​In a lawsuit regarding coverage disputes for damage caused by Superstorm Sandy, the United States District Court for the District of New Jersey has dismissed claims against a homeowners’ insurer for the failure to comply with the policy’s suit limitation clause. The Court In Brown v. State Farm Ins. Co. also dismissed claims against an independent flood insurance adjusting company as preempted by FEMA, as well as claims against an insurer based upon evidence that the flood policy was directly issued by FEMA. Clark & Fox attorney Erin Nulty represented the independent adjusting company in this matter.

​Brown concerned claims for Sandy-related damage submitted by policyholders to their flood insurer and homeowners’ insurer. The homeowners’ insurer paid a fraction of the damages claimed by the policyholder, while the flood insurer denied some claims and left others unresolved. The policyholders filed suit against the Federal Emergency Management Association (“FEMA”), FEMA’s administrator, the flood insurer, the homeowners’ insurer, an independent adjusting company that handled the flood and homeowners’ claim, and another adjusting company to which some of the work was allegedly subcontracted (that was dismissed early on in the litigation). In the Complaint, the policyholders alleged that the homeowners’ insurer also issued the flood policy as a “write-your-own” (“WYO”) carrier for FEMA. The homeowners’ insurer and primary adjusting company filed motions to dismiss.

​In ruling upon these motions, the Court observed that while insurance policy suit limitation clauses were tolled under New Jersey law until a claim was denied, the present lawsuit was filed over a year after the homeowners’ insurer unequivocally denied all of the policyholders’ claims. The Court therefore held that the claims against the homeowners’ insurer were barred by the policy’s one-year suit limitation clause. The Court further stated that the flood policy attached to the complaint demonstrated that the policy was issued directly by FEMA, rather than the homeowners’ insurer. The Court therefore dismissed the claims against the homeowners’ carrier.

​The Court also held that the claims against the primary independent adjuster pertaining to flood insurance were preempted under the National Flood Insurance Act (“NFIA”). While the NFIA authorizes claims against FEMA under flood insurance policies issued directly by FEMA, no statute or regulation authorizes claims against other parties relating to standard flood insurance policies. The Court therefore dismissed the claims against the adjuster pertaining to flood insurance.

​Finally, as FEMA and its administrator had previously been dismissed from the lawsuit in light of the policyholder’s contention that the flood policy was a “write-your-own” policy, the Court ordered that these parties be reinstated.

​Brown demonstrates that the contentious nature of Sandy-related claims will not distract courts from enforcing clear and unambiguous policy provisions pertaining to such claims.