United States District Court, M.D. Tennessee, Nashville Division
MICHAEL H. HARRIS and BEVERLY D. HARRIS, Plaintiffs,
NATIONWIDE MUTUAL FIRE INS. CO., DAVID W. VANDENBERGH, FIRST AMERICAN FLOOD DATA SERVICES, FIRST AMERICAN CORPORATION, FIRST AMERICAN CORELOGIC, INC., REGIONS BANK, AMSOUTH BANK, N.A., GEORGE V. LOGAN and DOROTHY A. LOGAN, Defendants.
A. TRAUGER UNITED STATES DISTRICT JUDGE
before the court is a Motion for Summary Judgment (Docket No.
211), filed by defendants CoreLogic Flood Services, LLC f/k/a
First American Flood Data Services, First American
Corporation, and First American CoreLogic, Inc.
(collectively, “CoreLogic”). The plaintiffs,
Michael and Beverly Harris, have filed a Response in
opposition (Docket No. 217), to which CoreLogic has filed a
Reply (Docket No. 221). For the reasons discussed herein, the
motion will be denied.
& PROCEDURAL HISTORY
2006, Michael and Beverly Harris were in the market for a new
home. Their previous house having been destroyed by a
tornado, the plaintiffs were looking for a safe investment.
(Docket No. 211-3 at 14-15 (Deposition of Michael Harris).)
On June 13, 2006, the plaintiffs executed a purchase
agreement for a two-story house on the Cumberland River.
(Docket No. 211-4.) The purchase agreement included the
Survey Work and Flood Certifications are the best means of
identifying boundary lines and/or encroachments and easements
or flood zone classifications. Buyer may obtain a Mortgage
Loan Inspection or Boundary Line Survey and Flood Zone
Certifications. If these matters are of concern to the Buyer,
Buyer should address these concerns in the Special
Stipulations Section of this Agreement.
(Id. at 6.) In the agreement's Special
Stipulations section, the plaintiffs listed the ability to
use the dock lift on the lake and details regarding
inspection of the house, but did not address flood zone
determinations. They paid an undisclosed sum of earnest money
and obtained a mortgage through Regions Bank
to the August 21, 2006 closing date, Regions contracted with
CoreLogic, a flood certification company, to provide a flood
zone determination for the house. Buyers securing loans for
houses in flood zones are required by lenders to purchase
flood insurance pursuant to the National Flood Insurance Act
of 1968, 42 U.S.C. 4001 et seq.
(“NFIA”). Flood zones-known as Special Flood
Hazard Areas (“SFHA”)-are determined by the
Federal Emergency Management Agency (“FEMA”) and
demarcated on Flood Insurance Rate Maps
(“FIRMs”). The FIRM in place at the time (the
“1981 FIRM”) showed that the house was in a SFHA.
incorrectly determined that the house was not in a flood zone
and that flood insurance was thus not required. CoreLogic
made its determination on July 3, 2006, via a Standard Flood
Hazard Determination Form (“SFHDF”). (Docket No.
211-5.) The plaintiffs received the SFHDF prepared by
CoreLogic at the August 21, 2006 closing on their house.
(Docket No. 211-3 at 4, 6 (Deposition of Michael Harris).) In
the section immediately following CoreLogic's
determination that the plaintiffs' house was not in a
flood zone, the SFHDF included the following language:
However, your home may be near a SFHA. As such you, or your
lender, may want to consider the advisability of obtaining
flood insurance at reduced rates. You should check with your
insurance agent or company as to coverage types and amounts
available to you and make your own determination as to
whether you desire any such coverage.
No. 211-5 at 1.) On the next page, the SFHDF included the
THIS FLOOD DETERMINATION IS PROVIDED TO THE LENDER PURSUANT
TO THE FLOOD DISASTER PROTECTION ACT. IT SHOULD NOT BE USED
FOR ANY OTHER PURPOSE.
(Id. at 2.) The plaintiffs cannot remember whether
they read the full SFHDF upon receiving it; however, they
understood that it stated CoreLogic's determination that
the house was not in a flood zone. (Docket No. 211-7 at 3.)
The plaintiffs closed on the house and, subsequently, did not
purchase flood insurance.
deposition, Michael Harris stated unequivocally that the
plaintiffs would not have purchased the house, had they known
it was in a flood zone:
Q. Dr. Harris, do you believe you had the ability to walk
away from this purchase agreement?
A. I could have and lost my earnest money, yes.
Q. Okay. You could have walked out that day?
Q. And you're saying that that's what you would have
A. I probably would have.
Q. I need to know more than probably, Doctor.
A. Yes, I would have.
Q. Would you probably would have or you certainly would have?
A. I would have walked away and left my earnest money on the
Q. You definitely would have done ...