Travelers Prop. Cas. Co. of Am. v. Ocean Reef Charters LLC, 6:17-CV-06670 EAW

• Citation: 324 F.Supp.3d 366
• Decision Date: 31 August 2018
• Docket Number: 6:17-CV-06670 EAW
• Parties: TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Plaintiff, v. OCEAN REEF CHARTERS LLC, and Stonegate Bank, Defendants.
• Court: U.S. District Court — Western District of New York

324 F.Supp.3d 366

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Plaintiff,

v.OCEAN REEF CHARTERS LLC, and Stonegate Bank, Defendants.

6:17-CV-06670 EAW

United States District Court, W.D. New York.

Signed August 31, 2018

James William Carbin, Patrick Ryan McElduff, Duane Morris, LLP, Newark, NJ, for Plaintiff.

Darlene Mondi Lidondici, Pro Hac Vice, Fertig & Gramling, Fort Lauderdale, FL, Karl S. Essler, Morgenstern DeVoesick PLLC, Pittsford, NY, David M. Knapp, Kevin T. Merriman, Ward Greenberg Heller & Reidy LLP, Rochester, NY, for Defendants.

DECISION AND ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

Plaintiff Travelers Property Casualty Company of America ("Plaintiff") commenced this admiralty and maritime action on September 26, 2017, requesting that the Court enter a declaratory judgment against Ocean Reef Charters LLC ("Ocean Reef") and Stonegate Bank (the "Bank")¹ (collectively, "Defendants") that sets forth the parties' rights and obligations under a maritime insurance policy (the "Policy") covering a 1998 92-foot Hatteras yacht (the "Yacht"). (Dkt. 1).

Presently before the Court is Ocean Reef's motion to transfer venue (Dkt. 16), Centennial's motion to transfer venue, and, in the alternative, to dismiss the action (Dkt. 18), and Ocean Reef's motion for leave to file supplemental evidence (Dkt. 30). For the following reasons, Ocean Reef's motion to transfer is granted, Centennial's motion is granted to the extent that it seeks to transfer venue to the Southern District of Florida but is otherwise denied, and Ocean Reef's motion for leave to file supplemental evidence is denied.

BACKGROUND ²

Plaintiff, a Connecticut business entity with its principal place of business located in Connecticut, is in the business of issuing marine insurance policies. (Dkt. 1 at ¶ 5). In August 2016, Plaintiff issued the Policy to Ocean Reef, effective October 10, 2016, through October 10, 2017, which provided various insurance coverages for the Yacht. (Id. at ¶ 8; see Dkt. 15 (the Policy) ). The Bank is included as a "loss payee" on the Policy. (Dkt. 1 at ¶ 10; see Dkt. 15 at 30). The Policy provides coverage for property damage, commercial towing/emergency services, liability, medical payments, longshore & harbor workers, personal property, and uninsured/underinsured boaters. (Dkt. 15 at 30). The Policy contains a "Captain Warranty," requiring the employment of a "professional captain," and a "Crew Warranty," requiring the employment of "1 full time or part time professional crew." (Dkt. 1 at ¶¶ 12-13; see Dkt. 15 at 27-28). The Policy also includes a "Named Storm Deductible Endorsement," which increases the insurance deductible to five percent "of the Physical Damage amount of insurance" provided within the declarations page "for any loss or damages" resulting from a "named storm as defined by the National Oceanic and Atmospheric Administration (NOAA)," under certain specified conditions. (Dkt. 1 at ¶ 14; see Dkt. 15 at 29).

Ocean Reef has claimed that the Yacht was damaged in September 2017, as a result of Hurricane Irma. (Dkt. 1 at ¶¶ 15-16). Plaintiff alleges that Ocean Reef did not employ or otherwise secure the services of an "approved captain" or a "professional crew." (Id. at ¶¶ 18-22). Plaintiff further alleges that Ocean Reef requested that Plaintiff "make an advance payment to fund the raising of the vessel," and that Plaintiff agreed to do so "subject to a complete reservation of rights, including the right to seek reimbursement." (Id. at ¶¶ 24-25). Ocean Reef allegedly "received the benefit of [Plaintiff]'s payment." (Id. at ¶ 27).

PROCEDURAL HISTORY

On September 26, 2017, Plaintiff commenced this action requesting a declaratory judgment clarifying the parties' rights and responsibilities under the Policy. Specifically, Plaintiff seeks a judgment declaring that: (1) Ocean Reef violated the Captain Warranty and the Crew Warranty; (2) Both violations preclude coverage for any claimed damages or costs; and (3) Plaintiff has no obligation to pay for any claimed damages and costs under the Policy. (Id. at 7). In the alternative, Plaintiff seeks a judgment declaring that the "named storm" deductible applies to any recoverable claim sought by Ocean Reef. (Id. ). Plaintiff further requests that the judgment declare its right "to recover the amounts paid to raise the vessel, plus interest and costs," as well as "the costs, disbursements and reasonable fees of this action." (Id. ).

On December 15, 2017, Ocean Reef filed a motion to transfer this case to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). (Dkt. 16). On December 21, 2017, the Bank filed a separate motion to transfer, which also requested that this case be transferred to the Southern District of Florida pursuant to § 1404(a). (Dkt. 18). In addition, the Bank asserts, in the alternative, that it should be dismissed from this action because the Court cannot assert personal jurisdiction over it. (Id. ). Plaintiff opposes both motions. (Dkt. 21; Dkt. 24).

On January 31, 2018, Ocean Reef filed a motion for leave to file supplemental evidence. (Dkt. 30). Specifically, Ocean Reef requested leave to file a loan agreement related to the Yacht, which was executed between itself and the Bank in 2016. Ocean Reef claims that the agreement would rebuff Plaintiff's assertion that the Bank negotiated, delivered, and issued this loan in Rochester, New York. The Bank filed a declaration suggesting that the loan agreement is irrelevant to whether the Court should transfer this case to the Southern District of Florida. (Dkt. 33). Plaintiff opposes Ocean Reef's motion for leave to file supplemental evidence. (Dkt. 32).

On August 8, 2018, the Court heard argument on the parties' respective motions and reserved decision.

DISCUSSION

I. Defendants' Motions to Transfer Venue

A. Plaintiff Has Invoked This Court's Admiralty Jurisdiction

Plaintiff simultaneously invokes this Court's admiralty and diversity jurisdiction. (Dkt. 1 at ¶¶ 2-3). "Title 28 U.S.C. § 1333(1) grants federal district courts the power to entertain [a]ny civil case of admiralty or maritime jurisdiction. [T]his grant includes jurisdiction over all contracts which relate to the navigation, business, or commerce of the sea." Fireman's Fund Ins. Co. v. Great Am. Ins. Co. of N.Y. , 822 F.3d 620, 632 (2d Cir. 2016) (quotation marks and citations omitted). However, pursuant to Rule 9(h) of the Federal Rules of Civil Procedure, "if a claim for relief falls within the federal courts' admiralty jurisdiction, but is also within the court's subject-matter jurisdiction on some other ground—oftentimes, diversity of citizenship—a plaintiff must explicitly designate the claim as an admiralty claim or else forego admiralty's special procedures and remedies." Garanti Finansal Kiralama A.S. v. Aqua Marine & Trading Inc. , 697 F.3d 59, 69 (2d Cir. 2012) (citations omitted); see McCague v. Trilogy Corp. , No. CIV.A. 06-887, 2007 WL 839921, at *5 n.6 (E.D. Pa. Mar. 15, 2007) ("To invoke admiralty jurisdiction under Fed. R. Civ. P. 9(h), plaintiff must affirmatively insert a statement in the pleadings identifying the claim as an ‘admiralty or maritime claim.’ " (citing Fedorczyk v. Caribbean Cruise Lines, Ltd. , 82 F.3d 69, 73 (3d Cir. 1996) ) ).

In this case, Plaintiff has specifically alleged that "[t]his is an admiralty and maritime claim within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure and within the admiralty jurisdiction of this Court pursuant to 28 U.S.C. § 1333." (Dkt. 1 at ¶ 2); see D'Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd. , 886 F.3d 216, 225 (2d Cir. 2018) ("We routinely conclude that insurance policies covering marine risks fall within our maritime jurisdiction."). The fact that Plaintiff has also alleged that this Court has jurisdiction to entertain this action under principles of diversity does not subvert the invocation of federal admiralty jurisdiction. See BP Expl. & Prod. Inc. v. Cashman Equip. Corp. , 132 F.Supp.3d 876, 882 (S.D. Tex. 2015) ("If an action falls within admiralty jurisdiction, federal courts apply substantive admiralty law to claims that sound in admiralty, regardless of whether jurisdiction is also based upon diversity." (citing Pope & Talbot v. Hawn , 346 U.S. 406, 410-11, 74 S.Ct. 202, 98 L.Ed. 143 (1953) ) ), on reconsideration in part , No. A. H-13-3046, 2016 WL 1399259 (S.D. Tex. Apr. 8, 2016) ; see also Preston v. Frantz , 11 F.3d 357, 358 (2d Cir. 1993) ("[W]hen, as in this case, plaintiffs bring a suit based upon diversity jurisdiction, we nevertheless apply substantive federal maritime law if we have admiralty jurisdiction."); Am. S.S. Owners Mut. Prot. & Indem. Ass'n, Inc. v. Henderson , No. 10 Civ. 8033 (PGG), 2013 WL 1245451, at *3 (S.D.N.Y. Mar. 26, 2013) ("Even if removal of the Maine action was based on diversity jurisdiction, however, admiralty choice-of-law rules apply."). As such, the special procedures attendant to this Court's admiralty jurisdiction apply to this case.

B. Legal Standard to Transfer Venue in an Admiralty Case

A federal action premised upon diversity jurisdiction is governed by the venue rules set forth in 28 U.S.C. § 1391. Kirkpatrick v. Rays Grp. , 71 F.Supp.2d 204, 211 (W.D.N.Y. 1999). Section 1391(b) provides that a civil action may generally be brought in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or (3) if there is no district in which an action may otherwise be brought as provided in this section any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b).

However, " Fed. R. Civ. P. 82 provides that the venue provisions of 28 U.S.C. §§ 1391 -...