United States District Court, D. South Carolina, Charleston Division
William A. Roberts, Plaintiff,
Discover Home Loans, Inc; LenderLive Network, LLC; Lee S. Demarest; and Allstate Insurance Company, Defendant.
ORDER AND OPINION
Richard M. Gergel United States District Court Judge
matter is before the court on Plaintiff's motion to
remand. (Dkt. No. 19). For the following reasons,
Plaintiff's motion to remand is DENIED.
William Roberts owns a home at 794 Piccadilly Drive in
Charleston, South Carolina. (Dkt. No. 1-1 at 5). Plaintiff
maintained flood insurance for his home purchased through
Allstate Insurance Company ("Allstate"). (Dkt. No.
1-1 at 6). On July 31, 2014, Plaintiff renewed his flood
insurance policy (Dkt. No. 1-1 at 7). The policy period was
set to expire on July 31, 2015. Id., LenderLive Network
("LenderLive"), the servicer of a mortgage
Plaintiff took out on the home in late 2014, assumed
responsibility for paying the renewal premium when it came
due the following year. (Dkt. No. 1-1 at 8). This case arises
from Allstate's termination of Plaintiff's flood
insurance policy due to nonpayment of that premium.
participates in the National Flood Insurance Program
("NFIP") pursuant to the National Flood Insurance
Act ("NFIA") of 1968. 42 U.S.C. §§ 4001,
et seq. FEMA administers the NFIP. See 42 U.S.C.
§ 4011(a). Congress established the NFIP to reduce
losses caused by flood damage through a uniform national
policy by which flood insurance would be made available on
reasonable terms and conditions. Id. Premiums
collected from policy holders are deposited in the U.S.
Treasury. 42 U.S.C. § 4017(d).
this framework, Allstate serves as a Write-Your-Own carrier
("WYO"), whereby it is allowed to issue flood
insurance policies under the government program in its own
name. 44 C.F.R. § 62.23. All flood insurance policies
issued by WYO carriers under the WYO program must mirror the
exact terms and conditions found in 44 C.F.R. Part 61,
Appendix A. 44 C.F.R. §§ 61.4(b), 62.23 (c)-(d)
(mandating exact terms). This policy is known as a Standard
Flood Insurance Policy ("SFIP"). The SFIP provides:
This policy and all disputes arising from the handling of any
claim under the policy are governed exclusively by the flood
insurance regulations issued by FEMA, the National Flood
Insurance Act of 1968, as amended (42 U.S.C. § 4001, et
seq.), and Federal common law.
(Dkt. No. 1 at 5 (citing 44 C.F.R. Pt. 61, App. A(1), Article
and procedures governing the issuance and administration of
SFIPs are published in FEMA's Flood Insurance Manual
("The Manual"). (Dkt. No. 32 at 13). The Manual
regulates the renewal and termination of SFIPs as follows:
[1.] The National Flood Insurance Program (NFIP) must issue a
notice of expiration not less than 45 days before the
expiration of the flood insurance policy by first-class mail
to the owner of the property, the servicer of any loan
secured by the property, and (if known) the owner of the
[2.] All parties listed on the policy declaration page (the
agent/ producer, insured, and any mortgagee) are to be mailed
an initial Renewal Notice no less than 45 days prior to the
policy expiration date.
[3.] If the premium payment is not received by the insurer by
the policy expiration date, a Final Notice is produced and
must be sent to all parties listed on the declarations page
(the agent/producer, insured, and any mortgagee). The final
notice must indicate that coverage has expired and the the
expired policy will be reissued with a new effective date if
the premium payment is not received by the insurer within 30
days following the policy expiration date.
[4.] The Final Notice to the lender must indicate that
coverage will terminate if premium is not received within
this 30 day period.
[5.] Insurers must be able to reproduce copies of the Final
Notice to the mortgagee and have processes in place to verify
the date the Final Notice was mailed.
(Dkt. No. 32-2 at 2-3).
flood insurance policy in question is an SFIP. (Dkt. No. 19
at 4). In November 2014, Plaintiff received a mortgage
through Discover Home Loans ("Discover"). (Dkt. No.
1-1 at 6). Discover required Plaintiff to provide $537.96,
which it held in escrow, to cover the SFIP premium for the
next policy period. (Dkt. No. 1-1 at 7-8). Before that
premium was due, Discover transferred the servicing of