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Geico Marine Insurance Co. v. Shackleford

United States District Court, M.D. Florida, Tampa Division

December 7, 2017




         BEFORE THE COURT are Plaintiffs Motion for Final Summary Judgment (Dkt. 24), Defendant's Memorandum in Opposition (Dkt 35), Defendant's Notice of Supplemental Authorities (Dkt. 36), and Plaintiffs Reply (Dkt. 41). Upon consideration, the motion for summary judgment (Dkt. 24) is DENIED.

         I. BACKGROUND

         GEICO Marine Insurance Company issued a marine insurance policy covering Defendant's vessel on March 13, 2016. (Dkt. 1 at pp. 14-35). The vessel suffered damage from inclement weather, consisting of lightning and strong winds, on June 17, 2016 while docked in Fort Lauderdale, Florida. (Dkt. 24-9 at ¶ 6). GEICO filed a Complaint seeking declaratory judgment that the policy does not cover the loss because of Defendant's breach of a navigational warranty in the policy (Count I), his breach of the implied warranty of seaworthiness (Count II), and his breach of the maritime duty of uberrimae fidei (utmost good faith) (Count III). (Dkt. 1).

         II. STANDARD

         Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A genuine factual dispute exists only if a reasonable fact-finder 'could find by a preponderance of the evidence that the [non-movant] is entitled to a verdict.' " Kernel Records Oy v. Mosley, 694 F.3d 1294, 1300 (11th Cir. 2012) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). A fact is material if it may affect the outcome of the suit under governing law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997). All facts are viewed and all reasonable inferences are drawn in the light most favorable to the nonmoving party. See Scott v, Harris, 550 U.S. 372, 380 (2007).

         The moving party bears the initial burden of showing that there are no genuine disputes of material fact. Hickson Corp. v. Northern Crossarm Co., Inc., 351 F.3d 1256, 1260 (11thCir. 2004) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Once the moving party demonstrates the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories, and admissions on file to designate facts showing a genuine issue fortrial. See Celotex Corp., 477 U.S. at 324. The nonmoving party's evidence "cannot consist of conclusory allegations or legal conclusions." Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir. 1991). The Court will not weigh the evidence or make findings of fact. Morrison v. Amway Corp., 323 F.3d 920, 924 (11th Cir. 2003). Rather, the Court's role is limited to deciding whether there is sufficient evidence upon which a reasonable finder of fact could find for the nonmoving party. See id.


         GEICO is not entitled to summary judgment because it has not met its burden of establishing the absence of a genuine issue of material fact with respect to the three breaches it alleges.

         A. The Policy's Terms Governing Navigational Areas Are Ambiguous and the Ambiguity Must Be Resolved Against GEICO

         GEICO asserts in Count I that the policy does not cover the loss because the vessel was located "outside of the agreed upon navigational area when the loss occurred." (Dkt. 1 at ¶ 40). GEICO issued the policy of marine insurance, on a liability only basis, to Defendant on March 13, 2016. The "General Conditions" section of the policy provides:

Where Covered:
Coverage is provided:
A. While the boat is afloat within the navigational area shown on the Declarations Page; and B. While the boat or its equipment is ashore or being transported by land conveyance in the United States or Canada.

         (Policy, Dkt. 1 at p. 32). The Declarations Page attached to the policy at the time of issuance includes a section titled "Cruising Limits" that provides "the boat must be north of Cape Hatteras, NC from June 1 until November 1 annually." (Id. at p. 14). It is undisputed that the vessel was south of Cape Hatteras when the loss occurred.

         While Geico's contention seems straightforward because the vessel was outside the navigational area prescribed by the Declarations Page when the loss occurred, a careful analysis of the policy and its endorsements reveal an ambiguity with respect to whether the "cruising limits" in the Declarations Page applied at the time of loss of were modified by the endorsements.

         GEICO issued a March 14, 2016 endorsement that amended coverage to "Port Risk Ashore, " which "provides no coverage for navigation, and coverage will only apply to the insured vessel while the boat is out of the water, " and added hull coverage of $264, 000. (Id. at p. 15). The "Navigation Area" section at the bottom of the endorsement is blank. (Id.). The Cruising Limits section of the Declarations Page issued with the March 14, 2016 endorsement provides that coverage is "Port Risk Ashore." (Id. at p. 16).

         GEICO issued a May 27, 2016 endorsement that "[r]emoved the Port Risk Ashore restriction, " but left the "Navigation Area" section blank. (Id. at p. 18). GEICO did not issue a declarations page with the May 27, 2016 endorsement. See generally (id.)[1]

         Significantly, Defendant requested removal of the port risk ashore restriction from the policy via e-mails dated May 26, 2016 for the purpose of sailing the vessel from the west coast of Florida to Fort Lauderdale, where it would undergo repairs, that same week. See (E-mails dated May 26, 2016 and attached documents, Dkt. 35-2 at pp. 122-151). He provided a marine survey report prepared by Rich Parrey and an addendum to a marine survey report prepared by Steven Berlin in support of his request. See (Id.). Defendant commenced the voyage to Fort Lauderdale at the end of May 2016, and successfully completed that voyage. (Complaint, Dkt. 1 at ¶ 28); (Answer, Dkt. 5 at ¶ 28); (Defendant's declaration, Dkt. 35-1 at ¶ 14). As noted, the loss occurred in Fort Lauderdale in June 2016.

         GEICO argues that the navigational limit in the March 13 Declarations Page controls, and Defendant, therefore, breached the navigational warranty. Defendant argues that the May 27 endorsement that removed the port risk ashore restriction without providing a navigational limitation controls over the inconsistent Declarations Page, and that ambiguities must be construed against GEICO as the drafter of the policy. Defendant primarily ...

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