996 F.3d 1161
11th Cir.2021Background
- Ocean Reef Charters owned the M/Y My Lady and held a Travelers marine insurance policy (Oct 2016–Oct 2017) that contained express captain and crew warranties (full‑time approved captain; one professional crew member).
- In September 2017, as Hurricane Irma approached, Ocean Reef had no captain or crew aboard; the yacht sank at its dock after a year‑old piling failed, producing a total constructive loss.
- Travelers sued Ocean Reef and later denied coverage, asserting breaches of the captain and crew warranties that, under federal maritime law, void coverage even if unrelated to the loss.
- The district court granted Travelers summary judgment, relying on Eleventh Circuit precedent that express maritime warranties require strict compliance and that breach releases the insurer regardless of causation.
- On appeal, the Eleventh Circuit (panel) concluded Wilburn Boat governs and held there is no entrenched federal maritime rule governing captain or crew warranties; therefore Florida law (Fla. Stat. § 627.409(2)) applies.
- The panel reversed and remanded for the district court to apply Florida’s anti‑technical statute (under which an insurer must prove the breach increased the hazard) and any other arguments.
Issues
| Issue | Plaintiff's Argument (Travelers) | Defendant's Argument (Ocean Reef) | Held |
|---|---|---|---|
| Choice of law: whether federal maritime law or state law governs the effect of breaches of captain/crew warranties | Federal maritime law governs and requires strict compliance with express warranties in marine insurance policies | Wilburn Boat requires state law where there is no entrenched federal maritime rule; Florida law should apply | No entrenched federal rule for captain/crew warranties; Florida law governs (Fla. Stat. § 627.409(2)) |
| Whether federal maritime law requires strict compliance with all express warranties and voids coverage even when breach is unrelated to loss | Yes—breach of express warranty bars coverage regardless of causal connection | No—Wilburn Boat precludes imposing a uniform federal rule for all warranties; state law controls absent entrenched maritime precedent | Court declined to adopt a blanket federal rule; limited entrenched federal rules exist only for specific warranties (e.g., navigation limits, seaworthiness) |
| Whether existing Eleventh Circuit precedent (e.g., Cooke’s Seafood, Hilton Oil) establishes an entrenched federal rule applicable here | Those precedents establish strict maritime warranty rules broadly and control | Those cases are limited to specific warranties; they do not overrule Wilburn Boat | Prior Eleventh Circuit holdings are binding only to the extent they concern specific entrenched warranties (navigation limits, seaworthiness); they do not extend to captain/crew warranties |
| Burden and standard under applicable state law after choice of law resolved | N/A (federal rule should apply) | Under Fla. Stat. § 627.409(2) insurer must show breach increased the hazard; mere technical breach insufficient | Remanded for district court to apply § 627.409(2); insurer bears burden to prove breach increased risk of the loss |
Key Cases Cited
- Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310 (Sup. Ct.) (holds state law governs marine‑insurance warranty issues where no entrenched federal maritime rule exists)
- Lexington Ins. Co. v. Cooke’s Seafood, 835 F.2d 1364 (11th Cir.) (recognized strict construction of an express navigation‑limit warranty as a federal maritime rule)
- Hilton Oil Transp. v. Jonas, 75 F.3d 627 (11th Cir.) (applied an entrenched federal rule to a navigation‑type warranty)
- Kossick v. United Fruit Co., 365 U.S. 731 (Sup. Ct.) (applies maritime law where the matter has a distinctly maritime character; distinguished Wilburn Boat)
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (Sup. Ct.) (maritime contracts may implicate local interests warranting state‑law interpretation; federal law controls where state law defeats federal interests)
- Aguirre v. Citizens Cas. Co. of N.Y., 441 F.2d 141 (5th Cir.) (treated seaworthiness warranty as an entrenched federal maritime rule)