Carrier has no duty to cover boat loss

Where an application for admiralty insurance sought coverage for work in and around South Florida and the carrier insured that work based upon the representations in the insurance applications, it had no duty to cover a boat loss that occurred in Haitian waters.

Background

This declaratory judgment action is before the court on the motion for judgment on the pleadings filed by plaintiff Atlantic Specialty Insurance Company, or ASIC. ASIC seeks declaratory judgment that a marine insurance policy it issued to Bogdan Bindea in March 2020 is “null and void,” or, alternatively, that ASIC is not required to cover a pending claim relating to Bindea’s supply vessel because “Bindea had breached the policy” when the loss occurred.

Bindea opposes ASIC’s motion as premature. He has also filed his own claim against ASIC seeking declaratory judgment that the policy at issue here fully covers Bindea’s supply vessel.

Coverage

ASIC first argues that there is no insurance contract between ASIC and Bindea “because there was no meeting of the minds,” or mutual assent, as to the essential terms of any such agreement. “What Bindea wanted, and what he believed his agents had procured for him [from ASIC], was a contract of marine insurance to cover the [Bob Rouse] in Haitian waters, without restrictions on the number of crew, and with hull and machinery coverage in the amount of $600,000.” The applications ASIC received from Bindea’s agents contained none of that information, and instead sought coverage for the Bob Rouse and its three-person crew to “deliver[] construction supplies” in and around Ft. Lauderdale, Florida with a lesser amount of hull and machinery coverage.

Bindea’s brief does not address ASIC’s argument that the parties never mutually agreed on terms to insure the Bob Rouse. By not addressing that issue, Bindea has conceded it. Even so, Bindea’s own allegations show that he “was not aware of the terms conditions, conditions[,] and requirements the [written] contract contained.” Indeed, he disclaims any knowledge that this contract existed before the Bob Rouse capsized.

Thus, taking the pleadings and all reasonable inferences in Bindea’s favor, the undisputed facts show that Bindea and ASIC did not “assent to the same thing in the same sense” and that their minds simply did not “meet as to all the terms,” under which ASIC agreed to provide the type and scope of insurance that Bindea thought he had applied for and obtained.

Exclusions

The policy contains two clauses providing that the Bob Rouse “shall be confined to” a navigational area “within the east coast of Florida” and that, if the Rob Rouse “exceeds” this navigational area, “then all coverage herein is suspended until the vessel safely return[ed]” to an area “within the east coast of Florida.” Bindea asserts that the phrase “‘within the east coast of Florida’ is vague and ambiguous” and conflicts with other language defining the “applicable coverage territories” for liability insurance specifically. Thus, he asserts ASIC has waived or should be estopped from invoking the navigational warranties and therefore must cover a loss occurring while the Bob Rouse was “in transit from Port-au-Prince, Haiti to Môle Saint-Nicolas, Haiti.”

The applications submitted to ASIC stated that the Bob Rouse’s navigational operations would be limited to the “area around Florida” or, more specifically, to Ft. Lauderdale, Florida. Based on those statements, ASIC issued a policy providing the agreed-upon coverages only while the vessel was “within the east coast of Florida” and expressly excluding all coverage for any loss occurring while the vessel was outside of that navigational area. Bindea asserts that the phrase “within the east coast of Florida” is ambiguous, but he does not provide any alternative interpretation of that language.

More importantly, Bindea concedes that the Bob Rouse was “in Haiti” when this loss occurred. Haiti is a sovereign nation located in the Caribbean Sea roughly 500 nautical miles southeast of Florida’s eastern coast. It cannot reasonably be said to be “within” the east coast of Florida.

Accordingly, the policy’s language suspending all insurance coverage for the Bob Rouse while the vessel was not within the east coast of Florida “clearly and unambiguously bring[s]” this particular loss “within its scope.” ASIC is entitled to judgment as a matter of law that it has no obligation to cover Bindea’s claim for this loss.

Plaintiff’s motion for judgment on the pleadings granted.

Atlantic Specialty Insurance Company v. Bindea, Case No. 3:21-cv-00002, Sept. 30, 2022. WDVA at Charlottesville (Hoppe). VLW 022-3-449. 26 pp.