from the United States District Court for the Southern
District of Texas
BARKSDALE, SOUTHWICK, and HAYNES, Circuit Judges.
HAWKINS BARKSDALE, CIRCUIT JUDGE
Ekhlassi challenges the summary judgment awarded National
Lloyds Insurance Company pursuant to the National Flood
Insurance Act (the Act), 42 U.S.C. §§ 4001 et seq.
Primarily, at issue are: whether 42 U.S.C. § 4072
(providing for "original exclusive jurisdiction" in
district court and one-year limitations period) is applicable
to actions against Write-Your-Own (WYO) carriers
("private insurers [which] issue flood insurance
policies [underwritten by the Government] in their own
names" as part of the National Flood Insurance Program
(created by the Act), Campo v. Allstate Ins. Co.,
562 F.3d 751, 754 (5th Cir. 2009)); and, if § 4072 is
applicable, whether its one-year limitations period bars
action concerns the Act's government program, 42 U.S.C.
§§ 4071- 72, which allows private insurance
companies (as WYO carriers) to issue and administer
flood-insurance policies underwritten by the Government.
See Campo, 562 F.3d at 754. The required language of
the policy issued by WYO carriers is provided in the Code of
Federal Regulations in 44 C.F.R. pt. 61, App. A(1). See
Campo, 562 F.3d at 754 n.11. Lloyds participated in the
program as a WYO carrier.
above-referenced Standard Flood Insurance Policy, provided in
the Code of Federal Regulations and utilized by WYO carriers
participating in the National Flood Insurance Program, states
the "Requirements in Case of Loss". 44 C.F.R. Pt.
61, App. A(1), Art. VII (J). Among those requirements, the
policyholder "must . . . send [the insurer] a proof of
loss, which is [the insured's] statement of the amount
[the insured is] claiming under the policy [and is] signed
and sworn to by [the insured]". Id.
insured his house in Houston, Texas, with a National Flood
Insurance Program policy from Lloyds and a homeowner's
policy from Auto Club Indemnity Company (ACIC). ACIC is not a
party on appeal. An extensive rain-storm that caused flooding
damaged Ekhlassi's home on 25 May 2015, and he reported
the loss to Lloyds the next day.
May 2015, the Federal Emergency Management Agency (FEMA)
issued a notice with a waiver for National Flood Insurance
Program policyholders, extending the time within which to
file a proof of loss by 180 days for "all claims for the
flood damage related to the Texas and Oklahoma flooding"
that began on 16 May 2015 and included Ekhlassi's house.
As stated in the notice, policyholders had "a total of
240 days after the date of loss" to file the proof of
loss. The notice stated it did "not . . . waive any
other provisions of the [Standard Flood Insurance
such non-waived provision in the policy is the one-year
statute of limitations. 44 C.F.R. Pt. 61, App. A(1), Art. VII
(R). That provision states: "If you do sue, you
must start the suit within one year after the date
of the written denial of all or part of the claim, and you
must file the suit in the United States District
Court of the district in which the covered property was
located at the time of loss." Id. (emphasis
had an adjuster inspect his house. After doing so, the
adjuster obtained estimates from contractors for the cost of
repair, which exceeded $200, 000. Lloyds also inspected the
house, and concluded flooding from the 25 May storm did not
cause much of the claimed damage.
result, Lloyds' subsequent 6 October 2015 letter to
Ekhlassi stated it had reviewed his adjuster's report and
would process a claim for $3, 768.25 upon receipt of a
"signed, dated and sworn to proof of loss". The
letter also stated it was "denying payment for any
building and contents items not subject to direct physical
loss by or from flood" and "denying payment for all
non-covered items located below the lowest elevated floor of
[Ekhlassi's house], pursuant to the Standard Flood
the point, the 6 October letter warned Ekhlassi about the
above-quoted, one-year limitations period. As noted, this
period is provided in the Act, 42 U.S.C. § 4072; its
regulations, 44 C.F.R. § 62.22(a); and the Standard
Flood Insurance Policy, id. Pt. 61, App. A(1), Art.
VII (R). Notably, "strict compliance with the provisions
of federal flood insurance policies is required because
payments are drawn from the federal treasury".
Shuford v. Fidelity Nat'l Prop. & Cas. Ins.
Co., 508 F.3d 1337, 1343 (11th Cir. 2007) (citation
submitted a proof of loss in late December 2015 for $274,
940.05. In response, Lloyds' 11 January 2016 letter to
Ekhlassi acknowledged receipt of the proof of loss, and
rejected all but $3, 768.25 (the amount offered by the 6
October letter). The 11 January letter also instructed
Ekhlassi to "refer to the denial letter dated October 6,
2015[, ] for what Federal law allows under the Standard Flood
Insurance Policy and for reasons of denial for damages that
have been claimed".
mid-January, Ekhlassi signed, inter alia, a
different proof of loss for $3, 768.25, but he disagreed with
the amount and stated his intent not to "conclude this
claim in any manner whatsoever".
year from the 11 January 2016 denial, Ekhlassi filed this
action in Texas state court on 11 January 2017. He claimed,
inter alia, breach of contract against Lloyds. This
action was removed to federal court on 24 April 2017.
the issuer of the homeowner's policy, filed a
summary-judgment motion, which was granted in November 2017.
(As noted, ACIC is not a party on appeal.)
also filed a summary-judgment motion, which was granted in
January 2018. Ekhlassi v. Nat'l Lloyds Ins. Co.,
295 F.Supp.3d 750 (S.D. Tex. 2018). The court ruled
Ekhlassi's action was time-barred, based on its
concluding the 6 October, not the 11 January, letter
triggered the one-year limitations period. Id. at
early February 2018, pursuant to Federal Rule of Civil
Procedure 59(e), Ekhlassi moved to reconsider the summary
judgment awarded Lloyds. The March 2018 order denying the
motion reiterated the court's prior holding: the 6
October letter served as the denial triggering the
governed by the Act, this action concerns a WYO carrier. Our
court has previously, and comprehensively, explained how the
WYO program operates:
By enacting the National Flood Insurance Act of 1968, 42
U.S.C. § 4001 et seq., Congress established the
[National Flood Insurance Program] to make flood insurance
available on reasonable terms and to reduce fiscal pressure
on federal flood relief efforts. FEMA administers the
[p]rogram. Within [that] [p]rogram, the WYO program allows
private insurers to issue flood insurance policies in their
own names. Under this framework, the federal government
underwrites the policies and private WYO carriers perform
significant administrative functions including
"arrang[ing] for the adjustment, settlement, payment and
defense of all claims arising from the policies." WYO
carriers must issue policies containing the exact terms and
conditions of the [Standard Flood Insurance Policy] set forth
in FEMA regulations. Additionally, FEMA regulations govern
the methods by which WYO carriers adjust and pay claims.
Although WYO carriers play a large role, the government
ultimately pays a WYO carrier's claims. When claimants
sue their WYO carriers for payment of a claim, carriers bear
the defense costs, which are considered "part of the ...
claim expense allowance"; ...