FEMA Contractors Not Liable for Misrepresentations About Flood Risk

The North Fork of the White River in southern Missouri is a nationally known fly-fishing destination, teeming with brown and rainbow trout. The stream is fed from underground springs in the Ozark Mountains, keeping its waters cool on hot summer days.

Rivers, of course, are prone to flooding. Derek and Jennifer Christopherson were aware of that risk and purchased a flood certificate from CoreLogic Flood Services before buying a home and property overlooking the river, relocating from Fargo, North Dakota. The certificate said their home in Tecumseh, Missouri, was in Flood Zone X, outside of even the 500-year flood plain in the most favorable flood zone designation available.

In April 2017, only 40 days after they purchased the property, the North Fork spilled over its banks and flooded the home up to the roofline.

The Christophersons, who did not buy flood insurance, filed a lawsuit against CoreLogic, the couple who sold them the property, the real estate broker and brokerage that arranged the sale, the Federal Emergency Management Agency and three contractors who assisted FEMA in drawing its flood maps.

The litigation against CoreLogic and others continues, but earlier this month a panel of the 8th Circuit Court of Appeals affirmed a trial court decision that dismissed the Christophersons’ complaint against three contractors that assisted FEMA in determining flood risk. The panel said U.S. District Judge Roseann A. Ketchmark for the Western District of Missouri had correctly ruled that the Christophersons had failed to state a valid claim. “Vague naked assertions and conclusory statements,” the court said, “will not suffice.”

Ketchmark also dismissed FEMA as a defendant because the Flood Control Act of 1928 grants the agency sovereign immunity. The Christophersons did not appeal that portion of her ruling. She also ruled that the litigation against CoreLogic and other defendants is better handled in state court.

The Christophersons’ lawsuit says that they were unaware that in 2010 FEMA had ignored advice from the U.S. Army Corps of Engineers and changed the flood map for their area to lower the Special Flood Hazard area to 580 feet four inches to 615 feet above sea level. The CoreLogic flood certificate stated that there had been no prior changes to the map.

The prior owners of the property, Robert and Connie Jo Bushner “had specifically demanded” that FEMA make that change after they tried and failed to sell their home for several years, the lawsuit says. Robert Bushner allegedly told the Christophersons that the property was not in any flood zone and had never flooded, as did real estate agent Inez Pahlmann with Missouri Ozarks Realty.

The lawsuit charges that after the 2017 flood, FEMA and three of its contractors, Stantec Inc., WS Atkins and the Dewberry Companies, “fraudulently” amended the map to restore the prior 615-foot flood level and “back-dated” the change to 2010 to “make it appear” that the Special Flood Hazard designation had existed all the while.

“There is no justification, and has never been any justification, for the 2010 change from 615 feet to 580/581 feet, and such a 34′ lowering of the (base flood elevation) would never be reasonable, appropriate, or feasible,” the lawsuit says. The complaint states that the damage caused the defendants’ “fraud” is compounded because the new flood maps make it impossible for them to sell their property.

The Christophersons claim they suffered $1,500,000 in damages, a sum that includes the $350,000 they paid for the home, $280,282 in lost income and $150,000 in personal property.

The 8th Circuit panel, however, said in its opinion that other than “obtuse statements,” the Christophersons’ complaint does not state any facts that would support their allegations of fraud and negligent misrepresentation. There were no allegations of any acts or omissions by Stantec, Atkins of Dewberry individually.

The Christophersons filed a new lawsuit against CoreLogic and the Bushners in an Ozark County, Missouri, court. CoreLogic, a California corporation, had the case removed to federal court on April 27. Mark A. Olthoff, an attorney for CoreLogic, said he is aware of the Christophersons’ revived lawsuit, but he has not yet responded to it and is unable to comment.