Wimberg v. Chandler
| Decision Date | 05 November 1997 |
| Docket Number | No. 97-71-Civ-Oc-JES.,No. 95-236-Civ-Oc-JES.,No. 96-188-Civ-Oc-JES.,95-236-Civ-Oc-JES.,97-71-Civ-Oc-JES.,96-188-Civ-Oc-JES. |
| Citation | 986 F.Supp. 1447 |
| Parties | Christopher WIMBERG, Yvette Yaklich, and John Yaklich, Jr., Plaintiffs, v. William Paul CHANDLER, Defendant. In the Matter of the Complaint of W. Paul CHANDLER and Teresa C. Chandler, etc. PROGRESSIVE AMERICAN INSURANCE CO., Plaintiff, v. William Paul CHANDLER; Christopher Wimberg; Yvette Yaklich; and John Yaklich, Jr., Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Thomas T. Trettis, Jr., Law Office of Thomas T. Trettis, Naples, FL, M. Richard Mellon, Law Office of M. Richard Mellon, Naples, FL, E. Raymond Shope, II, Shope, Mellon & Assoc., Naples, FL, for Christopher Wimberg, Yvette Yaklich, John Yaklich, Jr.
Alan Keith Ragan, Marks, Gray, Conroy & Gibbs, P.A., Jacksonville, FL, for Teresa C. Chandler, W. Paul Chandler.
Terence Robert Perkins, Monaco, Smith, Hood, Perkins, Loucks & Stout, Daytona Beach, FL, for Progressive American Ins. Co.
Alan Keith Ragan, Marks, Gray, Conroy & Gibbs, P.A., Jacksonville, FL, Walter A. Ketcham, Jr., Grower, Ketcham, More, Rutherford, Noecker, Bronson, Siboni & Eide, P.A., Orlando, FL, for William Paul Chandler.
A bench trial was held on October 1, 1997, in Ocala, Florida in Progressive American Insurance Co. v. William Paul Chandler, Christopher Wimberg, Yvette Yaklich and John Yaklich. Jr., Case Number 96-188-Civ-Oc-JES. Progressive American Insurance Company (Progressive) seeks a declaratory judgment concerning the coverage, if any, under an insurance policy issued to defendant W. Paul Chandler for a Douglas Skater boat. The parties stipulated to the admissibility of certain depositions, and the Court has considered the deposition testimony of Gerry Murphy, William Paul Chandler, and Elizabeth McGregor. Additionally, the Court heard testimony from Mr. Chandler, Mr. Alfred L. Davis, Ms. Murphy, and Ms. McGregor.
1. On May 10, 1994, William Paul Chandler (Chandler) purchased a used 24' 3" fiberglass boat manufactured by Douglas Marine from Ronald Abbott in New York. The boat was a twin hull 1987 Skater model with two 150 horsepower Mercury outboard engines. This boat will be referred to as "the Douglas Skater".
2. Chandler has approximately 30 years of boating experience.
3. Chandler obtained insurance coverage for the Douglas Skater from a company unrelated to this action. In late August, 1994 Chandler began looking for another insurance company to provide coverage for the Douglas Skater because the original company was not going to renew the policy. Chandler placed telephone calls to several insurance agents prior to finding Sihle & Williamson Insurance Inc. (Sihle & Williamson) in the telephone directory.
4. On a date shortly before September 6, 1994, Chandler (or his wife) called Sihle & Williamson, a company with whom he had never done business, and informed agent Alfred L. Davis (Davis) he was looking for new insurance for the Douglas Skater. Davis requested various information, which Chandler provided. Chandler stated the year, make, model, hull number, and value of the boat. He also advised that the boat was 24 feet long and had two 150 horsepower outboard engines. Davis asked the top speed and the cruising speed of the boat. Chandler replied that the boat could reach a maximum speed in excess of 70 miles per hour and had a cruising speed of 65 miles per hour.
5. Davis submitted this information to U.S. Specialty Insurance Company for a quote, but the company declined to issue a quote.
6. Davis' associate, Norma Jean Butler, thereafter contacted Progressive and relayed the information provided by Chandler. Sihle & Williamson typically obtains information from the applicant and then calls Progressive to obtain a price for the insurance and a quote number. If the applicant decides to accept the quoted price, the quote number is placed on the application, the person signs the application and pays the quoted premium. Progressive is not bound to issue the insurance simply because there is a quote number issued. Progressive generally issues the insurance policy unless there is intervening information or a discrepancy which causes it not to do so.
7. In this case the Progressive representative prepared a worksheet which stated the Douglas Skater had a single 150 horsepower outboard engine and a maximum speed of 65 miles per hour. Progressive quoted a price of $764.00 to insure the Douglas Skater and gave a quote number. Plaintiff's Exhibit 5.
8. Davis conveyed the Progressive price quotation to Chandler by telephone, and Chandler accepted because it was one of the best he had received. Chandler's acceptance was not binding upon Progressive and there was no coverage at that time.
9. Davis then prepared the Florida 1994 Pleasure Boat and Personal Watercraft Insurance Application (the Application) (Ex. # 5), which is a Progressive form. Included on the Application is a box for in which Davis wrote "65". The Application was mailed by Sihle & Williamson to the Chandlers to sign and return.
10. Upon receipt of the Application, Mr. Chandler looked at it but did not actually read it. Chandler either did not note the 65 miles per hour in the maximum speed box or noted it and assumed the number related to the maximum cruising speed. Chandler and his wife signed the Application on September 6, 1994, and mailed it and the premium of $764.00 to Sihle & Williamson.
11. Progressive received the signed Application on September 12, 1994. Progressive relies solely upon the information given in an application to determine whether the vessel comes within its underwriting guidelines. In this case Progressive relied solely upon the information contained in the Application to decide the boat came within its underwriting guidelines and to issue the insurance coverage for the boat. At the time the Policy was issued Progressive conducted no inquiry or investigation as to the speed capacity of the Douglas Skater.
12. Progressive issued policy number 01284624-0 (the Policy) to the Chandlers, which provided insurance coverage for one year effective September 6, 1994. Plaintiff's Exhibit 7. Progressive realized there should have been a 50% surcharge because seventy percent of the Douglas Skater's two engines had a combined horsepower in excess of 190 horsepower. Progressive billed the Chandlers an additional $382.00, which was paid by the Chandlers with a credit card. Plaintiff's Exhibit 8.
13. The Policy on the Douglas Skater contained a provision which stated: Plaintiff's Exhibit 7, page 29.
14. At all times material to this case Progressive had an internal policy which prohibited insuring boats "capable of speeds over 70 mph." Plaintiff's Exhibit 4. The speed of watercraft in excess of 70 miles per hour was material to the acceptance of the risk, and Progressive would in good faith not have issued the Policy had the Chandlers' Application stated that the maximum speed of the Douglas Skater was in excess of 70 miles per hour.
15. Chandler did not know that Progressive had an internal policy of not insuring boats which could travel in excess of 70 miles per hour.
16. On July 29, 1995, Chandler demonstrated the Douglas Skater to a prospective buyer, Christopher Wimberg (Wimberg). The following people were on board the Douglas Skater: Chandler, Wimberg, Yvettte Yaklich (Mr. Wimberg's fiancee), and John Yaklich, Jr. (Yvette's brother). At approximately 5:30 p.m. the vessel was roughly 500 feet south of navigational marker 24 on the St. Johns River, with Chandler at the helm. The boat either veered starboard in order to negotiate a right hand turn in the river and struck the shore, or first struck a submerged tree and then careened into the shore. All the passengers have sued Chandler for negligence.
17. Chandler reported the accident to Progressive the next day. By August 15, 1995, Andy Wieland, a Progressive claims appraiser, inspected and photographed the boat and spoke with Chandler. Chandler advised Wieland that he had told the insurance sales agent (Davis) that his boat could travel faster than 70 miles per hour. Wieland made a notation in the claims file that "the engines seemed large" and that "somebody should follow up on the speed of the boat." In response to that notation, Progressive employees reviewed the Application and observed that the maximum speed was listed as 65 miles per hour. No further investigation was performed by Progressive, and the boat was not tested for speed.
18. The Policy on the Douglas Skater was renewed by Progressive for another year effective September 6, 1995. The Chandlers paid the $1,244.00 premium. Plaintiff's Exhibit 10.
19. On November 8, 1995, attorney Richard Mellon sent Progressive's Elizabeth McGregor a copy of an article about a Douglas Skater, Plaintiff's Exhibit 1, and photographs of the Douglas Skater's engines. The article indicated to Ms. McGregor that the boat may be capable of exceeding 70 miles per hour, and she therefore discussed the matter with her manager and legal department. She requested that Progressive follow up with Chandler about the speed, but did not know if this was done.
20. On November 22, 1995, McGregor issued a reservation of rights letter on behalf of Progressive to the Chandlers. The letter was predicated upon review of the information in the article provided by Mr. Mellon and stated in part:
We have uncovered some information in reference to the maximum speed capacity of your 1987 Douglas Skater indicating that it may not be a vehicle...
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