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Pittman v. Farmers Fire Insurance Exchange

United States District Court, W.D. Missouri, Western Division

July 24, 2015

CATHERINE LYNN PITTMAN et al., Plaintiffs,


GREG KAYS, Chief District Judge.

This case is about a couple that bought an insurance policy, believed it said one thing, then found out too late that they were wrong. Defendant Colby Yoder ("Yoder"), an insurance agent with Defendant Farmers Fire Insurance Exchange ("Farmers"), sold a flood insurance policy to Plaintiffs Catherine Lynn Pittman ("Cathy Pittman") and Troy Vernon Pittman (collectively, "the Pittmans"). The Pittmans claim Yoder misrepresented that their policy would cover all contents of their basement from flood damage. After floodwaters inundated their basement and ruined the items they kept there, the Pittmans read their policy for the first time and learned that it actually excluded most basement contents.

Yoder now moves for summary judgment on all claims against him (Doc. 44). As explained below, the Court holds that: Yoder has waived his real party in interest challenge; the Pittmans have abandoned their breach of contract and vexatious refusal to pay claims; there is no genuine dispute over facts material to the negligent procurement claim; federal law does not preempt the Pittmans' negligent misrepresentation claim; and there is a genuine dispute over facts material to that claim. Therefore, Yoder's motion is GRANTED IN PART and summary judgment is granted in his favor on all but the negligent misrepresentation claim.


A moving party is entitled to summary judgment if he "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Material facts are those "that might affect the outcome of the suit under the governing law, " and a genuine dispute over a material fact is one "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether the movant has met this standard, the court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in his favor. Chavis Van & Storage of Myrtle Beach, Inc. v. United Van Lines, LLC, 784 F.3d 1183, 1193 (8th Cir. 2015).

The movant must identify portions of the record that demonstrate the absence of a genuine dispute of material fact. Fed.R.Civ.P. 56(a). If the movant does so, then the nonmovants must respond by submitting evidentiary materials establishing the existence of a genuine dispute surrounding an element essential to their case. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). To carry this burden, the nonmoving parties must specifically controvert any given fact set forth in the movant's brief, or else those facts are deemed admitted. L.R. 56.1(a). The nonmoving parties must also "refer specifically to those portions of the record upon which [they] rel[y]." Id.

In their suggestions opposing summary judgment, the Pittmans do not specifically controvert most of Yoder's facts, so the Court deems all of those facts admitted. See id. They do attach a single affidavit from Cathy Pittman to support their version of the facts, but fail to tie the affidavit to any specific facts they dispute. This violates Local Rule 56.1(a). As a remedy, Yoder urges the Court to strike the affidavit. While the Court strictly enforces Local Rule 56.1(a), see, e.g., United States v. Brice, No. 3:10-CV-5062-DGK, 2012 WL 1078191, at *1 (W.D. Mo. Mar. 30, 2012), because the Pittmans offer only a simple, three-page affidavit as additional facts, the Court has no difficulty figuring out the exact source of the few facts they advance. Therefore, their transgression is harmless and the Court declines to strike the affidavit.


For purposes of deciding the motion, the Court finds the relevant facts to be as follows. This dispute concerns flood insurance, an area "governed to some extent by rules quite different from those that would apply in a normal insurance dispute." McCarty v. S. Farm Bureau Cas. Ins. Co., 758 F.3d 969, 972 (8th Cir. 2014). Flood insurance policies are not an inherently lucrative product for insurance companies. 11 Steven Plitt et al., Couch on Insurance § 153:51 (3d ed. Supp. 2014). Floods often evade reliable prediction, recur frequently in some areas, and wreak extensive damage. Id. This led private insurance companies to refuse to offer flood insurance on flood-prone property. H.R. Rep. No. 90-786, at 4-5 (1967); see 42 U.S.C. § 4001(b)(1). Without an adequate flood insurance market serving these areas, the federal government was spending large sums of money on flood disaster aid. 42 U.S.C. § 4001(a).

To address this problem, in 1968 Congress enacted the National Flood Insurance Program ("NFIP"). 42 U.S.C. §§ 4001-4131. As amended, the NFIP charges the Federal Emergency Management Agency ("FEMA") with providing unified flood insurance coverage nationwide below actuarial rates. Id. § 4011(a).

Private sector property insurance companies may participate in the NFIP as so-called "Write-Your-Own" ("WYO") companies. Id. § 4071(a)(1); 44 C.F.R. §§ 61.13(f), 62.23-.24. "In essence, the insurance companies serve as administrators for the federal program." DeCosta v. Allstate Ins. Co., 730 F.3d 76, 83 (1st Cir. 2013). WYO companies issue flood insurance policies in their own name and handle the adjustment, settlement, payment, and defense of all claims arising from those policies. 44 C.F.R. § 62.23(d). WYO companies deposit the premiums they collect into the U.S. treasury, 42 U.S.C. § 4017(d), and in return receive a commission based on claims paid, 44 C.F.R. pt. 62, app. A, art. III. The federal government, in turn, pays claims and the WYO companies' defense costs. 42 U.S.C. § 4017(a)(5), (d). The federal government also sets the terms of the policies by requiring the use of the Standard Flood Insurance Policy ("SFIP"), the terms of which cannot be varied without express permission from FEMA. 44 C.F.R. §§ 61.4(b), 61.13(d).

It is through this program that the Pittmans came to buy a flood insurance policy. The Pittmans owned a single family home in Peculiar, Missouri, on property that abuts a river. In 2007, the river overflowed and almost flooded their basement. The Pittmans worried that a future flood would successfully reach their basement.

Cathy Pittman contacted Yoder, an insurance agent for Farmers, a WYO company. They discussed the Pittmans purchasing a flood insurance policy. Cathy Pittman specifically told Yoder that she wanted a flood insurance policy to cover the contents of her basement. She detailed the high value possessions she kept in the basement, including furniture, televisions, kitchen appliances, a computer, and hunting supplies.

Because the SFIP was the only flood policy available, [1] Yoder prepared to sell Cathy Pittman that policy. He asked her several questions to complete the SFIP application, including questions about her basement. Yoder said that he could procure a federal flood insurance policy that covered up to $250, 000 for the house and $100, 000 for its contents. He specifically promised that the policy would cover all of the contents of their home, including items in the basement. Cathy Pittman ...

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