Although the insureds timely filed their suit for denial of flood benefits in state court, the Fourth Circuit found the lawsuit against the Insurer was untimely because it was not filed in federal district court. Woodson v. Allstate Ins. Co., 2017 U. S. App. LEXIS 7862 (4th Cir. May 3 , 2917). 

   Hurricane Irene struck the insureds' house in August 27, 2011. Their property was flooded and for several hours, subjected to wave action, allegedly causing further damage to the home. The insureds contacted Allstate, who retained Rimkus Consulting Group, Inc. to inspect the property. Rimkus found that, other than a substantial loss of soil washed away around the supporting portion of the house, there was no damage to the structure of the house. Rimkus recommended reimbursement of $1200 for the washed out soil. 

   The insureds retained House Engineering, P.C., which submitted a report describing substantial damage caused by the hurricane, including movement to the pilings that caused the house to no longer be level.  The insureds claimed $228,822 in damages.

    On February 28, 2012, Allstate denied the claim for foundation damage. On February 27, 2013, the insureds filed suit in state court for breach of contract and bad faith. Allstate removed to federal district court on April 1, 2013. After a bench trial, the district court found that the property damage was caused by flooding, wave action, and erosion. The court credited the testimony of the House Engineering representative. Damages of $233,398 were awarded. The court also found there was bad faith in Allstate's handling of the claim and awarded $700,194 in damages. 

    Allstate appealed, arguing that the breach of contract claim was barred by the one year statute of limitations in the federal statutes as well as under the Standard Form Insurance Policy issued pursuant to the National Flood Insurance Program. Although the insureds filed within one year of the denial of the claim, they filed in state court, not a United States District Court. Filing a claim under the National Flood Insurance Program required doing so in federal district court. Therefore, the insureds' breach of contract claim was barred by the one year statute of limitations. 

    Likewise, the bad faith claim was barred by the statute of limitations. A policy issued under the National Flood Insurance Program required that all disputes arising from the handling of any claim were governed exclusively by the flood insurance regulations issued by FEMA, the National Flood Insurance Act, and federal common law. The applicable federal law required that any claim on the policy or arising out of the insurer's handling of the claim must be filed within one year of the denial of the claim.

    Accordingly, the judgment of the district court was reversed.