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Psychiatric Solutions, Inc. v. Federal Emergency Management Agency

United States District Court, E.D. Pennsylvania

March 31, 2015

PSYCHIATRIC SOLUTIONS, INC.
v.
FEDERAL EMERGENCY MANAGEMENT AGENCY, et al

For PSYCHIATRIC SOLUTIONS, INC., Plaintiff: HARRY P. BEGIER, JR., LEAD ATTORNEY, LAW OFFICES OF HARRY P. BEGIER, JR., PHILADELPHIA, PA.

For FIDELITY NATIONAL PROPERTY AND CASUALTY INS. CO., Defendant: DANIEL DAVID KREBBS, LEAD ATTORNEY, MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN, PHILADELPHIA, PA; DEANI BEARD MILANO, LEAD ATTORNEY, NIELSEN CARTER & TREAS LLC, METAIRIE, LA.

Page 491

MEMORANDUM

L. FELIPE RESTREPO, United States District Judge.

The National Flood Insurance Program (" NFIP" ) adjusts and pays flood insurance claims through private insurers who act as fiscal agents of the United States Treasury. These private insurers issue Standard Flood Insurance Policies. Plaintiff, Psychiatric Solutions, Inc. (" Psychiatric Solutions" ), had a Standard Flood Insurance Policy (" SFIP" ) through its insurer, Fidelity National Property and Casualty Ins. Co. (" Fidelity" ). Dissatisfied with the

Page 492

amount paid by Fidelity for Psychiatric Solutions' flood loss after Hurricane Irene, plaintiff now sues defendant Fidelity for breaching the SFIP contract and for federal extra-contractual claims of fraud and misrepresentation.[1]

Before the Court is defendant's Motion for Summary Judgment on each of Psychiatric Solutions' claims.[2] For the reasons explained below, defendant's motion is granted.

I. Background

Fidelity issued a SFIP to Psychiatric Solutions that provided flood insurance coverage for plaintiff's property located in Fort Washington, Pennsylvania. (JA 4, 7.)[3] A SFIP is an insurance policy that is part of a larger statutory framework designed to encourage private insurers to provide flood protection. See Suopys v. Omaha Prop. & Cas., 404 F.3d 805, 807 (3d Cir. 2005). As part of this statutory framework, Fidelity acted as a fiscal agent of the government by issuing SFIPs, which implemented terms and conditions of the Federal Emergency Management Agency (" FEMA" ). Id. SFIP claims are paid from federal funds. Id.

The SFIP issued to Psychiatric Solutions by Fidelity was effective from September 4, 2010 through September 4, 2011. (JA 4.) A few days before the policy expired, Psychiatric Solutions suffered from flood damage caused by Hurricane Irene on August 28, 2011. (JA 7.)

After inspections and approval, Fidelity paid $500,000 for the damage to the building on December 20, 2011, and $134,275.03 for the actual cash value (" ACV" ) of the personal property on April 25, 2013. (JA 9 & 10.) In dispute is Fidelity's handling and payment of Psychiatric Solutions' personal property claim.

The day after Hurricane Irene, Psychiatric Solutions notified Fidelity of the damage, and on August 30, Fidelity assigned an independent adjuster. (JA 8.) Before the independent adjuster inspected the damage, Psychiatric Solutions' property was flooded again on September 8, 2011 by another storm. (JA 8.)[4] This second storm hit four days after Fidelity's policy expired. (JA 4, 8.) Three days after the second storm, the independent adjuster came to inspect the damage. (JA 101.) The personal property at issue in this litigation was discarded by plaintiff prior to the independent adjuster's inspection. (JA 9.) In that the personal property was not available for inspection by the independent adjuster, he prepared an ACV ...


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