Grande v. St. Paul Fire & Marine Ins. Co.

Page 170

460 F.Supp.2d 170

Frank P. GRANDE, Plaintiff, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY and Charter Lakes Marine Insurance, Defendants.

No. CV-03-177-B-W.

United States District Court, D. Maine.

November 3, 2006.

Michael X. Savasuk, Law Office of Michael X. Savasuk, Portland, ME, for Plaintiff.

Mark G. Furey, Thompson, Bull, Furey, Bass & MacColl, LLC, P.A., Portland, ME, for Defendants.

ORDER ON MOTION FOR JUDGMENT AS A MATTER OF LAW AND MOTION FOR A NEW TRIAL

WOODCOCK, JR., District Judge.

In light of the law determined by the First Circuit in its opinion and the facts found by the jury in its verdict, the Court denies Defendants' motion for judgment as a matter of law or a new trial.

I. STATEMENT OF FACTS

In the late 1990s and early 2000s, Frank P. Grande. (Frank P.) owned and chartered, off the coast of Maine, a 25 foot sailing vessel, the APHRODITE. Like many boat owners, he began to long for something bigger and in the spring of 2003, while visiting his wealthy Texas cousin, Frank A. Grande (Frank A.), they struck a deal: Frank A. would loan Frank P. the money to purchase a bigger boat and Frank P. would repay his cousin through the sale of the APHRODITE and his house in Maine. There was nothing in writing.

Frank P. traveled to south Florida to shop for boats and Frank A. later joined him. They fixed upon a vessel, the GINA, a 44 foot Irwin. Frank A., who was wise in the ways of business and was fronting the money, did the negotiating with the GINA's owner. The negotiations were successful and Frank A. returned to Texas. On April 28, 2003, a purchase and sale agreement was entered into between the GINA's owner and Frank A. Frank A. paid the $75,000.00 purchase price for the GINA and the Bill of Sale was made out to him, not to Frank P.

Frank P. proceeded to make arrangements to sail the GINA from Florida to Maine. One of those arrangements was insurance. Frank P. had insured the APHRODITE for a number of years through a marine insurance agency, Charter Lakes Marine Insurance (Charter Lakes). The APHRODITE policy was issued by St. Paul Fire and Marine Insurance Company (St.Paul) and contained a navigation limit which read: "Atlantic coastal waters of the United States between Eastport ME and Saint Marys, GA not more than 100 miles from shore. Coastal Atlantic — Maine." Just before the GINA was purchased, Frank P. contacted his charter insurance agent, Mark VanEpps of Charter Lakes and notified Mr. VanEpps that he was going to require marine insurance on the GINA. He explained that he intended to sail the vessel "as the crow flies" from Miami to Maine, that he had never taken a similar voyage before, and that he was relying on him to secure the proper insurance. Mr. VanEpps informed Frank P. that the insurance company required a survey of the vessel and Frank P. set about obtaining the survey.

On April 28, 2003, Mr. VanEpps faxed Frank P. a quote for insuring the GINA. The letter enclosed an application, requested a copy of the survey, and stated in part: "There will be a one time trip fee of $150 for navigating your boat from Coconut, FL¹ to your homeport of Long Cove, ME." The total premium for the basic coverage was $2,094.00. Frank P. faxed the completed application to Mr. VanEpps along with the survey on April 28, 2003. Between April 28, 2003 and May 6, 2003, when he left Florida, Frank P. telephoned Mr. VanEpps to confirm that he had received the paperwork, that it was in good order, and that coverage was in place. Frank P. expressly asked Mr. VanEpps whether he was covered for the trip from Florida to Maine and Mr. VanEpps responded, "You are good to go at any time." Frank P. also asked about paying the insurance premium and Mr. VanEpps told him he would be billed.² Frank P. set sail for Maine on May 6, 2003.

After a brief stopover in Charleston, South Carolina, Frank P. headed north. As they passed Cape Hatteras, North Carolina, the evening of May 17, 2003, Frank P. who was on wheel watch observed four water spouts in the distance. He was terrified and took evasive action, ultimately traveling east, beyond 100 miles from shore. The next day, they raised the sails and shut off the diesel engine. At this point, however, a crew member informed Frank P. that one of the lower shrouds that secured the mast had snapped and without its support, the mast was itself in danger of snapping. Despite jury-rigged repairs, the mast was still flexing 2 to 3 feet and seas were building. They issued pan-pan calls and the HAWAII HORZON, a 670 foot container ship, responded, standing by the GINA for four hours during the night. Seas rose to eight to twelve feet with swells to fifteen feet. Ultimately, a Coast Guard helicopter arrived and Frank P. and the crew were rescued. When they abandoned the GINA, the vessel was more than 100 miles off shore.³

On May 19, 2003, Frank P. filed a notice of claim with Charter Lakes and by a letter dated May 22, 2003, he received a reservation of rights notice from St. Paul. The letter explained that "the facts obtained thus far indicate that you may have been outside of your navigational limits as defined by the Declarations Page of your policy." About the same time, he received the marine insurance policy from St. Paul, which contained a Yacht Voyage/Trip Endorsement, specifying the following limit of navigation: ATLANTIC coastal waters of the United States between Coconut, FL and Long Cove, ME not more than 100 miles from shore. St. Paul formally denied coverage on August 12, 2003 on the ground that the GINA "was abandoned ... approximately 160 miles from the closest point of land" and therefore coverage was "excluded by your policy." This law suit ensued.

II. THE TRAVEL OF THE CASE

This case has a history. Initiated by complaint filed October 2, 2003, the case originally went to a jury trial on April 12, 2005. At the close of Frank P.'s case, this Court granted judgment as a matter of law. Grande v. St. Paul Fire & Marine Ins. Co., 365 F.Supp.2d 57 (D.Me.2005). Frank P. successfully appealed to the First Circuit. Grande v. St. Paul Fire & Marine Ins. Co., 436 F.3d 277 (1st Cir.2006). The First Circuit decision informs and controls the issues in this case.

In Grande, the First Circuit concluded that whether there was a "special agreement" between Frank P. and the Defendants to provide coverage for the trip "unconstrained by a 100 — mile limit" is a jury question. Grande, 436 F.3d at 281. Thus, "when VanEpps said that insurance was in force, a jury could find (although not obliged to do so) that the parties were agreeing that the insurance was in force for the trip as described by Frank P. to VanEpps." Id.

The First Circuit came to the same conclusion about Frank P.'s failure to inform the Defendants of his cousin's interest in the vessel. Id. at 282. This Court had granted judgment as a matter of law in the first trial, in part, on the ground that, under maritime law, ownership is material to the acceptance of the risk. Grande, 365 F.Supp.2d at 66. However, on appeal, the First Circuit reiterated the principle that "materiality is primarily a question of fact, the resolution of which is necessarily a function of context and circumstances." Grande, 436 F.3d at 283. Further, the First Circuit explained that TN Frank P.'s testimony is credited, then he might be regarded as the owner' in the legal sense ... and in the economic sense...." Grande, 436 F.3d at 282. In any event, the precise nature of Frank P. and Frank A.'s interest in the GINA is "a matter for the jury." Id at 283.

The case was retried before a jury from July 18, 2006 through July 20, 2006. The jury returned a verdict in favor of the Plaintiff and against Defendants St. Paul. and Charter Lakes in the total amount of $79,579.00. Jury Verdict (Docket # 158). Post-trial motions followed the verdict. Pl.'s Post — Trial Br. (Docket # 160); Defs.' Post — Trial Br. (Docket # 165); Defs.' Mot. for J. as a Matter of Law or New Trial (Docket # 161, 162) (Defs.' Mot.); Pl.'s Resp. in Opp'n to Defs.' Mot. (Docket # 167) (Pl.'s Resp.); Defs.' Reply to Pl.'s Resp. (Docket # 169); Pl.'s Bill of Costs (Docket # 166); Defs.' Objection to Pl.'s Bill of Costs (Docket # 168). On October 27, 2006, the Court issued an Order addressing certain post-trial issues. Order on Post-Trial Issues (Docket # 170); Am. J. (Docket # 171).

III. DEFENDANTS' MOTION

On August 3, 2006, Defendants filed a post-trial consolidated motion and memorandum for judgment as a matter of law or for a new trial. Defs.' Mot. Regarding the motion for judgment as a matter of law, Defendants contend that there is no evidentiary basis for the jury's verdict that a special agreement between the parties existed to provide insurance on the GINA for the trip from Florida to Maine without navigational limits, and that no reasonable jury could conclude that Frank P. did not misrepresent or conceal material facts. Id. at 2-5. Regarding the motion for a new trial, Defendants claim that the verdict was against the weight of the evidence. Id. at 5-6.

IV. DISCUSSION

A. Motion for Judgment as a Matter of Law

1. Legal Standard

At the close of all the evidence, the Defendants moved for judgment as a matter of law pursuant to Rule 50(a) and now timely renew the motion under Rule 50(b). Fed.R.Civ.P. 50(a), (b). To succeed, the Defendants must establish that there is "no legally sufficient evidentiary basis for a reasonable jury to find for [the Plaintiff]. ..." Id. The First Circuit has commented that "[a] party seeking to overturn a jury verdict faces an uphill battle. Courts may only grant a judgment contravening a jury's determination when the evidence points so strongly and overwhelmingly in favor of the moving party that no reasonable jury could have returned a verdict adverse to that party." Rivera v. Turabo Med. Ctr. P'sitip, 415 F.3d 162, 167 (1st Cir.2005) (citation and quotation marks omitted). In Rivera Castillo, the First Circuit wrote,

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