Shark Tech. LLC v. Gagnon
2024 U.S. Dist. Lexis 45575 (S. Dist. Ala. March 14, 2024)
The court reminds us that attorneys’ fees are generally not recoverable in admiralty unless (1) they are provided for by the statute governing the claim, (2) the nonprevailing party acted in bad faith in the course of the litigation, or (3) there is a contract providing for the indemnification of attorneys’ fees.
2024 U.S. Dist. Lexis 48835 [March 19, 2024]
The District Court in the Eastern District of California was asked to confirm a vessel sale. The vessel’s owner, Lady Benjamin PD Cannon, objected alleging the plaintiff’s inventory of non-appurtenant property omitted a substantial amount of non-appurtenant property. Essentially, the owner objected to the extent her personal property may be destroyed with the vessel.
The court was sympathetic to the owner’s position. However, the court noted that the case had been pending for over a year during which time the vessel sat, decayed and incurred custia legis costs. Meanwhile, the owner offered no clear solution for removing her personal property from the vessel in the near future.
The court confirmed the sale. It also ordered any destruction of the vessel be delayed for at least 30 days so the owner can remove her personal property. The court ordered that the plaintiff was not to bear any expenses associated with removing the property. Unfortunately, the court did not order *who* was to bear the expense which opens the matter up to ambiguity and further motion practice.
Markel Am. Ins. Co. v. McRae (M.D. North Carolina – January 5, 2024)
The court addressed the doctrine of umberrimae fidei.
Under federal maritime law, an insurer can be excused from paying on a policy if the insured party has misrepresented or failed to disclose relevant facts. This duty of utmost good fiath, known as uberrimae fidei, is only found in maritime law.
The key inquiry is whether the insured disclosed to the insurer all known circumstances that materially affect the risk being insured. In other words, would the omitted information have reasonably affected the insurer’s determine to underwrite the risk. If the insured misrepresents a material fact in any way, they have breached their duty, even if the misrepresentation was unintentional, or due to negligence, mistake, accident, or voluntary ignorance. Any such misrepresentation results in a determination that the policy never attached and is void.
Markel alleged that the McRaes made several misrepresentations including that Mr. McRaie did not have a previous conviction, Mr. McRae’s license had not been suspended, the vessel had been prior insured, and that another insurance company had not refused to underwrite the vessel. The court found Mrs. McRae’s lack of knowledge regarding the alleged misrepresentations or belief that the statements were not relevant, did not excuse the misrepresentation. The court also found that the statements were material in that they were part of the insurer’s eligibility analysis. The court held that the doctrine of umberrimae fidei voided the underlying insurance policy and excused the insurers obligation to honor the policy.
