Theory Is That Carriers Are An Extension Of FEMA In Remitting Payments So As To Trigger Fee Recovery Under EAJA.
Back in 2009, the Fifth Circuit in Dwyer v. Fidelity National Prop. & Cas. Ins. Co., 565 F.3d 284, 289 (5th Cir. 2019) foreclosed recovery of attorney’s fees in coverage litigation by flood plaintiffs against insurance companies arising out of floods arising under the National Flood Insurance Program (NFIP)—a private-public partnership with FEMA by which the carriers remit payments to flood insurance victims.
However, relying on an Eleventh Circuit decision, three decisions from the Middle District of Florida recently have found attorney’s fees allowable under the Equal Access to Justice Act (EAJA) to prevailing flood victims in insurance coverage suits, founded on the theory that insurance payments were “functionally remitted” through FEMA (the U.S. agency requisite necessary under EAJA). See, e.g. Lovers Lane LLC v. Wright National Flood Ins. Co., 2019 WL 130362 (M.D. Fla. Jan. 9, 2019); Collier v. Wright National Flood Ins. Co., 2019 WL 1531895 (M.D. Fla. Apr. 9, 2019); Arevalo v. American Bankers Ins. Co. v. Florida, 2019 WL 2476644, at *3 (M.D. Fla. June 13, 2019). However, the Southern District of Florida has expressly disagreed with and has refused to follow Arevalo in a footnote in Hampson v. Wright National Flood Ins. Co., Case No. 4:19-cv-10093-KMM (S.D. Fla. Aug. 12, 2019).
Looks like this split likely will have to be decided in future appeals brought before the Fifth and Eleventh Circuit Court of Appeals.
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