FEMA sued for excluding couple from Sandy Claims Review process, firm alleges agency bypassed lawyers

By David Yates | Jun 15, 2017

NEW YORK – A complaint for injunctive relief has been brought against the Federal Emergency Management Agency.

Alleging the agency “capriciously” excluded them from the Hurricane Sandy Claims Review (SCR) process, Simone and David Greenbaum filed the complaint June 12 in the Eastern District of New York.

Several FEMA executives are also named as defendants, including Matthew Behnke, Robert Fenton Jr., David Maurstad and Roy Wright.

All of the defendants are accused of “erroneously, arbitrarily and capriciously” excluding the Greenbaums from the SCR because of an “improper communication” initiated by FEMA without the knowledge and consent of the couple’s counsel.

Sandy made landfall on Oct. 29, 2012, damaging hundreds of thousands of properties in New York and New Jersey. More than 140,000 individuals submitted claims under federal flood insurance policies that were issued by the National Flood Insurance Program.

In 2015, FEMA admitted there was evidence of fraud in the claims adjusting process and agreed to allow every person who had submitted a federal flood insurance claim to resubmit their claim for review.

“Remarkably, after admitting that fraud occurred in the claims process and that widespread underpayment was possible, FEMA publicly discouraged Sandy victims from retaining lawyers to assist them in navigating the SCR … and that claimants should not ‘waste’ their money on lawyers,’” the suit states.

“FEMA’s advice to policyholders was wrong. The SCR process is not simple or efficient, and to suggest that it would be policyholder-friendly was, at best, naïve.”

According o the lawsuit, The Greenbaums reopened their Sandy NFIP claim, initially without a lawyer, by contacting FEMA in June 2015. And despite FEMA’s promise that lawyers were not necessary, the Greenbaums decided to hire counsel from Weisbrod Matteis & Copley, a Washington, DC law firm.

On Sept. 10, 2015, the firm contacted FEMA to insure the couple’s claim was properly reopened. FEMA then contacted the Greenbaums directly without the knowledge or consent of their attorneys.

During one of these “improper communications” in October 2015, Simone requested FEMA speak with her attorneys directly and told the agency to proceed with the claim review the firm submitted on their behalf in September 2015 and not the one the couple initially made in June 2015.

“FEMA now insists that Mrs. Greenbaum ‘withdrew’ from the SCR entirely during this October 2015 exchange that FEMA initiated without the knowledge or presence of her counsel,” the suit states.

During the next 18 months, FEMA never mentioned the supposed withdrawal and continued to behave as if the couple’s claim remained active, and even assigned a caseworker to the claim in January 2016, three months after Simone supposedly withdrew, the suit alleges.

“FEMA staff received numerous documents related to the claim from WMC (the law firm) without ever suggesting that the agency deemed the claim closed,” the suit states.

“On May 4, 2017, FEMA announced for the first time after communicating with WMC for 554 days … that the Greenbaums had ‘withdrawn’ their claim in an email exchange on Oct. 28, 2015.”

To no avail, the Greenbaums and their attorneys immediately responded, attempting to communicate to FEMA that they only wanted the initial claim terminated so the review would exclusively focus on the review initiated by WMC.

“This was not the first time FEMA has tried to communicate directly with represented homeowners,” the suit states. “WMC represents approximately 1,200 policyholders in the SCR, and FEMA staff has engaged repeatedly in a systemic and well-documented pattern of improper communication with WMC clients without the knowledge or permission of those homeowners’ attorneys.

“FEMA should not be permitted to use its bureaucracy, blatant lack of controls required as a matter of legal ethics, and misconduct as an excuse to mischaracterize the Greenbaums’ actions and deny them access to the SCR.”

The plaintiffs are represented by Philip Halpern, attorney for the New York law firm Collier, Halpern & Newberg and August Matteis Jr. of WMC.

Cause No. 17-cv-3512

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