807 F.2d 916 (11th Cir. 1987), 86-5025, Lumber & Wood Products, Inc. v. New Hampshire Ins. Co.

Docket Nº:86-5025.
Citation:807 F.2d 916
Party Name:LUMBER & WOOD PRODUCTS, INC., Plaintiff-Appellee, v. NEW HAMPSHIRE INSURANCE COMPANY, etc., Defendant-Appellant.
Case Date:January 14, 1987
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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807 F.2d 916 (11th Cir. 1987)

LUMBER & WOOD PRODUCTS, INC., Plaintiff-Appellee,



No. 86-5025.

United States Court of Appeals, Eleventh Circuit

January 14, 1987

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Smathers & Thompson, Henry Bolz, III, Miami, Fla., for defendant-appellant.

Jack M. Coe, Lee, Schultz, Murphy & Coe, Thomas J. Schulte, Coral Gables, Fla., for plaintiff-appellee.

Appeal From the United States District Court for the Southern District of Florida.

Before JOHNSON and ANDERSON, Circuit Judges, and GARZA [*], Senior Circuit Judge.

GARZA, Senior Circuit Judge:

On September 13, 1979, Hurricane Frederic struck Chickasaw, Alabama and caused substantial damage to certain lumber stored on a shipping dock. Plaintiff-Appellee, Lumber & Wood Products, Incorporated ("Lumber & Wood"), filed a claim against Defendant-Appellant, New Hampshire Insurance Company ("New Hampshire"), seeking recovery for the loss. New Hampshire denied the claim. Consequently, Lumber & Wood filed a complaint against New Hampshire to have coverage determined and damages assessed. The district court judge entered a final judgment in favor of Lumber & Wood on December 11, 1985, reasoning that the cargo was still "in transit" because its placement on the consignee's dock was not intended as a final resting place for the cargo. We must reverse the district court's judgment because the policy's coverage expired prior to Hurricane Frederic's rampage in Chickasaw.

Lumber & Wood is in the business of purchasing lumber from various sources in South America and selling the lumber to various purchasers in the United States and elsewhere. Delta Hardwood Corporation ("Delta Hardwood") is in the business of purchasing shipments of lumber from Lumber & Wood and, thereafter, reselling the lumber in smaller lots to buyers in the Mobile, Alabama area. In June of 1974, New Hampshire issued a master Marine Open Cargo Policy to Lumber & Wood to insure shipments of lumber while being transported from South America to the United States. Certificate of Insurance No. 44, dated June 15, 1979, was issued to cover a shipment of bundled lumber aboard the M/V "Gina Star" from Brazil to Delta Hardwood's dock in Chickasaw.

The subject cargo was loaded aboard the M/V "Gina Star" and transported to Chickasaw without incident. The lumber, in good order and condition, was off-loaded and completely discharged onto Delta Hardwood's private dock on August 11, 1979. Delta Hardwood, the consignee, was the private owner of the contiguous berth, dock space and warehouse facilities at Chicasaw. The lumber had to be moved approximately ninety feet to be placed in Delta Hardwood's warehouse. Moreover, Delta

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Hardwood had overall responsibility concerning the grading, inspecting and movement of the lumber once off-loaded from the vessel. Delta Hardwood, in the past, had sold some lumber directly from the dock to purchasers. On August 12, upon receiving notice that the lumber had arrived at Chickasaw, Lumber & Wood issued an invoice to Delta Hardwood for the entire shipment and created an account receivable for the invoiced amount.

There was a conflict in the testimony given regarding several phone conversations that took place just before Hurricane Frederic struck. Apparently, a Delta Hardwood agent contacted a Lumber & Wood agent about a delay in storing the subject lumber in the warehouse due to a previous shipment which occupied a portion of the warehouse. The agent for Lumber & Wood testified that she was assured by New Hampshire that the insurance was in full force and effect as long as the lumber in question was out of the insured's control.

On September 13, 1979, Hurricane Frederic caused $63,025.23 worth of damage to the lumber which had remained on the dock. Approximately 10% of the subject lumber was still on the dock at the time of the destruction. Thirty-two days had elapsed from the delivery of the lumber at Delta Hardwood's facilities on August 11, until the arrival of Hurricane Frederic on September 13. After the commencement of legal action, Delta Hardwood and Lumber & Wood executed an assignment of Delta Hardwood's claim back over to Lumber & Wood.

The district court judge ruled that coverage existed because the cargo was "in transit" as it sat on Delta Hardwood's dock. The court reasoned that the premiums charged by New Hampshire did not contemplate the dock as a final resting place, but rather a warehouse to warehouse arrangement was intended and such should be strictly enforced pursuant to the agreement...

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