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Insurance Co. of North America v. Zaglool

December 7, 2007

INSURANCE COMPANY OF NORTH AMERICA, PLAINTIFF,
v.
GEORGE ZAGLOOL, JENNIFER ZAGLOOL, AND CHRISTOPHER HARTMAN, DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM & ORDER

Plaintiff Insurance Company of North America ("Plaintiff" or "INA")commenced this action seeking a declaratory judgment that there is no coverage for a boating accident that occurred on June 10, 2003 and that it is not obligated to indemnify or defend Defendants George Zaglool ("Zaglool") or Christopher Hartman ("Hartman") against claims arising out of said accident. Presently before the Court is INA's motion for summary judgment.For the reasons set forth below, the motion is granted to the extent that the Court holds that (1) Plaintiff is not obligated to indemnify or defend Hartman against claims arising out of the accident at issue; (2) in accordance with the Policy's household resident exclusion there is no coverage available under the Policy for Zaglool's liability, if any, to residents of his household.

Background

The following facts are undisputed unless otherwise noted: Zaglool is the owner of a 1997 thirty-one foot Sonic vessel with two engines of 415 horsepower each. The Sonic vessel is a high performance speedboat capable of speeds of 60 miles per hour or more..

INA issued a Yachtsman Policy to Zaglool effective for the period August 22, 2002 through August 22, 2003 (the "Policy") providing insurance coverage for the Sonic vessel pursuant to the terms and conditions contained therein. The Policy contains a "High Performance Vessel Endorsement with Named Operator Endorsement" which provides:

In consideration of the premium charged, the policy is amended as follows: Named Operator: Warranted by the insured that the coverage provided by this policy applies only when the vessel is operated by: George Zaglool

The Policy also includes the following Navigation Warranty: "ATLANTIC COAST NAVIGATION WARRANTY Warranted confined to Atlantic coastwise and inland tributary waters of the United States and Canada between St. John, New Brunswick and Morehead City, North Carolina."*fn1 Further, the Policy contains certain exclusions, including the following:

Exclusions: We do not provide coverage under Part B: Liability Coverage for:

a. liability of other covered persons to you, your spouse, or other persons who reside in your household:

b. your liability to your spouse, or other persons who reside in your household.

Also relevant to the instant motion is the "Covered Person" section of the Policy. It provides:

Covered person is defined as you, or any person or legal entity operating your vessel(s) as shown on the Declarations page for private pleasure use with your direct and prior permission. It does not include:

a. any paid captain or crew member

b. any person or legal entity operating, or employed by, or the agent of a marina, boat repair yard, yacht club, sales agency, boat service station or similar organization. However, we will cover your liability for bodily injury or property damage caused by any of these people or organizations.

On June 10, 2003 while Hartman was driving the Sonic vessel, an accident occurred wherein Zaglool's daughter, Defendant Jennifer Zaglool ("Jennifer"), was injured.*fn2 At the time of the accident, Hartman (and not Zaglool), was at the helm, driving and steering the Sonic, as well as controlling its speed and direction. Defendants contend that Hartman was at the helm of the Sonic vessel because he was a marine mechanic hired by Zaglool to service, repair and maintain the engines of the vessel. On June 26, 2003, INA issued a denial of coverage letter to Zaglool and a disclaimer letter to the guests on the Sonic vessel, including Jennifer, for breach of the named operator warranty and the exclusion from coverage for liability to "persons who reside in your household."

Discussion

I. ...


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