New York Marine & General Insurance v. Continental Cement Co.
761 F.3d 830
8th Cir.2014Background
- Mark Twain, a steel-hulled cement barge, sank in the Mississippi River in 2011 while insured by Starr Indemnity and New York Marine; Starr declined hull and wreck-removal coverage and sued for a declaration of rights.
- Continental Cement attached a 2008 General Condition Survey showing bulkhead and bilge deficiencies; Continental didn’t attach it to the insurance application.
- Continental applied for insurance in 2010; Starr issued primary and excess policies without knowledge of the 2008 survey; the 2008 survey would have raised seaworthiness concerns.
- Continental argued that Missouri law, not federal admiralty law, should govern utmost good faith; Starr argued for federal uberrimae fidei as controlling.
- The district court held utmost good faith to be entrenched federal law; trial produced a jury verdict for the insurers; district court voided the policies at inception.
- Continental appeals challenging choice of law, the utmost good faith doctrine, and related trial rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal or state law governs utmost good faith in maritime insurance. | Continental Cement argues Missouri law applies. | Starr Indemnity argues federal uberrimae fidei governs. | Federal doctrine is established; utmost good faith applies under federal maritime law. |
| Was the choice-of-law question properly preserved for appeal? | Continental preserved the issue via summary judgment challenges. | Appellant waived by not renewing at trial; however, appellate review is permitted for purely legal questions. | Choice-of-law issue properly reviewable on appeal despite procedural posture. |
| Did the district court err in applying the utmost good faith doctrine and instructing the jury? | Contends the instruction and application were improper or incomplete. | Instruction properly conveyed materiality and the duty; no prejudicial error. | Court’s jury instruction and application were correct; no reversible error. |
Key Cases Cited
- Wilburn Boat Co. v. Fireman's Fund Ins. Co., 347 U.S. 310 (1955) (established state law for maritime insurance under Wilburn Boat framework)
- Assicurazioni Generali S.P.A. v. Black & Veatch Corp., 362 F.3d 1108 (8th Cir. 2004) (choice between federal admiralty rule and state law in insurance disputes)
- Albany Insurance Co. v. Anh Thi Kieu, 927 F.2d 882 (5th Cir. 1991) (considered factors for applying federal vs state law; view on uberrimae fidei)
- Shipley v. Ark. Blue Cross and Blue Shield, 333 F.3d 898 (8th Cir. 2003) (recognition of insurance as uberrimae fidei in ERISA contexts)
- Inlet Fisheries, Inc. v. Dolphin, 518 F.3d 645 (9th Cir. 2008) (reaffirmed federal establishment of utmost good faith in marine insurance)
- Stipcich v. Metro. Life Ins. Co., 277 U.S. 311 (1928) (early articulation of uberrimae fidei in insurance law)
- Springfield Fire & Marine Ins. Co. v. Nat'l Fire Ins. Co., 51 F.2d 714 (8th Cir. 1931) (historical basis for uberrimae fidei in marine insurance)
- McLanahan v. Universal Ins. Co., 26 U.S. (1 Pet.) 170 (1828) (early articulation of uberrimae fidei in insurance)