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Breach of Bailment Case Fails to Succeed in Middle District

In the case of ACE AMERICAN INSURANCE COMPANY v. FIRST CHOICE MARINE, INC., 23 Fla. L. Weekly Fed. D160a (Fla. M.D. Jul. 29, 2010), reported recently in the Florida Law Weekly of February 21, 2012, the U.S. District Court for Middle District of Florida, Tampa Division held that an insurer's claim against a defendant for breach of oral bailment contract cannot succeed, even if the plaintiff were granted leave to amend, because the plaintiff did not, and cannot, allege that the plaintiff's insured put his boat and engines within exclusive possession of defendant.

The court found that the allegation that vessel owner took his boat and engines to boat repair dealer for warranty repairs to be performed excludes any possibility that vessel owner put his boat and engines within exclusive possession of defendant. The court further found that while the complaint states a claim for breach of warranty of workmanlike performance as to oral contract for warranty repairs to engines on vessel, which the plaintiff's insured entered into with defendant manufacturer, the provisions of the limited warranty agreement indicating intent of parties that the authorized dealer would perform warranty repairs, not manufacturer itself, excludes breach of contract claim based on manufacturer's implied duty to perform the warranty repairs itself.

The court also reviewed the enforceability of the limitation of liability clause as set out in the contract between the parties and found that the disclaimer and express limitation of liability are set off in a separate box and are stated in plain English in bold-faced capital letters. Therefore, the court found that the limitation clause does not absolve defendant manufacturer of all liability and provides a deterrent to negligence, and plaintiff insurer has alleged no facts from which court can infer overreaching.

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