Brown v. Yarings of Tex., Inc.

643 F.Supp.3d 1304

Kylie BROWN, et al., Plaintiffs, v. YARING'S OF TEXAS, INC., Defendant.

Yaring's of Texas, Inc., Third-Party Plaintiff/Counter Defendant, v. Atlantic Specialty Ins. Co., Third-Party Defendant/Counter Claimant.

Civil Action: 1:21-00355-KD-C

United States District Court, S.D. Alabama, Southern Division

Signed December 1, 2022

J. Christopher C. Zainey, Jr., Pro Hac Vice, The Lambert Firm, PLC, New Orleans, LA, Joshua Strickland, Rayville, LA, for Plaintiffs.

Jordan Doggett Hawk, Phelps Dunbar, LLP, Mobile, AL, Allen E. Graham, Mobile, AL, for Third-Party Defendant/Counter Claimant.

Thomas H. Benton, Jr., Benton Law Firm, LLC, Mobile, AL, for Defendant/Third-Party Plaintiff/Counter Defendant.

ORDER

KRISTI K. DuBOSE, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Third-Party Defendant/Counter Claimant Atlantic Specialty Insurance Company (ASIC)'s Motion for Summary Judgment (Docs. 73-75), Third-Party Plaintiff/Counter Defendant Yaring's of Texas, Inc. (Yaring)'s Response (Docs. 88-89), and ASIC's Reply (Docs. 94, 96) and Motion to Strike (Doc. 95).

I. Findings of Fact¹

A. The Incident

During Memorial Day weekend of 2020, the Plaintiffs were vacationing in Orange Beach, Alabama and decided to take a boat ride. This litigation is the result. Specifically, the Plaintiffs allege that they were injured while riding on a 30 foot jet boat named the M/V EAGLE II on Saturday May 23, 2020. (Doc. 74-1 at 2-3 (Dep. Capt. Jones at 38-39)).

For the last 20 years Defendant Yaring's of Texas, Inc. d/b/a Hudson's Marina (Yaring's)² has owned and operated Hudson Marina in Orange Beach where it charters and leases jet skis, pontoon boats, and other vessels to the public -- including as of 2020, the M/V EAGLE II. (Doc. 74-1 at 3-4 (Dep. Capt. Jones at 11, 17)). The M/V EAGLE II was issued a Certificate of Inspection (COI) by the U.S. Coast Guard which states: "this vessel may carry 23 Passengers, 0 Other Persons in crew, 0 Persons in addition to crew, and no Others. Total persons allowed: 25." (Doc. 74-8 at 11-12 (COI); (Doc. 74-1 at 4 (Dep. Capt. Jones at 17); Doc. 74-15 at 5 (Dep. LJones at 27))).

At the time of the incident there were 16 passengers on the M/V EAGLE II plus two (2) crew members (Captain Rodney Jones (Capt. Jones) and deckhand David Knight (Knight)), for a total of 18. (Doc. 74-1 at 3 (Dep. Capt. Jones at 39)). As described by Capt. Jones, while aboard the vessel and exiting an area called Perdido Pass, the M/V EAGLE II "topped an unusually high wave and fell hard into the trough of the wave[]" and "[r]eturned to Port due to one passenger said her back hurt. Assisted two passengers off the Vessel, as a second passenger also said her back hurt[]" -- "[w]as not aware that injury was serious, therefore no emergency response equipment was used." (Doc. 74-2 at 2 (5/24/20 U.S. Coast Guard Serious Marine Incident (SMI) Report)). See also Doc. 74-1 at 3 (Dep. Capt. Jones at 39); Doc. 89-1 at 7, 10, 15 (Dep. Capt. Jones at 44, 58, 167). Capt. Jones further elaborated, "I remember ... it was an exceptional reaction that the boat had. So my first thought was turn around and check on my customers." (Doc. 89-1 at 15 (Dep. Capt. Jones at 167)).

Capt. Jones returned to the dock and once docked, another passenger reported that her back hurt; some passengers disembarked and walked to their cars -- at least two (2) individuals were complaining they were hurt. (Doc. 74-1 at 3 (Dep. Capt. Jones at 39) Doc. 89-1 at 15-18 (Dep. Capt. Jones at 167, 190-192); Doc. 74-2 at 2 (5/24/20 U.S. Coast Guard SMI Report)). Per Captain Jones, "I had no reason to suspect" that anyone needed medical treatment beyond first aid. (Doc. 89-1 at 19 (Dep. Capt. Jones at 198)). Overall nine (9) passengers disembarked but seven (7) passengers continued the boat ride. (Doc. 74-1 at 3 (Dep. Capt. Jones at 39); Doc. 89-1 at 6 (Dep. Capt. Jones at 40)). At that time Capt. Jones did not know the Plaintiffs were hurt and did not believe that he needed to report the incident to the U.S. Coast Guard "because they walked to their car." (Doc. 89-1 at 10, 19 (Dep. Capt. Jones at 58, 198)).

B. 2020-2021 Insurance Policy with Protection/Indemnity (P & I)

In 2017 Thames Batré Insurance (Thames Batré) -- an entity that places commercial, property and casualty insurance coverage as well as personal lines of insurance -- became Yaring's insurance producer with Taylor Beville as its insurance agent. (Doc. 74-2 (Dep. Capt. Jones at 36-37); Doc. 74-8 at 2); Doc. 74-15 at 10 (Dep. LJones at 35); Doc. 94-1 at 2 (Dep. Beville at 10). In this capacity, Thames Batré obtained access to insurance carrier/insurer ASIC through wholesaler broker Marine N-Surance Brokers (c/o Paul Greenaway (Greenaway)) (Doc. 89-3 at 5-6 (Dep. Beville at 21-22)). ASIC provided marine insurance to Yaring's for the policy years 2018-2019 and 2019-2020. (Doc. 74-16 at 2, 5-6 (Decltn. Lichlyter)).

On April 7, 2020, Laurie Jones (Yaring's) emailed Thames Batré Account Manager Chrissy Catchot (Catchot) with the boat and captain updates, including a passenger vessel scheduled "as of 04-05-19." (Doc. 89-1 at 44-45; Doc. 74-10 at 1-2). The passenger vessel schedule showed the M/V EAGLE II for 12 passengers. (Id.)

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On May 1, 2020, Catchot emailed Greenaway, notifying him that Yaring's had "added a couple of vessels w/increased crew/server count[]", attaching those, and asking to "get this requoted so we can let them know how the premium will change[;]" the attachment listed the M/V EAGLE II as having 2 crew members and 12 passengers. (Doc. 74-7 at 1-2). On May 5, 2020, Greenaway emailed Catchot stating that because there was no e-mail to renew Yaring's account, "coverage lapsed on 11th April 2020." (Doc. 74-20 at 4).

On May 20, 2020, Greenaway emailed Catchot stating that the underwriters (which are Intact Services USA, LLC f/k/a OneBeacon Services, LLC (subsidiary of Intact Insurance Group USA, LLC including Underwriting Supervisor Mary Lichlyter)) "will need a schedule of the remaining vessels." (Doc. 74-12 at 8). On May 21, 2020, Catchot emailed Greenaway and attached a revised vessel schedule. (Id.) Later that day Catchot emailed Greenaway: "the Insured advis[ed] they are ready to proceed with binding[]" and "I sent the revised vessel schedule this morning." (Id. at 7). Greenaway then emailed Catchot the quote, which was yet again revised. (Id. at 5-7).

On Thursday May 21, 2020, the underwriter issued a Revised Renewal Coverage Quotation for Yaring's stating that Greenaway had acted as broker for the prospective insured and "[w]e have relied on all the information in your renewal submission. You represent to us, under the doctrine of Utmost Good Faith (Uberrimae Fidei), that you have disclosed to us all material and relevant facts concerning this risk." (Doc. 74-16 at 163 (5/21/20 Revised Renewal Quote)). The underwriter stated further "[y]ou have our permission to bind[] ... subject to .... [t]here has been no material change in the risk since we quoted[.]" (Id.)

On Friday May 22, 2020 Thames Batré prepared an insurance proposal summary (which summarizes the details of the policy providing a general description of coverage) for Yaring's and the P & I coverage section included a vessel schedule identifying (in part) the number of crew for each of the listed vessels (including the M/V EAGLE II (2 crew)); the vessel schedule did not list the number of passengers for any vessel. (Doc. 74-8 at 7); Doc. 89-3 at 11 (Dep. Beville at 56). The P & I Coverage section states: "Warranted Number of Crew and Servers is not to exceed the designated number for that vessel." (Doc. 74-8 at 13). At 2:30 p.m., Catchot emailed Laurie Jones (Yaring's) about the cost of the premium stating "[t]he majority of the premium is in the P & I coverage[]" and "[I]'m going to advise the underwriter to bind ... and if they need anything signed, we can get it to them next week.... Let me know before 3:00 if that's what you'd like me to do." (Doc. 74-9 at 1). At 2:56 p.m. Catchot emailed Greenaway and cc'd Taylor Beville ((Beville) Thames Batré), regarding the quote for Yaring's stating "[w]e have the order to bind with these changes and these premiums. Let's put this one to bed." (Doc. 74-12 at 5). At 3:13 p.m. Laurie Jones (Yaring's) emailed Catchot stating "Rodney [Jones] said ok so bind us[;]" however, the responsible person at Thames Batré had left for the day at 3:00 p.m. (Doc. 74-9 at 1).

On Saturday May 23, 2020, the incident occurred on the M/V EAGLE II. See supra.

On Sunday May 24, 2020, the U.S. Coast Guard called Capt. Jones because one of the passengers reported the incident, and asked him to complete an accident report form. Capt. Rodney completed a USCG incident form. (Doc. 89-1 at 11 (Dep. Capt. Jones at 59)). On this day, Yaring's submitted a U.S. Coast Guard Serious Marine Incident Report noting, "[w]e were unaware this was an incident until the Coast Guard called us Sunday afternoon. We called our Drug Consortium at that time to come and do the testing required at once." (Doc. 74-2 at 3 (5/24/20 U.S. Coast Guard SMI Report)). Yaring's also submitted a Report of Marine Casualty, Commercial Diving Casualty, or OCS-Related Casualty, stating the M/V EAGLE II had been involved in an injury that requires professional medical treatment. (Doc. 74-16 at 172-173).

On Tuesday May 26, 2020 the following emails were exchanged among Yaring's, Thames Batré, and Greenaway, regarding the effective date of Yaring's coverage -- including for the M/V EAGLE II -- and a requested "No Loss" Letter:

• At 9:34 a.m. Greenaway emailed Catchot with the revised quote. (Doc. 74-12 at 4).

• At 11:45 a.m. Catchot emailed Laurie Jones (Yaring's) a Revised Proposal stating she did not receive the May 22, 2020 email until that morning "but I have requested binding from the carrier. I just sent you some documents via e-signature to sign ... to get them back to me." (Doc. 74-9 at 1;

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