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Hodde v. American Bankers Insurance Co.

United States Court of Appeals, Eighth Circuit

March 7, 2016

Lyle Hodde; Alice Hodde; Hodde & Sons Limited Partnership, Plaintiffs - Appellants
v.
American Bankers Insurance Company of Florida, Defendant - Appellee

Submitted October 21, 2015

Appeal from United States District Court for the Southern District of Iowa - Council Bluffs.

For Lyle Hodde, Alice Hodde, Hodde & Sons Limited Partnership, Plaintiffs - Appellants: Jon Harry Johnson, JOHNSON LAW, P.L.C., Sidney, IA.

For American Bankers Insurance Company of Florida, Defendant - Appellee: Terry J. Abernathy, PICKENS & BARNES, Cedar Rapids, IA; Samuel Joseph Arena, Jr., Craig Blackman, Gina M. Stowe, STRADLEY & RONON, Philadelphia, PA; David Paul Niemeier, GREENSFELDER & HEMKER, Saint Louis, MO.

Before RILEY, Chief Judge, SMITH and SHEPHERD, Circuit Judges.

OPINION

Page 1143

SMITH, Circuit Judge.

In 2011, floodwaters from the Missouri River destroyed the Hoddes' property in Iowa. Prior to the flood, the Federal Emergency Management Agency (FEMA) issued a flood-in-progress designation. The Hoddes believed that the FEMA designation rendered their two Standard Flood Insurance Policies (SFIPs) worthless for the pending flood and elected to cancel them. One year later, however, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (FIRA), a remedial amendment that would have extended coverage for the Hoddes but for the fact that they had canceled the SFIPs. The Hoddes filed this suit against American Bankers Insurance Company of Florida (" American Bankers" ), the issuer of the SFIPs, seeking reinstatement of the SFIPs and payment for their flood loss. After a bench trial, the district court[1] concluded that the Hoddes were chargeable with knowledge of the terms of the SFIPs and that the FIRA does not reinstate the canceled SFIPs. The Hoddes appeal. We affirm.

I. Background

The Hoddes own property near the Missouri River in Iowa. On May 31, 2011, they purchased two SFIPs from American Bankers pursuant to the National Flood Insurance Program. The SFIPs provided a 30-day waiting period in which the Hoddes could cancel the SFIPs and receive a full refund. Additionally, the SFIPs would not cover any flood damage caused by a flood that FEMA declared to be in progress before the waiting period expired.

On June 6, FEMA declared that the Missouri River was flooding. That flood-in-progress designation included the county in which the Hoddes' property was located. Under the law at the time of the flood, the Hoddes' recently purchased insurance policies were rendered ineffective for the existing flooding event because the flood would be deemed to have occurred

Page 1144

before the expiration of the 30-day waiting period. The Hoddes were thus left with insurance policies that apparently would not cover impending flood damage from a major flood of the Missouri River. Shortly after the FEMA designation, the Hoddes' insurance agent informed them that they could cancel the SFIPs and receive a full refund. On June 20, Mr. Hodde executed a cancellation request for the two policies. And in July, after the expiration of the 30-day waiting period, the Hoddes' property was destroyed by floodwaters from the Missouri River. Had FEMA not declared the flood in progress, the insurance policies--if not canceled--would have covered the loss.

One year later, Congress passed the FIRA. The FIRA includes a provision that mitigated the effects of FEMA's preemptive flood-in-progress designation for the 2011 flood of the Missouri River. Specifically, the FIRA extended coverage for landowners who purchased flood insurance between May 1, 2011, and June 6, 2011, and did not suffer flood damage for at least 30 days. The Hoddes satisfy these requirements. The Hoddes filed a claim, but American Bankers denied coverage because the Hoddes canceled the SFIPs for a ...


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