Great Lakes Reinsurance (UK) PLC v. Morales (S.D. Fla. December 9, 2010)
Plaintiff is a marine insurance company which issued a policy affording Hull & Machinery coverage on a 2005 33-foot Avanti power vessel owned by Romilio Morales. On October 29, 2008, Jorge Barreiro operated the vessel, put the vessel on its trailer, parked the trailer in the driveway of his residence and went to work the next morning. Barreiro’s residence did not have a fence or gate. Barreiro’s wife noticed the vessel was missing the next afternoon. Morales filed a claim and demanded payment of an amount equal to the insured value of the vessel, claiming a total loss of the vessel as a result of the theft.
The insurer moved for summary judgment, arguing that it was entitled to rescind the insurance policy on the ground that it was void because the application contained material misrepresentations of Morales’ experience, or lack thereof, in operating and owning vessels. The application for the policy covering the vessel represented that Morales was the owner of the boat and had over twelve years experience in both the ownership and operation of boats. During his deposition, however, Morales testified that he has never owned a vessel and that the information about having experience and owning boats for over twelve years was incorrect. Barreiro’s application for coverage also represented that he had prior experience owning a boat. Barreiro also testified that he never owned a boat and that the information on the application was incorrect.
The court held that defendants’ misrepresentations concerned essential facts that were material to plaintiff’s decision to issue an insurance quote and a policy of marine insurance thereafter. The application forms specifically inquired as to defendants’ prior boating and ownership experience. Accordingly, the court held that plaintiff was entitled to rescind the policy, and summary judgment was appropriate.
Additionally, the court granted summary judgment on the basis of an exclusion precluding coverage for theft of the scheduled vessel while on a trailer unless the vessel is situated in a locked and fenced enclosure or marina and there is visible evidence of forcible entry and or removal made by tools, explosives, electricity or chemicals. The court held that the exclusion in the policy was unambiguous and provided no coverage.
For a copy of the decision click here
Toni Frain and Dan Gerber