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Showing posts from May, 2012

The Insurance Implications of the COSTA CONCORDIA

On May 2, 2012, during MLA week, I was asked by the joint committees of Marine Torts  and Casualties and Cruise Lines and Passenger Ships to speak as part of a panel on the COSTA CONCORDIA casualty. The thrust of my discussion was on the insurance ramifications of the event. In a nutshell, I discussed the breakdown of the insurance coverages for first party and third party insurances. Carnival, the parent company of the owner of the ship, Costa Crociere, reported to have insurance coverage for damage to the ship above a $30 million retention and third-party personal liability coverage above a $10 million retention. Claims are the casualty will cost $1 billion.

My ultimate conclusion in my presentation is that the casualty would not result in a hardening of the hull market and that the liability insurers were well placed to adequately deal with the matter.

Because I have received numerous requests to obtain a copy of my Power Point presentation, please let me know if you are interested…

Man Convicted for Obstruction of Justice & False Statements for Certifying Ships Safe for Sea

The Maritime Executive reports that a federal jury in Miami convicted a Miami-based ship surveyor for lying to the Coast Guard and for falsely certifying the safety of ships at sea. Alejandro Gonzalez, 60, of Miami-Dade County was convicted by a federal jury in Miami of three counts of making false statements to the U.S. Coast Guard and one count of obstruction of an agency proceeding. The defendant faces a maximum statutory penalty of five years in prison on each count.

The jury found Gonzalez guilty of lying to U.S. Coast Guard inspectors and a criminal investigator during an interview in April 2009 about the dry-docking of the M/V CALA GALDANA, a 68 mt cargo vessel, in San Juan, Puerto Rico.  Gonzalez repeatedly claimed the vessel was dry-docked in Cartagena, Colombia, in March 2006, while evidence at the trial proved conclusively that the vessel was never in Colombia during 2006.
Gonzalez was also convicted of falsifying documents in December 2009 for the M/V COSETTE, a 92 mt cargo …

Fraudulent Joinder in Southern District of Florida Explained

In DE VARONA v. DISCOUNT AUTO PARTS, LLC, 23 Fla. L. Weekly Fed. D253a (S.D. Fla. May 6, 2012), the plaintiff moved to remand a federal court case to state court on the grounds that the defendant's store manager was properly joined as resident defendant and that amount in controversy was less than $75,000. Judge Ungaro hearing the motion denied the motion for remand finding that there was no reasonable basis for the claim against the store manager, and where the removing defendant has proven that jurisdictional amount has been satisfied. This case is a win for defendants that remove cases to federal court based on diversity jurisdiction and are faced with plaintiffs that join improper, non-diverse parties for the sole purpose of defeating diversity. 

The facts are as follows--thePlaintiff, a Florida citizen, initiated her action in state court, naming a Virginia corporation as the sole defendant. Later, the Plaintiff amended her complaint, adding the company's store manager and…

Insurance Company Required to Divulge Bad Faith Discovery in a Breach of Contract Action

In SUMMIT TOWERS CONDOMINIUM ASSOCIATION, INC. v. QBE INSURANCE CORPORATION, 23 Fla. L. Weekly Fed. D191a (S.D. Fla. April 5, 2012), U.S. District Court Judge Patricia A. Seitz held that Magistrate Judge Andrea A. Simonton, who was assigned to handle discovery matters in an insurance breach of contract action, did not act contrary to law or clearly err when she ordered insurer's Rule 30(b)(6) witness to answer questions regarding financial incentives, general business practices, and bad faith.  The case also has interesting footnotes on how insurance attorneys need to be more civil in the litigation process.

The insurer supported its arguments that such discovery is not discoverable with numerous citations to state court cases that stand for the general proposition that discovery related to bad faith claims is improper in a first-party insurance breach of contract action. Nevertheless, consistent with Buckley Towers Condominium, Inc., v. QBE Insurance Corp., 2008 WL 2645680 (S.D. F…

Eleventh Circuit Speaks on Arbitration Provisions in Crew Contracts

Jane Doe v. Princess Cruse Lines, Ltd., Jane Doe v. Princess Cruse Lines, Ltd., No. 10-10809 (11th Cir. 2011), addresses the important necessity of careful corporate drafting of international arbitration provisions, a topic I have blogged about in the past.
Plaintiff Doe alleged a harrowing story of a woman working for Princess Cruise Lines on one of its ships, who alleged she was drugged by other employees, raped, and physically injured while she was unconscious, and, as the Court of Appeals summarized, “when she reported to officials of the cruise line what had happened to her they treated her with indifference and even hostility, failed to provide her with proper medical treatment on board, and interfered with her attempts to obtain medical treatment and counseling ashore”.  The issue before the Eleventh Circuit was whether and to what extent her claims were arbitrable under a broad arbitration provision.  In addition to making specific reference to the required arbitrability of cla…

Seaman's Contract Doesn't Always Require Arbitration

In THOMAS HINES v. CARNIVAL CORPORATION, 23 Fla. L. Weekly Fed. D225a (S.D. Fla.Mar. 29, 2012), aUnited States crew member who was injured on board cruise ship sued his employer cruise line, alleging claims of Jones Act negligence, unseaworthiness, failure to provide maintenance and cure, failure to treat, and seeking wages and penalties. The seaman sued in Florida state court and Carnival removed the case to federal court.

Judge Martinez of the U.S. District Court for the Southern District of Florida found that the federal court lacked jurisdiction over the case because the fourth jurisdictional requirement under 9 U.S.C. section 202 of a commercial relationship that has some reasonable relationship with one or more foreign states is not met where employee's Seafarer's Agreement contains no reference to performance abroad or in any foreign country, choice of law clause was also neutral, the plaintiff has alleged that he has not performed any employment duties on foreign soil,…