New Marine Insurance and Seaman's Arbitrability Decisions

A couple of interesting decisions have come down from the First and Fourth Circuit Courts of Appeal that are of interest to maritime practitioners. The first, relates to a marine insurance policy and its applicability resulting from a vessel seizure; the second, relates to the arbitrability of maintenance and cure, seaman's wages and other such claims.

In Markel Am. Ins. Co. v. Diaz-Santiago, the First Circuit Court of Appeals affirmed the trial court below. In 2008, MDS purchased a vessel and executed a note in favor of FirstBank, secured by a preferred ship mortgage under an agreement that required that they maintain insurance. In 2009, Customs and Border Protection seized the vessel as part of a drug enforcement action. The search and seizure damaged the vessel, significantly decreasing its value. Customs notified FirstBank, which initiated an administrative forfeiture proceeding, intervened in the criminal case, obtained voluntary dismissal of the indictment against the vessel, then submitted an insurance claim for "loss of the vessel including, without limitation, the value of the Bank's collateral, legal fees incurred in attempting to secure its release, as well as any applicable costs and interests." The insurer denied the claim. The district court granted FirstBank partial summary judgment and awarded $74,512.50 in attorneys' fees for costs and expenses incurred in securing release of the vessel and defending the validity of the policy. 

In Aggarao, Jr. v. Mol Ship Mgmt. Co., the Plaintiff, a citizen of the Philippines, brought suit against defendants for damages arising from severe injuries he sustained aboard the M/V Asian Spirit in the Chesapeake Bay near Baltimore. The Plaintiff's complaint alleged multiple clams against defendants, including unseaworthiness, maintenance and cure, breach of contract, violation of the Seaman's Wage Act, 46 U.S.C. 10313(i), and negligence under general maritime law and the Jones Act, 46 U.S.C. 30104. The court affirmed the district court's judgment that the arbitration clause at issue was enforceable and that the Plaintiff must arbitrate his claims against defendants in the Philippines. Nevertheless, the court vacated the dismissal of the case and remanded for reinstatement thereof, for assessment of the injunction request, for entry of a stay pending arbitration to ensure that the Plaintiff would have an opportunity at the award-enforcement stage for judicial review of his public policy defense based on the prospective waiver doctrine, and for such other and further proceedings.

You may click on the name of the decision above to obtain a complete copy of the decision. Otherwise, please feel free to contact me to obtain a copy of either of these decisions at miamipandi@comcast.net or mov@chaloslaw.com.

Volvo Ocean Race Volunteering Opportunities Have Kicked Into High Gear

As I have previously reported, the Volvo Ocean Race is headed to Miami May 6-20, 2012. It is the only North American stop in this world tour. My first chance to help this cause was during the Miami Boat Show last month, as you can see below:

Many volunteers are still needed. If you are interested in volunteering, please contact me via this Blog or my email addresses miamipandi@comcast.net or mov@chaloslaw.com. It is your opportunity to make a difference for our communities, both for Miami and for those that love sailing. Please let me hear from you!

Shake-a-Leg Fundraiser Appears to Have Been a Success

On February 15, 2012, the Florida Yacht Brokers Association in conjunction with the Fort Lauderdale Mariners' Club and Show Management had their Second Annual Boat Show Kick-Off Party to benefit the Shake-a-Leg Foundation. Lots of Mojitos, beers and other libations were had, while the guests mambo-ed and networked their way to through the great party.

Below is a picture at the event: pictured below from left to right is Christopher Karentz of SEA, his wife Lesley from the Star Center, my husband, Manuel F. Valdes from the Law Offices of Manuel F. Valdes and your humble blogger, Michelle, now of Chalos & Co.

If you are interested in learning more about the Fort Lauderdale Mariners' Club, you may click here: http://www.ftlmc.org/. A disclaimer here--I have been a member of the Fort Lauderdale Mariners' Club for several years. It is a great group of people and I have forged many friendships throughout the years in this organization.

If you want to learn more about Shake-a-Leg Miami, feel free to click here: http://www.shakealegmiami.org/site/c.kkLUJbMQKpH/b.2521629/k.BF03/Home.htm. A second disclaimer here--prior to having kids, I routinely gave of my time at Shake-a-Leg, as it was a way to keep the sailing skills learned back during my summer vacations going. I highly recommend this charity if you are looking for a wonderful place to give that is meaningful to our marine community.

Breach of Bailment Case Fails to Succeed in Middle District

In the case of ACE AMERICAN INSURANCE COMPANY v. FIRST CHOICE MARINE, INC., 23 Fla. L. Weekly Fed. D160a (Fla. M.D. Jul. 29, 2010), reported recently in the Florida Law Weekly of February 21, 2012, the U.S. District Court for Middle District of Florida, Tampa Division held that an insurer's claim against a defendant for breach of oral bailment contract cannot succeed, even if the plaintiff were granted leave to amend, because the plaintiff did not, and cannot, allege that the plaintiff's insured put his boat and engines within exclusive possession of defendant.

The court found that the allegation that vessel owner took his boat and engines to boat repair dealer for warranty repairs to be performed excludes any possibility that vessel owner put his boat and engines within exclusive possession of defendant. The court further found that while the complaint states a claim for breach of warranty of workmanlike performance as to oral contract for warranty repairs to engines on vessel, which the plaintiff's insured entered into with defendant manufacturer, the provisions of the limited warranty agreement indicating intent of parties that the authorized dealer would perform warranty repairs, not manufacturer itself, excludes breach of contract claim based on manufacturer's implied duty to perform the warranty repairs itself.

The court also reviewed the enforceability of the limitation of liability clause as set out in the contract between the parties and found that the disclaimer and express limitation of liability are set off in a separate box and are stated in plain English in bold-faced capital letters. Therefore, the court found that the limitation clause does not absolve defendant manufacturer of all liability and provides a deterrent to negligence, and plaintiff insurer has alleged no facts from which court can infer overreaching.

If you are interested in receiving a complete copy of this decision or wish to reach me, you may do so by writing to me at miamipandi@comcast.net or mov@chaloslaw.com.