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Geico Marine Insurance Co. v. Shackleford

United States Court of Appeals, Eleventh Circuit

December 17, 2019

GEICO MARINE INSURANCE COMPANY, Plaintiff-Appellant,
v.
JAMES SHACKLEFORD, Defendant-Appellee.

          Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 8:16-cv-02329-JDW-MAP

          Before WILLIAM PRYOR, MARTIN, and KATSAS, [*] Circuit Judges.

          WILLIAM PRYOR, CIRCUIT JUDGE:

         This appeal requires us to decide whether damage to a yacht was covered under a marine insurance policy. Geico Marine Insurance Company insured James Shackleford's 65-foot sailboat, Sea the World. After a storm damaged the vessel in Florida, Geico Marine denied Shackleford's claim under the policy. Geico Marine then filed a declaratory-judgment action against Shackleford. As one ground for relief, Geico Marine sought a declaration that a navigational limit in the policy that required the vessel to be north of Cape Hatteras, North Carolina, during hurricane season barred coverage. After a bench trial, the district court ruled against Geico Marine and declared that the policy covered the loss. Because we agree with Geico Marine that the navigational limit bars coverage, we reverse and remand.

         I. BACKGROUND

         Shackleford purchased the Sea the World in 2009. He paid about $120, 000 for the vessel, and at one point he planned to sail her around the world. But those plans never came to pass.

         In 2011, lightning struck the vessel. Shackleford took the vessel to Sailor's Wharf, a yacht yard in St. Petersburg, Florida, for repairs. But Sailor's Wharf only made matters worse. It improperly hauled the vessel from the water and improperly "blocked" the vessel while storing it on shore, which caused structural damage to the ship's hull.

         Shackleford filed an insurance claim with Continental Insurance Company, which insured the Sea the World then. In 2014, Continental declared the vessel a constructive total loss, settled Shackleford's claim, and canceled the policy. Continental also waived its subrogation rights and assigned its interest in any claim against Sailor's Wharf to Shackleford.

         In 2015, Shackleford sued Sailor's Wharf for breach of its repair contract. Shackleford v. Sailor's Wharf, Inc., No. 8:15-cv-00407-VMC-TBM (M.D. Fla. filed Feb. 26, 2015). As part of discovery in that litigation, Shackleford arranged to have the vessel hauled ashore for inspection by expert witnesses at Taylor Boatworks, a boatyard in Cortez on Florida's west coast. But before Taylor Boatworks would haul the vessel from the water, it required Shackleford to obtain liability insurance on the vessel.

         In March 2016, Shackleford obtained a liability-only policy from Geico Marine, which insured several of his other watercraft. The policy did not insure the hull of the vessel against damage but did permit navigation. The General Conditions section provided the following terms of coverage:

         Where Covered

         Coverage is provided:

A. While the boat is afloat within the navigational area shown on the Declarations Page; and
B. While the boat or its equipment is ashore or being transported by land conveyance in the United States or Canada.

         The accompanying declarations page, in turn, included the following navigational limit:

CRUISING LIMITS: While afloat, the insured Yacht shall be confined to the waters ...

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