## Facts

- Homeowners in Big Rock Mesa, Malibu, California owned property located on an ancient, dormant landslide.
- During the winter of 1982–1983, unusually heavy rainfall and effluent from defective septic systems raised groundwater levels, saturating and destabilizing subsurface soil.
- The increased groundwater contributed to reactivation of the landslide, damaging the homeowners’ properties and threatening additional damage.
- Each homeowner held a Standard Flood Insurance Policy (SFIP) issued under the National Flood Insurance Program (NFIP) pursuant to the National Flood Insurance Act.
- The SFIP required a signed and sworn proof of loss within 60 days after the loss and limited suits to one year after FEMA mailed a notice of disallowance.
- The homeowners notified FEMA of losses; most ultimately submitted formal proofs of loss.
- FEMA denied coverage, asserting the damage resulted from excluded land movement (landslide), not a covered flood loss.

## Issues

1. Whether SFIP/NFIP procedural requirements (including the 60-day sworn proof of loss and the one-year limitations period) must be strictly enforced as conditions on suing the federal government.
2. Whether an SFIP covering “all direct physical loss by flood” covers property damage caused by a landslide triggered by flood-related groundwater conditions.

## Decision

- The Ninth Circuit reversed the district court’s judgment to the extent it permitted recovery under the SFIPs for the Big Rock Mesa landslide losses.
- The court held that SFIP/NFIP procedural requirements are strictly construed and enforced as conditions on the federal government’s waiver of sovereign immunity.
- The court held that land movement (including landslides) is excluded from SFIP coverage even when flood-related water conditions contribute to triggering the land movement.

## Legal Principles

- Waivers of sovereign immunity are narrowly construed; conditions attached to the waiver in NFIP litigation must be strictly followed.
- SFIP terms are fixed by federal regulation and are not treated as ordinary private insurance contracts subject to equitable modification.
- A signed and sworn proof of loss deadline and the statutory/policy one-year filing period operate as substantive prerequisites to recovery against FEMA.
- SFIP coverage for “direct physical loss by flood” does not extend to losses caused by excluded earth movement (e.g., landslide/subsidence), even if flooding or elevated groundwater is part of the causal chain.

## Conclusion

The court required strict compliance with SFIP claim and suit prerequisites and enforced the SFIP’s earth-movement exclusion, holding that flood-related conditions that trigger a landslide do not convert landslide damage into a covered flood loss.


Wagner v. Dir., Fed. Emergency Mgmt. Agency, 847 F.2d 515 (9th Cir. 1988)