The opinion of the court was delivered by: Shapiro, Senior District Judge.
Plaintiff Dr. William H. Mahood ("Mahood"), filing a complaint
against Omaha Property and Casualty ("Omaha"), initially alleged
breach of contract and bad faith in connection with a flood
insurance claim. Because the flood insurance policy in dispute is
a Standard Flood Insurance Policy ("SFIP"), issued under the
National Flood Insurance Act of 1968, 42 U.S.C. § 4001 et seq.,
federal law governs this dispute*fn1 and state claims are
preempted; plaintiff voluntarily withdrew his state law-based
claims and is proceeding on a claim under the policy. The court
held a non-jury trial on plaintiff's SFIP claim for partial
denial of coverage. In accordance with Federal Rule of Civil
Procedure 52(a), the court enters the following findings of fact
and conclusions of law:
1. Mahood is the owner of the property located at 6250 West
Valley Green Road, Flourtown, Pennsylvania 19031.
2. Part of the building structure on said property (the Mahood
home) was constructed in approximately 1746; an addition was
built in the 1980's. The premises are situated on a flood plain.
3. At all times relevant hereto, plaintiff's property was
insured by a Standard Flood Insurance Policy ("SFIP"), codified
at 44 C.F.R. Pt. 61, App. A(1) (1998), issued by defendant Omaha.
4. The instant SFIP covered the building only (no contents
coverage) with the limit of $250,000.00, less a $1,000.00
deductible. $250,000.00 is the maximum amount of insurance
available under the National Flood Insurance Act.
5. The replacement cost of the Mahood home would be
$296,000.00. Tr. at 23-24.
6. On September 16, 1999, during Hurricane Floyd, there was a
flood loss to Mahood's home. Tr. 2/76.
7. The insurance policy with Omaha was in full force and effect
on the date of the loss.
8. During the flood, waters rose to a level of approximately 39
inches inside the home.
9. The home was uninhabitable after the flood; the flood
damaged the first floor structure and electrical, plumbing, and
mechanical systems. In addition, Mahood's well water was not
10. After the flood, the furniture inside the home was in
disarray. Floors were buckled and wall plaster was peeling. Tr.
at 36-37. The paint on the walls and trim was peeling and there
was mud and muck everywhere. Tr. at 149, 2/77. The walls and
ceilings of the entire first floor were covered with a powdery
mildew and a putrid odor permeated the home. Tr. at 60, 149-50,
11. Every surface of the kitchen was affected by the flood. Tr.
12. Every surface of the dining room was affected by the flood.
Tr. at 40.
13. Every surface of the powder room was affected by the flood.
Tr. at 41.
14. The living room suffered the worst damage. Tr. at 42. The
walls of the living room were comprised of an eighteen-inch thick
stone wall, plastered over; in front of the stone wall was a stud
system of two-by-fours, sheathed with wire lath and more plaster.
Both wall systems needed repair. Tr. at 67-68.
15. The living room floor joists all needed replacement and all
were replaced. Not all the joists were flood-damaged; some were
rotted due to their age. Tr. at 57-59.
16. On or about September 24, 1999, an independent adjuster
from Simsol Insurance Services ("Simsol") inspected the premises
on behalf of Omaha to determine the flood damage.
17. Robert Reinhart of Simsol estimated that the Mahood home
suffered covered damages that would cost $83,053.54 to repair.
18. From this amount, Omaha deducted depreciation in the amount
of $9,721.15. The claim was further subject to a deductible of
$1,000.00. Omaha considered the payable claim to be $72,332.39.
19. Upon proper proof of repairs, Omaha was willing to pay an
additional $9,502.74 it said had been subtracted for
20. Omaha did not provide evidence supporting the Simsol
estimate at trial.
21. Mahood hired his own public adjuster, Young Adjusting
22. Richard Reigner ("Reigner") was the Young employee assigned
to adjust Mahood's loss. Reigner is a licensed public insurance
adjuster in Pennsylvania and New Jersey and has been employed ...