MCADAM

FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

JOHN MCADAM,

Plaintiff,

Civil Action No. 25-12263 (MAS) (JTQ)

□□ MEMORANDUM OPINION

AMERICAN BANKERS INSURANCE .

COMPANY OF FLORIDA, e7 al,

Defendants.

SHIPP, District Judge

This matter comes before the Court upon Defendant American Bankers Insurance

Company of Florida’s (“Defendant”) Motion to Dismiss (ECF No. 9) Plaintiff John McAdam’s

(‘Plaintiff’) Complaint (ECF No. 1). Plaintiff opposed (ECF No. 17), and Defendant replied (ECF

No. 18). The Court has carefully considered the parties’ submissions and decides the matter

without oral argument pursuant to Local Civil Rule 78.1(b). For the reasons stated below, the Court

grants Defendant’s Motion to Dismiss.

I. BACKGROUND!

A. Factual Background

This matter involves a dispute about flood insurance coverage under the National Flood

Insurance Program (the “NFIP”).? (Compl. 4 1, ECF No. 1.) In or around December of 2010,

Plaintiff purchased a Standard Flood Insurance Policy (the “SFIP”) from Defendant through

co-defendant and broker, Nottingham Agency Inc. (“Nottingham”), for the property at 74

Alexauken Creek Road, Lambertville, NJ 08530 (the “Insured Property”). Ud. Jf 1-2, 10.)

Plaintiff’s annual SFIP term ran from December 22nd of each year to the following year. Ud. § 11.)

The SFIP for December 2020 to December 2021 was for “$250,000 in coverage for the Insured

' For the purpose of considering Defendant’s Motion to Dismiss, the Court accepts all factual

allegations in the Complaint as true and considers exhibits attached to the Complaint and matters

of public record. See Phillips v. County of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008); see also

Guidotti v. Legal Helpers Debt Resol., L.L.C., 716 F.3d 764, 772 (3d Cu. 2013) (noting that the

court can “consider only the complaint, exhibits attached to the complaint, matters of public record,

as well as undisputedly authentic documents if the complainant’s claims are based upon [those]

documents” on a Federal Rule of Civil Procedure 12(b)(6) motion (citation omitted)).

* “The NEIP is a federally supervised and guaranteed insurance program presently administered

by the Federal Emergency Management Agency (‘FEMA’)” created by Congress “to limit the

damage caused by flood disasters through prevention and protective measures, spread the risk of

flood damage among many private insurers and the federal government, and make flood insurance

‘availiable on reasonable terms and conditions’ to those in need of it,” Kan Holt v. Liberty Mut. Fire

Ins. Co., 163 F.3d 161, 165 Gd Cir. 1998) (citations omitted).

3 An SFIP is a flood insurance policy for which “FEMA fixes the terms and conditions of the. . .

policies, which, barring express written consent of the Federal Insurance Administrator, must be

issued without alteration as a[n] [SFIP].” Man Holt, 163 F.3d at 165-66 (citations omitted).

Property’s structure and $100,000 for the Insured Property’s contents, for a combined total of

$350,000.” Ud. J 12 (citing Ex, A to Compl. (“2020 Policy”), ECF No. 1-2).)4

On or about September 1, 2021, Hurricane Ida caused flood damage to Plaintiff's Insured

Property. (/d. 4] 15.) Within sixty days, Plaintiff filed an insurance claim under the SFIP reporting

damage to the Insured Property “in excess of the total Policy limit of $350,000.”

Ud. J 16.)

On October 29, 2021, Defendant mailed Plaintiff a “Revised Declaration” notice reducing

coverage from $250,000 for the Insured Property’s structure and $100,000 for the contents to

$150,000 and $60,000, respectively. Ud. § 17 (citing Ex. B to Compl. (“Revised Decl.”), ECF

No. 1-3).} In this correspondence, Defendant stated: “[t]he premium submitted with the application

was insufficient for the amount of coverage requested [therefore]... . coverage [is] reduced to the

amount [that] the submitted premium could purchase using those rates.” (Revised Decl. #1.) In

the SFIP’s “Coverage & Rating” section, Defendant provided the reason for reduced coverage:

“THIS IS AN ELEVATED BUILDING. COVERAGE IS LIMITED BELOW THE LOWEST

ELEVATED FLOOR. SEE PROPERTY NOT COVERED IN [SFIP].” Ud. at *4.) Defendant

provided Plaintiff with the option to “remit an additional $134.00... within 30 days. . . to increase

the coverage to the ‘Requested Coverage’ amounts ... . [at which time] the coverage w{ould] be

4 “Because the polices [sic] and the denial letters are integral to and relied upon by the Complaint,

this Court may consider them on a motion to dismiss... . [and since] the existence and terms ofa

SFIP are a matter of public record, this Court may consider those terms as well.” Berkzup

Ridgefield, LLC v. Am. Bankers Ins. Co. of Fla., No. 21-14071, 2021 WL 5083820, at *1 n.3

(D.N.J. Nov. 1, 2021).

> Pages preceded by an asterisk reflect the number atop the ECF header.

increased to the originally requested limits effective at policy inception.” Ud. at *1.) Plaintiff does

not allege that he exercised his option to remit the additional payment. (See generally Compl.)

On November 29, 2021, Defendant mailed Plaintiff a second correspondence (“November

Correspondence”) with notification of a payout of $83,660.56 for the structure and $2,916.62 for

the contents in accordance with the reduced coverage under the SFIP sent on October 29, 2021.

(Compl. € 20 (citing Ex. C to Compl. (“Nov. Correspondence”), ECF No. 1-4).) In this

correspondence, Defendant wrote that the acceptance and denial of each claim was based on an

“Independent Adjuster’s” report. (See Nov, Correspondence *3.) With the denied claims,

Defendant listed the specific items or areas of the home for which coverage was denied and cited

the applicable SFIP provisions. (See id.) The last page of the correspondence included the

following “Policyholder Rights”:

After you receive a full or partial claim denial letter from your insurer, you have

several options available if you disagree with the claim denial . . . . [including filing

a] suit within one (1) year of the denial of your claim. Federal law permits you to □

file suit in the Federal District Court where the damage occurred within one (1) year

of when your insurer first denied all or part of your claim (42 U.S.C. § 4072; 44

C.ELR. § 62.22).

(id. at *5) (emphasis added).

On January 26, 2024, Defendant mailed correspondence to Plaintiff to notify him of an

additional payout of $12,524.57 for the Insured Property’s contents. (Compl. {21 (citing Ex. D to

Compl. (“Jan. Correspondence”), ECF No, 1-5).) On June 27, 2024, Defendant sent another

correspondence for a payout of $12,043.26 for the Insured Property’s structure. (/d. {] 22 (citing

Ex, E to Compl. (“June Correspondence”), ECF No. 1-6).)

B. Procedural Background

Plaintiff filed the Complaint on June 27, 2025, asserting three causes of action: (1) breach

of contract under the NFIP for “failure to operate in good faith and . . . refusal to pay the full value

of Plaintift’s flood loss claim” against Defendant (“Count One’); (2) breach of contract under N.J.

Admin. Code § 11:1-22.2 for reduction of “Plaintiff’s coverage under the Policy ... only after a

significant reported loss[]” against Defendant (“Count Two”); and (3) breach of contract against

Nottingham arising from the procurement and handling of Plaintiff's SFIP (“Count Three”).

(Compl. §§ 27-49.) Defendant thereafter filed the instant Motion to Dismiss. (Def.’s Mot. to

Dismiss, ECF No. 9.) Plaintiff opposed (PI.’s Opp’n Br., ECF No. 17), and Defendant replied

(Def.’s Reply Br., ECF No. 18).

II. LEGAL STANDARD

Federal Rule of Civil Procedure® 8(a)(2) “requires only ‘a short and plain statement of the

claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of

what the... claim is and the grounds upon which it rests.’” Bell Ail. Corp. v. Twombly, 550 US,

544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957).

A district court conducts a three-part analysis when considering a motion to dismiss under

Rule 12(b)(6). See Malleus v. George, 641 F.3d 560, 563 Gd Cir. 2011), First, the court must

identify “the elements a plaintiff must plead to state a claim.” Ashcroft v. Iqbal,

556 U.S. 662, 675 (2009). Second, the court must identify all of the plaintiff’s well-pleaded factual

allegations, accept them as true, and “construe the complaint in the light most favorable to the

plaintiff.” Fowler v. UPMC Shadyside, 578 ¥.3d 203, 210 (3d Cir. 2009) (citation omitted). The

court can discard bare legal conclusions or factually unsupported accusations that merely state the

defendant unlawfully harmed the plaintiff. See Igbal, 556 U.S. at 678 (citing Tivombly, 550 US.

at 555). Third, the court must determine whether “the [well-pleaded] facts alleged in the complaint

6 All references to “Rule” or “Rules” hereafter refer to the Federal Rules of Civil Procedure.

are sufficient to show that the plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d at 211

(quoting /gbal, 556 U.S. at 679). A facially plausible claim “allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Jd. at 210 (quoting /gbal,

556 U.S. at 678). On a Rule 12(b)(6) motion, the “defendant bears the burden of showing that no

claim has been presented.” Hedges vy. United States, 404 F.3d 744, 750 (3d Cir. 2005) (citing Kehr

Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).

Il. DISCUSSION

Defendant moves to dismiss Counts One and Two of Plaintiff's Complaint. (See generally

Def.’s Moving Br., ECF No. 10.) The Court addresses each claim in turn.

A. Breach of Contract Under the NFIP—Count One

Defendant’ argues that Count One should be dismissed because Plaintiff failed to file the

Complaint “within one year from [Defendant’s] partial denial of the claims for Hurricane Ida flood

damage to [the Insured Property]}” per the terms and conditions of the SFIP and pursuant to federal

regulation. (/d. at 10-11.)

In New Jersey, there is a six-year statute of limitations for all contractual actions which

“generally governs insurance actions as well.” Biegalski v Am. Bankers Ins. Co. of Fla.,

No. 14-6197, 2016 WL 1718101, at *4 (D.N.J. Apr. 29, 2016) (citing N.J. Stat. Ann. § 2A:14-1).

While parties cannot contract to longer limitations periods, “New Jersey courts ... have upheld

reasonable contractual limitations provisions of one year or less[]” even where “the applicable

? Defendant is a “Write-Your-Own [WYO] Program carrier participating in the [NFIP][.]” (Def.’s

Moving Br. 2, n.1.) FEMA established the WYO Program under which “private insurance

companies like [Defendant] write their own insurance policies .... [and] regardless whether

FEMA or a WYO company issues a flood insurance policy, the United States treasury funds pay

off the insureds’ claims.” Van Holt, 163 F.3d at 165 (citations omitted).

statute of limitations exceeded those time frames.” /d. (quoting Martinez-Santiago v. Pub. Storage,

38 F. Supp. 3d 500, 506-07 (D.N.J. 2014)).

Because the NFP is a federal program, and “SFIP claims are ultimately paid by the United

States government, all SFIPs must be identical to the form codified at 44 C.F.R. pt. 61, app. A(1).”

Mistiaro v. Fid. Nat'l Indem. Ins. Co., 880 F.3d 660, 662-63 (Gd Cir. 2018). Moreover, “[t]he

WYO Companies are bound to adjust claims in accordance with the terms of the SFIP.... [and]

WYO carriers may not alter, amend, or waive any provision or condition of the SFIP absent express

written consent from the Federal Insurance Administrator.” Suopys v. Omaha Prop. & Cas., 404

F.3d 805, 807 (3d Cir. 2005) (citations omitted). The plain language of the SFIP’s terms and

conditions read as follows:

[Plaintiff] may not sue [Defendant] to recover money under this policy unless

[Plaintiff] ha[s] complied with all the requirements of the policy. If [Plaintiff

does] sue, [Plaintiff] must start the suit within one year after the date of the

written denial of all or part of the claim, and .. . must file the suit in the United

States District Court of the district in which the insured property was located at the

time of loss. This requirement applies to any claim that [Plaintiff] may have under

this policy and to any dispute that [Plaintiff] may have arising out of the handling

of any claim under the policy.

44 C.ER., Pt. 61, App. AC), Art. VII(O) (emphasis added). The NFIP federal statute states that

Plaintiff must file “within one year after the date of mailing of notice of disallowance or partial

disallowancef.]” 42 U.S.C. § 4072.

Here, Defendant mailed Plaintiff correspondence notifying Plaintiff of a partial denial on

November 29, 2021. (See generally Nov. Correspondence.) Plaintiff, however, did not file suit

until June 27, 2025. (See generally Compl.) Plaintiff does not dispute the existence of the one-year

statute of limitations, instead, Plaintiff asserts there is no reference in the November

correspondence to a “partial denial or incomplete payment as a triggering event[] to file a

lawsuit.” (Pl.’s Opp’n Br. 5 (emphasis in original).)*

The Court disagrees and finds that the correspondence dated November 29, 2021:

(1) constitutes a partial denial of Plaintiff’s insurance claim; and (2) clearly states that a partial

denial is a triggering event to file a lawsuit. See Lionheart v. Phila Contribution, 368 F, App’x 282,

284-85 (3d Cir. 2010) (finding correspondence partially denying a claim “triggered” the SFIP’s

“one-year statute of limitations” thereby barring Plaintiff’s untimely suit); Malik v. Am. Bankers

Ins. Co. of Fla, No. 23-16240, 2024 WL 1635687, at *4 (D.N.J. Apr. 16, 2024) (finding

correspondence partially denying a claim “started the one-year statute of limitations” and “that a

subsequent denial” does not re-start the tolling).

The November Correspondence explicitly states that Defendant has partially denied

Plaintiff’s insurance claim and details what rights Plaintiff had as a policyholder. (See generally

Nov. Correspondence.) First, the correspondence listed the specific items or areas of the home for

which coverage was denied and cited the applicable SFIP provisions for each denial. (F.g., id. at

*3 (noting that “the SFIP does not cover [] equipment, like electrical supply generators . . . unless

the equipment is hard-wired and in an insured building as defined in the SFIP ... . [therefore,

Defendant is] denying coverage pursuant to the applicable policy section(s) listed below”).)

Plaintiff argues for the application of equitable tolling due to the “ambiguity” of a partial denial

given the issuance of payments after the November Correspondence. (See Pl.’s Opp’n Br. 9.) In

New Jersey, “[e]quitable tolling is traditionally reserved for limited occasions. These include:

(1) [if] the defendant has actively misled the plaintiff[;] (2) if the plaintiff has in some

extraordinary way been prevented from asserting his rights{;] or (3) if the plaintiff has timely

asserted his rights mistakenly in the wrong forum[.]” Biegalski, 2016 WL 1718101, at *6 (second

alteration in original) (quotations and citations omitted). Here, equitable tolling does not apply

because Plaintiff did not allege any of these narrow exceptions in the Complaint, nor has he

provided evidence of a qualifying circumstance under New Jersey law. (See generally Compl.)

Second, the correspondence included a section titled “Policyholder Rights” which listed “Actions

Available When You Disagree with your Claims Settlement Amount” and included the statute of

limitations for filing suit. (/d. at *5 (“Federal law permits you to file suit... within one (1) year

of when your insurer first denied all or part of your claim[.}”).)

The Court therefore finds that because: (1) the November Correspondence explicitly states

that the claim was partially denied and that the applicable statute of limitations is one year; and

(2) Plaintiff filed the Complaint two-and-a-half years after the statute of limitation period was

triggered, dismissal of Count One of Plaintiff’s Complaint is appropriate. See Migliaro, 880 F.3d

at 668 (affirming that “suit was properly dismissed as time-barred” because the “complaint was

filed almost two years after receiv[ing denial]”); Malik, 2024 WL 1635687, at *4-6 (granting

motion to dismiss and finding that plaintiff's complaint was time-barred when filed over a year

after receiving partial denial); Berkzup, 2021 WL 5083820, at *2-3 (granting motion to dismiss

and finding plaintiff’s complaint was time-barred when filed over two years after receiving denial).

The Court, accordingly, dismisses Count One of the Complaint,

B. Breach of Contract under New Jersey State Law-—-Count Two

Defendant argues that Count Two should be dismissed because state claims under the NFIP

are “preempted and unavailable against a WYO insurance carrier like [Defendant].” (Def.’s

Moving Br. 15.) Plaintiff acknowledges that “all disputes arising from the handling of any claim

under the policy are governed exclusively by the flood insurance regulations issued by FEMA[]”

and are therefore preempted. (PI.’s Opp’n Br. 12 (emphasis omitted) (citing 44 C.ER. Pt. 61, App.

A(1), Art. X).)°

Under the NFIP, because “a WYO insurer must strictly follow the claims processing

standards set out by the federal Government[,]....a WYO insurer may be unable to comply both

with state law and with the federal guidelines that it is bound to follow.” CER. 1988, Inc. v. Aetna

Cas. & Sur Co., 386 F.3d 263, 270 (3d Cir. 2004). Due to this conflict, state claims related to

handling and adjustment are preempted because “allowing [the plaintiff] to proceed on a state law

claim would directly hinder Congressional objectives in creating a federally subsidized standard

form of flood insurance.” Brusco, 2014 WL 2916716, at *3 (citing C_ELR., 386 F.3d at 270).

Plaintiff alleges that Defendant breached the contract and violated New Jersey law by

“reducing Plaintiff's coverage” and “not reimburs[ing] Plaintiff for years of premtums[.]”

(Compl. Ff 40, 42.) Specifically, Plaintiff claims Defendant “wrongfully .. . breach[ed] its

contractual obligation to provide agreed coverage for the Insured Property, by reducing Plaintiff's

coverage ., . after a significant reported loss.” (Compl. 4 40 (emphasis added).)

The Court finds that Plaintiff’s New Jersey claim regarding the wrongful reduction in

coverage is preempted because the allegations cleariy “arose in the claims adjustment context, and

it is well established that state-law claims relating to the adjustment of SFIP claims are preempted

by the NFIP.” Eedice, 2010 WL 11693193, at *8 (citing CER, 386 F.3d at 271-72); see, eg.,

Brusco, 2014 WL 2916716, at *4 (dismissing plaintiff’s breach of contract claim under state law

Plaintiff, however, asserts that “this provision ... does not expressly preempt state law disputes

relating to policy procurement.” (Pl.’s Opp’n Br. 12.) While there is a split in authority regarding

whether state law claims related to SFIP procurement are preempted, all allegations in the

Complaint against Defendant are related to the handling and adjustment of Plaintiff’s SFIP. (See

generally Compl.); see Eodice v. Selective Ins. Co. of Am., No. 08-151, 2010 WL 11693193, at *8

(D.N.J. Feb. 8, 2010). As a result, this Court “need not decide [the] issue” of “whether the NFIP

preempts procurement fraud claims against WYO insurers.” /d. at *8 (citations omitted).

10

after finding it preempted); Nei// v. State Farm Fire & Cas. Co., 159 F. Supp. 2d 770, 778 (E.D.

Pa. 2000) (“[H]old[ing] that extra-contractual state-law causes of action related to the handling of

claims under [NFIP] are preempted[.]”); Shuford v. Fid. Nat’l Prop. & Cas. Ins. Co., 508 F.3d

1337, 1344 (11th Cir. 2007) (finding “tort claim[] expressly preempted by federal law because it

arises from the handling of a claim under a [SFIP]’”).

The Court, therefore, dismisses Count Two of the Complaint.

IV. CONCLUSION

For the reasons set forth herein, Defendant’s Motion to Dismiss is granted. The Court will

issue an Order consistent with this Memorandum Opinion.

ft UNITED STATES DISTRICT JUDGE

DATED: JULY 7 , 2026

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