56 F.4th 1280
11th Cir.2023Background
- The Oakleys owned the 61-foot yacht Serendipity through Serendipity, LLC and insured it under a SeaWave policy underwritten by Lloyd’s.
- The Policy contained a Captain Warranty stating: “a full time licensed captain is employed for the maintenance and care of the vessel and is aboard while underway.” Earlier renewals had permitted Oakley to operate without the captain aboard; later renewals omitted that explicit permission.
- Serendipity, LLC listed retired captain William Connelly as its captain; Connelly did not work full time for the vessel and was effectively retired.
- Oakley piloted the yacht to Great Abaco Island, Bahamas in July 2019; the vessel was docked there and later destroyed when Hurricane Dorian unexpectedly intensified and made landfall on Great Abaco.
- Lloyd’s denied coverage, claiming breach of the Captain Warranty (no full-time licensed captain) and that the breach increased the hazard because a licensed captain would have evacuated the vessel to Florida; the district court granted summary judgment for Lloyd’s based largely on an expert report by Captain Danti.
- The Eleventh Circuit affirmed breach but reversed summary judgment, holding a genuine dispute exists whether the breach increased the hazard given contemporaneous weather forecasts and evidence that Dorian had been predicted to hit Florida earlier.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Captain Warranty is ambiguous | Warranty is vague (e.g., what is “full time”) and should be construed for insured | Warranty has plain meaning requiring a full-time licensed captain | Warranty ambiguous as to "full time" meaning, but ambiguity does not rescue insured because insured still failed either reading |
| Whether Serendipity, LLC breached the Captain Warranty | Connelly was effectively acting as captain/on-call and Oakley was permitted to operate | Connelly was retired/not full-time; Oakley was not licensed — warranty breached | Breach: Connelly was not a full-time licensed captain and Oakley was not licensed; breach established |
| Whether the breach increased the hazard under Fla. Stat. § 627.409(2) (voiding coverage) | Breach did not increase hazard: weather forecasts initially predicted Dorian would hit Florida; moving the vessel back could have been more dangerous; licensed captains were present/available to secure the vessel | Any licensed full-time captain would have evacuated the vessel to Florida, increasing the risk because insured failed to employ such a captain | Reversed district court: disputed material fact exists about hazard increase (jury question); summary judgment for Lloyd’s vacated |
| Whether insured forfeited the hazard argument by not responding to expert | Insured preserved the argument in its summary judgment filings and disputed the expert’s meteorological predicate | Lloyd’s argued insured failed to rebut expert and/or forfeited by not re-raising after court’s 56(f) order | Held for insured on preservation: insured adequately presented and preserved dispute about forecasts and thus did not forfeit the hazard issue |
Key Cases Cited
- Dahl-Eimers v. Mutual of Omaha Life Ins. Co., 986 F.2d 1379 (11th Cir. 1993) (defines ambiguity standard for insurance contracts)
- Travelers Indem. Co. v. PCR Inc., 889 So. 2d 779 (Fla. 2004) (policies must be interpreted according to plain meaning absent ambiguity)
- Roberson v. United Servs. Auto. Ass’n, 330 So. 2d 745 (Fla. 1st DCA 1976) (ambiguities construed against insurer)
- Penzer v. Transp. Ins. Co., 29 So. 3d 1000 (Fla. 2010) (policy complexity does not alone create ambiguity)
- Southern-Owners Ins. Co. v. Eason Rhodes & Assocs., LLC, 872 F.3d 1161 (11th Cir. 2017) (courts should not adopt strained constructions to create ambiguity)
- Pearl Assurance Co. v. S. Wood Prods. Co., 216 F.2d 135 (5th Cir. 1954) (issue of whether breach increased hazard is typically a jury question)
- Pickett v. Woods, 404 So. 2d 1152 (Fla. 5th DCA 1981) (statute prevents insurer from avoiding coverage for technical omissions that did not cause loss)