Progressive Garden State Ins. Co. v. Metius

• Decision Date: 25 January 2022
• Docket Number: Civ. 18-2893 (WJM)
• Parties: PROGRESSIVE GARDEN STATE INSURANCE COMPANY, Plaintiff, v. ERWIN METIUS, Defendant.
• Court: U.S. District Court — District of New Jersey

PROGRESSIVE GARDEN STATE INSURANCE COMPANY, Plaintiff, v. ERWIN METIUS, Defendant.

Civ. No. 18-2893 (WJM)

United States District Court, D. New Jersey

January 25, 2022

OPINION

WILLIAM J, MARTINI, U.S.D.J.

Plaintiff Progressive Garden State Insurance Company ("Progressive") brings this declaratory judgment action against its insured, Defendant Erwin Metius ("Metius"), seeking a declaration of non-coverage under a New Jersey Boat and Personal Watercraft Policy. This matter is now before the Court on Progressive's motion for summary judgment. ECF No. 49, Having reviewed all submissions made in support of and in opposition to the motion, the Court decides the motion on the papers and without oral argument. See Fed. R, Civ. P. 78(b); L. Civ. R 78.1(b). For the reasons stated herein, Progressive's motion for summary judgment is GRANTED.

I. JURISDICTION

The Court exercises subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1333. The claim concerns a marine insurance contract and therefore falls within the Court's admiralty jurisdiction. See N. Am. Specialty Ins. Co. v. DiAntonio, No. 14-4019, 2015 WL 790514, at * 1 (D.N.J. Feb. 25, 2015) (exercising subject matter jurisdiction over a declaratory judgment action pursuant to § 1333 where the case arose out of a charter vessel insurance policy).

II. FACTUAL BACKGROUND^[1]

A. The Boat Purchase

In August of 2016, Metius and his wife separated and he moved out of their jointly owned home in Jersey City, New Jersey, changed his mailing address to that of their jointly owned second home in Blairstown, New Jersey (the "Blairstown Address"), and stayed with family and friends until he rented an apartment of his own in Jersey City. Pl. SOMF ¶¶ 4-6, 9. The apartment was a five- to ten-minute commute from his office at 430 Communipaw Avenue in Jersey City (the "Office Address"), where he served as the President and CEO of his company, EAM Distribution. Id. ¶ 2; Metius Dep. Tr. 29:9-29:11.

In January of 2017, Metius and his girlfriend, Kim Latour ("Ms. Latour"), began looking for a boat to purchase, one that Metius "could live on or stay on overnight" that was "large enough to be comfortable on board" but "small enough to fit into the slips in Jersey marinas." Pl. SOMF ¶ 10; Metius Dep. Tr. 37:5-37:12. At his deposition, Metius agreed that he intended to keep the boat in Jersey City so it could be close to the office and "something [he] could live on in town." Metius Dep. Tr. 38:13-38:23.

In April of 2017, while still searching for a boat, Metius began negotiating with Hudson Point Marina (the "Marina") in Jersey City and its manager, Bruce Boyle ("Boyle"), to procure a boat slip. Pl. SOMF ¶ 12. Boyle provided him with a copy of the Hudson Point Dockage Agreement, paragraph 12 of which prohibited "live aboards." Id. ¶ 13, On April 21, 2017, Metius sent an email to Boyle stating, "[a]s mentioned it is my intention to live on the board throughout the year," and asking him to "remove the 'no live aboard' requirement from the Agreement." Pl. Ex. 4, ECF No. 49-5. Boyle agreed to do so. Id. At his deposition, Metius reiterated that "[i]t was my intention to use the boat as a base in Jersey City while I was-so I could avoid the commute from Blairstown," and that he "intended to stay on board the boat at times." Metius Dep. Tr. 42:16-42:18, 48:9-48:10.

In July of 2017, Metius finally purchased the 1988 Marine Trader motor yacht "Happy Hours" (the "Vessel"). Pl. SOMF ¶ 16; Metius Decl. Ex. E, ECF No. 50-13. He took possession of the Vessel in August of 2017 and terminated his Jersey City apartment lease that same month because, as he testified, "I had the boat. At that point I had purchased the boat." Pl. SOMF ¶ 16; Metius Dep. Tr. 29:19-29:22.

B. The Insurance Policy

On August 22, 2017, Metius applied for and obtained a New Jersey Boat and Personal Watercraft Policy (Policy No. 16050154-0) (the "Policy") online through Progressive's website. Pl, SOMF ¶ 21, The application required him to identify the "Primary Use" of his Vessel from the following series of drop-down menu items: "Business/Commercial use," "Pleasure use exclusively," "Primary Residence," "Racing/Speed contests," or "Rented or leased to others." Id.; Stern Decl. ¶ 5, ECF No. 49-10. Melius selected "Pleasure use exclusively." Pl. SOMF ¶ 22. If he had selected any of the other options, Progressive would not bind insurance coverage. Id. ¶ 21. At the end of the application, Metius reviewed Progressive's "Outline of Coverage" and answered the "Boat Questionnaire," which, in pertinent part, asked him if the Vessel he sought coverage for was "used as a primary residence." Id. ¶ 23. Metius marked "No." Id. He electronically signed the application, verifying the truth of its contents, and, based upon his representations, Progressive issued the Policy beginning August 22, 2017, Ins. Application, ECF No. 1-3; Ins. Policy, ECF No. 1-2.

The Policy provided Metius up to $300, 000 in liability coverage for "Liability to Others," including "Bodily Injury and Property Damage Liability," as well as for "Uninsured Boater," "Medical Payments," "Sign & Glide," and "Coastal Navigation." Pl. SOMF If 25. The Policy did not provide, and Metius did not pay the premium for, any coverage for hull insurance, i.e., comprehensive "Physical Damage Coverage." Id. ¶¶ 25, 28.

C. The Fire

Five months later, on the evening of December 28, 2017, Metius returned to the Vessel docked at her slip in the Marina and prepared to spend the night aboard. Id., ¶¶ 16, 33. He turned on the Vessel's reverse-cycle A/C unit and, for the first time since he purchased the Vessel, toggled its function to "HEAT," triggering what he believed was an electrical fire. Id. ¶ 33; Pl. Ex. 2, Dec. 29, 2017 Phone Tr. 10:14-10:20, ECF No. 49-3. The fire consumed the Vessel, burning it to the waterline, and ignited a boat in the neighboring slip, causing it to burn and sink. Pl. SOMF ¶ 33. There was further damage to the Marina dock, and the possibility of an oil spill. Id. ¶ 34.

D. The Insurance Claim

Metius filed an insurance claim with Progressive under his Policy, seeking to recover on the damages to his Vessel, damages to the neighboring boat, and environmental remediation.^[2] Id. ¶124, 35; Denial Letter, ECF No. 1-4.

As part of its investigation into the claim, Progressive spoke with Metius over the phone three times: on December 29, 2017, January 9, 2018, and January 17, 2018. See Pl. Ex. 2, Phone Trs., ECF No. 49-3. Each call was recorded for quality assurance with Metius's permission. Pi. SOMF ¶ 35. During these recorded phone calls, Metius made the following representations to Progressive concerning the use of his boat and his living situation:

• He purchased the Vessel "mostly as a liveaboard," to reside on the Vessel, and did live aboard it prior to the fire. Id. ¶ 36; Pl. Ex. 2, Dec. 29, 2017 Phone Tr. 6:1-6:3, 7:12-7:14, ECF No. 49-3; Pl. Ex. 2, Jan. 9, 2018 Phone Tr. 34:19-35:1, ECF No. 49-3;

• He purchased the Vessel after separating from his wife and "need[ing] to find somewhere else to live." Pl. Ex. 2, Jan. 9, 2018 Phone Tr. 56:15-56:20, ECF No. 49-3. Having had "boating experience" and "a lot of time on the water," he stated it seemed like a "cost effective . . . way to live." Id. 56:22-56:25;

• He took the Vessel out of its slip only once since he purchased it in August. Pl. SOMF ¶ 40;

• When asked where he was residing after the fire, he responded, "[a]t this moment, I don't have a home. Well [I] have a place that I don't-I have a second home, but I don't live there. Pm officially homeless at the moment." Pl. Ex. 2, Jan. 9, 2018 Phone Tr. 20:11-20:15, ECF No. 49-3. He further stated, "my boat and my home went down, so I'm living with family and friends. ... I was referring to my boat as my home." Id. 20:17-20:21;

• When asked where he receives mail and bills, he responded, "I have a weekend home or a home in Blairstown, New Jersey. I don't receive-I don't have anything mailed there. Everything comes to my office [at 430 Communipaw]. I have a business and I just manage my bills and my affairs through my office here," Id., 37:24-38:7;

• He was not living at the Blairstown Address after the fire because it was an hour-and-a-half commute. Id. 38:10-38:15. He stated, "I go up on weekends and, you know. On occasion I might go up through the week, but for the most part I stay in town here (inaudible)." Id. 38:19-38:21; and

• When asked why he had indicated on his insurance application that he was using the Vessel for pleasure, as opposed to indicating that he would be living on it as a primary residence, Metius responded, "Pm not sure I understand the difference. The pleasure-it's a pleasure craft. I don't know that there was an option of a live- aboard. Again, I don't quite understand the distinction." Pl. Ex. 2, Jan. 17, 2018 Phone Tr. 71:4-71:17, ECF No. 49-3.

Progressive determined from Metius's representations that he had purchased and insured the Vessel not for "Pleasure use exclusively" as he had indicated on his insurance application, but with the intention of using the Vessel as a primary residence, and was using it as such at the time of the loss, in violation of the Policy, Denial Letter, ECF No. 1-4. Progressive consequently denied coverage of his claim on January 29, 2018, voided the Policy back to its inception, and refunded him the premium he had paid. Id; Rescission Notice, ECF No. 1-5.

In doing so, Progressive relied upon the Policy's Exclusion number 21, under "Part I-Liability to Others," which expressly provides:

Coverage under this Part I, including our duty to defend, will not apply to any insured person for: ... 21. bodily injury or property damage arising out of an accident while using a watercraft as a primary

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