ORDER GRANTING UNDERWRITERS’ MOTIONS FOR SUMMARY JUDGMENT
This matter comes before the Court on a motion for summary judgment by American Trade Insurance Company and American Atlantic Insurance Company (“American Trade” and “American Atlantic,” respectively) against the plaintiff Port Lynch, Inc. (docket no. 72). Atlantic Marine and General Insurance Company (“Atlantic Marine”) joins in American Trade and American Atlantic’s motion for summary judgment (docket no. 84), and also makes an *818 independent motion for summary judgment, based solely on the issue of Port Lynch’s breach of its warranty of navigation (docket no. 85). The Court, having considered these motions and all papers filed in support of and in opposition to the motions, and having heard oral argument on November 16, 1990, does hereby GRANT the underwriters’ motions for summary judgment (docket nos. 72, 84 and 85).
I. BACKGROUND
This is a dispute over insurance coverage for a fire that occurred aboard the fishing vessel HAWAIIAN PRINCESS on July 2, 1988, causing the total loss of the vessel. The loss occurred while the vessel was in transit from crab fishing grounds in the Bering Sea, more than 1000 miles from southeast Alaska. Plaintiff Port Lynch is the owner of the vessel.
Port Lynch procured hull and machinery insurance for six of its vessels, including the HAWAIIAN PRINCESS, through its insurance brokers, Monroe Insurance and Brokerage and William Monroe (collectively, “Monroe”). In attempting to place the insurance, Monroe enlisted the assistance of other brokers, Frank Barnhardt and Barnhardt Marine Insurance (collectively, “Barnhardt”), who work almost exclusively in marine insurance. Barnhardt, with the assistance of Monroe, placed the first $300,000 of hull and machinery insurance with New England International Assurety of America (“New England”). New England is now in receivership in Louisiana and unable to pay on the policy. Barnhardt and Monroe also placed an excess $200,000 hull and machinery insurance policy with the Atlantic Gulf and West Indies Underwriting Group (“AGWI”). Atlantic Gulf & Marine Insurance (“Atlantic Gulf”), an affiliate of Barnhardt, acted as an agent for the hull and machinery underwriters for this excess $200,000 policy. The underwriters for this excess policy included, among others, American Trade Insurance Company, American Atlantic Insurance Company, and Atlantic Marine and General Insurance Company (collectively, the “Underwriters”).
Some time after Port Lynch filed a claim for the loss to the HAWAIIAN PRINCESS, the Underwriters denied coverage for the loss. Port Lynch then brought this action against New England and the Underwriters for the excess hull and machinery policy seeking recovery under the primary and excess policies for the loss. The Underwriters now move for summary judgment, asserting that no coverage is available to Port Lynch as a matter of law for four reasons. First, they argue that the policy is void ab initio because of material misrepresentations by the plaintiff in attempting to procure the marine insurance. Second, they contend that Port Lynch breached the warranty of navigation by using the HAWAIIAN PRINCESS in the Bering Sea instead of processing shrimp at anchor in southeast Alaska. Third, they claim that the plaintiff breached the trading warranty in that the vessel was under power and engaged in crabbing instead of being anchored and processing shrimp. Finally, the Underwriters argue that Port Lynch breached the warranty of seaworthiness in that the vessel sailed without the fire fighting equipment which had been recommended by the hull surveyor prior to the loss.
II. DISCUSSION
A. Summary Judgment Standard
Summary judgment is appropriate only if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). Thus, the question is whether the evidence, together with permissible inferences drawn from that evidence, is sufficient to establish a “genuine issue as to any material fact.”
United Steelworkers of America v. Phelps Dodge Corp.,
*819 B. Applicable Law
Of primary importance for the purpose of deciding these motions for summary judgment is whether state insurance law or federal admiralty law applies to the disposi-tive issues in this case. Unlike many other cases which have confronted this issue, there are significant differences here between federal admiralty precepts and state insurance law as it relates to some issues. If federal law applies, plaintiff’s insurance policy may be held void
ab initio
because federal cases hold that any misrepresentation or nondisclosure of a material fact will void the policy
ab initio,
regardless of the intent of the party who omitted or misrepresented the material fact.
Puritan Ins. Co. v. Eagle S.S. Co. S.A.,
If state law applies, plaintiff has a greater chance of recovering from its excess hull and machinery underwriters. Under Washington law, a misrepresentation or omission does not void an insurance policy unless the misrepresentation is material to the loss.
Miller v. Commercial Union Assur. Co.,
To resolve this issue, the court must consider the application of
Wilburn Boat Co. v. Fireman’s Fund Ins. Co.,
The district court and the court of appeals had applied, as a matter of federal admiralty law, the “literal performance” rule. This rule requires literal fulfillment of every policy warranty so that any breach would bar recovery. The Supreme Court reversed and remanded the case, holding that there was no established federal admiralty rule governing warranties of the kind involved in Wilburn Boat, that it would be inappropriate for the Court to fashion such a rule, and that in the absence of a federal rule of law, the scope and validity of such warranties were governed by state law. The Court emphasized that the Court had always treated marine insurance contracts, like all others, as subject to state control, and that the judicial and legislative history of insurance regulation warned against the judicial creation of admiralty rules to govern marine policy terms and warranties.
Federal courts have struggled in their application of
Wilburn Boat,
calling the decision “confusing” and “enigmatic.”
See, e.g., Albany Ins. Co. v. Wisniewski,
The Court finds that the standard in the Ninth Circuit for applying federal admiralty law or state law is set forth in
Bohemia
as follows: state law controls in the absence of a federal statute, a judicially fashioned admiralty rule, or a need for uniformity in admiralty practice. In this case, the Underwriters argue that they are entitled to summary judgment as a matter of law for four reasons: (1) misrepresentation, (2) breach of the warranty of navigation, (3) breach of the trading warranty, and (4) breach of the warranty of seaworthiness. With respect to each issue raised by the Underwriters, it is therefore necessary for the court to determine if there is a judicially fashioned admiralty rule or a need for uniformity in admiralty practice which would mandate the application of federal law. If there is not, the court must apply the law of the state with the greatest interest in the case, which is the State of Washington.
Lien Ho Hsing Steel Enterprise Co. v. Weihtag,
1. MISREPRESENTATION. The Underwriters argue that the excess hull and machinery policy is void ab initio because Port Lynch made material misrepresentations in attempting to procure the insurance. The Underwriters assert that Port Lynch failed to provide its insurance broker with a current survey report from 1987 which showed that the vessel lacked adequate fire fighting equipment, particularly a Halón fire extinguishing system in the engine compartment. Instead, Port Lynch submitted only a survey from 1985, which allegedly did not show such a defect. The Underwriters claim that the 1987 survey was material and would have influenced the Underwriters’ decisions with respect to whether any coverage would be provided and the premium charged. Plaintiffs response to this argument is that its failure to submit the 1987 report was due to inadvertence on the part of its new office manager, Hal Edwards, and was therefore not done with the intent to deceive, and under state law intent to deceive is required before underwriters can prevail on their misrepresentation claim. Plaintiff also argues that the 1987 survey was not material because: (1) the surveyor merely recommended the installation of Halón fire fighting units “as required,” and the installation of such units is not legally required for vessels of the HAWAIIAN PRINCESS’S size; and (2) an expert, John Adams, president of a specialty marine insurance brokerage, stated in his deposition that he has issued and would issue insurance on vessels similar to the HAWAIIAN PRINCESS without a fixed fire fighting system in the engine room.
a. Federal Maritime Law Concerning Misrepresentation and Nondisclosure.
It is a well established principle of general marine law that marine insurance is a contract
uberrimae fidei,
requiring the utmost good faith by both parties to the contract.
1
Gulfstream Cargo,
In almost all the federal cases where the issue of misrepresentation or nondisclosure has been raised as a defense to coverage under a marine insurance policy, courts have applied the general rule of marine insurance, requiring full disclosure of all material facts by the insured and holding policies void
ab initio
where the insured fails to comply with this duty.
See, e.g., Knight v. U.S. Fire Ins. Co.,
b. State Law.
In the present case, there is a Washington state statute which varies the established maritime law. RCW 48.18.090(1) provides that “no oral or written misrepresentation or warranty made in the negotiation of an insurance contract, by the insured or on his behalf, shall be deemed material or defeat or avoid the contract or prevent it attaching, unless the misrepresentation or warranty is made with the intent to deceive.” Although the statute speaks only of affirmative misrepresentations, Washington courts have held that, consistent with the policy behind RCW 48.-18.090(1), the failure to provide information not requested by an insurer does not vitiate the contract, absent proof that such silence amounts to fraud or bad faith.
State v. United Pacific Ins. Co.,
c. Wilburn Boat Analysis.
Bohemia
provides that under
Wilburn Boat,
state law will control the interpretation of a marine insurance policy only in the absence of a federal statute, a judicially fashioned admiralty rule, or a need
*822
for uniformity in admiralty practice.
Bohemia,
Under established federal maritime law, the insured has a duty to disclose voluntarily to the insurer, even though no inquiry is made, every material fact and circumstance within his knowledge and unknown (or fairly presumed to be unknown) to the insurer. An insured’s failure to do so, intentionally or otherwise, allows the insurer to have the contract declared void
ab initio
if the nondisclosure was material to the risk.
See, e.g., Sun Mutual Ins. Co. v. Ocean Ins. Co.,
There is good reason behind appellant’s argument that federal maritime law, rather than state law, governs [the defense of nondisclosure raised in connection with a marine insurance policy]. Appellant contends, and we agree, that Fireman’s Fund Ins. Co. v. Wilburn Boat Co.,348 U.S. 310 ,75 S.Ct. 368 ,99 L.Ed. 337 , merely held that state law is to be applied in the field of marine insurance only where “entrenched federal precedent is lacking” with respect to a specific issue. This is the interpretation which the Supreme Court itself and the Court of Appeals for the Second Circuit has placed on that decision. See Kossick v. United Fruit Co.,365 U.S. 731 , 742,81 S.Ct. 886 [894],6 L.Ed.2d 56 [1961], and Purofied Down Products Corp. v. Travelers Fire Ins. Co., 2 Cir.,278 F.2d 439 , 441 n. 1 [1960], Since the above stated rule of concealment in marine insurance is solidly entrenched in our body of federal maritime law [citation omitted], it would seem that this rule should apply in the instant case. Because, however, we believe that the same rule obtains in Texas, this point is of minimal significance to a decision here.
Fireman’s Fund Ins. Co. v. Wilburn Boat Co.,
Applying federal admiralty law to the case at hand, the Court finds that Port Lynch’s failure to provide the Underwriters with the 1987 survey will void the policy if the survey was material to the risk.
Puritan Ins. Co.,
2.
BREACH OF NAVIGATION AND TRADING WARRANTIES.
The Underwriters also contend that Port Lynch cannot recover as a matter of law because Port Lynch breached the warranty of navigation in the policy by navigating the HAWAIIAN PRINCESS in the Bering Sea instead of anchoring the vessel in southeast Alaska. The policy contained a warranty that the vessel would be used for processing shrimp in southeast Alaska;
2
the loss occurred while the vessel was crabbing in the Bering Sea more than 1000 miles north. They also argue that plaintiff Port Lynch breached its trading warranty in that the HAWAIIAN PRINCESS was under power and engaged in crabbing at the time of the fire instead of being anchored and processing shrimp. Plaintiff responds to these contentions by arguing first that Port Lynch owners never saw the policy until after the loss. While the owners admit providing the brokers with a fishing schedule, they claim that they never intended the schedule to be a “promissory warranty.” Alternatively, the plaintiff argues that even if the court finds that Port Lynch had a positive duty to be anchored and processing shrimp in southeast Alaska,
Wilburn Boat
requires the application of state law, and state law provides that there must be a causal connection between a breach of warranty and the loss.
Riordan v. Commercial Travelers Mut. Ins. Co.,
The Underwriters argue that there is an established federal admiralty law governing breaches of express navigation warranties which must be applied in this case. Most significantly they cite
Lexington Ins. Co. v. Cooke’s Seafood,
It is well established under general maritime law that “where a vessel ventures voluntarily outside of the navigational limits specified in a hull policy, and sinks or is otherwise destroyed while outside the mentioned limits, the insurer is relieved from liability for the loss of the vessel.”
Lexington Ins. Co. v. Cooke’s Seafood,
Wilburn Boat
does not require this court to reject solidly entrenched rules of maritime law applicable to the precise types of warranties at issue in this case in favor of applying general state insurance principles. As stated earlier,
Wilburn Boat
merely provides that state law will control the interpretation of a marine insurance policy only in the absence of a federal statute, a judicially fashioned admiralty rule, or a need for uniformity in admiralty practice. With respect to the interpretation of navigational and trading warranties, the Court holds that there is both a judicially fashioned admiralty rule which applies and a need for uniformity in admiralty practice. The federal admiralty rule requiring strict interpretation of navigational and trading limits has been adopted and applied by almost every federal court which has considered the scope and effect of navigational and trading limits in marine insurance policies. Such cases include
Robinson,
As contrary authority, the plaintiffs cite
Highlands Ins. Co. v. Koetje,
Navigation warranties are peculiarly maritime in nature, unlike the warranty at issue in Wilburn Boat. And not only is the uniformity so essential to a coherent body of admiralty law advanced by maintaining a federal rule concerning the effect of a breach of a trading limit warranty, see generally Offshore Logistics v. Tallentire,477 U.S. 207 ,106 S.Ct. 2485 ,91 L.Ed.2d 174 (1986) (state wrongful death remedies do not apply on the high seas), [footnote omitted] but federal maritime decisional law concerning the necessity of strict adherence to the terms of this type of express warranty was clearly established prior to the Wilburn Boat decision. Robinson v. Home Ins. Co.,73 F.2d 3 , supra; Canton Ins. Office v. Indep. Transp. Co.,217 F. 213 , supra.
Lexington,
Bearing in mind that ships, fishing vessels in particular, often operate in the waters of several or many states, to allow for different standards of coverage where trading limit warranties have been breached according to where a vessel sank, or where the insurance policy providing coverage was issued, etc., would have a severely deleterious effect on uniformity in maritime law.
Lexington,
In the present case, the insurance policy covered the HAWAIIAN PRINCESS while the vessel was processing shrimp in southeast Alaska. It is undisputed that the loss to the HAWAIIAN PRINCESS occurred in the Bering Sea, more than one thousand miles from southeast Alaska. Thus, applying the judicially established federal admiralty rule governing the interpretation and effect of navigation and trading warranties, the Underwriters are relieved from liability for the loss of the HAWAIIAN PRINCESS.
The Court further finds that even assuming
arguendo
that state law applies to the interpretation of these warranties, the result would be the same. In
Reynolds v. Pacific Marine Ins. Co.,
One of the essential requisites of a voyage policy of insurance is that it should contain an accurate description of the waters in which the boat covered by the policy is to be while it is insured. In 1 Arnould, on Marine Insurance (9th ed., 1914) vol. 1, p. 25, § 14, it is said:
“In the case of a voyage policy the underwriter cannot know the nature of the risk he is asked to insure, nor, *826 consequently, the amount of premium he ought to require, unless he knows the nature of the voyage on which the ship is to sail, or the goods are to be conveyed. It is therefore one of the most essential requisites of a policy of insurance, that it should contain an accurate description of the voyage insured.”
It follows, therefore, that the marginal language of the policy, which specified the waters in which the Arnold was to be while covered by the policy, was an essential part of the contract and, therefore, not such a warranty as is contemplated by the statute.
Reynolds,
98 Wash, at 365,
3. WARRANTY OF SEAWORTHINESS. The Underwriters argue that Port Lynch breached the express warranty of seaworthiness in that the vessel broke ground without the fire fighting facilities recommended by its hull surveyor. Port Lynch responds to this argument by asserting (1) that the Underwriters have provided no evidence that the vessel was unseawor-thy at any time relevant to this litigation, (2) that the lack of a Halón fire fighting system is not evidence of unseaworthiness because such a system is not legally required, (3) that because Port Lynch believed that it was complying with the law regarding fire safety measures, the Underwriters cannot show that it had knowledge of the vessel’s unseaworthiness, and (4) that the Underwriters have failed to show that a fixed fire system would have saved the vessel.
The parties do not dispute which law applies to the warranty of seaworthiness. Both parties cite and apply federal case law. Therefore, the Court will not engage in a
Wilburn Boat
analysis with respect to this issue. Under the case law cited by the parties, the insured has an obligation not knowingly to permit the vessel to break ground in an unseaworthy condition.
Saskatchewan Government Ins. Office v. Spot Pack, Inc.,
III. CONCLUSION
The Court finds as a matter of law that Port Lynch was in breach of the naviga *827 tional and trading warranties specified in the excess hull and machinery policy at the time the loss of the HAWAIIAN PRINCESS occurred and that, therefore, the Underwriters are relieved from liability for the loss of the vessel. Accordingly, the Underwriters’ motions for summary judgment are granted.
IT IS SO ORDERED.
Notes
. As early as 1906, the English Marine Insurance Act,
. Under the heading "NAVIGATION LIMITS,” the policy states in relevant part, "May/15 to Sept/l — Southeast Alaska anchored, processing shrimp with six (6) crew, ...”
. The reasoning of
U.S. Fire Ins. Co. v. Liberad,
.
Highlands Ins. Co. v. Koetje,