Stokes v. Markel Am. Ins. Co.
| Decision Date | 31 March 2022 |
| Docket Number | C.A. No. 19-2014-LPS |
| Citation | 595 F.Supp.3d 274 |
| Parties | James STOKES, Plaintiff, v. MARKEL AMERICAN INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Delaware |
Michael B. McCauley, PALMER, BIEZUP & HENDERSON LLP, Wilmington, Delaware, Daniel H. Wooster, PALMER, BIEZUP & HENDERSON LLP, Philadelphia, Pennsylvania, David A. Neblett, James M. Mahaffey III, and John A. Wynn, PERRY & NEBLETT, P.A., Miami, Florida, Attorneys for Plaintiff.
Timothy S. Martin and Daryll Hawthorne-Searight, WHITE & WILLIAMS LLP, Wilmington, Delaware, Krista Fowler Acuna, HAMILTON, MILLER & BIRTHISEL LLP, Miami, Florida, Attorneys for Defendant.
STARK, United State Circuit Judge:
On December 28, 2018, Plaintiff James Stokes ("Stokes" or "Plaintiff") filed suit against Markel American Insurance Company ("MAIC" or "Defendant") in Florida state court, asserting eight causes of action including breach of contract and tort claims. (D.I. 1-1) MAIC removed the case based on diversity jurisdiction to the United States District Court for the Southern District of Florida, and that court subsequently granted MAIC's motion to transfer the case to this Court pursuant to 28 U.S.C. § 1404(a). (See D.I. 87 Ex. 2)
Presently before the Court are MAIC's motion for choice of law (D.I. 86), Plaintiff's Daubert motion (D.I. 98), and summary judgment motions brought by both MAIC (D.I. 104) and Plaintiff (D.I. 107). On January 6, 2022, the Court heard argument on all four motions. (D.I. 120) ("Tr.")
Having considered the parties’ arguments and filings, and for the reasons below, the Court will deny Plaintiff's Daubert motion; grant in part and deny in part Defendant's summary judgment motion; and deny Plaintiff's summary judgment motion. The Court agrees with Defendant's analysis as to which substantive law governs Plaintiff's various claims, and has applied the law accordingly in deciding the parties’ dispositive motions.
On October 11, 2018, during heavy rains brought by Hurricane Michael, Plaintiff's boat sank while it was moored in Ocean View, Delaware. The 2017 39-foot Midnight Express (the "Vessel") was insured by MAIC, under Policy No. MHP00000361698 (the "Policy"), an "all-risk," agreed $680,000 value, marine policy covering the period between October 20, 2017 and October 20, 2018. (D.I. 108 Ex. B) The Policy's choice-of-law provision provides:
This policy is subject to established principles and precedents of federal admiralty law of the United States of America, but where no substantive principle or precedent is applicable state law shall apply. Any provision of this policy that conflicts with applicable law or regulation is hereby amended to conform to the minimum requirements of the law or regulation.
(Id. at 3)
In terms of coverage, the Policy states: "We will cover sudden accidental direct physical loss or damage to the insured watercraft." (Id. at 5) (emphasis omitted) The Policy includes several exclusions, one of which provides: "We will not pay for loss, damage or expense caused by or resulting from ... manufacturer's defects or design defects." (Id. at 6) (emphasis omitted) A design defect is defined in the Policy as "a flaw in the structural plan of the insured watercraft's hull or machinery, or any of its components." (Id. at 1) (emphasis omitted) The Policy provides further that: (Id. ) (emphasis omitted)
On June 1, 2018, before the Vessel sank, Stokes negotiated and accepted the terms of an Endorsed Policy that allowed the Vessel to remain in Florida for two weeks past the contractual period. (See D.I. 95 at 14; D.I. 87 Ex. 4) He also added the Rickenbacker Marina in Florida as an additional insured to the Policy. (D.I. 87 Ex. 4) Stokes claims that he negotiated and accepted these terms while he was in Florida. (See D.I. 95 at 5-6)
After the Vessel sank, Plaintiff filed a claim under the Policy, and MAIC performed an initial survey of the Vessel. (See D.I. 108 at 3) MAIC's surveyor, Jonathan Klopman, reported that (D.I. 108 Ex. E at 4) After the initial survey, MAIC issued a reservation of rights letter on November 12, 2018, stating that the Vessel may be unseaworthy and that any claim for coverage may be subject to policy exclusions. (D.I. 108 Ex. F at 2-3) The letter also stated that MAIC could not yet determine whether coverage existed for Stokes’ loss. (Id. ) Although it has now been over three years since the loss, Plaintiff alleges that MAIC has not yet formulated an official coverage position. (See D.I. 108 at 4)
Despite this uncertainty as to coverage, MAIC has paid costs related to the loss. It issued invoices related to the post-loss work and storage of the Vessel totaling at least $5,280.25, and it paid more than $15,199.00 for raising, salvaging, and towing the Vessel from the site of the loss to the Indian River Marina, where the Vessel remains today. MAIC has also paid indemnity payments related to the loss on behalf of Stokes. (See D.I. 108 at 6)
The parties’ experts disagree as to why the Vessel sank. In the view of Plaintiff's experts, the sinking was caused by an "excessive amount of rain from Hurricane Michael." (D.I. 114 Ex. A at 1) By contrast, Defendant's expert, Robert K. Taylor, concluded that the Vessel was "defectively designed" because "the boat did not have an adequately designed cockpit drainage system" and "the deck hatch located directly adjacent to the cockpit scuppers was neither watertight nor weathertight." (D.I. 99 Ex. A at 17) Alternatively, he opined that the lack of an owner's manual or signage instructing users of these inadequacies or recommending that they cover the boat when not in use constituted design defects. (Id. )
Plaintiff alleges that the Vessel was only in Delaware because MAIC required that he store it there during hurricane season. (D.I. 36 Ex. 1 ¶ 18) He claims that he purchased and registered the Vessel in Florida, "specifically for boating in Florida," and that his captain is located in Florida. (Id. ¶¶ 13-14) At the time the parties entered into the Policy, however, Stokes’ insurance agent was located in Maryland. (See D.I. 87 at 5) His application for insurance for the Vessel lists his primary residence as being in the District of Columbia, where the Policy was issued and delivered to him. (Id. ) Stokes also lists a D.C. address as his primary address in the Policy Declarations, which state that the Vessel's "Unit Mooring Location" is in Maryland. (D.I. 87 Ex. 3 at 307)
In Daubert v. Merrell Dow Pharmaceuticals, Inc. , 509 U.S. 579, 597, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), the Supreme Court explained that Federal Rule of Evidence 702 creates "a gatekeeping role for the [trial] judge" in order to "ensur[e] that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Rule 702(a) requires that expert testimony "help the trier of fact to understand the evidence or to determine a fact in issue." Expert testimony is admissible only if "the testimony is based on sufficient facts or data," "the testimony is the product of reliable principles and methods," and "the expert has reliably applied the principles and methods to the facts of the case." Fed. R. Evid. 702(b)-(d).
There are three distinct requirements for proper expert testimony: (1) the expert must be qualified; (2) the opinion must be reliable; and (3) the expert's opinion must relate to the facts. See Elcock v. Kmart Corp. , 233 F.3d 734, 741 (3d Cir. 2000).
Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if 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." The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 585-87, 585 n.10, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). An assertion that a fact cannot be – or, alternatively, is – genuinely disputed must be supported either by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials" or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A) & (B). If the moving party has carried its burden, the nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Matsushita , 475 U.S. at 587, 106 S.Ct. 1348 (internal quotation marks and emphasis omitted). The Court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).
To defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita , 475 U.S. at 586, 106 S.Ct. 1348 ; see also Podobnik v. U.S. Postal Serv. , 409 F.3d 584, 594 (3d Cir. 2005) () (...
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