"Commercial Towing/Salvage" and stated that "this vessel [is] very well equipped to perform the duties of a Tow or Salvage/Rescue boat." Ex. 15A; Tr. 533. The survey for Flagship's vessel REEFE HOOKER indicated that the vessel's intended use was "Commercial towing/salvage/rescue" and stated that "This vessel was converted to a towing/salvage/rescue vessel . . . [which] has proven very successful as this vessel has lended itself admirably to the commercial application." Ex. 15A.
Commercial Union's remarkable claim that, having expressly requested these surveys, Tr. 180, 438-441, it failed to read them, Tr. 441, 468, 509, 551, holds no water. "The assured complies with the rule [of uberrimae fide ] if he discloses sufficient to call the attention of the underwriter in such a way that, if the latter requires further information, he can ask for it." Puritan, 779 F.2d at 871. See Knight, 804 F.2d at 13; Contractors Realty Co. Ins. v. Ins. Co. of North America, 469 F. Supp. 1287 (S.D.N.Y. 1979). Commercial Union had its own good faith duty to read what it had requested, especially when the insurance coverage for the individual licensees was expressly made subject to their provision of such requested documents, Tr. 495-96. See also Compagnie de Reassurance d' Ile de France v. New England Reinsurance Corp., 944 F. Supp. 986, 1003 (D. Mass. 1996) ("The duty of uberrimae fidei is a reciprocal one"); Royal Ins. Co. of Am. v. Cathy Daniels, Ltd., 684 F. Supp. 786, 792 (S.D.N.Y. 1988). Nor did Commercial Union's own witnesses deny their obligation to read these materials and take such information into consideration in issuing their policies. See Tr. 124-26, 441, 467-69, 509-510, 527, 656.
Furthermore, even if one were to assume, contrary to fact, that aspects of Flagship's business were not adequately disclosed to Commercial Union, it is clear that Commercial Union did not regard such aspects as material to its determination of whether or not to issue the Flagship policy. Thus, Commercial Union, having learned by no later than August 1, 1995 that most if not all of the Sea Tow licensees were engaged in oil spill clean-up, salvage work, towage of commercial vessels, search and rescue operations, and commercial diving, chose to void the insurance policy of only the one licensee, Flagship, that had made a substantial claim, and otherwise continued the Sea Tow policies in full force (as well as renewing its agency agreement with B&S). Tr. 176, 237, 327, 477, 491-92, 588, 646, 655, 659, 677; Ex. B, Q. Nor does the fact that Commercial Union decided not to renew the Sea Tow policies change the analysis, since the decision not to renew the policies was made in June 1995, well before the August 1, 1995 deposition at which Commercial Union claims to have first learned the full scope of Flagship's business activities. Tr. 587, 644, 658, 666; Ex. Q.
For the foregoing reasons, and having considered all additional points raised by counsel in their post-trial memoranda, the Court hereby dismisses Commercial Union's claim, and, instead, awards judgment to Flagship on its counterclaims for breach of contract and duty to defend. See Avondale Industries Inc. v. Travelers Indem. Company, 887 F.2d 1200, 1204 (2d Cir. 1989); Burroughs Wellcome Co. V. Commercial Union Ins. Co., 632 F. Supp. 1213, 1218 (S.D.N.Y. 1986). Given those determinations, Flagship's further counterclaim for reformation of contract is denied as moot.
The Court also denies Flagship's counterclaims for bad faith insurance handling in violation of Florida law and for wrongful rescission. As to the former, even assuming arguendo Florida law were applicable, Flagship's counterclaim is facially deficient in that Flagship has utterly failed to prove, or even allege, that it satisfied the condition precedent for actions brought pursuant to the relevant provisions of that law, i.e., 60 day's written notice of the violation to the insurer. West's F.S.A. § 624.155(b)(2)(a). As to the latter, the record is devoid of sufficient showing to warrant the Court in finding that Commercial Union's breach of its obligations under the policy was done "wilfully and without justification" so as to support a wrongful rescission claim. See Samovar of Russia Jewelry Antique Corp. v. General, 102 A.D.2d 279, 476 N.Y.S.2d 869, 871 (1st Dep't 1984); see also Alden Coal Mining Co., Inc. v. C. L. Amos Coal Co., 171 N.Y.S. 980 (Sup. Ct. N.Y. County 1918).
In light of these determinations, the parties are directed to jointly telephone Chambers on November 24, 1997 at 6:00 p.m. to schedule any remaining proceedings relating to this case, as well as in the related cases of Commercial Union v. Flagship, No. 97 Civ. 3943, and Commercial Union v. Flagship, et al., No. 97 Civ. 4552.
JED S. RAKOFF, U.S.D.J.
Dated: New York, New York
November 14, 1997
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