Aspen Am. Ins. Co. v. Tasal, LLC

553 F.Supp.3d 1127

ASPEN AMERICAN INSURANCE COMPANY, Plaintiff,

v.TASAL, LLC, Defendant.

Case No. 6:20-cv-875-PGB-DCI

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

Signed August 11, 2021

Steven E. Goldman, Jacqueline Louise Goldman, Goldman & Hellman, Ft. Lauderdale, FL, for Plaintiff Aspen American Insurance Company.

Stephen A. Marino, Jr., Benjamin C. Hassebrock, Ver Ploeg & Marino, PA, Miami, FL, Daniel Litman Gross, Office of State Attorney, West Palm Beach, FL, for Defendant Tasal, LLC.

ORDER

RAUL G. BYRON, UNITED STATES DISTRICT JUDGE

This cause comes before the Court on Plaintiff's Motion for Summary Judgment (Doc. 138), Defendant's Motion for Summary Judgment (Doc. 140), and the parties’ respective responses and replies thereto (Docs. 142, 144, 145, 146). Upon consideration, the Motions are due to be denied.

I. BACKGROUND

This contentious marine insurance dispute arises from a shipwrecked yacht, the unfortunate result of third-party Doug Koch's attempt to impress his female companion, Summer Foley, with a 3:00 A.M. joyride on Defendant Tasal, LLC's boat (hereinafter, the "Vessel "). (Doc. 143, ¶ 17).

The marine insurance policy at issue only covers Captain Kim Boxer, the named operator of the Vessel (the "Named Operator Provision "). (Doc. 88-2, pp. 1, 21 (the "Policy ")).¹ However, the Policy broadly covers "accidental physical loss of, or damage to," the Vessel. (Doc. 88-2, p. 10 (the "Policy ")). Thus, although the Named Operator Provision generally bars coverage when anyone other than Captain Boxer steers the Vessel, this exclusionary clause² does not apply in the event of theft. (Id. at pp. 1, 21).

The parties do not challenge this interpretation of the Policy. (See Docs. 138, 140). Rather, Defendant claims that the Policy covers the damage because Mr. Koch stole the Vessel, and Plaintiff Aspen American Insurance Company counters that the Policy does not cover the damage because there is no evidence of theft. Accordingly, there is only one dispositive fact question at stake here: did Mr. Koch steal the Vessel?

II. STANDARD OF REVIEW

To prevail on a summary judgment motion, the movant must show "that 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) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "An issue of fact is ‘material’ if, under the applicable substantive law, it might affect the outcome of the case. An issue of fact is ‘genuine’ if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Harrison v. Culliver , 746 F.3d 1288, 1298 (11th Cir. 2014).

The Court must "view the evidence and all factual inferences therefrom in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in favor of the non-movant." Davila v. Gladden , 777 F.3d 1198, 1203 (11th Cir. 2015) (quoting Carter v. City of Melbourne , 731 F.3d 1161, 1166 (11th Cir. 2013) (per curiam)). "A mere ‘scintilla’ of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party."

Brooks v. Cnty. Comm'n of Jefferson Cnty. , 446 F.3d 1160, 1162 (11th Cir. 2006) (quoting Walker v. Darby , 911 F.2d 1573, 1577 (11th Cir. 1990) ). Summary judgment should only be granted "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

III. DISCUSSION

Resolution of this relatively simple factual dispute should be easy sailing, but the case is more complicated than it initially appears. First, the Policy does not define "theft." (See Doc. 88-2). Instead of offering a precise definition supported by applicable law, the parties bicker about tangential topics. Denial of both Motions is proper on this basis alone—the parties should direct the Court to the appropriate legal standard rather than rely on the Court's independent research to buoy their arguments.

Second, the parties dive into the nature and scope of the relationship between Mr. Koch and Shahab Karmely, Defendant's owner. (Doc. 143, ¶¶ 2, 5).³ Plaintiff unequivocally recognizes that it cannot use the Named Operator Provision to escape liability if Mr. Koch stole the Vessel and that Mr. Karmely's consent (or lack thereof) to Mr. Koch's operation of the Vessel is key to the theft determination. Yet it confusingly—and erroneously—asserts, at the same time, that Mr. Karmely's consent is irrelevant under an isolated reading of the Named Operator Provision.

Plaintiff then posits that Mr. Karmely's behavior implicitly gave Mr. Koch consent to use the Vessel, which Defendant adamantly opposes. The ensuing maelstrom of conflicting testimony and insinuations of perjury demonstrates that the issue of Mr. Karmely's consent is best addressed at the bench trial.

Finally, Defendant contends that Captain Boxer did not have authority to grant Mr. Koch access to the Vessel on February 23, 2020. Attempting to navigate around this point, Plaintiff again insists, incorrectly, that Captain Boxer's ability to consent on behalf of Mr. Karmely is moot under a strict interpretation of the Named Operator Provision. Because Plaintiff fails to produce any evidence that Captain Boxer possessed agency power to consent for Mr. Karmely, the Court does not need to examine whether Captain Boxer in fact did so.

For these reasons, both Motions are dead in the water.

A. The Definition of "Theft"

The Policy does not define "theft," and the parties do not identify the proper definition of "theft" under federal admiralty law or, pursuant to the Policy's choice of law provision, New York law. See Wilburn Boat Co. v. Fireman's Fund Ins. , 348 U.S. 310, 313–21, 75 S.Ct. 368, 99 L.Ed. 337 (1955) (holding that, generally, federal admiralty law governs marine insurance contracts and that, where there is no established rule of federal admiralty law, state law controls);⁴ Great Lakes Reinsurance (UK) PLC v. Yellow Fin 36 LLC , 736 F. Supp. 2d 1302, 1306 (M.D. Fla. 2010) ("Under federal maritime choice of law rules, contractual choice of law provisions are generally recognized as valid and enforceable, unless the choice of law is shown to be unreasonable and unjust, or in conflict with a fundamental purpose of maritime law."); (Doc. 88-2, p. 25). The parties jettison the ultimate issue—the meaning of "theft"—and quibble over inapposite arguments.

First, Defendant argues that federal admiralty law does not require any criminal intent to establish a covered loss for "theft," citing United States v. Henry , 447 F.2d 283 (3d Cir. 1971). (Doc. 140, p. 11 n.4). In Henry , the government charged the defendant with violation of 18 U.S.C. § 661 —which prohibits the taking and carrying away of any personal property of another with the intent to steal or purloin—for taking and sinking a third party's boat. Id. at 284. The defendant argued that § 661 codified common law larceny and, therefore, incorporates the essential element of intent to permanently deprive the owner of his property. Id. The government countered that § 661 was not a codification of common law larceny and that "a [f]ederal criminal statute describing an offense which was a crime at common law does not necessarily incorporate all of the elements of the common law crime." Id.

The Third Circuit agreed with the government, holding that § 661 did not codify common law larceny but rather broadened that offense. Id. at 285–86. The court ruled that the government did not need to prove that the defendant intended to permanently deprive the owner of his boat and upheld the district court's jury instruction, which stated "to steal or purloin means any taking whereby a person, by some wrongful act, willfully obtains or retains possession of property belonging to another without the permission or beyond any permission given with the intent to deprive the owner of the benefit of ownership." Id. at 286.

The Court notes that Henry interpreted a federal criminal statute —it does not establish a rule of federal admiralty law governing the meaning of "theft" in marine insurance contracts, and, consequently, it is inapplicable to this case. Thus, the Court cannot adopt Henry ’s upheld jury instruction on the definition of "to steal or purloin." Whereas Henry dealt with the federal penal code, this case applies either federal admiralty law or New York law.

Moreover, Henry refused to incorporate the common law larceny mens rea element into § 661 ’s definition of "to steal or purloin"—it did not nullify the criminal intent element of "theft" altogether. In fact, the Henry court explicitly defined "to steal or purloin" as including "the intent to deprive the owner of the benefit of ownership." See id. Defendant's argument is simply unmoored from Henry and, for that matter, common sense. Following Defendant's logic, any unauthorized taking would constitute a "theft," an outcome that the penal codes in this country do not contemplate.

Because the parties do not point to (and the Court does not find) any established rule of federal admiralty law defining "theft" in the marine insurance context, the Court turns to the meaning of "theft" under New York law. Plaintiff argues that an insured must establish the criminal intent element of common law larceny to obtain coverage, relying on Castner v. Ins. Co. of N. Am. , 40 A.D.2d 1, 337 N.Y.S.2d 52 (1972). But Castner is also distinguishable from this case. Whereas the automobile insurance policy at issue in Castner expressly required the owner to establish a criminal intent to permanently deprive her of the car, the instant Policy does not define "theft" at all, much less define the term to require the narrow common law larceny mens rea . Id. at 55.⁵

Importantly, Plaintiff could have specifically...