International Ship Repair & Marine Services, Inc. v. St. Paul Fire & Marine Insurance

Citations: 906 F. Supp. 645; 1995 U.S. Dist. LEXIS 18012; 1995 WL 711035Docket: 94-1368-CIV-T-17(E), 94-1844-CIV-T-17(E)

Court: District Court, M.D. Florida; November 21, 1995; Federal District Court

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The case involves International Ship Repair and Marine Services, Inc. as the plaintiff against St. Paul Fire and Marine Insurance Company, which is also a plaintiff in a separate action against International and others. The United States District Court for the Middle District of Florida is addressing multiple motions related to summary judgment and the admissibility of affidavits. The key motions include International's motion for summary judgment filed on June 6, 1995, and St. Paul’s opposing memorandum filed on August 4, 1995, along with St. Paul’s cross motion for summary judgment. International has submitted several affidavits in support of its opposition to St. Paul's cross motion, which St. Paul subsequently moves to strike. St. Paul also submitted an affidavit from Clark Travitz in support of its cross motion, which International seeks to strike. The document details the various filings, including motions, memoranda, and affidavits, with specific docket numbers for each. The judge overseeing the case is District Judge Kovachevich.

On October 5, 1993, International acquired a floating dry dock, the CHL2, from Bath Iron Works. Following its purchase, International obtained two insurance policies from St. Paul: a one-year time hull policy and a voyage policy for the journey from Portland, Maine to Tampa, Florida. On October 18, 1993, during transit, the CHL2 began to list due to water in the hull, prompting International to redirect to Boston for inspection. Several missing bow planks were identified, leading to repairs costing approximately $835,000, which St. Paul subsequently denied coverage for, asserting the policies were void.

International contested this denial, claiming the policies remained valid. After repairs, the CHL2 sank during a subsequent tow to Tampa amid a storm. International filed a complaint against St. Paul in Hillsborough County Circuit Court for breach of contract, which was later removed to federal court based on diversity jurisdiction. The complaint was amended to include claims of bad faith and tortious breach. St. Paul countered that International breached the implied warranty of seaworthiness.

On August 4, 1995, St. Paul moved for summary judgment, arguing that the insurance policy was void due to International's lack of utmost good faith, failure to disclose the CHL2's purchase price, knowledge of the dry dock's deteriorated condition, and misrepresentation by International's surveyor. Concurrently, St. Paul filed a declaratory judgment action in the District Court of Maine, seeking reimbursement for an advance of $62,500 for damages during the trip, confirming nonliability for hull damage, and declaring the hull policy endorsement null due to International's breach of the implied warranty of seaworthiness. These actions were consolidated under one case number.

On June 29, 1995, International filed a motion for summary judgment, asserting that St. Paul's claims hinge on proving a breach of the warranty of seaworthiness, which International contends it did not breach since St. Paul acknowledged the seaworthiness of the CHL2 in the insurance policy. Consequently, International claims entitlement to summary judgment. Both parties submitted affidavits to support their motions and filed motions to strike each other's affidavits. The court will first address these motions, noting that under Rule 56(e) of the Federal Rules of Civil Procedure, an affidavit can be struck if it is merely conclusory or not based on personal knowledge. Affidavits supporting summary judgment must present admissible evidence, while the admissibility of affidavits from the nonmoving party in opposition remains ambiguous in the circuit. The Eleventh Circuit has suggested that materials submitted by the nonmoving party may be considered even if potentially inadmissible at trial, provided they raise material factual questions. The court referenced various case precedents that illustrate this distinction and the implications for evaluating summary judgment motions.

The Court in this circuit holds that evidence presented in opposition to summary judgment must be substantively admissible, even if its form is not, aligning with the rulings of other Circuit Courts of Appeals. The nonmoving party is not required to provide evidence in a form admissible at trial, but the content must be admissible as established in the cases of Winskunas v. Birnbaum and Garside v. Osco Drug, which clarify that hearsay cannot be used to counter a motion for summary judgment. The Supreme Court's decision in Celotex stresses the necessity of summary judgment for efficient legal proceedings, indicating that allowing inadmissible evidence would hinder this process. Therefore, the Court emphasizes that adherence to the Federal Rules of Civil Procedure and the precedent set in Celotex is essential. 

In this case, both parties sought to strike the other's inadmissible affidavit portions; however, the Court must consider all evidence submitted in opposition to the summary judgment motion. While the Court will evaluate only admissible evidence in support of each party's motion, it will also review entire affidavits, including inadmissible parts, when assessing opposition to the summary judgment. Consequently, both motions to strike are denied. Summary judgment may be granted if the evidence shows no genuine issue of material fact, as dictated by Rule 56(c), especially when a party fails to demonstrate an essential element necessary for their case. This failure results in all other facts being rendered immaterial.

A moving party is entitled to judgment as a matter of law when the nonmoving party fails to demonstrate a sufficient showing on an essential element for which it bears the burden of proof. The moving party must initially state the basis for its motion and identify portions of the record that show the absence of a genuine issue of material fact, which can be accomplished by indicating an absence of evidence supporting the nonmoving party's case. The nature of this initial burden varies depending on whether the moving or nonmoving party would bear the burden of proof at trial.

If the moving party has the burden at trial, it must provide credible evidence that would lead to a directed verdict if unchallenged. The Eleventh Circuit requires the moving party to demonstrate that no reasonable jury could find for the nonmoving party on essential elements where it bears the burden of proof. If the moving party meets this burden, it is entitled to summary judgment unless the nonmoving party presents significant evidence of a triable issue.

Conversely, if the moving party establishes the absence of a genuine issue of material fact regarding elements for which the nonmoving party bears the burden, the nonmoving party must go beyond pleadings to show specific facts indicating a genuine issue for trial. A fact is considered genuine if a reasonable jury could find for the nonmoving party based on the evidence. Material facts are those that could influence the trial's outcome. The court must view all evidence in the light most favorable to the nonmoving party and assess whether the nonmoving party's evidence could support a jury finding that meets the relevant evidentiary standard. However, credibility determinations and evidence weighing are functions of the jury, not the judge, in summary judgment considerations.

St. Paul's Cross Motion for Summary Judgment argues that International made material misrepresentations, which St. Paul claims void the insurance contract and prevent International from proving breach of contract, bad faith, and tortious breach of statute. St. Paul cites four instances of misrepresentation: 1) a lack of utmost good faith, 2) failure to disclose the CHL2's purchase price, 3) knowledge of the CHL2's deteriorated condition without informing St. Paul, and 4) misrepresentation of the survey conducted on the CHL2. St. Paul acknowledges its burden to prove these misrepresentations at trial, particularly showing that International had knowledge of the undisclosed facts. While St. Paul claims that International knew the CHL2 was not seaworthy based on extensive records received during the sale, the court finds that this evidence, even if uncontested, is insufficient for summary judgment because questions of intent and knowledge are generally factual matters for a jury. Moreover, International's submitted affidavits counter St. Paul's claims by stating that they inspected the CHL2 and believed it to be in good condition, indicating a triable issue of fact.

International's Motion for Summary Judgment asserts that a seaworthiness admitted clause in the insurance contract waives the implied warranty of seaworthiness. International must prove this waiver at trial, similarly needing to demonstrate that no reasonable jury could find for St. Paul on essential elements of the case. The court must interpret the meaning of "seaworthiness admitted as between the assured and assurers," with International arguing it waives the implied warranty of seaworthiness, while St. Paul contends it only pertains to inherent design flaws of the dry dock, not to all types of deterioration.

International Ship Repair and Marine Services and St. Paul Fire and Marine Insurance Company present competing interpretations of a contract phrase regarding the warranty of seaworthiness. International argues for a broad waiver, while St. Paul contends it is a narrow waiver. The Court finds it cannot ascertain the parties' intentions from the contract language and cites prior rulings establishing that a party's state of mind is a factual issue for determination at trial. International has provided sufficient evidence to potentially warrant a directed verdict if unchallenged, but St. Paul has also demonstrated a triable issue of fact. Consequently, the Court denies various motions for summary judgment and motions to strike affidavits from both parties. The Court also reminds the parties of the requirements of Local Rule 3.01(g) for civil motions and notes that St. Paul has been permitted to amend its complaint to include a claim for material misrepresentation without causing prejudice to either party.