945 F.3d 1135
11th Cir.2019Background
- Shackleford owned the 65-foot yacht Sea the World; it suffered prior hull damage and Continental settled a constructive total loss claim, assigning subrogation rights to Shackleford.
- In March 2016 Shackleford obtained a Geico Marine liability-only policy, then the same day added a "Port Risk Ashore" endorsement (no navigation coverage) so Taylor Boatworks would haul the vessel for inspection.
- After deciding to repair the yacht, Shackleford asked Geico to remove the Port Risk Ashore restriction; on May 27 Geico removed it and issued an updated declarations page reinstating a cruising/navigational limit requiring the boat to be north of Cape Hatteras, NC from June 1 to November 1 while afloat.
- Shackleford departed May 28 for Fort Lauderdale; the vessel was anchored in Florida in early June when a storm drove it into a seawall, causing covered-like damage; Geico denied the claim and sued for declaratory relief.
- The district court ruled for Shackleford, finding no navigational limit at the time of loss or, alternatively, that Geico implicitly waived enforcement; it also rejected Geico’s uberrimae fidei defense.
- The Eleventh Circuit reversed: it held the declarations’ cruising limits unambiguously imposed a navigational warranty, Geico did not waive it, federal maritime law’s strict enforcement applies, and the breach bars coverage.
Issues
| Issue | Shackleford's Argument | Geico's Argument | Held |
|---|---|---|---|
| Whether the policy contained a navigational limit at the time of loss | Policy is ambiguous (term "navigational area" vs. "cruising limits" and blank endorsement field); ambiguities construed against insurer | Declarations’ "cruising limits" plainly define the navigational area referenced by the policy; endorsement language does not override declarations | Unambiguous: the cruising limits constituted the navigational limit at loss |
| Whether Geico implicitly waived the navigational limit by agreeing that Shackleford could sail to Fort Lauderdale | Geico knew of the planned voyage and thus waived enforcement by conduct | No implied waiver—waiver requires voluntary, intentional relinquishment of a known right; lifting Port Risk Ashore did not show intent to relinquish the navigation limit | No implied waiver |
| Whether parties contracted out of maritime rule of strict enforcement via the policy’s "Conformity to Law" clause | Clause imports Florida law, replacing federal maritime rule with Florida’s more permissive warranty rule | Clause applies only to the policy’s express terms (not implied federal maritime rules); parties did not choose state law over maritime law | Parties did not contract out; federal maritime rule controls |
| Whether breach of the navigational limit bars coverage | Florida law (argued) limits avoidance to breaches that increased the hazard; express warranties should not be strictly enforced here | Federal maritime law requires absolute enforcement of express navigational warranties; breach releases insurer even if breach did not cause loss | Breach bars coverage under federal maritime law |
Key Cases Cited
- AIG Centennial Ins. Co. v. O’Neill, 782 F.3d 1296 (11th Cir. 2015) (maritime contracts governed by maritime law but state law fills gaps where no federal admiralty rule exists)
- Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310 (1955) (federal maritime law does not preclude application of state law to marine insurance in absence of established federal rule)
- Lexington Ins. Co. v. Cooke’s Seafood, 835 F.2d 1364 (11th Cir. 1988) (express navigational warranties in marine insurance are strictly enforced)
- Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d 161 (Fla. 2003) (insurance contracts construed by plain language; ambiguities resolved for coverage)
- Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528 (Fla. 2005) (courts must give each policy provision operative effect and not rewrite contracts)
- King v. Allstate Ins. Co., 906 F.2d 1537 (11th Cir. 1990) (parties may contract out of maritime rules but must do so clearly)
- Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707 (Fla. 2005) (implied waiver requires voluntary, intentional relinquishment of a known right)