Defense Win
Case Dismissed under the National Flood Insurance Act
On Friday, January 24, 2024, attorneys Pierce Rand and Jay Bowlby of deMaine Seeberger PLLC secured a CR 12(b)(6) dismissal of state-law negligent misrepresentation and Consumer Protection Act claims asserted against their clients in Lewis County Superior Court.
The claims arose from the handling of an insurance claim made by a property owner, Chehalis Preservation Limited Partnership, who was insured under a Standard Flood Insurance Policy issued by the Federal Emergency Management Agency (FEMA) pursuant to the National Flood Insurance Act. Chehalis hired the plaintiff, BluSky Restoration Contractors, LLC, to perform asbestos abatement work on the property following a flood. BluSky sued the independent adjuster hired by FEMA to perform adjustment work on the property, alleging that the adjuster represented to BluSky that the asbestos abatement work would be covered under the Standard Flood Insurance Policy, that BluSky relied on this representation in agreeing to perform the abatement work for Chehalis, and that, after BluSky performed the abatement work, it learned that the work was not covered under the Policy.
The defendants moved to dismiss for failure to state a valid claim. They asserted that BluSky’s state-law claims were expressly preempted by three federal regulations prescribing the Standard Flood Insurance Policy, each of which state: “This policy and all disputes arising from … the handling of any claim under the policy are governed exclusively by the flood insurance regulations issued by FEMA, the National Flood Insurance Act of 1968, as amended (42 U.S.C. 4001, et seq.), and Federal common law.” 44 C.F.R. pt. 61, app., A(1), art. X; id. app. A(2), art. X; id. app. A(3), art. XI (emphasis added).
The defendants argued that this language is not limited to claims asserted by insureds against the insurer. They argued that this language also covers claims asserted by third parties to the insurance policy against independent adjusters, as long as those claims arise from the handling of a claim under the Standard Flood Insurance Policy.
The Court agreed and granted the motion to dismiss. The case is BluSky Restoration Contractors, LLC v. Administrative Strategies, LLC, No. 24-2-01126-21.
The claims arose from the handling of an insurance claim made by a property owner, Chehalis Preservation Limited Partnership, who was insured under a Standard Flood Insurance Policy issued by the Federal Emergency Management Agency (FEMA) pursuant to the National Flood Insurance Act. Chehalis hired the plaintiff, BluSky Restoration Contractors, LLC, to perform asbestos abatement work on the property following a flood. BluSky sued the independent adjuster hired by FEMA to perform adjustment work on the property, alleging that the adjuster represented to BluSky that the asbestos abatement work would be covered under the Standard Flood Insurance Policy, that BluSky relied on this representation in agreeing to perform the abatement work for Chehalis, and that, after BluSky performed the abatement work, it learned that the work was not covered under the Policy.
The defendants moved to dismiss for failure to state a valid claim. They asserted that BluSky’s state-law claims were expressly preempted by three federal regulations prescribing the Standard Flood Insurance Policy, each of which state: “This policy and all disputes arising from … the handling of any claim under the policy are governed exclusively by the flood insurance regulations issued by FEMA, the National Flood Insurance Act of 1968, as amended (42 U.S.C. 4001, et seq.), and Federal common law.” 44 C.F.R. pt. 61, app., A(1), art. X; id. app. A(2), art. X; id. app. A(3), art. XI (emphasis added).
The defendants argued that this language is not limited to claims asserted by insureds against the insurer. They argued that this language also covers claims asserted by third parties to the insurance policy against independent adjusters, as long as those claims arise from the handling of a claim under the Standard Flood Insurance Policy.
The Court agreed and granted the motion to dismiss. The case is BluSky Restoration Contractors, LLC v. Administrative Strategies, LLC, No. 24-2-01126-21.