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JEFFERSON INS. CO. OF NEW YORK v. CASSELLA

May 7, 2003

JEFFERSON INSURANCE COMPANY OF NEW YORK, Plaintiff,
v.
Michael CASSELLA, Thomas J. Cassella, Dolphin Marine Transport, Inc., Keith Couch, a minor child, John Munro, a minor child, James Presta, a minor child, Defendants.



The opinion of the court was delivered by: DENIS HURLEY, District Judge.

MEMORANDUM & ORDER

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.

 I. BACKGROUND.

  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 (emphasis added).

  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, 2000, initiated

[261 F. Supp.2d 163]

      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 judgment.

 II. DISCUSSION.

 A. Cross-Motions for Summary ...


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