IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals

No. 14-40135 Fifth Circuit

FILED November 6, 2015 Lyle W. Cayce BRIAN LOWERY, et al, Clerk

Plaintiffs, v. FIDELITY NATIONAL PROPERTY AND CASUALTY INSURANCE COMPANY, a corporation,

Defendant --------------------------------------------------- JEFFREY M. PYE; THERESA PYE,

Plaintiffs - Appellees Cross-Appellants v. FIDELITY NATIONAL PROPERTY AND CASUALTY INSURANCE COMPANY, a corporation,

Defendant - Appellant Cross-Appellee

Appeals from the United States District Court for the Southern District of Texas

Before JOLLY, HIGGINSON, and COSTA, Circuit Judges. COSTA, Circuit Judge: Case: 14-40135 Document: 00513262839 Page: 2 Date Filed: 11/06/2015

Along with countless other structures on Galveston Island, Jeffrey and Theresa Pye’s home was left in shambles after Hurricane Ike. Although they received some compensation from both their flood and wind insurers, they brought this suit seeking additional coverage under the flood policy. After a bench trial, the court denied the Pyes’ claim for additional building coverage on the ground that the total recovery they had already received from insurers exceeded their total loss. As for contents coverage, the court awarded $2,500 for some car parts damaged in the storm. Both sides appeal. Concluding that federal common law governing the National Flood Insurance Program recognizes the rule against double recovery, we affirm the ruling that the Pyes are not entitled to additional building coverage. But we vacate the personal property award to the Pyes as they now concede it was in error. I. Jeffrey and Theresa Pye owned a two-unit residential building in Galveston. In 2007, an appraiser estimated the market value to be $195,000. They lived in one of the units and rented the other. The building was insured against floods by Fidelity National Property and Casualty Insurance Co., which participates in the National Flood Insurance Program. Under the Program, FEMA allows private insurers to issue government-backed flood insurance using FEMA’s Standard Flood Insurance Policies (SFIPs). The Pyes had a SFIP issued by Fidelity with policy limits of $205,400 for building coverage and $50,000 for contents coverage, and $1,000 deductibles for each. A separate policy issued by the Texas Windstorm Insurance Association insured against wind damage. Hurricane Ike severely damaged the Pyes’ property when it made landfall in September 2008. They sought coverage from their wind insurer, and eventually brought suit and settled for $66,765.84, plus attorneys’ fees and expenses. The Pyes also made claims on their flood policy. Fidelity’s adjuster Case: 14-40135 Document: 00513262839 Page: 3 Date Filed: 11/06/2015

No. 14-40135 inspected the damage and prepared a proof of loss—“a policyholder’s statement of the amount of money being requested, signed to and sworn to by the policyholder with documentation to support the amount requested” 1—that the Pyes signed. Fidelity paid $76,968.23 for building damage and $30,367.49 for contents damage. The payment excluded damaged car parts valued at $2,500. The Pyes felt shortchanged. Their lawyer commissioned a new estimate by Halley Lovato, who determined that the flood damage to their house amounted to $175,180. The l