The opinion of the court was delivered by: DENIS HURLEY, District Judge.
In a declaratory judgment action involving a marine insurance
contract, the Parties have filed cross-motions for summary judgment. For
the reasons discussed infra, the Court grants the Defendants' motion and
denies the Plaintiffs motion.
On or about March 30, 2000, Plaintiff issued a marine insurance policy
("Policy") to Defendant Michael Cassella. The Policy was issued via two
different insurance brokers, to cover Michael Cassella's new "Donzi 38 ZX
boat" ("Boat"). The Policy signed by Michael Cassella is comprised of
four "Parts." Part 1 is the "Declarations Page," on which Michael
Cassella signed the document. Part 1 also provides that "[i]t is
warranted that the vessel be confined to the . . . . [w]aters of Long
Island Sound and Great South Bay."
Part 2, the "Named Perils of Yacht Policy," contains further exclusions
from the Policy. However, Part 2 makes no mention of limitations
regarding users that had permission to operate the Boat. In fact, the
"Definitions" portion of Part 2 expressly states that the term "insured
. . . . [i]n addition to [the named insured] . . . shall mean any person
who may be operating the insured boat with your permission." Policy at 1
At some point after Michael Cassella signed the "Declarations" portion
of the Policy, Plaintiffs issued a "Named Operator(s)/Additional
Operator(s) Endorsement" ("Endorsement"). The Endorsement states: "The
person(s) listed on the following schedule is/are to be sole operator(s)
of the insured vessel. If the insured vessel is operated by any other
person(s), this insurance is null and void." The Endorsement was not
signed by Michael Cassella.
On June 14, 2001, within the relevant period covered by the Policy, the
Boat was being operated, with permission, by Defendant Thomas Cassella.
On this date, the Boat collided with the Dolphin II, a charter vessel
operated by Defendant Dolphin Marine Transport, Inc. ("Dolphin"). At the
time of the collision, both boats were located in Freeport Creek in
Nassau County, New York. (Freeport Creek is connected to the Great South
Bay.) The Boat required $32,000 in repairs. The boat maintained by
Dolphin also was damaged in this collision.
At some time after the collision, Michael Cassella, filed a claim with
Plaintiff. Dolphin also submitted a claim to Plaintiff. Thereafter,
Dolphin initiated a lawsuit alleging negligence by Thomas Cassella and
seeking to hold Michael Cassella vicariously liable for the lost profits
it suffered while its boat was not seaworthy.
Plaintiff refused to pay Michael Cassella's claim and, on October 2,
the instant declaratory judgment action. Plaintiffs complaint argues that
Michael Cassella's failure to expressly list Thomas Cassella amounted to
a material breach of the insurance policy and that the Endorsemert
expressly excluded coverage when anyone other than the named insured
operated the Boat. Based upon those two arguments, Plaintiff seeks
declaratory judgment with regard to the coverage of the Policy. See
28 U.S.C. § 2201. Michael Cassella, while answering the complaint,
filed four counterclaims. These counterclaims assert that Plaintiff has
refused to perform its obligations under the Policy and seeks declaratory
judgment in favor of Michael Cassella. The counterclaims further seek
"attorneys fees, costs and disbursements incurred in connection with the
defense of the within action and/or institution of counter-claims."
On September 30, 2002, the parties filed cross-motions for summary
A. Cross-Motions for Summary ...