Marine Environmental Remediation Group, LLC et al v. Travelers Property Casualty Company of America
Filing
162
OPINION AND ORDER ADOPTING 152 REPORT AND RECOMMENDATION, as amended. See attached. Travelers' Motion in Limine at Docket No. 117 is DENIED; Travelers' Motion for Summary Judgement at Docket No. 120 is DENIED; and Plaintiff's Motion for Summary Judgement at Docket No. 100 is DENIED. Signed by Judge Gina R. Mendez-Miro on 9/19/2023.(GMN)
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 1 of 64
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
Party Book Hill Park, LLC,
Plaintiff,
Civil No. 18-01179(GMM)
v.
Travelers
Property
Company of America
Casualty
Defendant.
OPINION AND ORDER
This case arises from an insurance coverage dispute over the
sinking of the LONE STAR, a former pipe barge owned by Marine
Environmental Remediation Group, LLC (a subsidiary owned by MER
Group Puerto Rico, LLC (collectively “MER”)). Insurer, Traveler’s
Property
Casualty
Company
of
American
(“Travelers”
or
“Defendants”) denied MER coverage for the incident. On March 1,
2022, Party Book Hill Park, LLC (“Book Hill” or “Plaintiff”)
purchased MER’s claims against Defendants after MER went bankrupt
and thereafter, became the Plaintiff in this case. (Docket 49-1 at
2).
Before the Court is Magistrate Judge’s Giselle López Soler’s
(“MJ”) July 17, 2023, Report and Recommendation (“R&R”). (Docket
No. 152). In her report, the MJ addressed both Plaintiff’s and
Travelers’ motions for summary judgment regarding disputes over
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insurance
contract
terms,
the
scope
of
insurance
contract
coverage, and the cause of Plaintiff’s losses. (Docket Nos. 100,
116, 118, 120, 137, 139, 140, 141). The MJ also addressed Travelers
Property Casualty Company of America’s Motion in Limine to Exclude
From Use In Summary Judgment And At Trial All Evidence Offered By
Book Hill Park, LLC for which it Refused to Testify in its 30(B)(6)
Deposition (“Motion in Limine”). (Docket Nos. 117, 119, 130, 132).
For the following reasons, the Court ADOPTS the R&R, as amended by
the alterations discussed herein.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 2016, MER entered a contract with Travelers to acquire a
Protection and Indemnity Policy of Insurance (“P&I Policy”) and a
Bumbershoot
Policy
of
Insurance
(“Bumbershoot
Policy”)
(collectively, “Policies”) to insure the LONE STAR, a vessel it
had purchased for scrapping and recycling, for the policy period
of September 17, 2016 to September 17, 2017. (Docket Nos. 28 at ¶
8; 118-1 ¶ 24; 116-1 ¶ 24; 100-40; 100-39; 100-41; 100-6; 100-7;
100-11; 100-41; 100-46 ¶ 3-4).
MER’s
dissemblance
of
the
LONE
STAR
for
recycling
was
performed at a former navy base, Roosevelt Roads in Ceiba (the
“Facility”). (Docket No. 28 ¶¶ 36-37). By October 2016, MER reduced
the barge to the “canoe” stage of recycling but was unable to
complete the process because it had thus far failed to acquire a
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parcel of land on which to store the canoes that it had detached
from the vessel. Id. ¶¶ 38, 40.
On or about April 30, 2017, the LONE STAR sank at the Facility
and
discharged
approximately
1,800
gallons
of
oil
into
the
surrounding waters. (Docket Nos. 120-1 ¶ 62; 141-1 ¶ 62; 100-15 at
1; 140-1 ¶ 69; 141-1 ¶ 69; 120-1). MER stated that it immediately
notified Travelers of the barge’s sinking and requested coverage.
Docket No. 120-1 ¶¶ 52-56. In response to MER’s request for
coverage, Travelers issued three reservation of rights letters on
June 30, 2017, August 11, 2017, and again on August 16, 2017. Id.
¶¶ 58-60.
Following the sinking of the LONE STAR, MER’s surveyors
concluded that open valves on the barge caused its sinking. Id. ¶¶
49-50. MER alleges that its agents had not opened the valves. Id.
¶ 51. After evaluating the incident, the U.S. Coast Guard issued
an order demanding that the Lone STAR wreck be addressed and
removed due its threat of pollution. Id. ¶ 57. Then, on July 28,
2017, the Puerto Rico Department of Natural and Environmental
Resources (“DNER”) issued an order directing the removal of the
wreck. Id. ¶¶ 61. Subsequently, the Puerto Rico Local Redevelopment
Agency (“LRA”) also issued orders requiring the removal of the
LONE STAR’s wreckage. (Docket No. 120-1 ¶¶ 63-64).
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Travelers
was
apprised
of
the
various
government
agency
orders. Id. at ¶¶ 60-64. Nevertheless, Travelers denied MER both
compulsory and voluntary wreck removal coverage for the sinking of
the LONE STAR on June 20, 2018. (Docket Nos. 20; 116-1 ¶ 75; 1181 ¶ 75). Travelers argued that: (1) the wreck did not threaten
navigation; (2) orders to remove the wreck were pollution-centric
and thus excused by their Policies’ pollution exclusion clauses;
and (3) the wreck was a pollution event not covered by Travelers’
Policies. (Docket Nos. 118-1 ¶ 94; 118-1 ¶ 98; 116-1 ¶ 98). MER
retained Resolve Salvage and Fire (Americas) to raise the LONE
STAR. (Docket No. 118-1 at ¶ 73).
On March 9, 2018, MER filed its initial insurance claim
seeking: (1) compensation for costs associated with the compulsory
wreck removal of the LONE STAR under Travelers’ P&I policy; (2)
remedy for Travelers’ breach of contract for refusing to cover the
LONE STAR’s wreck removal; and (3) damages for Travelers’ acting
in bath faith (“dolo”) pursuant to P.R. Laws Ann. Tit. 31, § 3018.
On September 14, 2018, MER filed an amended complaint against
Travelers. (Docket No. 28). MER alleged that both, Traveler’s P&I
Policy and Bumbershoot Policy provided coverage for the LONE STAR.
(Docket No. 28 ¶ 11). The P&I Policy covered compulsory and
voluntary wreck removal costs up to $1,000,000, as well as damages
caused by third parties, including vandalism and sabotage. Id. ¶
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15. Travelers’ Bumbershoot Policy covered any excess amounts after
the exhaustion of other coverage that MER was required to pay for
protection and indemnity risks up to a limit of $9,000,000. Id. ¶¶
16-20. MER stated that it submitted timely payments for both
policies. Id. ¶ 21.
MER also contended that Travelers issued multiple iterations
of the Policies, which contained numerous errors in the contractual
terms and conditions. Id. ¶¶ 22-29. Based on these contentions,
MER requests that this Court grant them a declaratory judgment
that Travelers is liable for all costs incurred and paid related
to the LONE STAR’s wreck. Id. ¶¶ 71-73. MER further seeks damages
for breach of contract and dolo under Puerto Rico Law. (Docket No.
28 ¶¶ 74-89).
Travelers answered MER’s amended complaint with a denial and
counterclaim seeking a declaration that the P&I and Bumbershoot
Policies were null and void as applied to the LONE STAR because:
(1) MER breached its duty of good faith (uberrimae fidei); (2) MER
violated the Policies’ warranties of seaworthiness and it is thus
not entitled to coverage; (3) the LONE STAR’s sinking was not a
fortuitous event and thus it is not covered by the Policies; (4)
Traveler’s Policies generally do not cover the barge’s recovery;
and (5) even if the LONE STAR is covered by the Policies, wreck
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removal coverage under those Policies is limited by their specific
terms. (Docket No. 29 at 12-14, ¶¶ 12-36).
On December 17, 2018, Travelers filed a
Motion to Stay
Proceedings Pending Resolution of Case Civ No. 17-9881(LGS) in the
United States District Court for the Southern District of New York
pending the conclusion of the associated case; Starr Indemnity &
Liability Company v. Marine Environmental Remediation Group, LLC,
Civil No. 17-9881 (S.D.N.Y). (Docket No. 32). Travelers contended
that
Starr
Indemnity
&
Liability
Company
(“Starr”)
provided
pollution insurance to MER that covered the LONE STAR’s sinking,
paid for costs of the barge’s removal (costs which MER allegedly
also
sought
to
recoup
from
Travelers),
and
sued
MER
for
reimbursement in the New York court. Id. at 3-4. Travelers argued
that the outcome of MER’s case with Starr directly implicated its
dispute with MER. Id. The Court stayed these proceedings and
administratively closed this case on February 8, 2019. (Docket
Nos. 44; 46). Plaintiff then filed a motion to reopen this case on
June 14, 2022, and the stay was lifted on June 16, 2022. (Docket
Nos. 49; 58). Discovery for this case concluded on November 16,
2022. (Docket No. 113).
Plaintiff filed its Motion for Summary Judgment (Partial) on
October
17,
2022.
(Docket
No.
100).
Specifically,
Plaintiff
requests that the Court grant it partial summary judgment against
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Travelers’ counterclaim and find that: (1) the Court’s admiralty
jurisdiction and general maritime law do not apply to this case
because the LONE STAR was a “dead ship”; (2) Travelers’ failed to
establish its uberrimae fidei defense; (3) the LONE STAR was not
a vessel, so the warranty of seaworthiness doctrine does not apply
to it; (4) the admiralty rule of fortuity does not apply to the
present case; and (5) assuming arguendo that the rule of fortuity
applies,
then
the
Plaintiff
submitted
sufficient
evidence
to
establish fortuity. Id. at 1-14.
Plaintiff further seeks summary judgment on its claims that:
(1)
the
Policies’
terms
are
ambiguous
and
should
thus
be
interpreted in its favor and against the exclusions claimed by
Travelers; (2) Travelers breached the terms of the P&I Policy; (3)
Travelers breached the terms of the Bumbershoot Policy; and (4)
Travelers denial of coverage for the LONE STAR was done in bad
faith under Puerto Rico law. Id. at 11-25. Plaintiff thus argues
that it is entitled to judgement as a matter of law, alleging that
its only remaining dispute with Travelers is damages, which should
be resolved by a jury.
Travelers then filed a Motion in Limine requesting that the
Court exclude from evidence to be offered in summary judgment and
or at trial proceedings, all evidence related to nine topics of
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deposition testimony notified to Plaintiff in its Rule 30(b)(6)
deposition. (Docket No. 117).
On November 30, 2022, Travelers filed its Motion for Summary
Judgment and Memorandum of Law in Support. (Docket No. 120).
Travelers requests that the Court grant summary judgment on its
counterclaims, specifically finding that: (1) the costs of the
LONE STAR’s wreck removal were not covered under the Policies
because the wreck was a pollution event excluded by the P&I
Policy’s pollution exclusion clause; (2) the Policies were void
under the doctrine of
uberrimae fidei; (3) MER breached
the
Policies’ warranty of seaworthiness for the LONE STAR; and (4) the
sinking of the LONE STAR was not a fortuitous event and was thus
not covered by Travelers Policies. Id. at 1-21. Additionally,
Travelers
seeks
summary
judgment
requesting
the
dismissal
of
Plaintiff’s claims contending that Plaintiff’s claim of bad faith
is groundless because their coverage denial was justified given
that the claimed event was not covered by the Policies. Id. at 2124.
In December of 2022, the Court issued two orders referring
motions to the MJ for Reports and Recommendations as to Travelers’
and Plaintiff’s summary judgment motions and Travelers’ Motion in
Limine. (Docket Nos. 133; 134). After undertaking a careful review
of the record before her, the MJ issued a R&R recommending that
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both Defendant’s and Plaintiff’s motions be denied. (Docket No.
152).
On July 31, 2023, Plaintiff and Defendants both filed separate
objections to the MJ’s R&R. (Docket Nos. 153; 154).
II.
TRAVELERS’ MOTION IN LIMINE
After Book Hill purchased MER’s claim and became the primary
plaintiff in the case, Travelers noticed the party deposition of
Book Hill under Federal Rule of Civil Procedure Rule 30(b)(6) and
attached a list of nine deposition topics. (Docket No. 117-6).
Plaintiff supplied Moiz Doriwala (“Doriwala”) to serve as its
corporate
representative.
(Docket
No.
117-7).
During
the
depositions, Doriwala refused to respond to the topics notified by
Travelers. Id. Doriwala stated that his knowledge of the facts of
the case arose from conversations with his counsel and stated that
he was excused from responding to the questions due to attorneyclient privilege. Id.
Given Doriwala’s alleged failure to answer any substantive
questions in his deposition, Travelers’ Motion in Limine requests
that the Court preclude Plaintiff from introducing all evidence
related to the nine topics of Doriwala’s deposition either on
summary judgement or at trial. (Docket No. 117 at 3). On November
29, 2022, Plaintiff filed an opposition statement to Traveler’s
Motion in Limine arguing that it was an untimely discovery dispute
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that failed to comply with discovery rule requirements. (Docket
No. 119 at 1). Critically, Plaintiff notes that Travelers supposed
Motion in Limine sought a discovery remedy — a barring of the
presentation of certain evidence — without first adhering to the
Court’s Order (Docket No. 114), Local Rule 26(b), or first filing
a motion to compel under Federal Rule 37(a)(1). Id. at 2. As such,
Plaintiff requests that the Court deny Travelers’ Motion in Limine
on procedural grounds.
In
her
Doriwala’s
review
of
invocation
the
of
matter,
the
attorney-client
MJ
acknowledged
privilege
to
that
avoid
answering questions at deposition was improper. Nevertheless, she
agreed with Plaintiff on procedural grounds and recommended the
denial of Traveler’s Motion in Limine. The Court concurs.
Pursuant to Federal Rule of Civil Procedure 30(b)(6), when a
corporation is the target of a deposition, the “named organization
must designate one or more officers, directors, or managing agents,
or designate other persons who consent to testify on its behalf;
and. . .[t]he persons designated must testify about information
known or reasonably available to the organization.” Fed. R. Civ.
P. 30(b)(6). Corporate parties are thus required to adequately
prepare their representatives to testify on notified deposition
topics, even when such preparation may be burdensome. See Santiago
v. Costco Wholesale Corp., Civil No. 19-1082 (SCC/BJM), 2020 WL
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3669642 at *1 (D.P.R. July 6, 2020); see also In re Montreal Maine
& Atl. Ry., Ltd., 608 B.R. 1 (Bankr. D. Me. 2019) (stating that
“[t]here
is
no
obligation
to
select
a
person
with
personal
knowledge of the events in question, but. . .there is an implicit
obligation to prepare the witness. As specified in the rule, this
preparation. . .extends to all information reasonably available to
the responding organization.”)
At his deposition, Doriwala refused to reply to questions
regarding the nine topics notified by Travelers on grounds of
attorney-client privilege and a lack of knowledge independent of
his communications with counsel. Thus, it is evident that Doriwala
was
not
satisfactorily
prepared
to
serve
as
Plaintiff's
representative. Production of an unprepared Rule 30(b)(6) witness
is treated by courts as “tantamount to a failure to appear.” Kyoei
Fire & Marine Ins. Co. v. M/V Maritime Antalya, 248 F.R.D. 126,
152 (S.D.N.Y.2007) (quoting Bank of N.Y. v. Meridien BIAO Bank
Tanzania Ltd., 171 F.R.D. 135, 151 (S.D.N.Y.1997)). As such, the
MJ was correct in noting that, “Plaintiff utterly failed to comply
with its obligation under Rule 30(b)(6).” (Docket No. 152 at 5).
Due to Plaintiff’s shortcomings in producing a competent
representative, Travelers seeks to exclude documentary and other
testimonial evidence related to the nine specified topics in its
Rule 30(b)(6) deposition notice to Doriwala. (Docket No. 130).
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But, as the MJ properly finds, Traveler’s request, which was made
after the close of discovery is untimely and procedurally improper.
Given
that
Travelers’
objections
arise
out
of
Plaintiff’s
production of an incapable and uninformed corporate representative
in violation of Rule 30(b)(6) requirements, their protestations
here are ones of discovery, not admissibility.
A motion
in limine
is a “pretrial request that certain
inadmissible evidence not be mentioned at trial.” U.S. v. AgostoVega, 731 F.3d 62, 65 (1st Cir. 2013). Despite Doriwala’s evident
shortcomings as a witness, the contested testimonial evidence from
his deposition is not inherently inadmissible. It would only become
so if the Court were to sanction Plaintiff by barring its use at
trial. Regardless, Plaintiff already notified the Court that it
did not intend to present Doriwala’s testimony at trial. The
admissibility issue is moot. (Docket No. 132 at 5).
Rule 37(a)(1) of the Federal Rules of Civil Procedure, allows
a party to enter a motion to compel disclosure or discovery. Fed.
R. Civ. P. 37(a)(1). A Rule 37(a)(1) motion may be filed in
instances where a corporation fails to make a designation under
Rule 30(b)(6). Fed. R. Civ. P. 37(a)(3)(B)(ii). Rule 37(a)(1)
provides: “[t]he motion [to compel] must include a certification
that the movant has in good faith conferred or attempted to confer
with the person or party failing to make disclosure or discovery
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in an effort to obtain it without court action.” Fed. R. Civ. P.
37(a). Local Rule 26(b) similarly requires that “[a] judge shall
not consider any discovery motion that is not accompanied by a
certification that the moving party has made a reasonable and goodfaith effort to reach an agreement with opposing counsel on the
matters set forth in the motion. An attempt to confer will not
suffice.” Local Civ. R. 26(b); see also Bonner v. Triple S Mgmt.
Corp., 68 F.4th 677, 686 (1st Cir. 2023); Avilés v. Sol Meliá V.C.
P.R. Corp., 2020 U.S. Dist. LEXIS 264495, *14 (D.P.R. 2020). As
such, if the moving party fails to make such a certification, the
Court is compelled to dispose of the discovery motion.
Travelers’ objections to the evidence produced by Doriwala’s
deposition were untimely they were not submitted to the Court with
the requisite Rule 37(a)(1) certification. It is undisputed that
the deposition at issue was scheduled for September 26, 2022 and
that discovery in the case concluded on November 16, 2022. (Docket
No. 113). As such, Travelers had almost 2 months to object to
Travelers insufficient production of a corporate representative.
This
didn’t
Doriwala’s
happen
as
admittedly
Travelers
did
insufficient
not
seek
performance
a
remedy
until
for
after
discovery had ended. As the MJ noted in her R&R, the Court should
not impose discovery sanctions when a party made no effort to
compel discovery prior to the expiration of the discovery period.
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See Santiago v. Costco Wholesale Corp., 2020 WL 3669642 at *3
(holding that a court cannot impose sanctions when no court order
compelling the information at dispute was filed).
Travelers made no attempt to seek relief within the discovery
window when the Court could have compelled Plaintiff to produce a
capable corporate representative. Travelers' failure to make a
timely objection thus reinforced any prejudice it may have suffered
at the hands of Plaintiff’s provision of a poor corporate witness.
Moreover, Travelers failed to engage in any reasonable and or good
faith attempt to confer with Plaintiff to resolve the evidentiary
dispute as is required under Rule 37(a)(1) and Local Rule 25(b).
The Court, in concurrence with the MJ, finds that Travelers’ Motion
in Limine is DENIED.
III. SUMMARY JUDGEMENT STANDARD
Pursuant to Rule 56 of the Federal Rules of Civil Procedure,
summary judgment is appropriate when the moving party establishes
that “there is no genuine dispute as to any material fact and the
movant is entitled to judgement as a matter of law.” Fed. R. Civ.
P. 56(a). A “genuine issue exists where a ‘reasonable jury could
resolve the point in favor of the nonmoving party.’” Meuser v.
Fed.
Express
Corp.,
564
F.3d
507,
515
(1st
Cir.
2009)
(quoting Suarez v. Pueblo Int’l, Inc., 229 F.3d 49, 53 (1st Cir.
2000)). “A fact is material only if it possesses the capacity to
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sway
the
outcome
of
the
litigation
under
the
applicable
law.” Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008)
(internal quotation marks omitted).
In a summary judgement motion, the moving party bears the
burden of proving that there is a lack of material evidence
supporting the non-movant’s case. See Cellotex Corp. v. Catrett,
477 U.S. 317, 325 (1986); see also Ocasio-Hernández v. FortuñoBurset, 777 F.3d 1, 4–5 (1st Cir. 2015). In considering a motion
for summary judgment, the court must consider “the record in the
light most favorable to the nonmovant’ and must make all reasonable
inferences
in
that
party’s
favor.”
García-García
v.
Costco
Wholesale Corp., 878 F3d 411, 417 (1st Cir. 2017); see also Murray
v. Kindred Nursing Ctrs. W. LLC, 789 F.3d 20, 25 (1st Cir. 2015).
IV.
After
examining
the
UNCONTESTED FACTS
parties’
submissions,
but
having
disregarded any legal arguments and conclusory statements in the
parties’ statements of facts, the Court finds that the following
material facts are not in dispute:
1.
MER was the owner of the former pipe barge LONE STAR.
(Docket Nos. 100-4 at 3; 116-1 ¶ 1; 118- 1 ¶ 1).
2.
MER purchased the LONE STAR for the sole purpose of
scrapping and recycling it. (Docket Nos. 116-1 ¶ 2;
118-1 ¶ 2).
3.
At all times relevant to this action, MER conducted
its ship scrapping operation at the former navy base
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at Roosevelt Roads in Ceiba (the “Facility”).
(Docket Nos. 100-5 at 3; 116-1 ¶ 3; 118-1 ¶ 3).
4.
On December 15, 2015, MER leased the Facility from
the LRA. (Docket Nos. 100-5; 116-1 ¶ 4; 118-1 ¶ 4).
5.
MER
hired
(hereinafter,
Pier 3, with
the weekends.
6.
Under Annointed’s corporate procedure, guards were
supposed to note and to report anything out of the
ordinary or unusual, including if they saw someone,
heard any banging, or saw a 56 flashlight on Pier 3
or on or around MER’s vessels outside of MER’s normal
business hours. (Docket Nos. 140-1 ¶ 52; 141-1 ¶
52).
7.
MER began dismantling the LONE STAR on or about
December 15, 2015. (Docket Nos. 140-1 ¶ 1; 141-1 ¶
1).
8.
MER estimated that it would take approximately 6
months to reduce a vessel to its “canoe” stage.
(Docket Nos. 140-1 ¶ 2; 141-1 ¶ 2; 120-1 at 1).
MER hoped to use the beach at Torpedo Bay to remove
the LONE STAR. (Docket Nos. 140-1 ¶ 49; 141-1 ¶ 49).
9.
Anointed
Security
Services
Inc.
“Anointed”) to provide security at
guards on duty 24 hours a day and on
(Docket Nos. 140-1 ¶ 51; 141-1 ¶ 51).
10.
Due to the LONE STAR’s size, MER hoped to tow the
LONE STAR out approximately 500-600 yards into the
waters of Torpedo Bay, attach snatch blocks to the
vessel, install a winch in the ground of Torpedo Bay
Beach and winch the LONE STAR up onto the land over
roller bags. (Docket Nos. 140-1 ¶; 141-1 ¶ 47).
11.
MER contracted with Travelers to enter into the P&I
Policy and the Bumbershoot Policy to insure the LONE
STAR barge. (Docket Nos. 100-40 (P&I Policy); 10039 (Bumbershoot Policy); 100-41; 100-6 (P&I Policy
Binder); 100-7 (Bumbershoot Policy Binder); 100-11;
100-41; 100-46 ¶ 3-4).
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12.
At the time MER applied for insurance with Travelers,
MER knew that it did not have formal approval for a
suitable parcel of land where to store canoes after
removal from the water, but the Government of Puerto
Rico had assured MER that one would be provided.
(Docket Nos. 140-1 ¶ 28; 141-1 ¶ 28; 120-1 at 40–
42).
13.
On July 26, 2016, MER represented to Arthur J.
Gallagher Risk Management Services, Inc. (“AJG”),
MER’s insurance broker and its agent in dealing with
Travelers, that the recycling of the LONE STAR had
not yet begun. (Docket Nos. 140-1 ¶ 4; 141-1 ¶ 4;
and 120-1 at 75 (“We currently own two vessels that
are slated for demolition: a) LONE STAR. . .”)).
14.
On July 29, 2016, AJG provided MER’s Marine Insurance
Submission
Packet
(“Initial
Submission”)
to
Travelers. (Docket Nos. 140-1 ¶ 5; 141-1 ¶ 5; 120-1
at 132).
15.
MER’s Initial Submission represented to Travelers
that the LONE STAR was “slated for demolition” and
“is to be broken up at MER facility.” (Docket Nos.
116-1 ¶ 33; 118-1 ¶ 33; 120-1 at 132, 138).
16.
MER’s Initial Submission represented to Travelers
that “[o]nce the ship has been reduced to the lower
hull area (still afloat and capable of being towed),
the remaining section (referred to as the ‘canoe’)
near the conclusion of the process is towed to either
a graving dock or dry dock, a marine railway, or a
roller-slip, installed and blocked and the final
cleaning and demolition is performed.” (Docket Nos.
140-1 ¶ 7; 141-1 ¶ 7; 120-1 at 130).
17.
On August 11, 2016, AJG emailed Travelers updated
hull values for the SEVEN POLARIS, LONE STAR, and
ATLANTIC
VII,
2016-2017
Gross
Receipt
Forecasts/Estimates,
Loss
Runs,
an
“[i]mproved/updated
Submission
document”
(“Supplemental Submission”), and other miscellaneous
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 18 of 64
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information. (Docket Nos. 120-1 at 161; 140-1 ¶ 11;
141-1 ¶ 11).
18.
In the Supplemental Submission, MER represented to
Travelers that its method of vessel demolition would
“maintain […] the ship’s watertight integrity, trim,
and stability.” (Docket Nos. 120-1 at 163; 140-1 ¶
15; 141-1 ¶ 15).
19.
Under “Exposure Details” in the Supplemental
Submission, MER changed the LONE STAR from being
“slated for demolition” to “being demolished.”
(Docket Nos. 120-1 at 165; 140-1 ¶ 14; 141-1 ¶ 14).
20.
Under “Exposure Details” in the Supplemental
Submission, MER represented that it “owns four
vessels.” (Docket Nos. 120-1 at 164; 140-1 ¶ 17;
141-1 ¶ 17).
21.
Under “Insurance Requirements” in the Supplemental
Submission, MER represented to Travelers that “MER
is seeking a marine insurance program to cover its
operational risk exposures [. . .]” (Docket Nos.
120-1 at 164; 140-1 ¶ 16; 141-1 ¶ 16).
22.
Travelers and AJG had numerous conversations about
the risk throughout the underwriting process.
(Docket Nos. 140-1 ¶ 18; 141-1 ¶ 18; 120-1 at 205–
216).
23.
During the underwriting process, Travelers was
informed by AJG that when the LONE STAR and other
vessels were reduced to their “canoe” stage, these
would remain afloat and capable of being towed.
(Docket Nos. 140-1 ¶ 23; 141-1 ¶ 23; 120-1 at 130).
24.
During the underwriting process, MER advised
Travelers that it expected to receive final approval
of a suitable parcel of land soon before the canoes
would need to be removed from the water. (Docket
Nos. 140-1 ¶ 20; 141-1 ¶ 20; 120-1 at 220–224).
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25.
During the underwriting process, Travelers was
informed by AJG that the LONE STAR and other vessels
would be removed from the water upon being reduced
to their “canoe” stage. (Docket Nos. 140-1 ¶ 21;
141-1 ¶ 21; 120-1 at 130).
26.
The Policies bound on or about September 17, 2016,
and covered the period between September 17, 2016,
and September 17, 2017. (Docket Nos. 140-1 ¶ 32;
141-1 ¶ 32; 116-1 ¶ 25; 118-1 ¶ 25; 100-6; 100-7).
27.
MER paid all the premiums under the P&I Policy.
(Docket Nos. 100-46 ¶ 6; 116-1 ¶ 26; 118-1 ¶ 26).
28.
MER paid all the premiums under the Bumbershoot
Policy. (Docket Nos. 100-46 ¶ 7; 116-1 ¶ 27; 118- 1
¶ 27).
29.
On September 17, 2016, Travelers issued MER a P&I
Binder which established a P&I limit of liability of
“$1,000,000 [for] each vessel insured” and listed
the LONE STAR on the schedule of vessels. (Docket
No. 100-6 at 1, 3).
30.
On September 17, 2016, Travelers issued MER a
Bumbershoot Coverage Binder which established a
$9,000,000 limit of liability and listed the LONE
STAR as possessing an underlying insurance policy
for “Vessel Pollution” with a limit of $4,610,100.
(Docket Nos. 100-7 at 1; 100-39 at 24).
31.
The P&I Policy provided coverage for both compulsory
and voluntary wreck removal. (Docket Nos. 100-6 at
1; 118-1 ¶¶ 28–29; 116-1 ¶¶ 28–29).
32.
The Bumbershoot Policy provided excess coverage for
compulsory wreck removal and pollution. (Docket Nos.
118-1 ¶ 100; 116-1 ¶ 100).
33.
The Bumbershoot Policy did not provide coverage for
voluntary wreck removal. (Docket Nos. 118-1 ¶ 32;
116-1 ¶ 32).
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34.
MER demolished the LONE STAR to the point where it
felt that it was “as far as [it] can go safely”
sometime between September and October 2016. (Docket
Nos. 140-1 ¶ 45; 141-1 ¶ 45; 120-1 at 43–44).
35.
After the initial declaration of reaching the
“canoe” stage between September and October 2016,
MER “reached the decision” to “remove a large chunk
of the raked bow” and “then re-declared [the LONE
STAR] to be at the canoe stage” “in or about early
November of that year.” (Docket Nos. 140-1 ¶ 46;
141-1 ¶ 46).
36.
By November 2016, the LONE STAR had been scrapped to
“canoe” form, i.e., only its lower hull remained.
(Docket Nos. 116-1 ¶ 14; 118-1 ¶ 14; 100-3 ¶ 59;
100-15 at 2).
37.
Travelers first issued a written copy of the P&I
Policy (policy number ZOH-81M6730A-16-ND) on or
about December 2, 2016. (Docket Nos. 100-9; 116-1 ¶
37; 118-1 ¶ 37).
38.
The P&I Policy issued on December 2, 2016, includes
a warranty of seaworthiness. (Docket No. 100-9 at
10).
39.
The P&I Policy issued on December 2, 2016, includes
a pollution exclusion clause listed under the
“Exclusions” section of the “AIMU Protection and
Indemnity (P and I Clauses).” (Docket Nos. 100-9 at
29; 154 at 13–14; 157 at 5 (“Plaintiff does not
dispute that the 2016 copy of the P&I Policy contains
the exclusion to which Travelers cites”)).
40.
The P&I Policy issued on December 3, 2016, includes
two provisions under “General Conditions and/or
Limitations” and “General Conditions,” respectively,
that prevent coverage for any loss or claim already
covered by other insurance. (Docket No. 100-9 at 24,
30).
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41.
Travelers did not issue a written copy of the
Bumbershoot Policy on December 2, 2016. (Docket Nos.
116-1 ¶ 38; and 118-1 ¶ 38).
42.
Between November 2016 and January 2017, MER laid off
approximately 300 of its employees, leaving only
four or five employees employed at Roosevelt Roads.
(Docket Nos. 140-1 ¶ 50; 141-1 ¶ 50).
43.
In the months prior to the LONE STAR sinking, MER
stopped paying its security company, Anointed,
because it was engaged in a contractual dispute with
Anointed. (Docket Nos. 140-1 ¶ 53; 141-1 ¶ 53).
44.
In or about February 2017, the Puerto Rican
Government provided MER with a temporary location in
the form of permission to use a boat ramp adjacent
to MER’s facility to remove the LONE STAR. (Docket
Nos. 116-1 ¶ 18; 118-1 ¶ 18).
45.
As of March 13, 2017, MER owed the LRA $113,606.11
in rent for the property at Roosevelt Roads, which
it had withheld due to the failure of the LRA to
provide the land MER had been promised. (Docket Nos.
140-1 ¶ 61; 141-1 ¶ 61).
46.
MER did not blank off the LONE STAR’s Sea chest
valves. (Docket Nos. 140-1 ¶ 56; 141-1 ¶ 56; 120-1
at 340–341 (“Q. What, if anything, was done to ensure
that those valves were not opened again, either
intentionally or accidentally? A. [n]othing that I
could think of.”)).
47.
MER knew that if the sea chest valve was open, the
vessel would be vulnerable to flooding. (Docket Nos.
140-1 ¶ 57; 141-1 ¶ 57).
48.
MER’s hired security guards, Anointed, did not
report anything unusual from the time the LONE STAR
was last seen afloat on April 29, 2017, to when she
was found sunk on April 30, 2017. (Docket Nos. 1401 ¶ 63; 141-1 ¶ 63).
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49.
There was no appreciable, if any, rainfall on the
evening of April 29, 2017, in the vicinity of the
MER facility at Ceiba, Puerto Rico. (Docket Nos.
116-1 ¶ 21; 118-1 ¶ 21).
50.
The LONE STAR sank on or about April 30, 2017.
(Docket Nos. 140-1 ¶ 62; 141-1 ¶ 62; 100-15 at 1).
51.
When the LONE STAR sank, it discharged approximately
1,800 gallons of waste oil into the water. (Docket
Nos. 100-18 (USCG Administrative Order); 140-1 ¶ 69;
141-1 ¶ 69).
52.
MER’s insurance broker, AJG, reported the loss of
the LONE STAR to Travelers on May 3, 2017. (Docket
Nos. 100-13 at 1; 116-1 ¶ 24; 118-1 ¶ 24).
53.
On May 4, 2017, Travelers appointed a surveyor,
Stewart Hutcheson, to investigate the loss of the
LONE STAR. (Docket Nos. 100-14; 116-1 ¶ 39; 118-1 ¶
39).
54.
On May 8, 2017, Hutcheson went to Ceiba to survey
the wreck of the LONE STAR. (Docket Nos. 118-1 ¶ 40;
116-1 ¶ 40; 100-14; 100-15 at 1).
55.
On May 9, 2017, Hutcheson provided a report that
stated “[t]he cause of the loss at this time cannot
be determined” to the claims adjuster assigned by
Travelers’ to investigate the claim. (Docket Nos.
Nos. 100-15 at 8; 118-1 ¶ 41; 116-1 ¶ 41).
56.
Mr. Hutcheson’s first report stated that he believed
“that the cause is limited to one or a combination
of the following causes, with the most probable
listed first. Sabotage or criminal mischief, . . .
Sudden failure of hull plating on the central
underside forward of amidships, . . . [and/or] Sudden
failure of primary raw water supply plumbing at or
around the sea chest.” (Docket No. 100-15 at 9-10).
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57.
On June 30, 2017, Travelers issued its first
Reservation of Rights letter. (Docket Nos. 100-21;
116-1 ¶ 53; 118-1 ¶ 53).
58.
On July 7, 2017, the United States Coast Guard issued
Administrative
Order
No.
007-17
(“First
Administrative Order”) which stated: “I have
determined that there may be an imminent and
substantial threat to the environment because of an
actual and continued discharge of oil from the LONE
STAR.” (Docket No. 100-18).
59.
The First Administrative Order stated that “[u]nder
the Oil Pollution Act of 1990, the responsible party
is liable for, among other things, removal costs and
damages resulting from this condition. […] The
Responsible Party, owners, operators or persons in
charge of the Federal Water Pollution Control Act,
to a civil penalty of up to $44,539 per day of
violation or up to three (3) times the cost incurred
by the Oil Spill Liability Trust Fund.” (Docket No.
100-18 at 3).
60.
On June 13, 2017, divers from the National Oceanic
and Atmospheric Administration (“NOAA”) and DNER,
dove the wreck and found several coral species
adjacent to the wreck which were listed as
“endangered” under the Endangered Species Act.
(Docket Nos. 116-1 ¶ 49; 118-1 ¶ 49).
61.
On July 28, 2017, the DNER ordered that the LONE
STAR be removed. (Docket Nos. 100-28; 140-1 ¶ 87;
141-1 ¶ 87).
62.
The DNER’s Order stated: “I order you to remove from
the water within a period of no more than 30 days
the sunken vessel “Lone Star” which is currently
located near the pier 3.” (Docket Nos. 100-28; 1401 ¶ 88; 141-1 ¶ 88).
63.
The DNER’s Order did not explicitly
“pollution.” (Docket No. 100-28).
mention
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64.
On August 11, 2017, Travelers issued a Second
Reservation of Rights letter. (Docket Nos. 100-29;
116-1 ¶ 63; 118-1 ¶ 63).
65.
On August 11, 2017, Travelers acknowledged that it
had not yet provided correct written copies of the
Policies that matched the intent and agreement of
the parties. (Docket Nos. 116-1 ¶ 67; 118-1 ¶ 67;
100-30 at 1 (“As discussed, intent for coverage is
outlined by the binders that are attached. We are
working on getting the policies to match the agreed
intent”)).
66.
On August 14, 2017, the United States Coast Guard
provided MER with an Amended Administrative Order
Number 007-17. The Amended Order required MER to
conduct a dive assessment to identify and locate any
oil still present within the LONE STAR and to have
resources capable of removing the threat the LONE
STAR posed to the local environment. (Docket Nos.
116-1 ¶ 68; 118-1 ¶ 68; 100-31).
67.
The LRA also issued orders requiring MER remove the
wreck of the LONE STAR. (Docket Nos. 116-1 ¶ 62;
118-1 ¶ 62; 100-3 ¶¶ 135, 137).
68.
On August 16, 2017, Travelers, issued a Third
Reservation
of
Rights
letter.
The
letter
acknowledged receipt of the Amended Administrative
Order 007-17 and noted that said order did not
“trigger[] Travelers’ P&I Policy or Bumbleshoot
Policy.” (Docket Nos. 116-1 ¶ 69; 118-1 ¶ 69; 10032).
69.
On August 26, 2017, a dive team evaluated the sunken
wreck of the LONE STAR and determined that the port
main capable valve was open. (Docket Nos. 116-1 ¶
102; 118-1 ¶ 102; 100-49 (Dive Report) at 3 (“[t]his
indicates that the port side main sea chest valve
was open. The diver also noted a large 4" line
wrapped 3-4 times around the base of this valve,
with a sling chocked on the valve base as well. The
diver then continued to survey along the bulkhead at
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Frame 20. The diver noted multiple pipes and valves
along this area that have been cut.”)).
70.
On August 27, 2017, Travelers confirmed that it was
still investigating coverage. (Docket Nos. 116-1 ¶
71; 118-1 ¶ 71; 100-34).
71.
On September 2, 2017, Hutcheson provided his second
report to the claims adjuster for Travelers assigned
to investigate the claim. (Docket Nos. 140-1 ¶ 81;
141-1 ¶ 81; 120-1 at 466–471).
72.
On September 19, 2017, MER’s broker, AJG, sent
Travelers a list of “correcting endorsements” to add
to the P&I Policy “asap,” including the “American
Institute Pollution Exclusion Clause and Buyback
Endorsement A.” (Docket No. 100-11 at 2).
73.
MER worked with Starr, its pollution insurer, to
remove the wreck of the LONE STAR. (Docket Nos. 1161 ¶ 72; 118-1 ¶ 72; 100-35).
74.
MER began solicited quotes to remove the wreck and
Resolve Salvage & Fire (“Resolve”) and Ardent Global
Marine Services (“Ardent”) submitted bids. (Docket
Nos. 116-1 ¶ 47; 118-1 ¶ 47).
75.
In or about October 2017, Resolve began its salvage
efforts, and by December 6, 2017, the wreck of the
LONE STAR had been completely removed. (Docket Nos.
116-1 ¶ 73; 118-1 ¶ 73; 100-36 at 1).
76.
Starr paid Resolve $2,080,000.00 to remove the LONE
STAR. (Docket Nos. 140-1 ¶ 99; 141-1 ¶ 99; 120-1 at
507–510).
77.
Starr incurred and paid $2,485,358.97 in expenses on
behalf of MER subject to a reservation of rights and
preferred ship mortgage. (Docket No. 100-45 at 11).
78.
Starr denied MER’s claim related to the sinking of
the LONE STAR and demanded a full reimbursement of
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the amounts paid by Starr. (Docket Nos. 100-45 ¶ 13;
118-1 ¶ 109; 116-1 ¶ 109).
79.
Starr and MER reached a settlement agreement in which
MER’s Bankruptcy Trustee paid Starr $793,500.00 of
the $1,221,000.00 being held in escrow from the sale
of the SEVEN POLARIS. (Docket No. 100-45 ¶ 17).
80.
On March 29, 2018, MER filed suit against Travelers
in this Court, but this Court stayed proceedings on
February 8, 2019, pending the outcome of litigation
between MER and Starr. (Docket Nos. 116-1 ¶ 74 1181 ¶ 74).
81.
Following MER’s filing of suit against Travelers,
Travelers, for the first time, denied MER’s claims
by filing a counterclaim on June 20, 2018, in the
Puerto Rico action. (Docket Nos. 20; 116-1 ¶ 75;
118-1 ¶ 75).
82.
On July 3, 2018, Travelers issued the first and only
copy of the Bumbershoot Policy, as well as a
“corrected” copy of the P&I Policy. (Docket Nos.
116-1 ¶ 76; 118-1 ¶ 76; 100-39; 100-40).
83.
The P&I Policy issued on July 3, 2018, included the
LONE STAR on the P&I Policy’s schedule of vessels,
providing $1,000,000.00 in liability coverage.
(Docket Nos. 140-1 ¶ 35; 141-1 ¶ 35; 100-40 at 32).
84.
The P&I Policy issued on July 3, 2018, includes a
warranty of seaworthiness. (Docket Nos. 140-1 ¶ 33;
141-1 ¶ 33; 120-1 at 255).
85.
The P&I Policy issued on July 3, 2018, includes a
pollution
exclusion
clause
titled
“American
Institute Pollution Exclusion Clause (P&I) and
Buyback Endorsement A.” (Docket Nos. 140-1 ¶ 34;
141-1 ¶ 34; 100-40 at 31).
86.
The P&I Policy issued on July 3, 2018, includes a
provision
under
“General
Conditions
and/or
Limitations” that prevents coverage for any loss or
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claim already covered by other insurance. (Docket
Nos. 140-1 ¶ 37; 141-1 ¶ 37; 100-40 at 38).
87.
The Bumbershoot Policy issued on July 3, 2018,
provided $9,000,000.00 in excess coverage (Docket
Nos. 140-1 ¶ 39; 141-1 ¶ 39; 100-3 ¶ 78; 100-7, 10039 at 1; 100-46 ¶ 16).
88.
The Bumbershoot Policy issued on July 3, 2018,
includes a pollution liability form. (Docket Nos.
140-1 ¶ 41; 141-1 ¶ 41; 100-39 at 26).
89.
The Bumbershoot Policy issued on July 3, 2018, listed
Starr’s Vessel Pollution Coverage on the schedule of
underlying insurances with a limit of $4,610,100.00
in coverage for the LONE STAR. (Docket Nos. 140- 1
¶ 43; 141-1 ¶ 43; 100-39 at 24).
90.
The Bumbershoot Policy issued on July 3, 2018,
includes a provision under “General Conditions”
excluding coverage for losses or claims covered by
other valid and collectible insurance, unless the
other insurance policy is in excess of the
Bumbershoot Policy. (Docket Nos. 100-39 at 20; 1401 ¶ 40; 141-1 ¶ 40).
91.
Travelers denied compulsory wreck removal coverage
because the wreck of the LONE STAR did not pose a
threat to navigation and the orders to remove it
were pollution centric. (Docket Nos. 118-1 ¶ 94;
116-1 ¶ 94; 100-38 at 17–18).
92.
Travelers denied voluntary wreck removal coverage on
the basis that the sinking of the LONE STAR was a
pollution event. (Docket Nos. 118-1 ¶ 98; 116-1 ¶
98; 100-38 at 26).
93.
On October 19, 2022, Hutcheson provided a final
report in which he claimed that “MER failed to
exercise due diligence and failed to keep the LONE
STAR in a seaworthy condition from November 2016
through April 30th 2017.” (Docket No. 120-2 at 1).
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V. DISCUSSION
A Court may refer motions to a Magistrate Judge for review
and recommendation. See 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P.
72(b); Local Civ. R. 72. Within fourteen days of receiving a copy
of an R&R, adversely impacted parties are entitled to “serve and
file specific written objections to the proposed findings and
recommendations.” 28 U.S.C. § 636(b)(1)(C).
Upon receipt of a timely objection, the Court must review de
novo “those portions of the report or specified proposed findings
or recommendation to which specific objection is made.” Total
Petroleum Puerto Rico Corp. v. Fonseca-Marrero, Civil No. 16-2436
(PAD), 2018 WL 6131777, at *1 (D.P.R. Nov. 20, 2018) (quoting
Ramos-Echevarria v. Pichis, Inc., 698 F.Supp.2d 262, 264 (D.P.R.
2010)); see also United States v. Valencia-Copete, 792 F.2d 4 (1st
Cir. 1986). In conducting this review, the Court may “accept,
reject,
or
modify,
recommendations
in
made
whole
by
the
or
in
part,
magistrate
the
findings
judge.”
28
or
U.S.C.
§
636(a)(b)(1)(C).
Thus, after completing an independent review of the record,
the
MJ’s
R&R,
and
recommendations,
determinations
the
the
and
Plaintiff’s
Court
objections
ADOPTS
recommendations
as
for
to
amended
resolving
presented at Docket Nos. 100, 117, and 120.
the
the
the
MJ’s
MJ’s
issues
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A.
Admiralty and Maritime Jurisdiction
Travelers’ counterclaims rest on the applicability of the
admiralty law doctrines of uberrimae fidei, seaworthiness, and
fortuity. Plaintiff contends that the Policies trigger neither
maritime law nor admiralty jurisdiction since the LONE STAR could
not be classified as a vessel but rather was a “dead ship” that
had been permanently removed from navigation prior to the Policies’
binding. Dead ships, Plaintiff posits, do not fall under admiralty
nor maritime jurisdiction.
Pursuant
to
Section
1333(1)
of
Title
28
U.S.C,
federal
district courts possess jurisdiction over “[a]ny civil case of
admiralty or maritime jurisdiction. . .”
28 U.S.C. § 1333(1); see
also U.S. Const. Art. III, § 2, cl. 1 (extending the federal
judicial
power
to
“all
[c]ases
of
admiralty
and
maritime
[j]urisdiction. . .”). Such jurisdiction “extends to and includes
cases of injury or damage, to person or property, caused by a
vessel on navigable waters, even though the injury or damage is
done or consummated on land.” 46 U.S.C. § 30101(a).
The test for determining whether a contract invokes admiralty
or maritime jurisdiction turns on “the nature and character of the
contract,’ and the true criterion is whether it has reference to
maritime service or maritime transactions.” Norfolk S. Ry. Co. v.
Kirby, 543 U.S. 14, 24 (2004) (quoting North Pacific S.S. Co. v.
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Hall Brothers Marine Railway & Shipbuilding Co., 249 U.S. 119, 125
(1919)); see also Catlin (Syndicate 2003) at Lloyd's v. San Juan
Towing & Marine Servs., 946 F. Supp. 2d 256, 259 (D.P.R. 2013)
(stating
that
jurisdiction
“[i]n
exists
a
contract
when
the
dispute,
subject
federal
matter
of
admiralty
the
contract
underlying a case or controversy is maritime in nature.”) As such,
the MJ was correct in dismissing Plaintiff’s argument. (Docket No.
152 at 15). LONE STAR’s alleged status as a ‘dead ship’ and not a
vessel is immaterial to determining whether the present matter
arises under maritime jurisdiction.
The
First
jurisdiction
Circuit
attaches
has
in
concluded
actions
that
based
“federal
upon
marine
admiralty
insurance
policies.” Acadia Ins. Co. v. McNeil, 116 F.3d 599, 601 (1st Cir.
1997). Courts have generally recognized that federal admiralty
jurisdiction is invoked in marine insurance policy disputes. See
e.g. Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310,
313 (1955) (“Since the insurance policy here sued on is a maritime
contract[,] the Admiralty Clause of the Constitution brings it
within federal jurisdiction.”); Windsor Mount Joy Mut. Ins. Co. v.
Giragosian, 57 F.3d 50, 54 (1st Cir. 1995) (“The propriety of
maritime jurisdiction over a suit involving a marine insurance
policy
is
unquestionable.”)
This
District
has
previously
determined that disputes over the interpretation and enforcement
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of
insurance
contracts
accordingly
fall
under
admiralty
jurisdiction. See Inversiones Calmer, S.A. v. C.E. Heath & Co.,
681 F. Supp. 100, 102 (D.P.R. 1988) (citing Ins. Co. v. Dunham, 78
U.S. 1 (1870); Wilburn Boat Co., 348 U.S. at 310).
The undisputed facts support the finding that Travelers’
Policies possess a maritime interest and thus trigger admiralty
and
maritime
jurisdiction.
MER’s
own
language
throughout
the
Policy contracting process made it clear that it sought to procure
a maritime insurance policy to cover maritime risks for its ships,
including the LONE STAR. In July 2016, MER through the insurance
broker AJG submitted a Marine Insurance Submission Packet to
Travelers in the hope of obtaining an insurance policy to cover
the LONE STAR. (Docket Nos. 140-1 ¶ 5; 141-1 ¶ 5; 120-1 at 132).
During the underwriting process, MER characterized the LONE STAR
as a vessel and the insurance that it was seeking as “marine.” See
e.g. Docket Nos. 120-1 at 164; 140-1 ¶ 16; 141-1 ¶ 16, stating
that “MER is seeking a marine insurance program to cover its
operational risk exposure” and Docket Nos. 140-1 ¶¶ 20, 21, 23;
141-1 ¶¶ 20, 21, 23 in which MER referred to “the LONE STAR and
other vessels.”
The maritime nature of the Policies is also evident in the
contents of the Policies themselves. As the MJ highlighted, both
iterations of the P&I Policy, the one issued on July 3, 2018 and
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the one issued on December 2, 2016, contained innately maritime
risks including a warranty of seaworthiness, a clause on vessel
alterations or repairs, and terms on collision liability. (Docket
Nos. 100 at 14-15; 100-9 at 10, 32).
The First Circuit has held
that insurance policies covering inherently marine risks were
maritime insurance policies. See Catlin at Lloyd’s v. San Juan
Towing & Marine, 778 F.3d 69, 77 (1st Cir. 2015) (stating that
“there can be no doubt that the Policy is an ocean marine insurance
policy. . .[because] the Policy covers maritime interests and
risks” that included “hull, P&I, ship repairs, legal, general
liability and contractors equipment.”); see also Acadia Ins. Co.,
116 F.3d at 603 (finding that an insurance policy was governed by
maritime law because it “insures primarily (if not exclusively)
against risks associated with marine ventures.”).
Finally, the parties agree that Travelers P&I Policy covered
the voluntary and compulsory wreck removal of vessels including
the LONE STAR. (Docket Nos. 100-6 at 1; 118-1 ¶¶ 28–29; 116-1 ¶¶
28–29). There is also no dispute that both the U.S. Coast Guard
and the LRA issued orders finding that the sunken LONE STAR posed
a threat to navigable waters. (Docket Nos. 100-31; 100-3 ¶¶ 135,
137). A contract falls under maritime law when a sunken ship,
regardless of its vessel status, obstructs navigation. See Puerto
Rico Ports Auth. v. Umpierre-Solares, 456 F.3d 220, 225-226 (1st
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 33 of 64
Civil No. 18-01179(GMM)
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Cir. 2006) (finding that “whether [the ship] was ‘live’ or ‘dead’
when it was lying at the bottom of San Juan Harbor, obstructing
navigation, is of no consequence to our jurisdictional inquiry.
What matters is that La Isla Nena was lying at the bottom of San
Juan Harbor, obstructing navigation, and that the Contract related
to the removal of this obstruction.”). Thus, as the MJ correctly
ascertained and based upon the settled evidence, there seems to be
no dispute of material fact that the Policies at issue in this
case are maritime contracts falling under admiralty jurisdiction.
1.
Uberrimae Fidei
Travelers contends that the Policies are voidable since MER
violated
the
maritime
doctrine
of
uberrimae
fidei
by
making
material misrepresentations to Travelers prior to the Policies’
binding. (Docket No. 120 ¶ 7). Uberrimae Fidei translates to mean
“utmost good faith.” Black’s Law Dictionary 1754 (10th ed. 2014);
see also Grande v. St. Paul Fire & Marine Ins. Co., 436 F.3d 277,
282 (1st Cir. 2006). Under this federal maritime doctrine, the
insured in a maritime insurance contract must “disclose to the
insurer
all
known
circumstances
that
materially
affect
the
insurer's risk, the default of which. . .renders the insurance
contract voidable by the insurer.” Windsor Mount Joy Mut. Ins.
Co., 57 F.3d at 54-55; see also Markel Am. Ins. Co. v. Veras, 995
F. Supp. 2d 65, 75 (D.P.R. 2014) (quoting Grande, 436 F.3d at 283)
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 34 of 64
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(stating that the insured is required to make “full disclosure of
all material facts of which the insured has, or ought to have,
knowledge. . .even [when] no inquiry [has been] made” by the
insurer). Moreover, uberrimae fidei does not require a showing of
fraud to be invoked to void a contract. See Catlin (Syndicate 2003)
at Lloyd's, 974 F.Supp.2d at 73; see also A/S Ivarans Rederei v.
P.R. Ports Auth., 617 F.2d 903, 905 (1st Cir. 1980) (“Whether the
nondisclosure of a known fact material to a marine risk was
intended or not is beside the point; such nondisclosure voids the
policy.”)
Travelers posits that MER made material misrepresentations
regarding the LONE STAR’s stage of demolition. Parties do not
dispute MER’s sole purpose in acquiring the LONE STAR was to scrap
and recycle the vessel. (Docket Nos. 116-1 ¶ 2; 118-1 ¶ 2). Parties
also agree that in its August 11, 2016 Supplemental Submission to
Travelers, MER changed the LONE STAR’s status from being “slated
for demolition” to “being demolished.” (Docket Nos. 120-1 at 165;
140-1 ¶ 14; 141-1 ¶ 14). It is an undisputed fact that on September
17, 2016, the Policies were binding. (Docket Nos. 140-1 ¶ 32; 1411 ¶ 32; 116-1 ¶ 25; 118-1 ¶ 25; 100-6; 100-7). It was not until
November 2016, that the LONE STAR was fully reduced to canoe form.
(Docket Nos. 116-1 ¶ 14; 118-1 ¶ 14; 100-3 ¶ 59; 100-15 at 2). The
facts support that Travelers was aware that demolishment of the
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LONE STAR had already begun prior to the binding of the Policies.
As such, there is insufficient evidence to demonstrate that MER
violated the doctrine of uberrimae fidei.
Travelers also argues that MER misled it to believe that MER
had secured a suitable location where it could remove and store
the LONE STAR’s canoes. The undisputed facts demonstrate that at
the time it was applying for insurance with Travelers, MER was
aware that it lacked formal government approval for a suitable
parcel of land where it could store the LONE STAR canoes following
their removal from the water. (Docket Nos. 140-1 ¶ 28; 141-1 ¶ 28;
120-1
at
40–42).
Nevertheless,
MER
also
represented
that
it
received assurances from the Government of Puerto Rico that one
would be provided in the future. (Docket No. 140-1 ¶ 28).
The
facts establish that during the underwriting process, MER advised
Travelers that it did not yet have a parcel of land upon which to
store the LONE STAR’s removed canoes but that it expected to
receive
final
approval
from
the
government
to
establish
one
imminently. (Docket Nos. 140-1 ¶ 20; 141-1 ¶ 20; 120-1 at 220–
224). Undisputed evidence also shows that MER chose not to wait
for the acquisition of a suitable canoe storage land parcel prior
to initiating its dismantling of the LONE STAR.
Travelers further argues that MER misrepresented that it had
an appropriate method for removing the LONE STAR from the water.
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Civil No. 18-01179(GMM)
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Plaintiff stated that when MER applied for an insurance policy
with Travelers, it had made the faulty assumption that the LONE
STAR could be removed via crane and that it was not until later in
the disassembly process that it discovered that cranes would not
be a viable removal approach. (Docket Nos. 118-1 ¶ 8, 100-3 ¶ 59;
137-3 at 137:13-138:5; 141-1 ¶ 3; 118-3 (Affidavit of Lawrence J.
Kahn at ¶ 11)). Notably, however, the evidence does not indicate
that MER ever informed Travelers of its alleged intention to use
a crane in the removal of the LONE STAR. Rather, MER stated that
once the LONE STAR had been reduced to its canoe form, it could be
“towed to either a graving dock or dry dock, a marine railway, or
a roller-slip, installed and blocked and the final cleaning and
demolition. . .performed.” (Docket No. 120-1 at ¶ 7).
Finally,
Travelers
alleges
that
MER
misrepresented
its
intentions of preserving the integrity of the LONE STAR during the
demolition process and fraudulently stated that the LONE STAR would
retain the capability of being towed even though no such towing
mechanism was available. (Docket No. 120 at 13). Travelers contends
that MER did not maintain the LONE STAR’s integrity, trim, and
stability when it cut the LONE STAR and left it at risk of flooding
and sinking. Id. at 19.
Settled
Submission,
facts
MER
demonstrate
represented
to
that
in
Travelers
its
that
Supplemental
its
vessel
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demolition
method
would
“maintain.
.
.the
ship’s
watertight
integrity, trim, and stability.” (Docket Nos. 120-1 at 163; 140-1
¶ 15; 141-1 ¶ 15). The parties agree that during the underwriting
process, AJG informed Travelers that when the LONE STAR was reduced
to its “canoe” stage it would remain afloat and capable of being
towed. (Docket Nos. 140-1 ¶ 23; 141-1 ¶ 23; 120-1 at 130). Parties
acknowledged that by November 2016, the LONE STAR was fully reduced
to a “canoe” form. (Docket Nos. 116-1 ¶ 14; 118-1 ¶ 14; 100-3 ¶
59; 100-15 at 2). Whether the LONE STAR’s canoe form compromised
its integrity is an issue of fact not for this Court to determine.
Moreover, a factual dispute remains open regarding the cause of
the LONE STAR’s sinking, be it sabotage, criminal tampering, or
MER’s own negligence. See Hutcheson’s first report (stating that
the cause of the loss was indeterminable but finding that sabotage
or criminal mischief was the most probable cause) (Docket No. 10015 at 9).
Given that Travelers was aware of MER’s failure to yet acquire
a suitable parcel of land for canoe storage at the time the
Policies bound, open disputes regarding MER’s ability to remove
the canoe by crane or other means,
and unanswered questions
regarding the LONE STAR’s integrity and cause of sinking, there
are insufficient settled facts to grant summary judgment on the
matter of whether MER complied with the doctrine of uberrimae
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Civil No. 18-01179(GMM)
Page -38-
fidei. See Catlin (Syndicate 2003) at Lloyd's, 974 F. Supp. 2d at
80 (disputed material facts as to whether insured complied with
the
uberrimae
fidei
doctrine's
representation
and
disclosure
requirements led to a denial of summary judgment); Good Bus. Corp.
v. Markel Am. Ins. Co., Civil No. 11-1521 (SEC), 11-1532 (SEC),
2012 WL 3583534 at *7 (D.P.R. Aug. 20, 2012) (factual disputes
barred summary judgment on uberrimae fidei).
In accordance with the foregoing arguments, the Court concurs
with the MJ’s conclusion that there remain issues of material facts
that preclude the granting of summary judgement on Traveler’s
counterclaim seeking to void its Policies on grounds that MER
violated
the
doctrine
of
uberrimae
fidei.
Plaintiff’s
and
Travelers’ motions for summary judgement on this claim are DENIED.
2.
Seaworthiness
Travelers
counterclaims
filed
a
contending
Motion
for
Summary
that
(1)
MER
Judgement
violated
the
on
its
express
Seaworthiness Warranty in its P&I Policy and (2) MER failed to
maintain the LONE STAR in a seaworthy state. Plaintiff disagrees.
It argues that since the LONE STAR had been permanently removed
from navigation, it was not a vessel as a matter of law and thus
was
not
subject
to
the
Warranty
of
Seaworthiness.
Moreover,
Plaintiff posits that even if the LONE STAR were a vessel covered
by the warranty, awarding summary judgment to Travelers with
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respect to the LONE STAR’s seaworthiness would be inappropriate.
Plaintiff stresses that a genuine dispute of material fact remained
over whether MER was at fault for the LONE STAR’s sinking, the
fact relied on to demonstrate the barge’s unseaworthiness.
“A warranty of seaworthiness is an absolute duty owed by a
ship owner to its crew [and] to its insurer to provide ‘a vessel
and
appurtenances
reasonably
fit
for
their
intended
use.’”
Underwriters at Lloyd’s v. Labarca, 260 F.3d 3, 7 (1st Cir. 2001)
(quoting Ferrara v. A. & V. Fishing, Inc., 99 F. 3d 449, 453 (1st
Cir. 1996)). The warranty requires shipowners to ensure that “all
things about a ship, whether the hull, the decks, the machinery,
the tools furnished, the stowage, or the cargo containers, must be
reasonably fit for the purpose for which they are to be used.” JJ
Water Works, Inc. v. San Juan Towing & Marine Services, Inc., 59
F.Supp.3d 380, 395 (D.P.R. 2014) (quoting Gutierrez v. Waterman
S.S. Corp., 373 U.S. 206, 213 (1963)). A shipowner’s negligence is
irrelevant
to
the
imposition
of
liability,
the
warranty
is
absolute. See Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 549
(1960). All marine insurance policies possess an implied warranty
of seaworthiness. See Underwriters at Lloyd’s, 260 F.3d at 9. But
the warranty does not apply after a vessel removed from navigation.
Roper v. U.S., 368 U.S. 20, 24 (1961).
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 40 of 64
Civil No. 18-01179(GMM)
Page -40-
“The word ‘vessel’ includes every description of watercraft
or other artificial contrivance used, or capable of being used, as
a means of transportation on water.” 1 U.S.C. § 3. The Supreme
Court
stated
that
the
test
to
determine
whether
a
floating
structure is a vessel turns on whether a “reasonable observer,
looking
to
the
[structure]’s
physical
characteristics
and
activities, would consider it designed to a practical degree for
carrying people or things over water.” Lozman v. City of Riviera
Beach, 568 U.S. 115, 121 (2013). A craft’s capability of flotation,
being towed, and or having shore connections does not characterize
a structure as a vessel. See Id. at 120. Moreover, in determining
whether a craft is a vessel, courts should “avoid subjective
elements,
such
as
owner’s
intent,”
and
should
consider
only
“objective evidence of a waterborne transportation purpose.” Id.
at 128.
Plaintiff contends that at the time the Policies were binding,
the LONE STAR had already been removed from navigation and thus
the warranty of seaworthiness did not apply to the LONE STAR at
any time relevant to the present dispute. Pursuant to the dead
ship doctrine, the First Circuit finds that a craft is stripped of
its vessel status “when its function is so changed that it has no
further navigation function.” Mullane v. Chambers, 333 F.3d 322,
328 (1st Cir. 2003) (quoting Goodman v.1973 26 Foot Trojan Vessel,
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 41 of 64
Civil No. 18-01179(GMM)
Page -41-
Ark. Registration No. AR1439SN, 859 F.2d 71, 73 (8th Cir.1988))
(internal quotation marks omitted). Other Circuits have held that
a structure is a “dead ship” and not a vessel when it has “been
withdrawn from navigation and maritime commerce.” See e.g. In re
Southern Recycling, L.L.C., 982 F.3d 374, 383 (5th Cir. 2020);
Amoco Oil v. M/V Montclair, 766 F.2d 473, 477 (11th Cir. 1986).
Like the Supreme Court’s Lozman test, the determination that a
vessel has been withdrawn from navigation turns on the physical
characteristics of and modifications to its structure. See In re
Southern Recycling, L.L.C., 982 F.3d at 383(citing Thomas J.
Schoenbaum, 1 Admiralty & Mar. L. § 3:6 (6th ed. 2018).
The MJ thus found that the uncontested facts in the present
matter
do
not
determination
allow
on
the
the
Court
LONE
to
STAR’s
make
a
vessel
summary
judgment
status
nor
its
seaworthiness. The Court agrees. Parties do not dispute that the
LONE STAR had been permanently removed from navigation at the time
the Policies were binding. (Docket No. 118-1 ¶ 87; 100-38 at
315:19–316:6
(“we
agree
the
Lone
Star
was
removed
from
navigation.”); 118-2 at 38:6-11 (“we did believe that the Lone
Star was out of operation at the time.”)). However, the proper
test for a craft’s vessel status is a careful analysis of the
“objective manifestations” of “physical attributes and behavior of
the structure. . .” Lozman, 568 U.S. at 128. Notably, Traveler’s
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appointed surveyor, Hutcheson, made no specific findings as to the
LONE STAR’s fitness for navigation. Factors including the LONE
STAR’s dormant state and MER’s purpose in purchasing the barge are
not determinative. See Jerome B. Grubart, Inc. v. Great Lakes
Dredge & Dock Co., 513 U.S. 527, 535 (1995) (holding that a barge
that was intermittently used as a work platform was still a
“vessel”
since
it
was
also
occasionally
“used
for
transportation.”); In re Southern Recycling, L.L.C, 982 F.3d at
383 (noting that the “subjective intent to dismantle [a ship] for
scrap is insufficient to render it a dead ship.”). Based on the
settled facts, the Court cannot make a finding on the LONE STAR’s
navigation function at the time the Policies bound and thus summary
judgment on this matter is inappropriate.
Even if the Court were able to determine that the LONE STAR
was a vessel at the time the Policies bound, thus requiring MER to
adhere to the warranty of seaworthiness, factual disputes over
whether MER met this obligation would remain. There is no argument
that by November 2016 the LONE STAR had been reduced to its “canoe”
form. (Docket Nos. 116-1 ¶ 14; 118-1 ¶ 14; 100-3 ¶ 59; 100-15 at
2). Parties agree that the barge sank on April 30, 2017. (Docket
Nos. 140-1 ¶ 62; 141-1 ¶ 62; 100-15 at 1). But there are factual
debates over the cause of the LONE STAR’s sinking.
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Civil No. 18-01179(GMM)
Page -43-
In conducting his post incident analyses of the LONE STAR’s,
Hutcheson first found that the likely cause of the sinking was
sabotage
or
criminal
mischief.
(Docket
No.
100-15
at
9-10).
However, he later concluded that the LONE STAR was downed due to
MER’s own negligence and failure to maintain the craft in a
seaworthy condition. (Docket No. 120-2 at 1). Moreover, dive
reports on the LONE STAR’s wreckage found that “the port main
capable valve was open.” (Docket Nos. 116-1 ¶ 102; 118-1 ¶ 102;
100-49 (Dive Report) at 3 (“[t]his indicates that the port side
main sea chest valve was open. . .diver noted multiple pipes and
valves along this area that have been cut.”)). But evidence also
demonstrates that MER employees “had been instructed not to open
the sea chest valves.” (Docket No. 120-1 at 373, Kahn’s Dep. (Oct.
17, 2018) at 96:25-97:17). It thus is unclear that the open sea
chest valves caused the LONE STAR’s sinking and if they did, it is
contested whether their open status was an act of sabotage. Further
inquiry into this factual dispute is a job for a jury and is not
for this Court to resolve now. Travelers’ and Plaintiff’s motions
for summary judgment on these matters are DENIED.
3.
Fortuity
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 44 of 64
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Travelers contend that the Court should grant its motion for
summary judgement because the LONE STAR’s loss was not the result
of fortuity. Plaintiff counters that it demonstrated fortuity. “A
loss is fortuitous unless it results from an inherent defect,
ordinary wear and tear, or intentional misconduct of the insured.”
Markel Am. Ins. Co. v. Pajam Fishing Corp., 691 F.Supp.2d 260, 264
(D. Mass. 2010); see also Markel Am. Ins. Co. v. Pajam Fishing
Corp., 691 F.Supp.2d at 365 (quoting Ingersoll Milling Mach Co. v.
M/V Bodena, 829 F.2d 293, 307 (2d. Cir.1987)) (stating that “[a]
loss is fortuitous unless it results from an inherent defect,
ordinary wear and tear, or intentional misconduct of the insured.”)
Having already concluded that the Policies are governed by
maritime law, Plaintiff’s contention that the fortuity rule does
not apply to the LONE STAR is rendered groundless. Plaintiff,
however, presents additional arguments opposing the application of
the fortuity rule to the LONE STAR as discussed below.
Plaintiff posits that for the purpose of denying coverage
under the Policies, Travelers bears the burden of demonstrating
that the LONE STAR’s sinking was not fortuitous. As an initial
matter, the applicable burden of proof to determine coverage for
an allegedly fortuitous incident turns on whether a policy is a
named perils policy or an all-risk policy. Catlin (Syndicate 2003)
at Lloyd's, 974 F.Supp.2d at 80-81. Parties have not briefed this
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 45 of 64
Civil No. 18-01179(GMM)
Page -45-
matter but “to prove that an all-risks insurance policy covers its
claim, the insured has the burden of demonstrating the existence
of an all-risk policy, an insurable interest in the subject matter
of the insurance contract, and the fortuitous loss of the covered
property.” § 49:28. Marine insurance, 16 Williston on Contracts §
49:28 (4th ed.).
“The burden of demonstrating fortuity is not a particularly
onerous one.” Morrison Grain Co. v. Utica Mut. Ins. Co., 632 F.2d
424, 430 (5th Cir. 1980). “Since the nature of a fortuitous loss
is that it may not be easily explained, the insured need not point
to an exact cause of the loss.” Chartis Property Casualty Company
v. Inganamort, 953 F.3d 231, 235 (3d Cir. 2020). This District has
previously held that the insured bears the burden of proving that
a particular “loss or damage suffered was fortuitous” even under
an all-risk policy. Caitlin (Syndicate 2003) at Lloyd’s, 974
F.Supp.2d at 83. Other courts have concurred. See e.g. Perry v.
Hanover Ins. Grp., Inc., 621 F.Supp.3d 113, 120 (D.Me. 2022)
(quoting Nw. Mut. Life Ins. Co. v. Linard, 498 F.2d 556, 563 (2d
Cir. 1974)) (“the question of coverage turns on whether the event
itself
is
fortuitous,
then
the
matter
of
whether
a
ship’s
destruction was intentional goes to the scope of the policy’s
coverage and so properly remains the insured's burden.”); Chartis
Property Casualty Company, 953 F.3d at 235 (“The First, Second,
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Civil No. 18-01179(GMM)
Page -46-
Fifth, and Eleventh Circuits have all held that, for marine
insurance policies, the insured bears the burden of proving that
the loss was fortuitous.”) Accordingly, contrary to Plaintiff’s
arguments, it is Plaintiff and not Travelers who bears the burden
of demonstrating fortuity.
Plaintiff further argues that the LONE STAR’s loss was the
result of third-party sabotage. Sabotage by a third party is
fortuitous. See Ferrara & DiMercurio, Inc. v. St. Paul Mercury
Ins. Co., 169 F.3d 43 (1st Cir. 1999) (noting that “Even if
fortuity were a requirement for fire coverage, arson by a third
party, however intentional on the part of the arsonist, surely is
‘fortuitous’ vis-a-vis the insured, who does not expect that such
a loss will occur.”) Plaintiff further notes that the Dive Report
found that the barge’s main sea chest valve was open. (Docket No.
100-49 at 3). Moreover, Plaintiff references the initial report of
Traveler’s surveyor stating that he believed “that the cause [of
the LONE STAR’s sinking] is limited to one or a combination of the
following causes, with the most probable listed first. Sabotage or
criminal mischief. . .” (Docket No. 100-15 at 9-10). However,
Hutcheson’s final report determined that the cause of the sinking
was
MER’s
condition.
failure
to
maintain
the
LONE
STAR
in
a
seaworthy
(Docket No. 120-2 at 1). These contradictory reports
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Civil No. 18-01179(GMM)
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underscore that a clear issue of fact regarding whether the LONE
STAR’s loss was the result of sabotage remains.
Travelers alleges that MER rendered the LONE STAR incapable
of
being
towed
and
vulnerable
to
sinking
by
degrading
its
stability, trim and watertight integrity. (Docket No. 120-2 at 4
(Hutcheson’s final report) (“the height of the freeboard was only
2.5 ft. The sequence of the cutting in my professional opinion was
not in keeping with prudent or sound marine practice and left the
‘canoe’ form of the Lone Star at risk of sinking.”)). Plaintiff
however argues that there is a genuine dispute of material fact as
to whether MER cut the LONE STAR too far preventing a summary
judgement finding that the loss was not fortuitous.
Parties agree that between September and October 2016, MER
believed that the LONE STAR had deem disassembled “as far as [it]
can go safely.” (Docket Nos. 140-1 ¶ 45; 141-1 ¶ 45; 120-1 at 43–
44). Moreover, an expert retained by Plaintiff, Kevin Highfield,
determined that the LONE STAR’s canoe demonstrated no structural
failure in its sinking and that, although it was unsuitable for
transport outside of safe harbor, it was afloat with stable drafts.
(Docket No. 137-7 ¶¶ 3.4.6-3.4.7). Furthermore, although it is
undisputed that MER did not “blank off” the LONE STAR’s sea chest,
a dispute remains over whether MER had a duty to “blank off” or
provide
the
sea
chest
valves
with
additional
protection.
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 48 of 64
Civil No. 18-01179(GMM)
Page -48-
Critically, it is unknown whether MER’s failure to “blank off” or
provide the sea chest valves with additional protection caused the
barge’s sinking. As such, questions regarding whether: (1) MER’s
actions proximately caused the loss of the LONE STAR; and (2)
whether MER cut the barge too far or erred in not “blanking off”
its sea chest valves remain undeterminable. Thus, as concluded by
the MJ,
granting
inappropriate.
summary judgment at this juncture would be
See
Catlin
(Syndicate
2003)
at
Lloyd's,
974
F.Supp.2d at 84 (denying summary judgment in all-risk policy when
the evidence “tend[s] to support conflicting inferences” of why
vessel sank).
Finally, Plaintiff suggests arguendo that even if MER was
negligent in cutting the LONE STAR too far or in failing to “blank
off” or chain the sea chest valves, the barge’s loss should still
be classified as a fortuitous because MER did not engage in willful
misconduct. (Docket No. 137 at 28-31). Losses resulting from
negligent behavior can be considered fortuitous. See Goodman v.
Fireman’s Fund Ins. Co., 600 F.2d 1040, 1042 (4th Cir. 1979) (“A
loss is not considered fortuitous if it results. . .from ordinary
wear and tear. . .However, loss due to the negligence of the
insured or his agents has generally been held to be fortuitous
and,
absent
express
exclusion,
is
covered
by
an
all
risks
policy.”); Youell v. Exxon Corp., 48 F.3d 105, 110 (2d Cir. 1995)
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 49 of 64
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Page -49-
(“The fortuity rule excludes from coverage losses that arise from.
. .wear and tear. . .; losses that arise from. . .the insured's
negligence[ ] are covered.”), vacated on other grounds by Exxon
Corp. v. Youell, 516 U.S. 801 (1995).
It is undisputed that between November 2016 and January 2017,
MER fired approximately 300 of its employees, leaving only four or
five employees employed at Roosevelt Roads. (Docket Nos. 140-1 ¶
50; 141-1 ¶ 50). Furthermore, Parties acknowledge that in the
months preceding the LONE STAR’s loss MER stopped making payments
to its security company. (Docket Nos. 140-1 ¶ 53; 141-1 ¶ 53).
These
facts
on
their
own
are
insufficient
to
support
a
determinative finding that MER engaged in willful misconduct. As
such, Plaintiff’s, and Traveler’s requests for summary judgement
on the matter of whether the LONE STAR’s sinking was fortuitous
are DENIED.
B.
Coverage under the P&I Policy
Travelers
moves
for
summary
judgment
arguing
that
its
Policies are clear and plainly do not cover the costs of removing
the LONE STAR’s wreck.
Travelers
contends
that:
(Docket No. 120 at 8).
(1)
the
P&I
Policy
Specifically,
contained
clear
“pollution exclusion” and “cover elsewhere” clauses; (2) the LONE
STAR’s sinking was a pollution event and the raising of the ship
was
ordered
for
the
purpose
of
abating
and
preventing
oil
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discharge; and (3) Starr provided MER with pollution coverage and
paid for the response and clean-up of the LONE STAR. Id. at 5-6.
While Plaintiff acknowledges that the sinking of the LONE
STAR certainly qualified as a “pollution event,” it disagrees that
the pollution that occurred relieved Travelers of its contractual
obligations to cover all costs associated with the barge’s wreck
removal. (Docket
No. 100 at 19).
Plaintiff alleges
that the
Policies’ terms were ambiguous. Plaintiff further contends, and
Travelers agrees, that the Policies should be governed under Puerto
Rico law. (Docket Nos. 100 at 12-16; 116 at 12).1 Pursuant to
Puerto
Rico
law,
Plaintiff
argues
that
ambiguous
insurance
policies are to be interpreted in favor of the insured and as such
they are entitled to coverage under the P&I Policy’s voluntary and
compulsory wreck removal terms as a matter of law. (Docket No. 137
at 10). On these grounds, Plaintiff argues that the Court should
grant it summary judgment.
Parties do not dispute that the P&I Policy covered the LONE
STAR for both compulsory and voluntary wreck removal. (Docket Nos.
100-6 at 1; 118-1 ¶¶ 28–29; 116-1 ¶¶ 28–29). Moreover, it is agreed
Past cases, however, have not applied Puerto Rico law in resolving maritime
insurance disputes. See, e.g. Catlin at Lloyd’s, 778 F.3d at 75 (refused to
look to the Puerto Rico Insurance Code because marine insurance is exempted
from the application of the Insurance Code); Nw. Selecta, Inc., 541 F.Supp.3d
at 211(quoting Lloyd's of London v. Pagán-Sánchez, 539 F.3d 19, 25 (1st Cir.
2008)) (“the Puerto Rico legislature has expressed its intent to exclude
maritime insurance contracts from its statutory provisions governing the
interpretation and construction of insurance contracts.”).
1
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that
the
LONE
STAR’s
sinking
caused
a
pollution
event
that
discharged 1,800 gallons of waste oil into navigable waters.
(Docket Nos. 100-18 (USCG Administrative Order); 140-1 ¶ 69; 1411 ¶ 69). The issues in controversy regarding the applicability of
the P&I Policy are: (1) whether under the Policies the LONE STAR’s
sinking
was
purely
a
pollution
event,
as
characterized
by
Travelers, or if it was predominately a compulsory or voluntary
wreck removal incident that produced pollution; and (2) whether
the Policy’s pollution exclusion clause functions to eliminate
coverage of the LONE STAR’s loss.
Plaintiff contends that Travelers should be fully barred from
relying on its Policy exclusions, specifically, the pollution
exclusion clause, to deny coverage due to Travelers’ alleged breach
of
the
duty
Plaintiff
of
uberrimae
stresses
that
fidei.
(Docket
“Travelers
No.
cannot,
137
in
at
10-11).
fairness,
be
permitted to benefit from its own misconduct in failing to issue
proper copies of the Policies until after the LONE STAR was raised
and after MER was forced to sue Travelers for coverage and in
failing to investigate and adjust the loss.” Id.
Insurer’s
obligations
of
uberrimae
fidei
are
not
well-
developed in admiralty law. Thus, Plaintiff’s argument draws upon
a 2007 case arising from an insurer’s breach of the duty of good
faith and fair dealing. See North American Foreign Trading Corp.
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Page -52-
v. Mitsui Sumitomo Ins. USA Inc., 499 F.Supp.2d 361, 381 (S.D.N.Y.
2007). In Mitsui, an insurer denied two insurance claims almost a
year after they were made. The court there did focus on the duty
of
uberrimae
fidei
but
rather
determined
that
the
insurer’s
decision to wait almost a year to deny coverage constituted a
breach of its duty of good faith and fair dealing. Id. at 377,
381. The Court there stressed that the “[insurer] should have acted
in good faith by issuing a reservation of rights letter to inform
insured of [its] position. . .” Id. at 381.
In the present matter, and unlike the insurer in Mitsui, there
is
no
question
that
Travelers
investigated
and
issued
three
reservations of rights letters to Plaintiff prior to denying
coverage under the Policies. (Docket Nos. 100-21; 100-29; 100-32).
As such, the Court, like the MJ, is not persuaded that Travelers
should be estopped from defending against coverage of the LONE
STAR. See Narragansett Bay Ins. Co. v. Kaplan, 146 F.Supp.3d 364,
372-73 (D.Mass. 2015) (quoting Three Sons, Inc. v. Phoenix Ins.
Co., 357 Mass. 271, 257 N.E.2d 774, 777 (1970)) (“A reservation of
rights
in
such
circumstances
notifies
the
insured
that
the
insurer’s defense is subject to the later right to disclaim
liability. The insured thus can take the necessary steps to protect
his rights and has no basis for claiming an estoppel.”)
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Page -53-
Consequently, having determined that dispute of the Policies
is not barred under the doctrine of uberrimae fidei, the Court
next considers whether the Parties clearly intended to include an
enforceable pollution exclusion clause in the Policies. As an
initial matter, the Court respectfully disagrees with the MJ’s
determination that it was unclear that the Parties intended to
include the pollution exclusion clause in the P&I Policy. The MJ’s
initial analysis on the applicability of the pollution exclusion
clause to the LONE STAR rested on her determination that the clause
only appeared in the edited July 2018 iteration of the P&I contract
which was not issued until after the barge’s sinking and the
conclusion of the Policy’s coverage period. (Docket No. 152 at
27). However, in reviewing the relevant documents, the Court found
that the original P&I Policy issued on December 2, 2016 contained
a nearly identical pollution exclusion clause. Specifically, the
2016 version of the Policy provides that:
Notwithstanding anything to the contrary elsewhere
herein the Underwriters will not indemnify the Assured
in respect of the following matters: [. . .] (N) Any
liability for, or any loss, damage, cost, expense, fine,
or penalty of any kind or nature whatsoever, whether
statutory or otherwise, incurred by or imposed on the
Assured, directly of indirectly, in consequence of, or
with respect to, the actual or potential discharge,
emission, spillage or leakage upon or into the seas,
waters, land or air, of substances of any kind or nature
whatsoever.
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Page -54-
Docket No. 100-9 at 28-29. The July 2018 version of the Policy
provides that:
This Policy will not indemnify the Assured against any sum(s)
paid, nor insure against any liability, with respect to any
loss, damage, cost, liability, expense, fine, or penalty of
any kind or nature whatsoever, and whether statutory or
otherwise, incurred by or imposed on the Assured, directly or
indirectly, in consequence of, or with respect to, the actual
or potential discharge, emission, spillage or leakage upon or
into the seas, waters, land or air, of oil, petroleum
productions, chemicals or other substances of any kind or
nature whatsoever.
(Docket No. 100-40 at 31; 140-1 ¶ 34; 141-1 ¶ 34).
In consideration of these undisputed facts, the Court finds
that there is not an open question as to whether the pollution
exclusion clause was present in both the 2016 and 2018 versions of
the P&I Policy.
Nevertheless, Plaintiff argues that the pollution exclusion
clause in neither iteration of the P&I Policy should apply to the
LONE STAR because both versions of Policy do not match the Parties’
true intent and agreement. (Docket No. 157 at 6). However, the
plain language of both versions of the P&I Policy is sufficient to
render the clause’s applicability unambiguous. See Littlefield v.
Acadia Ins. Co., 392 F.3d 1 (1st Cir. 2004); see also 2 Lee R.
Russ, Couch on Insurance § 22:43 (3d ed. 1995) (“Since it must be
assumed that each word contained in an insurance policy is intended
to serve a purpose, every term will be given effect if that can be
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 55 of 64
Civil No. 18-01179(GMM)
Page -55-
done by any reasonable construction.”). There exists no version of
the P&I Policy presented in the present matter that does not
include a pollution exclusion clause, and thus, no intrinsic
evidence of Plaintiff’s intent to exclude the provision is to be
considered.2
Plaintiff
posits
that
even
assuming
that
the
pollution
exclusion clause is applicable to the LONE STAR, it does not
function
to
relieve
Travelers
of
the
obligation
to
provide
compulsory and voluntary wreck removal in accordance with the P&I
Policy. Put simply, Plaintiff argues that the LONE STAR’s sinking,
discharging of oil, and subsequent raising was both a pollution
event and a wreck event. Plaintiff further argues that the P&I
Policy is ambiguous given that Travelers admittedly failed to issue
correct written copies of the Policies until July 2018 after the
LONE STAR had sunk and these proceedings had begun. As such,
Plaintiff finds the P&I Policy to be inherently ambiguous because
the final terms, the scope of those terms, and how those terms
interacted with one another was not reduced into writing until two
years after the Lone Star incident occurred. Plaintiff contends
Even if this Court were to consider extrinsic evidence of intent, the record
contradicts Plaintiff’s narrative. The P&I Binder issued on September 17, 2016,
explicitly lists “AIMU Protection and Indemnity Clauses,” a boilerplate
provision which includes pollution in its list of exclusions. (Docket Nos. 1006 at 1; 100-9 at 26, 29). Moreover, on September 30, 2016, MER’s broker and
agent, AJG, asked Travelers to add the “American Institute Pollution Exclusion
Clause and Buy Back Endorsement A” to the list of endorsements included on the
P&I binder, clearly indicating MER’s intent to include a pollution exclusion.
2
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that under applicable Puerto Rico Law, when the terms of an
insurance contract are ambiguous, the matter should be resolved in
favor of the insured. Plaintiff cites this Court’s previous finding
that if an insurance policy is ambiguous “it will generally be
construed against the insurer who drafted it in order to promote
coverage for losses to which the policy relates. . . ” Nw. Selecta,
Inc. v. Guardian Ins. Co., Inc., 541 F.Supp.3d 206, 211–12 (D.P.R.
2021) (quoting Ingersoll Mill. Mach. Co., 829 F.2d at 306). Thus,
in light of the Policy’s ambiguity and controlling Puerto Rican
law, Plaintiff asks the Court to grant it summary judgment on the
Policy’s coverage of the LONE STAR.
As previously noted, the parties agree that the P&I Policy
covered compulsory and voluntary wreck removal. (Docket Nos. 1006 at 1; 118-1 ¶¶ 28–29; 116-1 ¶¶ 28–29). As the MJ acknowledges,
there is a sound argument that the LONE STAR’s raising constituted
a compulsory wreck removal given that the U.S. Coast Guard, the
Puerto Rico Department of Natural and Environmental Resources, and
the Local Redevelopment Authority for Roosevelt Roads all issued
orders requiring the raising and removal of the sunken barge.
(Docket Nos. 100-18; 100-28; 116-1 ¶ 62; 118-1 ¶ 62; 100-3 ¶¶ 135,
137). Moreover, as the MJ noted, there is insufficient evidence in
the record that would allow the Court to determine whether the
pollution exclusion clause applies in instances in which the loss
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claimed
is
also
a
wreck
removal.
(Docket
No.
152
at
28).
Additionally, based on the presented evidence, the Court cannot
determine for the purposes of summary judgement whether damages
from an event like the LONE STAR’s sinking —that is dual in nature—
are severable into pollution damages and wreck removal damages.
Assuming that such damages are severable, the Court recognizes
that it is ill-suited to assess, categorize, and divide damages
across liable parties.3
Considering the foregoing, the Court finds that a jury is
best suited to determine the scope and effect of the pollution
exclusion clause in the context of a dual pollution and wreck event
such as that of the LONE STAR. For the reasons reviewed above,
Travelers’ request for summary judgment that coverage of the LONE
STAR was wholly excluded under the P&I Policy’s pollution exclusion
clause is DENIED. Plaintiff’s request for summary judgment that
the LONE STAR was covered by the compulsory or voluntary wreck
removal
provisions
of
the
P&I
Policy
regardless
of
the
applicability of the pollution exclusion clause is also DENIED.
Finally, Travelers moved this Court to grant it summary
judgment based on the “cover elsewhere” clause in the general
conditions
of
the
P&I
Policy.
The
2018
Policy
contains
the
Plaintiff acknowledges that there is an issue of fact as to how to apply the
P&I Policy in the context of a dual loss. (Docket No. 137 at 16).
3
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Civil No. 18-01179(GMM)
Page -58-
condition that, “Provided that where the Assured is, irrespective
of this insurance, covered or protected against any loss or claim
which would otherwise have been paid by the Assurer, under this
policy, there shall be no contribution by the Assurer on the basis
of double insurance.” (Docket No. 100-40 at 38). But, as the MJ
correctly noted, it is undisputed that although Starr originally
provided pollution coverage under reservation of rights for the
LONE
STAR
incident,
reimbursement
from
it
MER
ultimately
during
MER’s
moved
for
bankruptcy
and
received
proceedings.
(Docket Nos. 100-45 at 11; 100-45 ¶ 17). Thus, Traveler’s request
for summary judgment on the issue of double recovery is DENIED.
C.
Coverage under the Bumbershoot Policy
Plaintiff argues that Travelers also breached the Bumbershoot
Policy. (Docket 100 at 20). As such, in determining the appropriate
damages owed by Travelers for the sinking of the LONE STAR,
Plaintiff contends that the jury should be allowed to consider the
Bumbershoot Policy’s coverage limits. Id. Plaintiff contends that
although the LONE STAR’s pollution removal did not exceed the
limits
of
its
Starr
Policy,
because
Starr
ultimately
denied
coverage and sought reimbursement for its cost payments for the
LONE STAR incident, the Bumbershoot Policy was triggered by the
LONE STAR’s pollution event. (Docket Nos. 100 at 20-21; 137 at
17). Travelers disagrees arguing that the coverage of the LONE
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Civil No. 18-01179(GMM)
Page -59-
STAR’s pollution event by Starr was not exhausted and thus, the
Bumbershoot Policy was not triggered to provide excess pollution
coverage. There is no disagreement that Starr initially paid
$2,485,358.97 subject to reservation of rights and later settled
a claim for reimbursement for $793,500. (Docket No. 100-45 ¶ 17).
As such, the amount paid by Starr fell under its policy limits.
Plaintiff also argues that considering that the costs of the
LONE STAR’s raising exceeded $1,000,000 the Court should find that
Travelers breached the Bumbershoot policy by failing to pay the
excess
expenses
associated
with
the
barge’s
compulsory
wreck
removal. (Docket No. 100 at 20). It is uncontested that the
Bumbershoot Policy provides excess coverage for both compulsory
wreck removal and pollution. (Docket Nos. 118-1 ¶ 100, 116-1 ¶
100). Parties also agree that the LONE STAR was scheduled on the
Bumbershoot Policy. (Docket Nos. 100-7 at 1, 100-39 at 24).
The
MJ
regarding
compulsory
held
the
that
LONE
wreck
in
light
STAR’s
removal
of
coverage
provision,
the
open
under
factual
the
summary
P&I
judgment
dispute
Policy’s
on
the
applicability of the excess insurance Bumbershoot Policy would be
inappropriate at this time. (Docket 152 at 29).
The Court agrees
and thus holds that both Plaintiff’s and Defendant’s demands for
summary judgment as to the excess coverage of the Bumbershoot
Policy are to be DENIED.
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 60 of 64
Civil No. 18-01179(GMM)
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D.
Denial of Coverage in Bad Faith
Plaintiff alleges that Travelers violated Puerto Rico Civil
Code, 31 P.R. Laws Ann. § 3018 by acting in bad faith or “dolo”
when it failed to issue correct copies of its Policies and denied
Plaintiff’s coverage for the LONE STAR’s sinking. (Docket Nos. 100
at 26-30). Plaintiff requests that the Court grant it summary
judgment,
finding
that
Travelers
acted
bad
faith.
Travelers
disputes Plaintiff’s dolo claims arguing that it did not act in
bad faith and that its denial of coverage under the Policies was
the valid result of a careful investigation of the facts before
it. (Docket No. 116 at 14-15).
“Under Puerto Rico law, ‘dolo,’ or contractual fraud, occurs
when the wrongful representations or omissions affect the freedom
of consent of one of the contracting parties.” Portugues-Santana
v. Rekomdiv Int'l, 657 F.3d 56 (1st Cir. 2011). “A party acts with
bad faith (‘dolo’) when it ‘knowingly and intentionally, through
deceitful
means,
avoids
complying
with
its
contractual
obligation.’” Oriental Financial Group, Inc. v. Federal Ins. Co.
Inc., 598 F.Supp.2d 199, 219 (D.P.R. 2008) (quoting Generadora De
Electricidad Del Caribe, Inc. v. Foster Wheeler, 92 F.Supp.2d 8,
18 (D.P.R. 2000)). A claim for dolo under the Puerto Rico Civil
Code requires that claimant establish “conscious [and] deliberate
purpose of avoiding the normal performance of the obligations”
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 61 of 64
Civil No. 18-01179(GMM)
Page -61-
under the Policies. Marquez v. Torres Campos, 111 D.P.R. 854, 11
P.R.
Offic.
Trans.
1085,
1098
(1982)
(quoting
8-1
Manresa, Comentarios al Código Civil Español 209 (6th ed. 1967)
(Ed. Reus Madrid)).
It is undisputed that Travelers provided MER with Policy
binders
on
September
17,
2016.
(Docket
Nos.
100-6;
100-7).
Moreover, the parties agree that on August 11, 2017, Travelers
acknowledged that it had not yet provided MER with written copies
of the Policies that matched the intent and agreement of the
parties. (Docket Nos. 116-1 ¶ 67; 118-1 ¶ 67; 100-30 at 1).
Evidence further demonstrates that Travelers and AJG exchanged a
series of subsequent emails discussing the terms of the Policies.
(Docket Nos. 100-11, 100-41). For example, in a September 19, 2017
email, AJG sent Travelers a list of “correcting endorsements” to
be added to the P&I Policy “asap.” (Docket No. 100-11 at 2).
The MJ concluded that these facts suggested that negotiation
of the Policies was a protracted process and that it was suspect
that Travelers failed to issue the final Policies until after the
conclusion of the coverage period, the loss of the LONE STAR, and
the initiation of these proceedings. Nevertheless, the MJ did not
identify any determinative evidence suggesting that Travelers was
intentionally slow or deceptive in its dealings with MER, nor did
she find concrete proof that Travelers purposefully attempted to
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Civil No. 18-01179(GMM)
Page -62-
avoid complying with its obligations under the Policies. This Court
also
found
no
such
evidence
and
thus
concurs
with
her
determinations.
The following undisputed facts substantiate that there can be
no disagreement that Travelers performed an investigation of the
sinking of the LONE STAR. On May 3, 2017 MER reported the loss of
the barge to Travelers. (Docket Nos. 100-13 at 1; 116-1 ¶ 24; 1181 ¶ 24). Travelers then appointed Stewart Hutcheson to investigate
the barge’s sinking. (Docket Nos. 100-14; 116-1 ¶ 39; and 118-1 ¶
39). Hutcheson issued three reports of his analysis. (Docket Nos.
100-15; 120-1; 120-2). His final report concluded that the LONE
STAR’s loss was caused by MER’s own negligence. (Docket No. 120-2
at 1). As such, Travelers issued three Reservation of Rights
letters on June 30, 2017, August 11, 2017, and August 16, 2017.
(Docket Nos. 100-21; 100-29; 100-32). Then on June 20, 2018,
Travelers entered its formal denial of coverage based on the
pollution exclusion clause in the 2018 version of the P&I Policy.
(Docket Nos. 20; 116-1 ¶ 75; 118-1 ¶ 75). Moreover, even if
Travelers investigation of the LONE STAR’s loss was faulty, those
shortcomings are insufficient to substantiate a dolo claim. See
Pace v. Ins. Co. of N. Am., 838 F.2d 572, 584 (1st Cir. 1988)
(“Although an insurer’s subjective bad faith may be inferred from
a flawed investigation, an improper investigation, standing alone,
Case 3:18-cv-01179-GMM Document 162 Filed 09/19/23 Page 63 of 64
Civil No. 18-01179(GMM)
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is not a sufficient cause for recovery if the insurer in fact had
an objectively reasonable basis to deny the claim”; “[i]f a claim
is “fairly debatable,” no liability in tort will arise).
As was previously stated, to substantiate a claim of dolo,
Plaintiff must demonstrate that Travelers acted with deliberate
purpose and intent to avoid its contractual obligations under the
Policies. See Marquez, 111 D.P.R. 854, 11 P.R. Offic. Trans. 1085.
Investigations of intent are not for the Court to decide. See
Gazelle v. MR 314 Fortaleza LLC, Civil No. 16-2500 (GAG), 2019 WL
13193718 at *3(D.P.R. Mar. 14, 2019) (“[T]here are unsettled issues
of motive and intent as to the conduct of the parties, which
precludes the court from granting summary judgment.”); Mulero–
Rodriguez
v.
Ponte,
Inc.,
98
F.3d
670,
677
(1st
Cir.
1996)
(reversing summary judgment and emphasizing that “determinations
of motive and intent. . .are questions better suited for the
jury”); Tew v. Chase Manhattan Bank, N.A., 728 F.Supp. 1551, 1555
(S.D. Fla. 1990) (“Certain issues such as fraud, intent, and
knowledge lend themselves to trial, rather than summary judgment.
These
matters
can
often
only
be
proved
by
reliance
upon
circumstantial evidence except in the rare case where there is
uncontroverted proof of a ‘smoking gun.’”) (emphasis supplied).
Drawing on the facts above, the MJ and the Court both find that
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Civil No. 18-01179(GMM)
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summary judgment on Plaintiff’s claim of dolo under Puerto Rico
law must be DENIED.
V. CONCLUSION
For the reasons stated above, the Court ADOPTS the MJ’s Report
and Recommendation as amended. Thus, Travelers’ Motion in Limine
at
Docket
No.
117
is
DENIED;
Travelers’
Motion
for
Summary
Judgement at Docket No. 120 is DENIED; and Plaintiff’s Motion for
Summary Judgement at Docket No. 100 is DENIED.
IT IS SO ORDERED.
In San Juan, Puerto Rico, September 19, 2023.
s/Gina R. Méndez-Miró
GINA R. MÉNDEZ-MIRÓ
UNITED STATES DISTRICT JUDGE
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