James Stokes’ vessel, MIDNIGHT EXPRESS, sank while moored in Ocean View, Delaware during heavy rain from Hurricane Michael in October 2018. He brought this suit against the hull insurer for the vessel, Markel American Ins. Co. (MAIC), in Florida state court, and MAIC removed the case to federal court. Chief Judge Altonaga (Southern District of Florida) transferred the case to the federal court in Delaware, where the parties later filed motions summary judgment and motions as to choice of law. The Insured sought to apply Florida law to the breach of contract and extra-contractual claims. On behalf of the marine insurer, HM&B and local counsel argued that Washington D.C. law should apply. Judge Stark agreed with MAIC that, regardless of whether maritime or state choice-of-law applied, Florida law did NOT apply. Judge Stark found that the policy was not executed in Florida, and Stokes purchased the insurance and executed the policy in the District of Columbia (although he used the boat for most of the year in Florida and was in Florida when he negotiated and accepted the terms of an endorsement that extended the contractual period). Thus, Judge Stark held that the law of the District of Columbia would apply to the contract claims in the absence of an established maritime principle (whether applying maritime or Florida state choice of law tests). The insured was then provided with an opportunity to amend the complaint to assert any additional D.C. recognized causes of action- which it attempted. However, Judge Bibas (assuming the case after Judge Stark was elevated to the circuit courts), then granted MAIC’s motion to dismiss all of insured’s claims other than breach of contract under D.C. law. Aside from dismissing the duplicative declaratory judgment count, all of the insured’s attempted extra-contractual claims were also dismissed- including conversion, breach of the implied covenant of good faith and fair dealing, violations of the D.C. Consumer Protection Procedures Act, and fraud. The case will now rightfully proceed on the breach of contract count and whether the loss is a covered fortuitous loss or otherwise excluded.
This case was led by HM&B partner Krista Fowler Acuña.