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BULLARD v. CONNOR

April 4, 1989

WILLIAM C. BULLARD, SR., Plaintiff,
v.
ROBERT E. CONNOR, acting in his capacity as Director of the Federal Emergency Management Agency, and the Federal Emergency Management Agency, Defendants


Ilana Diamond Rovner, United States District Judge.


The opinion of the court was delivered by: ROVNER

ILANA DIAMOND ROVNER, UNITED STATES DISTRICT JUDGE

 I. INTRODUCTION

 Plaintiff, William C. Bullard, filed this lawsuit to recover under a flood insurance policy issued to him by the defendants, the Federal Emergency Management Agency ("FEMA") and its director, Robert E. Connor. Jurisdiction is based on 42 U.S.C. § 4072. *fn1" FEMA has moved for summary judgment on the ground that Bullard did not file a signed proof of loss form within 60 days after the damage occurred as required by the insurance policy. Currently pending before the Court are defendants' objections to the Magistrate's Report and Recommendation ("Report") that the defendants' motion be denied. For the reasons stated below, the Court declines to adopt the Report and grants defendants' motion for summary judgment.

 II. FACTS

 Bullard owns a house in Bellwood, Illinois. On May 6, 1986, FEMA issued a Standard Flood Insurance Policy ("SFIP") to Bullard which was in force for one year. *fn2" The policy requires that a sworn proof of loss form be filed within 60 days of a loss. *fn3" The policy further provides that no suit may be brought unless the policyholder has complied with all of the requirements of the policy. *fn4"

 Plaintiff incurred a loss due to flooding on October 3, 1986. On October 20, 1986, FEMA received Bullard's Notice of Loss, a preliminary notification, which claimed $ 14,500 in damages and contained a list of allegedly damaged property. *fn5" The list failed to specify values for any of the individual items. On October 21, 1986, William McCain, an adjuster hired by FEMA, inspected Bullard's property. According to FEMA, the adjuster investigated the loss, formulated a proof of loss showing a net claim of $ 844.00, and presented it to Bullard for signature. After he consulted with his insurance agent and the adjuster, Bullard refused to sign the proof of loss. The adjuster then submitted the unsigned proof of loss to FEMA. Bullard states that the agent neither tendered anything for him to sign nor indicated that a proof of loss was necessary.

 On October 22, 1986, FEMA sent a letter to Bullard informing him that under the terms and conditions of the policy, Bullard had 60 days from the date of loss to provide a signed proof of loss. The letter also stated that failure to submit a proof of loss form would jeopardize his right of recovery under the terms of the policy. Bullard denies having received this letter.

 In a letter to Bullard dated November 12, 1986, James Napier, a FEMA claims examiner, stated that the unsigned proof of loss from October 21, 1986 had been modified because the stated loss did not reflect the actual cash value of the items damaged. The letter enclosed a second proof of loss for $ 528.28 and informed Bullard that if he wished to accept this amount for the settlement of his claim, he should sign and return this proof of loss. Bullard contends the November 12th letter implied that he needed to sign the proof of loss only if he agreed to the stated dollar amount and that he did not need to submit a proof of loss if he disputed the amount. *fn6" Bullard never submitted a signed proof of loss. In a letter dated February 6, 1987, FEMA informed Bullard that his file was being closed without payment because a proof of loss had not been filed by December 3, 1986.

 The Magistrate concluded that, under the facts of the case, the plaintiff could reasonably interpret the government's actions as an indication that a sworn proof of loss was no longer required, thereby estopping the government from relying on the 60-day requirement for the proof of loss. The Magistrate relied on FEMA's alleged failure to inform Bullard that additional information was necessary and found that FEMA's letter of November 12, 1986 could reasonably be interpreted as indicating that no further information was necessary.

 Pursuant to 28 U.S.C. § 636(b)(1), the parties filed responses to the Magistrate's Report. FEMA argues that the Report is inconsistent with controlling Supreme Court precedent which has established a stringent test for applying estoppel against the government and that estoppel is not appropriate in this case. Bullard contends that genuine issues of material fact remain on the question of estoppel and thereby preclude summary judgment. Pursuant to 28 U.S.C. § 636(b)(1), the Court has conducted a de novo review of the entire record before the Magistrate.

 III. DISCUSSION

 Traditionally, courts did not allow estoppel to lie against the federal government or its agencies. Azar v. United States Postal Service, 777 F.2d 1265, 1269 (7th Cir. 1985). While this absolute bar has been relaxed to some extent, the concerns underlying this rule continue to exist. In Heckler v. Community Health Services of Crawford County, Inc., 467 U.S. 51, ...


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