Hanover Insurance Co. v. J&S Promotions, LLC
| Decision Date | 29 June 2021 |
| Docket Number | 2:19-cv-835-JES-NPM |
| Court | U.S. District Court — Middle District of Florida |
| Parties | THE HANOVER INSURANCE COMPANY, Plaintiff, v. J&S PROMOTIONS, LLC, JAMES F. SMITH, and STANNY R. PARK, Defendants. |
This matter comes before the Court on plaintiff's Motion for Summary Final Judgment (Doc. #53) filed on December 1, 2020. Defendants J&S Promotions, LLC and James F. Smith filed a Response in Opposition (Doc. #55) on December 15, 2020, to which Plaintiff filed a Reply (Doc. #59) on January 5, 2021. Defendant Stanny R. Park (Park) has not filed a response to the motion, although she was provided notice of the time to respond (Doc. #54) and of the date and time of oral argument (Doc. #64). The Hanover Insurance Company filed a Notice of Filing Underwriting Affidavit (Doc. #66) on May 11, 2021. The Court heard oral arguments on May 12, 2021. (Doc. #67.) With the permission of the Court (Doc. #68), the parties (other than defendant Park) filed supplemental memoranda on May 17 2021. (Docs. ##71, 72.)
On November 20, 2019, the Hanover Insurance Company (Hanover) filed a Complaint for Declaratory Judgment (Doc. #1) seeking determinations of rights and responsibilities under an insurance policy issued by Hanover to defendant J&S Promotions, LLC (J&S or the Named Insured), whose president and sole member is defendant James F. Smith (Smith). (Id. at ¶ 3.) The determinations relate to the existence of coverage for bodily injury and property damage allegedly resulting from the grounding of the insured yacht upon a coral reef on or about December 28, 2017 (the Grounding Incident). (Id., introductory paragraph.) Hanover seeks declarations that for various reasons no coverage is available under the policy for such injury or damage. For the reasons set forth below, the Complaint is dismissed in part for lack of jurisdiction and the motion for summary judgment as to the remaining counts is granted in part and denied in part.
Summary judgment is appropriate only when the Court is satisfied that “there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “An issue of fact is ‘genuine’ if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Baby Buddies, Inc. v. Toys “R” Us, Inc., 611 F.3d 1308, 1314 (11th Cir. 2010). A fact is “material” if it may affect the outcome of the suit under governing law. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). “A court must decide ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’” Hickson Corp. v. N. Crossarm Co Inc., 357 F.3d 1256, 1260 (11th Cir. 2004)(quoting Anderson, 477 U.S. at 251). In ruling on a motion for summary judgment, the Court views all evidence and draws all reasonable inferences in favor of the non-moving party. Scott v. Harris, 550 U.S. 372, 380 (2007); Tana v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).
Disputes involving marine insurance policies typically fall within a district court's admiralty jurisdiction under 28 U.S.C. § 1333 and Article 3, Section 2 of the United States Constitution. AIG Centennial Ins. Co. v. O'Neill, 782 F.3d 1296, 1302 & n.6 (11th Cir. 2015); Windsor Mount Joy Mut. Ins. Co. v. Giragosian, 57 F.3d 50 54 (1st Cir. 1995).[1] See also (Doc. #1, ¶ 7.) “Article III of the Constitution limits federal courts' jurisdiction to certain ‘Cases’ and ‘Controversies.’” Clapper v. Amnesty Intern. USA, 568 U.S. 398, 408 (2013). This does not include every sort of dispute, but only those “historically viewed as capable of resolution through the judicial process.” Hollingsworth v. Perry, 570 U.S. 693, 700 (2013). See also Uzuegbunam v. Preczewski, 141 S.Ct. 792, 798 (2021). An actual controversy must exist not only at the time the complaint is filed, but through all stages of the litigation. Trump v. New York, 141 S.Ct. 530, 534 (2020); Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 160 (2016), as revised (Feb. 9, 2016). “In our system of government, courts have ‘no business’ deciding legal disputes or expounding on law in the absence of such a case or controversy.” Already, LLC v. Nike, Inc., 568 U.S. 85, 90 (2013).
A claim for a declaratory judgment under the federal Declaratory Judgment Act, 28 U.S.C. § 2202(a), requires the same type of case-or-controversy under Article III. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). “In all cases arising under the Declaratory Judgment Act, the threshold question is whether a justiciable controversy exists”. Atlanta Gas Light Co. v. Aetna Cas. & Sur. Co., 68 F.3d 409, 414 (11th Cir. 1995) (citation omitted). “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). “[A]ctions for declaratory judgment on insurance coverage are generally not justiciable until there has been at least a threat of a claim or lawsuit.” Progressive Mountain Ins. Co. v. Middlebrooks, 805 F. App’x. 731, 734 (11th Cir. 2020) (citations omitted). Plaintiff must establish a case-or-controversy as to each claim separately. Griffin v. Dugger, 823 F.2d 1476, 1483 (11th Cir. 1987). Even if there is a case or controversy, the Court has discretion not to exercise its jurisdiction. Stevens v. Osuna, 877 F.3d 1293, 1311–12 (11th Cir. 2017).
Hanover issued Hanover Yacht Policy No. IHP D262113 00 (the Policy) with an insured period of May 5, 2017 to May 5, 2018. (Doc. #1-2, p. 2.)[2] The Policy applies to a 78-foot long, 2010 Marlow 78 Explorer motor yacht named “Quality Time” (the Insured Yacht). (Id.) The Named Insured on the Policy is J&S. (Id.) In addition, Smith qualifies as an Insured with respect to the liability insurance provided in Section II because he was operating the Insured Yacht with the permission of J&S when the Grounding Incident occurred. (Doc. #1-2, p. 35.)
The Policy includes two coverage parts: Section I relates to first-party property coverage, while Section II relates to liability coverage. (Id., pp. 38-47). The Policy contains the following relevant insuring agreement relating to damages:
We will pay damages caused by an occurrence to which this coverage applies and for which the insured shall become legally obligated to pay, arising out of the ownership, maintenance or use of the insured yacht and which results in bodily injury, property damage, or pollution.
(Doc. #1-2, pp. 43 (emphasis in original).) The Policy also contains the following relevant insuring agreement relating to medical payments for bodily injuries:
We will pay the necessary medical expenses resulting from a bodily injury to you or others from an occurrence which occurs while in, upon, boarding, or dis-embarking the insured yacht . . ..
(Doc. #1-2, pp. 45 (emphasis in original).) Additional provisions of the Policy will be discussed as necessary to resolve specific issues.
According to Smith’s deposition (Doc. #53-4), on December 29, 2017, Smith, his wife, and five other persons (Brian Frye, Melissa l/n/u, Lauren Kasper, Johnny Conser, and Stanny Parks) boarded the Insured Yacht in Fort Myers, Florida. (Id., p. 7.) The group intended to make the 5-6 hour trip to Dry Tortugas National Park, stay there overnight on the Insured Yacht, then travel approximately 70 miles east to Key West, and stay there for a couple of days before returning to Fort Myers. (Id., pp. 9-10, 33-34.) Although the original plan was to make the 105-mile trip in the daylight, the party got a late start from Fort Myers due to Ms. Park’s late arrival. (Id., pp. 9-10.)
Smith piloted the Insured Yacht upon their afternoon departure from Fort Myers. (Id., p. 13.) About 40 miles outside the Tortugas, Smith realized it was going to get dark before they would arrive. (Id., p. 12.) Smith decided to continue at a very slow speed overnight, so as to arrive the next morning. (Id.) During this nighttime journey, the Insured Yacht was alternatively operated by Smith and his wife and by Frye and Conser, in two-hour shifts. (Doc. #53-4, pp. 13-15.) None of the individuals operating the Insured Yacht during this time, or at any time during the trip, was the Captain as defined and identified in the Policy. (Id., pp. 28-31, 34-35.)
In the morning of December 30, 2017, while Smith was operating the Insured Yacht, it arrived at the Dry Tortugas National Park. (Id., p. 5.) The Insured Yacht had been towing a dinghy through the night, but upon arrival Smith and his crew put the dinghy on board the Insured Yacht. (Id., p. 18.) As the Insured Yacht pulled into the boundaries of the port, the crew offloaded the dinghy. (Id., p. 17.)
At about 9:00 a.m. the Insured Yacht either ran aground on a coral reef while approaching the channel into the Dry Tortugas National Park, or “bumped” a rock, causing little or no damage to the Insured Yacht.[3] (Id., pp. 15-19, 25.) The dinghy was not tied to the Insured Yacht at the time of the Grounding Incident, having been disconnected moments before by Conser or Frye, or both. (Doc. #53-4, pp. 18-19.) Additional facts will be discussed as necessary to resolve specific issues.
In the Complaint, Hanover requests a judgment declaring that “there is no coverage under the Policy for any loss liability, damages, bodily injury, property damage or injury or damage of any type in connection with the Grounding Incident.” (Doc. #1, p. 12.) Hanover now...
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