Outlaw Performance Boats, LLP v. Brown & Brown of Fla.
| Decision Date | 06 February 2023 |
| Docket Number | 2:21-11961 |
| Parties | OUTLAW PERFORMANCE BOATS, LLP, et al., Plaintiff, v. BROWN AND BROWN OF FLORIDA, INC. et al., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
HON GERSHWIN A. DRAIN UNITED STATES DISTRICT JUDGE
On August 24, 2021, Plantiffs Outlaw Performance Boats LLP (“Outlaw”), Outlaw owner Larry Lalewicz (“Larry”) and Leslie Gillis (“Leslie”) filed a First Amended Complaint. It named insurance company Brown & Brown of Florida Inc., (“Brown & Brown”) and insurance agent Reed Hendrix (“Hendrix”) as Defendants.
The complaint alleges four counts: Breach of Contract (Count I) Breach of Fiduciary Duty (Count II), Negligence (Count III) against Defendant Hendrix only, and Respondeat Superior (Count IV) against Defendant Brown and Brown only.
Before the Court is Defendants' motion for summary judgment on all counts, filed on October 26, 2022. [ECF No. 37] Plaintiffs responded on October 27, 2022. [ECF No. 39]. Defendants replied on November 3, 2022. [ECF No. 40]. Both parties also filed motions for leave to file supplemental briefing with the briefs attached. [ECF Nos. 45 and 47]. Those motions for leave are GRANTED. The motion for summary judgment is fully briefed and the Court heard oral argument on January 27, 2023.
For the reasons stated below, Defendants' motion for summary judgment is GRANTED with respect to Count I (Breach of Contract) and DENIED with respect to Counts (II-IV).
Plaintiffs say they engaged Brown & Brown and its employee Hendrix to act as their agent and provide them a quote for a “full coverage” insurance policy for their custom 2019 Outlaw Catamaran charter fishing vessel (“Vessel”). Although Plaintiff did eventually secure an insurance policy with the help of Hendrix and other staff at Brown and Brown, the company was not the insurer of the Vessel.
The insuring company's name was Yachtinsure. Plaintiffs do not bring any claims against Yachtinsure in this case.
The facts relevant to this motion pertain to whether Hendrix contracted with Plaintiffs to advise and connect them with an insurer that would cover the vessel while in the waters and trailer, as well as during transportation between states, and whether that purported agreement was breached due to Hendrix's alleged negligence.
Larry contacted Hendrix in an email on December 11, 2019. He informed Hendrix that he wanted help getting an insurance policy to cover his charter captain and boat. [ECF No. 39-2, PageID.435]. Hendrix is alleged to have said, “I grew up charter fishing and commercial fishing and I now specialize in insurance for these types of risk . . . I insure a ton of Freeman boats and your Outlaw Vessels are very similar.” [Id]. Plaintiffs replied, “[w]e are new to this and any help on getting this new charter captain and boat covered, would be great!” [Id]. On December 16, 2019, Hendrix requested a survey or “spec sheet” of the Vessel because “it is a custom build and one of a kind,” and the insurance carriers wanted more information. [ECF No. 39-2, PageID.432]. Plaintiffs sent Hendrix a survey of the boat.
As part of the discussions with Hendrix, Larry says he specifically informed Hendrix that he “intended to trailer” the Vessel between Michigan and Louisiana and inquired into whether the policy would cover such “transportation.” [ECF No. 39-3, PageID.442]. On December 20, 2019, Hendrix sent Plaintiffs an email stating: [ECF No. 39-4, PageID.445].
On January 7, 2020, Plaintiffs were allegedly sent the completed proposal for insurance from Hendrix along with a quote from Aspen American Insurance Company and Yachtinsure Limited.
On January 15, 2020, Larry executed an application for insurance to Brown & Brown. He claims Hendrix prepared the application for him. The application stated that the main mooring for the vessel was at Cypress Cove Marina in Venice, Louisiana, with navigational requirements identified as the “Waters of Gulf of Mexico (excluding Cuba) not exceeding 250 miles offshore.” [ECF No. 37-2, PageID.332]. And it stated that the vessel would not be “laid up[.]” [Id].
On January 27, 2020, Robyn Aizprua, Marine Account Manager for Brown & Brown, sent Larry and Leslie a copy of the binder for insurance. Also on January 27, 2020, Ms. Aizprua sent Larry and Leslie a copy of the yacht policy Declaration and stated in her correspondence “If you are not in agreement with the Marine Insurance Confirmation[,] please contact our office immediately so that we may discuss this matter further and amend your coverage accordingly.” The same day, Larry sent to Defendants an email stating that they “need to change the declaration page to Larry Lalewicz[,]”-instead of both Larry and Leslie-as the beneficial owner of the vessel.
Plaintiffs were subsequently issued a yacht policy with Yachtinsure, Ltd., policy number ASU00804500, effective February 1, 2020. On February 3, 2020, Ms. Aizprua forwarded a copy of the binder of insurance with Endorsement 1, which amended the policy as Mr. Lalewicz requested.
On February 24, 2020, Emily Williams, Marketing Assistant for Brown & Brown, sent a copy of the policy to Larry and in her email, requested that he The policy stated that:
coverage will not apply during any period in which your yacht and/or vessel . . . are outside of the named navigational territory as shown on the Declaration unless prior written consent and agreement has been obtained by us. Please be aware that an Additional Premium may become payable for this extension of coverage.
On January 12, 2021, while stored on its trailer in Michigan, Plaintiffs' boat caught fire, destroying the Vessel and causing over $400,000.00 in losses to Plaintiffs, according to a fire department report. [ECF No. 39-5, PageID.447]. Plaintiffs submitted a proof of claim to their insurance carrier, Yachtinsure, for this loss. On January 26, 2021, Plaintiffs received a Reservation of Rights letter, denying coverage for the loss because, it was damaged while on the trailer outside of navigational limits. [ECF No. 39-6, PageID.451].
Plaintiffs say they contacted Hendrix at Brown & Brown seeking an explanation as to why the claim was denied and why the policy Hendrix procured did not cover the loss, and “why Hendrix failed to obtain the insurance he promised to provide.” [ECF No. 39, PageID.416]. Plaintiffs say neither Hendrix nor Brown & Brown responded to that request. [Id].
Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). No genuine dispute of material fact exists where the record “taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Matsushita Elec. Indus., Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
“Of course, [the moving party] always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323. The party opposing summary judgment must show that she/he can make good on the promise of the pleadings by laying out enough evidence that will be admissible at trial to demonstrate that a genuine issue on a material fact exists, and that a trial is necessary. Bard v. Brown Cnty., Ohio, 970 F.3d 738 (6th Cir. 2020).
Ultimately, the court evaluates “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.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). In doing so, the Court “draw[s] all reasonable inferences and view[s] the evidence in the light most favorable to the [nonmovant]” to determine whether a genuine dispute of material fact exists. Henschel v. Clare Cty. Rd. Comm'n, 737 F.3d 1017, 1022 (6th Cir. 2013).
Plaintiffs allege that they formed a contract with Hendrix to secure adequate insurance coverage, including coverage for when the boat was on its trailer in Michigan.
To prevail on a claim for breach of contract, the plaintiff must establish by a preponderance of the evidence that (1) there was a contract, (2) the other party breached the contract, and (3) the breach resulted in damages to the party claiming breach. Bank of Am., NA v. First Am. Title Ins. Co., 499 Mich. 74, 878 N.W.2d 816 (2016).
A valid contract requires five elements: (1) parties competent to contract, (2) a proper subject matter, (3) legal consideration (i.e., a bargained for exchange), (4) mutuality of agreement, and (5) mutuality of obligation. AFT Mich v. Michigan, 497 Mich. 197, 235, 866 N.W.2d 782 (2015). “Unless an acceptance is unambiguous and in strict conformance with the...
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