Shane Smith | Property Insurance Coverage Law Blog | September 2, 2019
A recent Southern District of Florida decision addressed this issue.1
A property in Islamorada, Florida, which was owned by the estate of Raymond K. Hampson, was damaged by Hurricane Irma in September 2017. The personal representative for the estate, Timothy R. Hampson (“Hampson”) made a claim for damages under the standard flood insurance policy (“SFIP”) covering the property. When Hampson sued Wright National Flood Insurance Company, a Write Your Own (“WYO”) carrier, for breach of the insurance contract, Hampson also sought an award of attorney’s fees, costs and case expenses under the Equal Justice to Access Act (the “EAJA”), 28 U.S.C. § 2412.
In 1980, Congress enacted the EAJA and significantly expanded the federal government’s liability to pay the attorney’s fees of parties that prevail against the government in litigation or administrative proceedings.
A party may recover attorney’s fees and costs under the EAJA as the prevailing party in a case “brought by or against the United States. . . unless the court finds that the position of the United States was substantially justified.”2 The statute defines “United States” to include “any agency and any official of the United States acting in his or her official capacity.”3
Wright filed a motion to dismiss Hampson’s claims for attorneys’ fees, costs, and case expenses under the EAJA. Wright argued that Hampson could not recover attorneys’ fees, costs, and case expenses under the EAJA against a WYO carrier.
Chief District Judge K. Michael Moore of the Southern District of Florida agreed:4
[A]ttorney’s fees are not recoverable under the EAJA in cases for breach of an SFIP brought against a WYO program insurance carrier participating in the United States Government’s NFIP because WYO carriers are not considered “agencies” under the EAJA. Dwyer v. Fidelity Nat’l Prop. & Cas. Ins. Co., 565 F.3d 284, 289(5th Cir. 2009) (“[S]erving as a fiscal agent and a participant in a heavily regulated federal program did not transform Fidelity into a federal agency under the EAJA.”). The EAJA must be applied according to its express terms and attorney’s fees against a WYO carrier in a suit for SFIP funds may not be maintained under the EAJA. Id. at 289–90.
District Courts in this circuit have uniformly found that a plaintiff is not entitled to attorney’s fees and costs under the EAJA. See e.g., Cosgrove v. Wright Nat’l Flood Ins. Co., No.4:18-cv-10117-KMM, Paperless Order Denying Plaintiff’s Request for EAJA Fees (S.D. Fla. June 3, 2019), ECF No. 29 (holding that EAJA fees were not recoverable against a WYO Company because it was not an “agency” under the EAJA); Island Club Condo., Inc. v. Wright Nat’l Flood Ins. Co., 4:18-cv-10303-JLK (S.D. Fla. May 9, 2019), ECF No. 16 (granting motion to dismiss claim for attorney’s fees under the EAJA because “serving as ‘fiscal agents,’ without more, does not convert WYO insurers into official government agencies”); Chatman v. Wright Nat’l Flood Ins. Co., No. 3:17-CV-00125-HES-PDB, 2017 WL 3730558, at *1–2 (M.D. Fla. June 21, 2017) (granting motion to dismiss claim for attorney’s fees pursuant to the EAJA because Wright National Flood Insurance Company, a WYO carrier participating in the NFIP, “is not an agency of the United States as required by the EAJA”)(citation omitted); Perdido Sun Condo. Ass’n v. Nationwide Mut. Ins. Co., 2007 WL 2565990, at *4 (N.D. Fla. Aug. 30, 2007). Here, Plaintiff brings a claim for breach of an SFIP against Defendant, a WYO carrier participating in the NFIP pursuant to the NFIA. Compl.¶¶ 1–5. Thus, Plaintiff’s claims for attorney’s fees, costs, and case expenses pursuant to the EAJA are dismissed.
The Hampson court cited an earlier Middle District of Florida case but disagreed with the holding in that case:5
Plaintiff relies on Arevalo v. Am. Bankers Ins. Co. of Fla., No. 219CV159FTM99UAM, 2019 U.S. Dist. LEXIS 99000, 2019 WL 2476644, at *3 (M.D. Fla. June 13, 2019) to support its arguments that attorney’s fees and costs are warranted. Therein, the Middle District of Florida found that “it is not so much whether American Bankers is an ‘agency’ of the United States under the Act. Rather, it seems to matter more whether the government is the source of the funds or who would pay an award of attorney’s fees.” Id. Therefore, the Middle District of Florida concluded that “it is at least plausible at this point in the litigation that attorney’s fees may be paid from federal funds by FEMA.” Id. However, this Court disagrees and declines to depart from the case law in this circuit and other courts finding that a WYO carrier is not an agency of the United States as required by the EAJA.
The Hampson holding demonstrates that a policyholder cannot recover attorney’s fees, costs and expenses from a WYO carrier under the EAJA in Hurricane Irma flood insurance cases filed in the Southern District of Florida.
1 Hampson v. Wright National Flood Ins. Co., No. 4:19-cv-10083 (S.D. Fla. Aug. 12, 2019).
2 28 U.S.C. § 2412(d)(1)(A), (b).
3 28 U.S.C. § 2412(d)(2)(C).
4 Hampson v. Wright National Flood Ins. Co., No. 4:19-cv-10083 (S.D. Fla. Aug. 12, 2019) at *3-4.
5 Id. at *4, fn 3.