McGair v. American Bankers Insurance
2012 U.S. App. LEXIS 18594
| 1st Cir. | 2012Background
- NFIP/WYO framework governs federally backed flood policies; SFIP terms supersede Declarations Page terms absent express written consent to alteration.
- The McGairs bought a PRP SFIP in 2006 for flood coverage, including basement contents limited by SFIP Article III(A)(8) and (B)(3).
- A 2010 flood damaged the home and basement; insurer paid a limited amount, asserting basement contents were not fully covered.
- Declarations Page indicated basement contents location as 'basement and above' and stated overall contents coverage up to $100,000, with no SFIP limitations identified there.
- District court granted summary judgment for American Bankers, holding SFIP terms control and no alteration by Declarations Page; McGairs appeal.
- Court addresses jurisdiction and whether SFIP controls over Declarations Page and the alleged ambiguity in the policy terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SFIP controls over Declarations Page | McGairs argue declarations create ambiguity in coverage | American Bankers says SFIP cannot be altered; declarations irrelevant | SFIP controls; declarations cannot alter terms without consent |
| Whether Declarations Page creates ambiguity favorable to McGairs | Declaration 'basement and above' creates ambiguity on basement contents | No ambiguity because SFIP terms trump; no alteration permitted | No ambiguity; SFIP terms govern and limitations apply |
| Whether federal question jurisdiction exists | N/A | Dispute jurisdiction analysis under §4072 vs §1331 | Federal question jurisdiction under §1331; not necessary to reach §4072 for outcome |
| Liability of WYO company for damages | McGairs seek damages against insurer as SFIP party | WYO acts as fiscal agent; not liable for misinterpretation within SFIP limits | WYO liability not triggered; strict construction of SFIP applies |
Key Cases Cited
- Palmieri v. Allstate Ins. Co., 445 F.3d 179 (2d Cir. 2006) (NFIP regulations back federal administration and SFIP terms)
- Phelps v. Fed. Emergency Mgmt. Agency, 785 F.2d 13 (1st Cir. 1986) (Interpretations of SFIP and federal regulation principles)
- Christensen v. Harris Cnty., 529 U.S. 576 (S. Ct. 2000) (Agency manuals lack force of law; no Chevron deference for SFIP interpretations)
- Jacobson v. Metropolitan Property & Casualty Insurance Co., 672 F.3d 171 (2d Cir. 2012) (SFIP must be strictly construed; declarations cannot override terms)
- Wagenmaker v. Amica Mut. Insurance Co., 369 F. App'x 149 (1st Cir. 2010) (Declarations page controlling in private policy; not applicable to SFIP)
- Studio Frames Ltd. v. Standard Fire Ins. Co., 369 F.3d 376 (4th Cir. 2004) (NFIP context; federal question jurisdiction and SFIP interpretation)
- Downey v. State Farm Fire & Cas. Co., 266 F.3d 675 (7th Cir. 2001) (NFIP interpretation and WYO responsibilities)