


   NOW INTO COURT, through undersigned counsel, comes Defendant State Farm Fire and
Casualty Company ("State Farm"), which respectfully submits that the following listed
facts are material [*33] to the Defendant's Motion, and there is no genuine dispute
between the parties as to these facts. On the basis of these undisputed material facts,
the Defendant asserts that it is entitled to judgment as a matter of law, dismissing
this lawsuit in its entirety with prejudice and at the Plaintiff's costs:
   1. State Farm is a Write-Your-Own ("WYO") Program carrier participating in the
U.S. Government's National Flood Insurance Program ("NFIP") pursuant to the National
Flood Insurance Act of 1968, as amended n1 ("NFIA"). (Exhibit 2, P 5).

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n1 42 U.S.C. §4001, et seq.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
   2. State Farm is a signatory to the Arrangement promulgated by the Federal
Emergency Management Agency ("FEMA") in its capacity as the agency charged by Congress
with running the NFIP. (Exhibit 2, P 6).
   3. The Arrangement is codified and found at 44 C.F.R. Part 62, Appendix A(1) (2004
edition). (Exhibit 2, P 7).
   4. The policy of flood insurance issued by State Farm is a Standard Flood Insurance
Policy ("SFIP") issued [*34] pursuant to the NFIA. (Exhibit 2, P 8).
   5. Rose Cole was the owner of the residence located at 103 Amanda Drive, Slidell,
Louisiana 70458 until December 15, 2006. (Docket # 1, of Case No. 074631, P XII).
   6. Jill Fayard ("Plaintiff") purchased the property from Rose Cole on December
15, 2006. (Docket # 1, of Case No. 074631, P XIV).
   7. On December 15, 2006, Rose Cole executed a document purporting to assign her
property damage claim to Plaintiff. (Docket # 1, of Case No. 074631, PXVI).
   8. On or about August 29, 2005, Hurricane Katrina made landfall in Louisiana.
(Id.).
   9. Plaintiff claims that the dwelling suffered flood damage as a result of
Hurricane Katrina. (Id.).
   10. August 29, 2005 is the date of the Plaintiff's loss. (Id.).
   11. On August 29, 2005, the dwelling was insured under an NFIP SFIP (Policy Number
98-RR-3064-5) issued by State Farm. (Exhibit 2, P 16).
   12. On August 29, 2005, the coverage limits under the SFIP (Policy Number
98-RR-3064-5) were $ 195,400.00 for the building, subject to a $ 500.00 deductible
and $ 53,400.00 for contents, subject to a $ 500.00 deductible. (Id.).
   13. On August 29, 2005, the Declaration Page for Policy Number 98-RR-3064-5 listed
[*35] Rose Cole, 103 Amanda Drive, Slidell, LA 70458 as the named insured. (Exhibit
1.).
   14. On December 15, 2006, the SFIP covering the property located at 103 Amanda
Drive, Slidell, LA 70458 was transferred to Plaintiff. (Docket # 1, of Case No. 074631,
P V and XIV).
   15. Subsequent to Hurricane Katrina, Rose Cole submitted a claim for benefits under
her SFIP (Policy Number 98-RR-3064-5) to State Farm. (Docket # 1, of Case No. 074631,
P XVII).
                                                                         Page 15
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


   16. Upon receipt of the insured's notice of loss, State Farm commenced the process
of adjusting the claim pursuant to the applicable federal rules promulgated by FEMA
on authority of 42 U.S.C. §4019. (Exhibit 2, P 18).
   17. State Farm, working with independent adjusters who were provided to the insured
as "a matter of courtesy only," n2 determined that the Plaintiff was entitled to
building coverage benefits in the amount of $ 78,498.85.00. (Exhibit 2, P 19).

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n2 44 C.F.R. §61 App. A(1), Art. VII(J)(7).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
   18. On November 17, 2005, State Farm prepared [*36] a letter to the Plaintiff
enclosing a check in the amount of $ 78,498.85. (Exhibit 2, P 20).
   19. Pursuant to Article VII(J)(4) of the SFIP, the insured must submit a Proof
of Loss meeting the requirements and providing the information listed and required
in Article VII(J)(4) of the SFIP within 60 days of the date of the loss. (44 C.F.R.
Pt. 61, App. A(1), Article VII(J)(4)). (Exhibit 2, P 21).
   20. For the August 29, 2005 flood loss claim, a Proof of Loss would have been due
on October 29, 2005. However, an extension was granted by FEMA giving SFIP insureds
one year from the date of the flood to provide a Proof of Loss, that being August
28, 2006. (Exhibit 2, P 22).
   21. No part, provision or requirement of the SFIP may be waived, altered or amended
by State Farm. Only the Federal Insurance Administrator may issue such a waiver, and
it must be in writing. (44 C.F.R. Pt. 61, App. A(1), Article VII (D)). (Exhibit 2,
P 23).
   22. Plaintiff failed to timely submit a signed and sworn Proof of Loss in support
of her claim for flood damages. (Exhibit 2, P 24).
   23. On August 28, 2007, the Plaintiff filed suit against State Farm alleging that
State Farm breached the SFIP because State Farm [*37] failed to pay sufficient
property damage due under the Plaintiff's flood policy. (Docket # 1, of Case No.
074631).
   24. The Plaintiff also seeks state law extra-contractual damages for the way her
flood
   25. The Plaintiff has not timely submitted any documents to support her claim that
any amounts paid by State Farm under the SFIP were insufficient. (Exhibit 2, P 25).
   26. Plaintiff, by filing the instant lawsuit, obviously disagrees with the
Defendant's adjustment, settlement and payment of the Plaintiff's claim. (Docket #
1, of Case No. 074631).
   27. Plaintiff and Defendant disagree over whether further federal benefits are
payable upon Plaintiff's claim. (Id.).
   28. Plaintiff's lawsuit seeks further benefits under the Plaintiff's SFIP beyond
the amounts previously paid as mentioned above. (Id.).
   29. Irrefutably, this lawsuit was filed for the specific purpose of obtaining a
court order requiring State Farm to pay to the Plaintiff further federal benefits
under the NFIP SFIP. (Id.).

Respectfully submitted,
                                                                         Page 16
  2007 U.S. Dist. Ct. Motions 4631; 2008 U.S. Dist. Ct. Motions LEXIS 26080, *


NIELSEN LAW FIRM, L.L.C.

/s/ Douglas K. Foster
Douglas K. Foster, # 28909
Kim Huong A. Tran, # 24896
Gerald J. Nielsen, # 17078
3838 [*38] North Causeway Blvd., Ste 2850
Metairie, Louisiana 70002
Tel: (504) 837-2500
Fax: (504) 832-9165
Attorneys for State Farm Fire and Casualty
Company
dfoster@nielsenlawfirm.com
   NOTICE OF HEARING
   That the attached Motion for Summary Judgment will be brought for hearing before
the Honorable Peter Beer on the 23rd day of July at 9:30 a.m. at the United States
District Courthouse located at 500 Poydras Street, New Orleans, Louisiana.

UNITED STATES DISTRICT JUDGE

Respectfully submitted,

NIELSEN LAW FIRM, L.L.C.

/s/ Douglas K. Foster
Douglas K. Foster, # 28909
Kim Huong A. Tran, # 24896
Gerald J. Nielsen, # 17078
3838 North Causeway Blvd., Ste 2850
Metairie, Louisiana 70002
Tel: (504) 837-2500
Fax: (504) 832-9165

Attorneys for State Farm Fire and Casualty
Company

   [SEE AFFIDAVIT OF JAMES F. TALLEY, III IN ORIGINAL]
   [SEE ATTACHMENT IN ORIGINAL]

				
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