Great Lakes Ins. SE v. Chartered Yachts Miami LLC

676 F.Supp.3d 1251

GREAT LAKES INSURANCE SE, Plaintiff, v. CHARTERED YACHTS MIAMI LLC, Defendant.

CASE NO. 20-25046-CV-WILLIAMS

United States District Court, S.D. Florida

Signed June 7, 2023

Steven Eric Goldman, Jacqueline Louise Goldman, The Goldman Maritime Law Group, Fort Lauderdale, FL, for Plaintiff.

Kavan Vartak, Michael T. Moore, Moore and Company, Coral Gables, FL, for Defendant.

ORDER

KATHLEEN M. WILLIAMS, UNITED STATES DISTRICT JUDGE

THIS MATTER is before the Court on Plaintiff Great Lakes Insurance SE's ("Plaintiff" or "Great Lakes") Motion for Summary Judgment (DE 68) ("Motion"). Defendant Chartered Yachts Miami LLC ("Defendant" or "CYM") responded (DE 77), Plaintiff replied (DE 86), and the Parties have filed their respective statements of material facts and responses (DE 69; DE 78). For the reasons set forth below, Plaintiff's Motion for Summary Judgment is granted.

I. BACKGROUND

The present dispute arises out of a policy of marine insurance, Policy No. CSRYP/181202 (the "Policy") issued by Great Lakes to CYM and IPFS Corp.¹ The Policy afforded "Hull & Machinery" coverage in the amount of $725,000.00 on a 1988 88 foot Leopard vessel named "PETRUS" (the "Vessel") owned by CYM, for a one year period starting on March 8, 2020 and ending on March 8, 2021. (DE 65 ¶¶ 7-17.) Great Lakes seeks a ruling from this Court that the Policy affords no coverage for any loss which is alleged to have occurred on or about November 7, 2020 (during the policy period), when seawater entered the Vessel via the stern (the "Incident"). (DE 65 ¶ 19.) Specifically, Great Lakes moves for summary judgment on the following counts of its Amended Complaint (DE 65): Count 2 for a declaratory judgment that CYM breached the warranty of seaworthiness; Count 5 for a declaratory judgment that CYM breached the Policy by misrepresenting material facts; Count 6 for a declaratory judgment that CYM breached the survey compliance warranty; and Count 7 for a declaratory judgment that CYM breached the legal and regulatory compliance warranty.

On or about March 6, 2019, CYM submitted to Concept Special Risks Ltd. ("Concept"),² via CYM's agent, an application for a policy of marine insurance. (DE 69-2.) Great Lakes ultimately agreed to issue Policy No. CSRYP/174352 to CYM based on the representations set forth in the application. (DE 69 ¶ 13.) The application was signed by Greg Pack ("Pack") and represents that Greg Pack and Nancie Pack are beneficial owners of the Vessel. (DE 69-2 at 1, 4.) Greg Pack is listed as the first operator of the Vessel. (Id. at 3.) In response to the question on the application requiring the disclosure of Greg Pack's boating qualifications, it states, "USCG 100 ton - Had a USCG 200 ton." (Id.) The application states, "Any misrepresentation in this application for insurance may render insurance coverage null and void from inception." (Id. at 4.)

One year later, on or about March 5, 2020, CYM submitted a Renewal Questionnaire, signed by Greg Pack, to Concept seeking a policy of marine insurance. (DE 69-4.) The Renewal Questionnaire included a prompt which requested the disclosure of Greg Pack's "[b]oating qualifications for which a valid license is held." (Id. at 3.) In response, Pack repeated his answer from the 2019 application, "USCG 100 Ton license." (Id.) On or about April 15, 2020, CYM submitted two Letters of Survey Recommendations Compliance ("LOCs") to Concept along with a copy of an April 2, 2020 survey performed by Global International Marine Surveyors (the "Global Survey"). (DE 69 ¶¶ 17, 19; DE 69-5; DE 69-6.) Each LOC references the Global Survey, which contained numerous recommendations, including those in Category A, "safety deficiencies," and those in Category B, "deficiencies needing immediate attention." (DE 69-6 at 33-34.³) The LOCs listed the following "outstanding recommendation(s)" with their "expected completion date":

Outstanding Recommendation(s)

Expected Completion Date

A-14 Hand held flares - New flares purchased

4-14-20

B-35 Life rafts - Solas

4-30-20

B-46 EPIRB - Solas

4-30-20

B-3 Dropped off life rafts to Solas to tag

4-30-20

B-4 EPIRB Dropped off to Solas to inspect

4-30-20

[Editor's Note: The preceding image contains the reference for footnotes⁴,⁵,⁶].

(DE 69-5.) Each LOC contained the following statement: "Any misrepresentation in this letter of compliance may render insurance coverage null and void from inception." (DE 69-5.) Great Lakes ultimately agreed to issue Policy No. CSRYP/181202 to CYM based on the representations set forth in the Renewal Questionnaire and the LOCs. (DE 69 ¶ 25.) The Policy states in relevant part:

9. General Conditions & Warranties

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i. It is warranted that covered persons must at all times comply with all laws and regulations [ ] governing the use and or operation of the Scheduled Vessel.

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l. This contract is null and void in the event of non-disclosure or misrepresentation of a fact or circumstances material to our acceptance or continuance of this insurance. No action or inaction by us shall be deemed a waiver of this provision.

******

q. Unless we agree in writing to the contrary, if we request a survey of the Scheduled Vessel then it is warranted that such survey is in existence prior to the effective date of this insurance and a copy of the same must be received by us within 30 days of the effective date of this agreement. If the survey makes any recommendations with respect to the Scheduled Vessel, then it is warranted that all such recommendations are completed prior to any loss giving rise to any claim hereunder, by skilled workmen using fit and proper materials . . .

******

s. Where any term herein is referred to as a 'warranty' or where any reference is made herein to the word 'warranted', the term shall be deemed a warranty and regardless of whether the same expressly provides that any breach will void this insuring agreement from inception, it is hereby agreed that any such breach will void this policy from inception.

(DE 69-7 at 13-14.)

On or about November 7, 2020, during the Policy period, the Vessel sustained damage during an incident when seawater entered the Vessel via the stern. (DE 69 ¶ 35.) Great Lakes alleges that the Vessel was unseaworthy on the date of the Incident due to lack of maintenance and wear and tear. (DE 68 at 5.) Specifically, Great Lakes claims that the Vessel did not have a properly functioning transom door, which allowed for water ingress, and that only one of two bilge pumps was operational. (DE 68 at 5.) Great Lakes' expert, Revel Boulon, Senior Marine Surveyor and Adjuster at Sedgwick, opined that the Incident was caused by a combination of lack of maintenance to the transom door and the lack of a functional automatic bilge pump in the machinery space bilge. (DE 69-9 ¶ 12.) CYM's expert opined that the Incident was caused by an accidental event in which an underwater rope got caught on the Vessel's port propeller as the Vessel entered the Miami River. (DE 78-3 at 2-3.)

Great Lakes conducted a post-Incident investigation which concluded, in part, that the LOCs falsely represented that all Global Survey recommendations had or would be completed by April 30, 2020. (DE 69-10 at 5.) At the time of Great Lakes' investigation, there was only one life raft aboard the Vessel and its tag was expired (despite recommendation B3 of the Global Survey), there was no E.P.I.R.B. aboard the Vessel (despite recommendation B4 of the Global Survey), and there were allegedly no flares aboard the Vessel (despite recommendation A1 of the Global Survey). (DE 69-10 at 5; DE 69-9 ¶ 21.) CYM claims that it completed all of the Global Survey recommendations and that the flares, life rafts and EPIRB were on board before and during the Incident, but that Great Lakes' investigator did not ask to see the flares during his investigation and that the EPIRB and one raft were lost during the water ingress on the Miami River. (DE 78-2, 45:1-9, 46:2-15, 49:2-24, 50:9-24.)

It is undisputed that on the date of the Incident, Greg Pack was acting as captain and sole operator of the Vessel with twelve passengers aboard and that Pack did not have a valid U.S. Coast Guard captain's license at the time of the insurance application, the Renewal Questionnaire, or the incident. (DE 69 ¶¶ 65-66; DE 78 ¶¶ 65-66.) It is also undisputed that the one life raft that remained aboard the Vessel after the Incident had a certification tag that had expired in January 2018.

II. LEGAL STANDARD

Summary judgment is appropriate "if the movant shows 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). "[O]nly disputes over facts that might affect the outcome of the suit under the governing [substantive] law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Any such dispute is "genuine" only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

In evaluating a motion for summary judgment, the Court considers the evidence in the record, "including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A). The party seeking summary judgment carries the burden of "informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. "To discharge this burden, the movant must point out to the Court that there is an absence of evidence to support the nonmoving party's case." Feinman v. Target Corp., No. 11-62480-CIV, 2012 WL 6061745, at *3 (S.D. Fla. Dec. 6, 2012) (citing ...