HM&B Secures Final Judgment in favor of Cargo Underwriters in $9 million Coverage Dispute

Pero, a commercial fresh produce seller, experienced Hurricane Irma-related damage to fresh produce stored in a cooled warehouse and to crops planted in fields and greenhouses.  Pero had a cargo insurance policy with certain London-based cargo underwriters, and was paid approximately $1.3 million for the loss of the damaged fresh produce in storage.  Coverage under the cargo policy was denied for the planted crops, which Pero valued at an additional $5 to $9 million.  The Cargo Underwriters moved for summary judgment and a declaration that the unambiguous wording of the cargo policy and the application documents incorporated therein provided only in-transit and storage coverage to Pero’s goods/merchandise (which was paid).  However, it did not provide coverage for immature, planted crops because crops were not Pero’s “goods,” nor were they in transit or in storage at the time of Hurricane Irma.  Pero filed a cross-motion for summary judgment for breach of contract.  The Court agreed with Underwriters and entered final judgment in its favor, declaring that the cargo policy was unambiguous and that it covered Pero’s cargo (i.e. its goods/merchandise while in transit or related storage).  Because Pero’s business was the wholesale and retail sale of bulk and packaged fresh produce, the Court declared that the cargo policy did not cover planted crops because crops were not “goods” within the meaning of the Policy.  The Motion was written by HM&B partners Krista Fowler Acuña, Jason Bloom, and Yolyvee Rivera.