Land is Not “Insured Property” Under the Standard Flood Insurance Policy

Torre v. Liberty Mutual Fire Ins. Co., 781 F.3d 651 (3d Cir. 2015).  This per curiam opinion deals with insurance coverage for the removal from plaintiffs’ land of Hurricane Sandy-generated debris (sand and other debris) not owned by plaintiffs.  The defendant insurer caused payment to be made to plantiffs on other aspects of the claim that they made, but the insurer declined to pay for this debris removal because, in defendant’s view, the applicable Standard Flood Insurance Policy (“SFIP”) did not cover that.  The parties cross-moved for summary judgment.  The District Court granted defendant’s motion and denied that of plaintiffs.  Plaintiffs appealed, but the Third Circuit affirmed after exercising plenary review, the applicable standard for appeals of summary judgment rulings.

The appeal revolved around the following SFIP language:  “We will pay the expense to remove non-owned debris that is on or in insured property and debris of insured property anywhere.”  The panel noted that “insured property” means “property that is insured,” which is the understanding of the Federal Emergency Management Agency as well.  The SFIP expressly stated that it did not cover “land, land values, lawns, trees, shrubs, plants, [or] growing crops.”  Accordingly, the panel concluded that “[t]he entire parcel of land thus cannot constitute ‘insured property’ because it is not insured by the SFIP at all.  And because the entire parcel of land does not constitute ‘insured property,’ the provision of the SFIP requiring Liberty to pay for the removal of non-owned debris that is ‘on or in insured property’ does not apply to the expenses the Torres incurred in removing non-owned debris from their land outside their home.”

Plaintiffs offered a number of arguments, virtually all of them based on other policy language, in an attempt to undermine this outcome, which the panel considered a “rather obvious result.”  The judges rejected all of those contentions.  The panel also observed that its decision was in accordance with “the only decision that the parties have cited in which another court has addressed a similar claim,” a 2002 ruling of the Eastern District of Pennsylvania available only electronically.  The judges noted a 2013 “decision that addresses the debris-removal provision,” from the District of North Dakota, but found that opinion unpersuasive because it did not address the 2002 Pennsylvania ruling and “provided very little reasoning and no legal support for its conclusion.”