Clark, et al v. Wright Ntl Flood Ins

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 19-30334

WILLIAM T. CLARK, III; MICHAEL S. PEARL,

Plaintiffs - Appellants

v.

WRIGHT NATIONAL FLOOD INSURANCE COMPANY, Appears solely in
its capacity as a Write-Your-Own Program,

Defendant - Appellee

Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:18-CV-4852

Before DENNIS, SOUTHWICK, and HO, Circuit Judges.
PER CURIAM:*
The plaintiffs brought a claim for breach of contract against the
defendant insurance company alleging the company failed to issue payment
for losses covered under the plaintiffs’ policy. The district court entered
summary judgment in favor of the company because the plaintiffs failed to
comply with the policy’s requirements for filing proofs of loss. We AFFIRM.

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5
TH
CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
FILED
August 4, 2020

Lyle W. Cayce
Clerk
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FACTUAL AND PROCEDURAL BACKGROUND
The home of the plaintiffs, William T. Clark III, and his son, Michael S.
Pearl, sustained damage due to flooding that occurred on March 11, 2016 and
again on August 12, 2016. Clark had a Standard Flood Insurance Policy
(“SFIP”) issued by the defendant Wright National Flood Insurance Company
in its capacity as a Write-Your-Own (“WYO”) insurance carrier participating
in the National Flood Insurance Program (“NFIP”).
For the March 2016 flood, Clark reported his losses on March 13. Bryan
Nixon, a claims inspector hired by a claims corporation working for Wright,
inspected Clark’s home on March 17. Clark submitted a letter he represented
as his proof of loss (“POL”) on April 27, showing building and contents losses
over the policy limits. The POL also contained the statement, “I hereby declare
and attest that the information contained in this letter is true and correct to
the best of my knowledge.” The deadline to submit a POL for the March flood
was July 11. Clark refused to sign a proposed POL that was prepared by
Nixon. Clark again refused to sign revised damage estimates and POLs
prepared by Nixon on May 16, 2017, and again on June 22. The plaintiffs
allege Nixon’s estimates and POLs, which were well under the policy limits,
failed to include certain flood-related damages. On January 22, 2018, though,
Clark submitted a POL for (1) the “undisputed building and contents losses for
the March flood,” and (2) the total building and contents losses claimed in the
April 27 POL. On January 29, Wright issued payment to Clark for only the
total undisputed amount of building and contents losses.
For the August 2016 flood, Clark reported his losses on August 17. Alan
Nunnelley, a claims inspector hired by a claims corporation working for
Wright, inspected Clark’s home on August 21 and provided Clark with a
damage estimate and a proposed POL dated October 25. Clark refused to sign
the proposed POL and submitted a letter he represented as his POL on
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December 7, 2016, which contained an invoice for contractor repairs, the
adjuster’s list of content losses, and the same declaratory statement found in
the April 27, 2016 POL for the March flood. The deadline to submit a POL for
the August flood was December 31, 2017. Clark again refused to sign a revised
and final POL prepared by Nunnelley on September 5, 2017. On February 7,
2018, Clark submitted a POL for $63,663.82, which were the undisputed losses
from the August flood, but the POL also stated that “there are additional
contents claims to be addressed later,” specifically the alleged losses listed in
Clark’s December 7, 2017 POL. The parties now agree that Wright issued
payment to Clark for the total undisputed amount of losses for the August flood
sometime in early 2019 after the Federal Emergency Management Agency
(“FEMA”) granted a limited waiver of the SFIP’s POL requirements to allow
Wright to tender the undisputed loss amount.
Clark and Pearl, litigating pro se, filed suit against Wright for breach of
contract on May 14, 2018, alleging Wright failed properly to adjust, settle, and
pay their claims for covered losses from the two floods. They seek as relief the
difference between the full amount of covered losses as alleged in their April
and December 2016 POLs and what Wright has already paid in undisputed
losses. Wright moved for summary judgment on January 23, 2019. The
district court granted Wright’s motion, concluding that: (1) Clark’s April and
December 2016 POLs were not sworn claims as required by the SFIP;
(2) Clark’s December 2016 POL failed to state the amount that the plaintiffs
claimed; (3) Clark’s January and February 2018 POLs were untimely; (4) the
plaintiffs’ waiver and estoppel arguments were improper; and (5) the plaintiffs
failed to meet their burden for additional discovery. The district court entered
judgment dismissing the case. Clark and Pearl timely appealed, pro se. Clark
and Pearl challenge all five conclusions of the district court.
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DISCUSSION
Before analyzing the district court’s five conclusions that appellants
challenge, we discuss the insurance program that is involved here.

I. National flood insurance
The National Flood Insurance Act, 42 U.S.C. § 4001 et seq., established
the NFIP to provide flood insurance at affordable rates. See Ferraro v. Liberty
Mut. Fire Ins. Co., 796 F.3d 529, 531 (5th Cir. 2015). FEMA operates the
program and issues policies directly or through private insurers called WYO
carriers, such as Wright, that are fiscal agents of the United States.
§ 4071(a)(1); Ferraro, 796 F.3d at 531–32. All SFIP policies are issued in a
standard form, which cannot be altered or waived without the written consent
of the Federal Insurance Administrator (“FIA”). Marseilles Homeowners
Condo. Ass’n Inc. v. Fidelity Nat’l Ins. Co., 542 F.3d 1053, 1055 (5th Cir. 2008);
44 C.F.R. § 61.13(d). “An SFIP is a regulation of FEMA, stating the conditions
under which federal flood-insurance funds may be disbursed to eligible
policyholders.” Id. at 1054 (citation omitted). Because all claims for all policies
issued under this program are paid directly from the federal treasury, the
provisions of the SFIP policies must be strictly construed and enforced.
Gowland v. Aetna Flood Ins. Program, 143 F.3d 951, 954 (5th Cir. 1998). An
SFIP policyholder may not sue to recover losses covered under the SFIP unless
the policyholder first “complied with all the requirements of the policy.” 44
C.F.R. § 61, app. A(1), art. VII(R).

II. Clark’s April and December 2016 POLs’ compliance with the SFIP
All the arguments for review arise from the district court’s grant of a
summary judgment. We review a summary judgment de novo, applying the
same standard as the district court. Austin v. Kroger Tex., L.P., 864 F.3d 326,
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328 (5th Cir. 2017). “The court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” F
ED R. CIV. P. 56(a). “A genuine
issue of material fact exists when the evidence is such that a reasonable jury
could return a verdict for the non-moving party. . . . All evidence is viewed in
the light most favorable to the nonmoving party and all reasonable inferences
are drawn in that party’s favor.” Austin, 864 F.3d at 328–29.
Clark and Pearl first argue that their 2016 POLs complied with the
SFIP. The SFIP required Clark, the policyholder, to send Wright a “signed
and sworn to” POL within 60 days of each loss. 44 C.F.R. § 61, app. A(1),
art. VII(J)(4). A policyholder’s failure to provide a compliant POL “relieves the
federal insurer’s obligation to pay what otherwise might be a valid claim.”
Gowland, 143 F.3d at 954. Substantial compliance is not sufficient. Id. Here,
the FIA expressly granted a limited waiver extending the 60-day deadline for
filing POLs for both the March and August 2016 floods. Both the April 2016
POL for the March 2016 flood and the December 2016 POL for the August 2016
flood were timely. At issue is whether these POLs satisfied the SFIP’s
“sworn-to” requirement. According to Clark and Pearl, the declaratory
statement in the 2016 POLs — “I hereby declare and attest that the
information contained in this letter is true and correct to the best of my
knowledge” — satisfies the SFIP’s sworn-to requirement. The district court,
however, concluded that the statement does not satisfy the SFIP’s sworn-to
requirement because the POLs were not notarized and they did not include the
phrase “under penalty of perjury.”
Clark and Pearl contend that their declarations satisfied the sworn-to
requirement because they declared and attested that the information was true
and correct. They argue that sufficed because the SFIP does not define the
term “sworn” and does not require the phrase “under penalty of perjury” or
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notarization. Also, as policyholders, they had not been referred to some
statute, court opinion, or other source explaining what it means to swear to the
information. Finally, the NFIP Claims Handbook does not state that the POL
must be notarized or include the phrase “under penalty of perjury.”
The SFIP does not define “sworn.” See 44 C.F.R. §§ 59.1, 61.2. While the
NFIP Claims Handbook states that POLs must be signed and must meet the
requirements of the SFIP, it does not state that POLs must be notarized or
must include the specific phrase “under penalty of perjury.”
1
Nevertheless, as
we pointed out earlier, issued under this program are paid directly from the
federal treasury, SFIP policy provisions must be strictly construed, and that
would include the sworn-to requirement. Gowland, 143 F.3d at 954.
To understand the phrase “sworn to” in a federal regulation, we rely on
a statute explaining that when under any federal regulation a matter is
required to be sworn to in writing, it may be supported by an unsworn, signed
writing declaring the matter to be “true under penalty of perjury,” in a form
substantially similar to “I declare (or certify, verify, or state) under penalty of
perjury that the foregoing is true and correct. Executed on (date).” 28 U.S.C.
§ 1746. FEMA’s model POL form includes an attestation whereby
policyholders “declare under penalty of perjury” that the information in their
POL is “true and correct.
2
Section 1746 prohibits use of an unsworn
declaration to satisfy a sworn-to requirements for depositions, oaths of office,
or other oaths required to be taken by a “specified official.” § 1746. The statute
makes clear that a “specified official” does not included a notary public. Id.

1
See NFIP Claims Handbook, https://www.fema.gov/media-library-
data/1508950641147-55cd79e196bc6ea15aba1c69bb9f1cef/FINAL_ClaimsHandbook.pdf
(FEMA form F-687).
2
See Proof of Loss form, https://www.fema.gov/media-library-data/1533073015253-
61a3c8a1dce7231a63f4c466a43615a8/FEMA_Form_086-0-09_8-1-2017_proof_of_loss.pdf
(FEMA form 086-0-09).
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Strictly construing the SFIP, we conclude that “sworn to” requires either
notarization or a declaration substantially similar to “I declare (or certify,
verify, or state) under penalty of perjury that the foregoing is true and correct.
Executed on (date).” § 1746. Neither of Clark’s 2016 POLs satisfy the SFIP’s
sworn-to requirement because neither POL was notarized nor included the
phrase “under penalty of perjury.” The district court did not err in concluding
the same. Because Clark’s 2016 POLs failed to comply with the SFIP’s sworn-
to requirement, the 2016 POLs cannot support a claim for breach of contract.
44 C.F.R. § 61, app. A(1), art. VII(R); Gowland, 143 F.3d at 954.
Clark and Pearl also argue the district court erred in finding that Clark’s
December 2016 POL for the August 2016 flood failed to state an amount
claimed as required by the SFIP. We need not consider this alternative basis
for concluding the December 2016 POL failed to comply with the SFIP because
we have already concluded that the December 2016 POL failed to comply with
the SFIP’s sworn-to requirement and any SFIP noncompliance obviates a
policyholder’s right to recover losses. 44 C.F.R. § 61, app. A(1), art. VII(R);
Gowland, 143 F.3d at 954.

III. Timeliness of Clark’s January and February 2018 POLs
Next, we consider Clark and Pearl’s argument that the district court
erred in finding Clark’s January 2018 POL for the March 2016 flood and
February 2018 POL for the August 2016 flood untimely. The district court held
that the 2018 POLs were untimely because they were submitted after FEMA’s
extension deadlines. The district court further found “no basis to hold that
plaintiffs’ initial, noncompliant proofs of loss allow Wright to accept their
untimely proofs of loss.”
As noted above, Clark filed timely POLs in April 2016 for the March 2016
flood and in December 2016 for the August 2016 flood, but these POLs were
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unsworn and thus failed to comply with the SFIP. Clark subsequently filed
POLs that were sworn for purposes of the SFIP, however, these POLs were not
filed until January and February 2018, after the expiration of FEMA’s
extended deadlines for filing POLs for the March and August 2016 floods.
Clark and Pearl rely on unpublished district court decisions for the
proposition that untimely POLs may be considered along with a timely POL if
the supplemental POL is not attempting to claim wholly new losses. See
Stogner v. Allstate Ins. Co., No. 09-3037, 2010 WL 148291 (E.D. La. Jan. 11,
2010); Smith v. American Bankers Ins. Co. of Fla., No. 13-5684, 2014 WL
2155030 (E.D. La. May 22, 2014). Although these cases are non binding, we
acknowledge that this court has not held to the contrary. Nevertheless, even
accepting this proposition as true, Clark’s 2018 supplemental POLs may not
be considered along with the timely 2016 POLs because the 2016 POLs were
noncompliant with the SFIP. We hold that untimely supplemental POLs that
are not attempting to claim wholly new losses may not be considered along
with timely POLs that are otherwise noncompliant with the SFIP. Gowland,
143 F.3d at 954–55. The district court did not err in holding the 2018 POLs
untimely.

IV. Waiver and Estoppel
Clark and Pearl argue that the district court erred in finding there was
no genuine dispute of a material fact concerning their compliance with the
SFIP. According to them, there is a material fact dispute regarding whether
FEMA determined that their 2016 POLs complied with the SFIP.
Before filing this suit for breach of contract in the district court, Clark
and Pearl administratively appealed Wright’s denial of certain losses claimed
for the August flood to FEMA on June 22, 2017. On August 22, 2018, FEMA
issued a decision in which it erroneously stated that Wright had paid the
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undisputed contents loss in the amount of $63,663.82 for the August flood
pursuant to the Clark’s February 2018 POL. In addition, FEMA found that
certain content damages were covered by the SFIP. FEMA also stated that the
decision did not prevent the policyholder from submitting any future claims for
items or damages not included in the loss adjustment. Wright subsequently
advised the district court that it had reviewed the matter with FEMA, that
FEMA approved Wright’s request and granted a limited waiver of the SFIP’s
POL requirement with respect to the plaintiffs’ contents claim in the
undisputed amount of $63,663.82 for the August flood, and that Wright then
paid this amount to Clark and Pearl.
Here, Clark and Pearl argue (1) there is a material fact dispute
concerning whether FEMA determined that their original POLs complied with
the SFIP requirements, (2) that the fact that FEMA instructed Wright to pay
for certain damages is strong evidence that FEMA found no deficiencies in
their original POLs, and (3) that there is a material fact dispute concerning
whether FEMA determined that their original POLs were compliant or
whether FEMA ignored the POLs and acted contrary to law when it ordered
Wright to pay damages.
The district court found these arguments to be seeking both waiver of
the SFIP’s POL requirements and equitable estoppel against Wright’s defense
based on noncompliant POLs. First, the district court determined that Clark
and Pearl’s FEMA administrative appeal did not have any bearing on the
issues in the instant case because FEMA addressed whether certain damages
were covered by the SFIP and did not address the SFIP’s POL requirements.
Second, the district court determined that FEMA’s and Wright’s actions could
not operate as a waiver of the obligation of Clark and Pearl to file SFIP-
compliant POLs. As noted above, 44 C.F.R. § 61.13(d) provides “that no
provision of the policy may be altered, varied, or waived without the express
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written consent of the Federal Insurance Administrator.” Gowland, 143 F.3d
at 954 (emphasis in original). No such waiver was sought or obtained here.
Last, the district court held that policyholders who have not complied
with the SFIP may not assert equitable estoppel. Indeed, “[w]hen 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 the Constitution.” Id. at 955. Neither this court
nor the Supreme Court has upheld an estoppel claim resulting in the payment
of money out of the United States treasury. We see no error here.

V. Additional discovery
Finally, we consider Clark and Pearl’s argument that the district court
abused its discretion in not allowing them to conduct additional discovery.
Specifically, they argue further discovery would provide evidence of whether
FEMA’s policies and procedures require that POLs must be either notarized or
include the phrase “under penalty of perjury” and that such evidence would
establish a material fact issue as to whether their 2016 POLs complied with
the SFIP. The district court determined that Clark and Pearl failed to
establish a material fact dispute and failed to show how additional discovery
would change the outcome of their claim.
“We review a denial of a Rule 56(d) motion for discovery for an abuse of
discretion.” Smith v. Reg’l Transit Auth., 827 F.3d 412, 417 (5th Cir. 2016). If
the nonmovant shows an inability to support its opposition factually, Rule
56(d) allows a district court to grant additional discovery before ruling on a
motion for summary judgment. F
ED. R. CIV. P. 56(d). Although such discovery
requests are “broadly favored and should be liberally granted,” the party
seeking discovery must first demonstrate “how additional discovery will create
a genuine issue of material fact.” Smith, 827 F.3d at 422–23 . In other words,
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the requesting party must “set forth a plausible basis for believing that
specified facts, susceptible of collection within a reasonable time frame,
probably exist and indicate how the emergent facts, if adduced, will influence
the outcome of the pending summary judgment motion.” Id. at 423. Thus,
when we evaluate a district court’s denial of additional discovery, “we generally
assess[] whether the evidence requested would affect the outcome of a
summary judgment motion.” Id.
The discovery Clark and Pearl seek regarding FEMA’s policies and
procedures would provide further evidence to support their waiver and
estoppel argument. As noted, though, neither argument is permissible in a
claim for breach of contract under the SFIP in this instance. The evidence
requested therefore would not affect the outcome. The district court did not
abuse its discretion in denying additional discovery.
AFFIRMED.
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