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

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--U.S. Crewmember Required to Arbitrate Claims Applying Norwegian Law

In Alberts v. Royal Caribbean Cruises, Ltd ., No. 15-14775 (11th Cir. Aug. 23, 2016), the U.S. Court of Appeals for the Eleventh Circuit held that a U.S. citizen, working aboard a Royal Caribbean cruise ship is required to arbitrate his claims against Royal Caribbean. Plaintiff, a United States citizen, worked as the lead trumpeter on a passenger Royal Caribbean cruise ship. The ship is a Bahamian flagged vessel with a home port in Fort Lauderdale, Florida. Royal Caribbean, the operator of the vessel, is a Liberian corporation with its principal place of business in Florida. After plaintiff became ill while working for Royal Caribbean, he filed suit alleging unseaworthiness, negligence, negligence under the Jones Act, maintenance and cure, and seaman’s wages and penalties. Royal Caribbean moved to compel arbitration, and the district court granted the motion. This appeal presented an issue of first impression: Whether a seaman’s work in international waters on a cruise ship
Post a Comment
Read more

Maritime Law--Jury Hits Royal Caribbean Cruises With $20.3M Verdict for Officer's Hand Injury

In Spearman v. Royal Caribbean Cruises , Case No. 2011-023730-CA-01, a Miami-Dade County, Florida jury has awarded $20.3 million to a former crewmember of Royal Caribbean Cruises, whose hand was crushed while coming to the aid of a fellow worker during an emergency test in 2008. After a three-week trial, the jury found the Miami-based cruise company negligent in operating an unseaworthy ship and 100 percent liable for the injuries suffered by Lisa Spearman, who was working an officer on Royal Caribbean’s Voyager of the Seas . Spearman sued the company in 2011, three years after her right hand was caught in a watertight power door during a fire-safety drill. According to her lawyers, Spearman was trying to prevent the door from closing on the ship’s nurse when her hand was pulled into a recess pocket of the sliding door and crushed.  The nurse allegedly breached the company’s safety protocol when she stumbled through the door, prompting the response from Spearman. Accordin
Post a Comment
Read more