Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

BIANCHI v. STATE FARM FIRE AND CAS. CO.

August 28, 2000

ROBERT BIANCHI AND JANET BIANCHI, PLAINTIFFS,
V.
STATE FARM FIRE AND CASUALTY COMPANY, RON EMILIO, DEFENDANTS.



The opinion of the court was delivered by: Ware, District Judge.

AMENDED ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' SECOND CAUSE OF ACTION AND GRANTING DEFENDANTS' MOTIONS TO STRIKE*fn1

I. INTRODUCTION

Defendants move to dismiss Plaintiffs' state law claim for breach of the implied covenant of good faith and fair dealing and to strike their prayers for punitive and emotional distress damages and attorneys' fees on the ground that the National Flood Insurance Act of 1968 ("NFIA") preempts such a state law claim. The Court finds that the state law claim is barred by the NFIA and dismisses it from this case. In addition, remedies sought by Plaintiffs are disallowed by NFIA and thus, the Court orders the prayer for punitive damages, emotional distress damages and attorneys' fees stricken.

II. BACKGROUND

In February 1997, Plaintiffs Robert and Janet Bianchi purchased flood insurance from Defendant State Farm and Casualty Company through its authorized agent Ron Emilio. The policy was issued pursuant to the National Flood Insurance Act ("NFIA") of 1968. Ron Emilio sold to Plaintiffs a standard State Farm flood insurance policy which insured the "dwelling" of Plaintiffs' home at 1530 Dana Avenue, Palo Alto, California, against loss of damage by or from a flood in an amount of up to $188,100.00. The policy was effective from February 23, 1997 to February 23, 1998. On February 3, 1998, Plaintiffs' home was flooded when water from the nearby San Francisquito Creek overflowed and poured onto Plaintiffs' property. The flood allegedly damaged both Plaintiffs' dwelling and personal property in an amount exceeding the limits of the flood insurance policy. In accordance with the policy, Plaintiffs submitted a written proof of loss to Defendants on April 27, 1998. In response, Defendant State Farm tendered a check to Plaintiffs for $75,000.00.

Plaintiffs contend that the $75,000.00 is insufficient to pay the covered loss. Plaintiffs contend that State Farm has breached the policy and has in bad faith refused to pay Plaintiffs the full benefits under the policy. Plaintiffs brought the current action against both State Farm and its agent, Ron Emilio. Plaintiffs are suing State Farm for breach of the insurance contract and breach of the covenant of good faith and fair dealing. Plaintiffs are suing Ron Emilio for negligently procuring an insurance policy with a coverage limitation that is inconsistent with the coverage limitation the Bianchis had originally agreed to.

Defendants move to dismiss Plaintiffs' second cause of action for breach of the implied covenant of good faith and fair dealing. Defendants also move to strike Plaintiffs' request for emotional distress damages, exemplary damages and attorneys fees and to strike Plaintiffs' surrebuttal and notice of newly published case law.

III. STANDARDS

Pursuant to Rule 12(b)(6), Fed.R.Civ.P., a claim may be dismissed as a matter of law for one of two reasons: "(1) lack of a cognizable legal theory or (2) insufficient facts under a cognizable legal theory." Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). When ruling on a motion to dismiss, "[a]ll material allegations in the complaint are to be taken as true and construed in the light most favorable to the non-moving party." Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986); NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). However, the Court will not accept wholly conclusory allegations. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981), cert. denied, 454 U.S. 1031, 102 S.Ct. 567, 70 L.Ed.2d 474 (1981); Kennedy v. H & M Landing, Inc., 529 F.2d 987, 989 (9th Cir. 1976). Further, when on the basis of a dispositive issue of law, no construction of factual allegations of a complaint will support the cause of action, dismissal of the complaint is appropriate. Executive 100, Inc. v. Martin County, 922 F.2d 1536 (11th Cir. 1991), cert. denied, 502 U.S. 810, 112 S.Ct. 55, 116 L.Ed.2d 32 (1991).

IV. DISCUSSION

A. Plaintiffs' Claim for Breach of the Covenant of Good Faith and Fair Dealing is Not Recognized Under the NFIA

The National Flood Insurance Act of 1968 has enabled the availability of flood insurance due to a joint partnership between the federal government and the private insurance industry. 42 U.S.C. § 4001(b), (d). The National Flood Insurance Program is a federally supervised and guaranteed program that is administered by the Federal Emergency Management Agency ("FEMA") pursuant to the NFIA and its corresponding regulations. See 44 C.F.R. § 59.1-77.2. Congress enacted this statute in order to limit damage caused by flood disasters through prevention and protective measures, and to make flood insurance "available on reasonable terms and conditions" to those who qualify. 42 U.S.C. § 4001(a)(1)-(4).

In addressing the issue of whether state or federal law should apply in resolving disputes arising from a policy issued pursuant to the NFIA, the 5th Circuit in West v. Harris, 573 F.2d 873, 881 (5th Cir. 1978), stated:

Since the flood insurance program is a child of Congress, conceived to achieve policies which are national in scope, and since the federal government participates extensively in the program both in a supervisory capacity and financially, it is clear that the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.