Northern Assurance Co. of America v. Keefe, 845 F. Supp. 2d 406

Keefe owns the M/V WILHELMINA and holds a Northern Assurance Yacht Policy with a $265,000 limit.
The policy covers accidental direct physical loss and includes Protection and Recovery Expenses.
A Chartering Coverage Endorsement added in May 2008 permits limited charters (max 6 passengers, max 12 charters/year) and makes violations void the policy; some coverages are affected (deductibles apply to liability and medical sections).
On August 21, 2010 Keefe chartered with more than six passengers (18 stated) without prior written consent; grounding occurred during the charter.
Coast Guard fines Keefe for negligent operation and carrying passengers without a valid COI; Keefe submitted a loss claim to Northern Assurance, which denied coverage; Northern filed suit for declaratory relief while Keefe asserted six counterclaims seeking coverage and related relief.
The court reserves ruling on jurisdiction and choice of law but issues a decision on cross-motions for summary judgment, finding that the Chartering Coverage Endorsement excludes coverage regardless of causation and that coverage does not reinstate after breach; ultimately Northern Assurance is granted summary judgment on Count 1 and all counterclaims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the Chartering Coverage Endorsement bar coverage even absent causation?	Keefe argued (through Keefe) that only liability coverage should be affected.	Northern Assurance contends a blanket effect: violations suspend the entire policy.	Yes; endorsement excludes coverage regardless of causation.
Does reinstatement occur after breach of warranty when risk is not neutralized?	Keefe urged reinstatement after passengers disembarked.	Northern Assurance argued no reinstatement unless risk is neutralized.	No reinstatement; coverage remains suspended.
Do Chartering Endorsement terms apply to property coverage, liability coverage, or both?	Keefe contends Endorsement only affects liability coverage.	Endorsement applies to policy as a whole.	Endorsement applies to the entire Yacht Policy; property coverage also suspended.

Lloyd’s of London v. Pagan-Sanchez, 539 F.3d 19 (1st Cir.2008) (federal rule on breach of warranty in marine insurance)
Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (S. Ct.2004) (federal substantive law governs when contract is maritime and not inherently local)
Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310 (S. Ct.1955) (state power to regulate marine insurance; cautions against admiralty rule creation)
Henjes v. Aetna Ins. Co., 132 F.2d 715 (2d Cir.1943) (reinstatement after warranty breach discussed in circuits)
Worthington v. Bearse, 94 Mass. 382 (Mass. 1866) (suspension and revival of marine policy when risk remains same)