Skip to main content

Maritime Law--8th Circuit Finds for Marine Insurer on Utmost Good Faith (Uberrimae Fidei) Principles


In New York Marine & General Ins. v. Continental Cement Co., Case No.13-2313 (8th Cir. July 17, 2014), the Eighth Circuit Court of Appeals has found that the District Court did not abuse its discretion in submitting the uberrimae fidei instruction against the insured.



Starr Indemnity filed a declaratory judgment action in the United States District Court for the Eastern District of Missouri, seeking a determination of its rights and obligations under Continental Cement's insurance policies after MARK TWAIN, a cement barge owned by Continental Cement, sank in the Mississippi River. Continental Cement counterclaimed for breach of contract and vexatious refusal to pay under Missouri law.

While conducting its investigation into the loss, Starr Indemnity discovered that a survey had been undertaken of MARK TWAIN in 2008 which indicated that the barge had not been watertight at the time Continental Cement obtained its policies. On the grounds that Continental Cement had breached its duty of uberrimae fidei by withholding this survey from its insurance application, Starr Indemnity asserted that the insurance policies were void. The doctrine of uberrimae fidei holds that parties to an insurance contract must deal with each other in "utmost good faith", which includes the obligation of the insured to make full disclosure in connection with the negotiations for insurance of all facts which may materially affect the underwriting of the risk. Under this doctrine, if utmost good faith is not exercised by the insured, the insurer may avoid the policy, retroactive to inception of the risk.

This doctrine has been found to be a well-entrenched doctrine of federal maritime law in apparently all circuits, except the Fifth Circuit.

Determining that Continental Cement did not waive its appeal, the Eighth Circuit concluded that the District Court did not err by applying the federal doctrine of utmost good faith, a judicially established federal admiralty rule, instead of Missouri state law; Continental Cement waived its appeal of the denial of its motion for judgment as a matter of law on Starr Indemnity's utmost good faith defense; and, apart from the issue of waiver, the district court did not abuse its discretion in submitting the utmost good faith instruction. Accordingly, the Eighth Circuit affirmed the judgment of the District Court.

If you are interested in receiving a copy of this decision or have any questions regarding this decision, please feel free to contact me at mov@chaloslaw.com.

Comments

  1. Miami Party RentalsJuly 31, 2015 at 4:16 AM

    I am deeply attracted by your post. It is really a nice and informative one. I will recommend it to my friends. Thanks a lot for sharing with us!Bar Rental Miami, Miami Tent Rentals, Event Planner Miami, Miami Party Rentals, Miami Banquet Hall, Banquet Hall Miami, Miami Event Space, Miami Venues



    ReplyDelete

Post a Comment

Popular posts from this blog

ReThink + ReUse Center "It's How We Roll" Fun Raiser -- Bowling Night -- October 16, 2014

As many of my readers may be aware, I am the Chair of the ReThink + ReUse Center, a non-for-profit educational and environmental Center in Miami educating children into rethinking reuseable materials for learning through play. The ReThink and ReUse Center’s Quality Play is Learning Program provides a series of educational and participatory workshops based on the philosophies of Reggio Emilia and Harvard's Project Zero Visible Thinking. The Children’s Trust is the major funder of this program, but the Center is required to continually fundraise for the balance its annual budget.   The Center is having a fun event you are invited to--the ReThink + Reuse Center’s “It’s How We Roll” bowling event on October 16, 2014 at Splitsville Luxury Lanes from 18:00 to 21:30 hours. My firm, Comcast and Waste Management are major sponsors for this event, but we could use a few more sponsors. If you are interested in sponsoring the event, please let me know by reaching me at mov@chalos
6 comments
Read more

Maritime Law--Florida's Arbitration Code Is Now Revised

Those of us that practice maritime law regularly must always be on the lookout for the contract that may contain an arbitration clause. Thus, any laws related to arbitration are important to those of us practicing in this sector.       The Florida legislature has revised the Florida Arbitration Code ("FAC") and named it the Revised Florida Arbitration Code (the " Revised Act"). Since 1967, the FAC had gone mostly unchanged. The Revised Act addresses concepts that were not addressed in the old law, such as the ability of arbitrators to issue provision remedies, challenges based on notice, consolidation of separate arbitration proceedings, required conflict disclosures by arbitrators, among other major changes. The Revised Act lays out a detailed framework for international arbitration conducted under Florida law and repeals sections of the FAC. The Revised Act spells out what experienced arbitrators knew the case law to be, but codifies it all in one pl
4 comments
Read more

Maritime Law--Lozman Case Revisited in Miami?

In Hoefling v. City of Miami , Case no.: 14-12482 (11th Cir. Jan. 25, 2016), the U.S. Court of Appeals for the Eleventh Circuit revived almost all of Hoefling's claims. You ask, "Who is Hoefling?" Hoefling  lived on his sailboat Metis O moored off Dinner Key for nearly a decade—until the day he came home and it was gone. About three months earlier, an officer from the Miami Police Department's Marine Patrol Detail tagged Hoefling's vessel for lacking a sanitary device and a working anchor light. He had a deal to use the facilities at the nearby marina but quickly went out and reportedly bought what he needed to comply. Three months later while he was on a business trip, the City of Miami seized and destroyed his boat and all his belongings. As a result, he was homeless. He sued under § 1983, maritime law, and state law. He stated a claim under the Fourth Amendment for seizure and destruction without notice or cause and a “taking.”    At the U.S. Distric
5 comments
Read more