Alberto Lamadrid, Miami Yacht Charters, LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh
| Decision Date | 22 May 2014 |
| Docket Number | No. 13-11416,No. 13-12259,D.C. Docket No. 1:11-cv-21163-JG,13-11416,13-12259 |
| Parties | ALBERTO LAMADRID, MIAMI YACHT CHARTERS, LLC, Plaintiffs - Counter Defendants - Counter Claimants - Appellants, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Defendant - Counter Claimant - Counter Defendant - Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[DO NOT PUBLISH]
Appeals from the United States District Court
for the Southern District of FloridaBefore MARTIN and DUBINA, Circuit Judges, and DUFFY,* District Judge.
Alberto LaMadrid ("LaMadrid") and Miami Yacht Charters, LLC ("Miami Yacht") (collectively "Appellants") appeal the District Court's grant of summary judgment in favor of National Union Fire Insurance Company of Pittsburgh, Pennsylvania ("National Union"). In this appeal, we must determine the scope of the coverage provided by an all-risk marine insurance policy. More specifically, we are presented with the question of whether Appellants, insureds under the policy at issue, met their burden of establishing an accidental or fortuitous loss based on the undisputed facts. We answer this query in the affirmative, and thus, reverse the District Court's entry of summary judgment in favor of National Union.
This action arises out of a coverage dispute regarding an all-risk marine insurance policy. Appellants own an 85-foot Broward Motor Yacht, the "Alicia," which is powered by two turbo-charged Detroit Diesel 12v71 engines. The Alicia is covered by an all-risk Recreational Marine Policy ("Policy") issued by National Union to Appellants, under which Miami Yacht and LaMadrid are the named insureds. In 2010, LaMadrid and his family were returning to Miami from avoyage to the Bahamas when LaMadrid observed black smoke flowing from the exhaust of the starboard engine. After the Alicia's captain reduced the vessel's speed, LaMadrid proceeded to the yacht's engine room, where he observed grayish smoke emanating from the air filters and valve covers.
Upon the Alicia's safe return to Miami, LaMadrid, who owns and operates Miami Yacht and Engine Works, enlisted his mechanics, as well as other individuals and entities, to examine the yacht in hopes of determining the cause of the smoke. Following unsuccessful attempts to identify the cause of the engine failure and to repair the engine, LaMadrid concluded that the starboard engine was beyond repair and subsequently reported a claim to his insurance agent.
After receiving the report of the loss, National Union dispatched its investigator, Stewart Hutcheson, to examine the vessel. However, given the post-loss condition of the starboard engine, Hutcheson was unable to identify or arrive at a conclusion regarding the cause of the loss and merely assumed that the engine's failure was due to wear and tear and corrosion. Based on Hutcheson's opinion, National Union denied coverage, citing only the Policy's wear and tear exclusion.1 Appellants retained Mirkos Pichel to inspect the yacht's starboard engine, as well as any remnants thereof, and to prepare a report offering hisopinions on the cause of the loss. Pichel concluded that the cause of the starboard engine's failure was a relief valve in the oil system that was fixed in the open position.2 In light of National Union's denial of coverage, this action and appeal followed.
On February 2, 2011, Appellants filed a single-count Complaint against National Union in Florida state court seeking to recover under the Policy. The action was subsequently removed to the United States District Court for the Southern District of Florida on the basis of diversity jurisdiction under 28 U.S.C. § 1332. Concurrently with removal, National Union answered Appellants'Complaint, denying, inter alia, that the vessel's damage was the result of a covered peril under the Policy.3
On April 29, 2011, the parties consented to the full jurisdiction of a Magistrate Judge with respect to all matters before the District Court, including trial. Shortly thereafter, the parties filed cross-motions for summary judgment. The opposing motions were fully briefed. Following an evidentiary hearing at which the parties' experts testified, and after additional briefing at the lower court's request, the court issued an Omnibus Order denying the parties' respective motions for summary judgment, as well as National Union's Motion to Strike the Affidavit and Deposition Testimony of Plaintiff's Expert Witness, Mirkos Pichel.
National Union timely filed a Motion for Reconsideration of the Court's Order Denying Defendant[']s Motion for Summary Judgment ("Motion for Reconsideration"). After full briefing, the lower court entered its Order Granting Defendant's Motion for Reconsideration ("Order Granting Reconsideration"), reversing its previous Omnibus Order, and in turn granting National Union's Motion for Summary Judgment and dismissing Appellants' claim with prejudice.
Final Judgment was entered upon the Order Granting Reconsideration in favor of National Union. Appellants thereafter filed a Rule 59(e) Motion to Alter or Amend Judgment, seeking reversal of the Final Judgment and the OrderGranting Reconsideration, as well as requesting the entry of summary judgment in Appellants' favor. After extensive supplemental briefing and a hearing, the District Court denied Appellants' Rule 59(e) Motion.
Appellants timely noticed their appeal of the decision on the merits.4 On April 23, 2013, the District Court entered an order awarding National Union its taxable costs, following which Appellants filed a second notice of appeal, specifically appealing the award of costs. On May 28, 2013, Appellants moved to consolidate the two appeals, and this Court entered an Order granting the requested consolidation on July 29, 2013.
Because summary judgment involves pure legal determinations, we review the District Court's grant of summary judgment de novo, applying the same legal standards as the District Court. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1259 (11th Cir. 2004). Summary judgment is properly granted where "the pleadings, depositions, answers to interrogatories, and admissions on file, togetherwith the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Id.
Prior to addressing the substantive question raised on appeal, we first confront the issue of whether Florida law or federal maritime law governs the instant dispute. Morrison Grain Co. v. Utica Mut. Ins. Co., 632 F.2d 424, 428 (5th Cir. 1980).5 Notwithstanding the extensive briefing, the parties' positions on this issue are less than clear. However, both because the parties themselves failed to squarely address this issue and because we find that the inquiry is without consequence to the outcome of this appeal, "we need not be stranded long on this legal shoal." Id.
Initially filed in Florida state court, this action was removed to federal court on the basis of the diversity of the parties.6 Although claims concerning marine insurance contracts may be maintained in federal court under diversityjurisdiction,7 "[f]ederal courts have long considered actions involving marine insurance policies to be within the admiralty jurisdiction of the federal courts and governed by federal maritime law." All Underwriters v. Weisberg, 222 F.3d 1309, 1312 (11th Cir. 2000); see Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 313 (1955) )); see also St. Paul Fire & Marine Ins. Co. v. Lago Canyon, Inc., 561 F.3d 1181, 1184 (11th Cir. 2009) (); Morrison Grain Co., 632 F.2d at 428 n.4 . However, merely because actions involving marine insurance contracts may fit within federal admiralty jurisdiction, "it does not follow . . . that every term in every maritime contract can only be controlled by some federally defined admiralty rule." Wilburn Boat Co., 348 U.S. at 313.
To the contrary, the Supreme Court held in Wilburn Boat Co. that in the absence of a controlling rule of federal maritime law, the interpretation or construction of a marine insurance contract is to be determined according to state law. See id. at 321; see also All Underwriters, 222 F.3d at 1313 (discussing Wilburn Boat Co.). In such instances, "when neither statutory nor judicially created maritime principles provide an answer to a specific legal question, courts may apply state law provided that the application of state law does not frustrate national interests in having uniformity in admiralty law." All Underwriters, 222 F.3d at 1312 (quoting Coastal Fuels Mktg., Inc. v. Fla. Express Shipping Co., 207 F.3d 1247, 1251 (11th Cir. 2000) (internal quotation marks omitted)); see also Steelmet, Inc. v. Caribe Towing Corp., 779 F.2d 1485, 1488 (11th Cir. 1986) ( ). Accordingly, this Court has recognized that "admiralty courts will generally look to appropriate state law in determining questions involving a marine insurance...
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