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(Article from Insurance Law Alert, January 2017)

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A California federal district court dismissed flood-related property damage claims based on the homeowner’s failure to comply with the federal jurisdictional requirements of the National Flood Insurance Program (“NFIP”).  Apatow v. Am. Bankers Ins. Co. of Florida, 2016 WL 7422288 (C.D. Cal. Dec. 21, 2016).

When Apatow’s home was damaged by storm surge, he sought coverage under a Standard Flood Insurance Policy.  The insurer denied the claim.  Nearly one year later, Apatow filed suit in state court alleging breach of contract.  The insurer removed the case to federal court and sought dismissal based on Apatow’s failure to comply with the requirements of the NFIP, which requires plaintiffs to sue insurers in federal court within one year of a claim denial.  The court held that Apatow’s failure to meet this jurisdictional requirement warranted dismissal as a matter of law.  In so ruling, the court rejected Apatow’s argument that filing in state court was sufficient to confer jurisdiction on the federal court.  The court also rejected the argument that the insurer had extended the limitations period by “reopening” the case.  Apatow argued that by engaging in continued communications, and by accepting a new Proof of Loss and issuing a check for partial damage, the insurer had “reopened” the case.  The court disagreed, explaining that the insurer’s consideration of new information for claim coverage does not restart the limitations period.  The court ruled that even if the insurer’s decision to grant coverage for some of the claims could be construed as “reopening” the case for purpose of extending the statute of limitations, “once Defendant denied each of Plaintiff’s claims, Plaintiff was put on notice that a suit would need to be filed within one year in federal court.  The later decision to grant certain claims did not affect the other denials, which remained in place.”