The opinion of the court was delivered by: CEDARBAUM
This is a diversity action in which plaintiff Belpar Marine, Inc. ("Belpar"), seeks recovery on four claims. For its first claim, Belpar alleges that defendants Marine Transport Management Co. ("MTM") and Adams & Porter, Inc. ("Adams & Porter") breached a contract of insurance by arranging the distribution of certain proceeds under the policy contrary to the terms of the policy. Belpar's second claim alleges that MTM was unjustly enriched through its receipt of payment of $385,000 under the insurance policy. The third claim asserts conversion by MTM of the M/V PINEY POINT ("Piney Point") by allowing it to sink so that MTM could collect under the insurance policy. Belpar's fourth claim sounds in fraud, alleging that the defendants conspired to obtain insurance for the Piney Point in an amount far in excess of MTM's insurable interest. Adams & Porter is alleged to have participated in the scheme to obtain its commission as insurance broker.
This matter comes before the court on cross-motions for summary judgment. Belpar has moved for partial summary judgment in its favor on its claim for unjust enrichment. MTM has cross-moved for summary judgment in its favor on all four of plaintiff's claims. Belpar has decided to withdraw its third and fourth claims. Accordingly, the summary judgment granted on the first and second claims entirely resolves the dispute between Belpar and MTM. My legal conclusions on these cross-motions are based entirely on the material facts on which the parties agree. And the parties agree that summary judgment is the appropriate method for deciding this case.
This dispute arises from the charter and subcharter of a U.S. flag ocean-going tugboat, the Piney Point, and her subsequent loss while under subcharter to Belco Petroleum Corporation of Peru ("Belco"). Belco is not a party to this action. The following facts are either taken from plaintiff's 3(g) statement of the undisputed facts or are evidenced by documents which are undisputed. On July 24, 1980, Belpar and MTM entered into a bareboat charter ("Charter") of the Piney Point. The initial charter period was six months with an unlimited option to renew on thirty days notice prior to the expiration of the current charter period. The charter hire rate was $400 per day. Under the terms of the Charter, MTM was required to obtain "Full Form Hull Insurance" on the Piney Point in the amount of $325,000, "the full value of the boat, as the case may be for the purposes hereof" (Charter para. 5).
According to the survey of Russell Brierly & Associates, as of July 29, 1980, the market value of the Piney Point was $400,000 and its replacement value was $700,000.
On July 29, 1980, MTM entered into a bareboat subcharter agreement bearing the title "Bareboat Service Contract" ("Subcharter") to hire the Piney Point to Belco for a period of six months commencing on August 21, 1980, with an option to renew for successive six-month periods on forty-five days notice to MTM. The Subcharter required Belco to obtain "Full Form Hull Insurance" at Belco's expense in the amount of $750,000, "the full value of the tugboat" (Subcharter para. 5). Pursuant to the Subcharter, Belco obtained insurance on the Piney Point in the amount of $750,000 by Endorsement 1027 to Belco's Marine Hull Policy 2761 with El Pacifico Compania de Seguros y Reaseguros of Lima, Peru ("El Pacifico"). The named insureds under this policy were Belco, Belpar and MTM.
On August 18, 1980 Belpar executed an agreement in favor of the First State Bank of Miami ("Bank of Miami") whereby it agreed to "sell, assign, transfer, and set over to BANK, all its right, title and intrest (sic) in and under the Bareboat Charter . . . together with all rents, issues, profits, revenues, royalties, rights and benefits due or to become due thereunder." Belpar made the assignment as additional collateral for a First Preferred Ship Mortgage on the vessel. By letter dated September 24, 1980, Bank of Miami notified MTM that MTM was to pay all monies due Belpar for use of the Piney Point directly to Bank of Miami.
On September 25, 1980, the Piney Point was lost at sea off the coast of Peru. Belco filed a claim with El Pacifico for total loss of the vessel. By letter dated November 6, 1980, MTM confirmed to Belco, with a copy to Adams & Porter, that the distribution of the insurance proceeds would be to Bank of Miami in the amount of $325,000 as mortgagee on the vessel; to Belco in the amount of $40,000 for equipment added to the vessel; and to MTM, as loss payee of the vessel, in the amount of $385,000. An authorization form dated November 7, 1980 which directs the insurer to pay to the insurance broker the sum of $750,000 was signed on behalf of MTM, on behalf of Belco, and on behalf of the Bank of Miami. The insurance proceeds were distributed by Adams & Porter in accordance with MTM's instructions.
Although disputed by MTM, I assume for purposes of this motion, as plaintiff asserts, that at no time prior to the distribution of the proceeds did MTM advise Belpar that the vessel had in fact been insured for $750,000 or that MTM had received $385,000 from the proceeds of the insurance.
Belpar moves for summary judgment on the ground that the excess proceeds, the $385,000 distributed to MTM, rightfully belong to Belpar, as the owner of the Piney Point. Its claim rests on the theory that if a beneficiary of an insurance policy receives a greater distribution than it is entitled to, the excess is held for the benefit of the other insureds. MTM answers that Belpar received exactly what it bargained for -- $325,000 in insurance proceeds, which was the stipulated loss value of the vessel in the charter agreement -- and that Belpar has no legal right to any more.
Summary Judgment is Appropriate on the Facts of this Case
In order to grant summary judgment, the court must determine that there are no genuine issues of material fact and that, as a matter of law, the moving party is entitled to judgment. R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69 (2d Cir. 1984). The burden is on the moving party to show that there are no genuine issues of fact, and all ambiguities are to be resolved in the light most favorable to the party opposing the motion. U.S. v. One Tintoretto Painting, Etc., 691 F.2d 603 (2d Cir. 1982). The fact that the parties give differing versions of the facts does not in and of itself preclude the granting of summary judgment unless the differences are material to the outcome of the litigation. Moss v. Ward, 450 F. Supp. 591 (W.D.N.Y. 1978).
It is in accordance with these standards that I have determined that MTM is entitled to summary judgment in its favor on its cross-motion to dismiss plaintiff's first and second claims, and that plaintiff's motion for ...