Management Agency, Federal Insurance Administration, FinancialAssistance/ Subsidy Arrangement
(the“Arrangement”),asetofterms andconditionsbetweenFEMAandtheprivateinsurersgoverningtheprogram.44C.F.R. pt. 62 app. A.In 1989 a preferred risk policy became available for the flood zone onwhichGrissom’shomewaslocated,butGrissomisunsureifhewaseverexplicitlyofferedthepreferredrisk policy. ThereisnoindicationthatLibertyMutual affirmatively informed Grissom he was eligible for preferred coverage.In2004herenewedhisLibertyMutualpolicywithcovered total loss of up to$121,200fora$531premium.Had he been enrolled in the preferred risk policy,hewouldhavehad$350,000intotalcoveredlossfora$317premium.The 2004renewalnoticefromLibertyMutualmentionedtheexistenceofpreferredratepolicies, but did not indicate whether Grissom was eligible.In August 2005, Grissom’s home was destroyed by Hurricane Katrina.Liberty Mutual paid Grissom’s $121,200 claim, the policy maximum. GrissomthensuedLibertyMutualinMississippi state court to recover the differencebetweenthecoveragehehadandthecoverage he could have had under thepreferredriskpolicy.Liberty Mutual removed the case to the Southern DistrictofMississippiwhichdeniedLibertyMutual’sRule12andRule56motionsandsubmitted the case to the jury. Liberty Mutual appeals.
STANDARD OF REVIEW
LibertyMutualisnotappealingfactsdetermined by the jury, but ratherthelegalconclusionsofthedistrictjudgewhichwereview
City of NewOrleans v. Mun. Admin. Servs.
,376F.3d501,506(5thCir.2004)(“Wereviewconclusions of law–including contractual interpretations–
.”).Determiningwhetherfederal funds were at stake is based on whether theArrangement—acontract—boundFEMAtopaytheexpenses.The federal