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Maclean v. Travelers Insurance Co.

United States District Court, D. Massachusetts

October 26, 2017

Kevin Maclean & Donna Maclean; Plaintiffs,
v.
Travelers Insurance Company; Defendant.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton, United States District Judge.

         This case involves a dispute about coverage under an insurance policy and, specifically, whether the owner of a speed boat is indemnified with respect to a purported boating accident that occurred in Boston Harbor. Kevin & Donna Maclean (“plaintiffs” or “the Macleans”) seek a declaratory judgment that Travelers Insurance Company (“Travelers” or “defendant”) is obligated to indemnify and defend William Fallon (“Fallon”), the owner of the M/V NIKKI, in a tort action arising from that incident. The tort claim is the subject of a separate proceeding, Maclean v. Boston Harbor Mini Speed Boats (14-cv-14288) (“the underlying action”), which is also pending in this session.

         Now before this Court is defendant's motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. For the following reasons, that motion will be denied with respect to subject matter jurisdiction but allowed for failure to state a claim.

         I. Background

         In August, 2013, the Macleans boarded the M/V NIKKI to enjoy a “lightning speedboat adventure”. According to the Macleans, the speedboat was traveling at a high rate of speed when it crossed the wake of another boat, tossing the plaintiffs into the air. They allege that when they crashed down onto the vessel they were seriously injured.

         The Commercial Marine Insurance Policy that is the subject matter of this action was issued by Travelers Property Casualty Company of America to William Fallon, effective from June 26, 2013 to June 26, 2014 (“the policy”). Although the renewed policy was in effect at the time of the alleged incident, the vessel was operated by Martin Cahill who was not named as an operator under the Named Operator Endorsement to the policy until two days after the accident. Travelers asserts that Cahill's operation of the vessel breached a policy warranty and, accordingly, it owes no duty to indemnify or defend Mr. Fallon in the underlying action.

         Plaintiffs filed the present complaint in June, 2016, seeking 1) a declaration of rights that the policy covers the plaintiff's alleged injuries; 2) a declaration of rights that Travelers is obligated to indemnify and defend Mr. Fallon; and 3) costs and other relief the Court deems fair and appropriate. In response, the defendant filed the motion to dismiss currently before the court.

         Because the Court agrees that Mr. Cahill's involvement breached the Named Operator Warranty, defendant's motion to dismiss will be allowed.

         II. The Policy

         This dispute turns on two provisions of the Commercial Marine Insurance Policy. First, the policy's choice of law provision provides that “[t]his policy shall be interpreted in accordance with the provisions of Federal Maritime Insurance Law.”

         Second, the policy contains a Named Operator Endorsement, which provides in relevant part:

Named Operator means the Named Insured and any other person, so designated by the Named Insured and approved by Us, to operate the insured vessel. Named Operators approved to operate the insured vessel are listed on the Named Operator Schedule included with this endorsement.
It is hereby warranted that all coverage provided under this policy is null and void when the insured vessel is operated by anyone other than those persons listed on the Named Operator Schedule.

         In May, 2017, Fallon “unconditionally and irrevocably” and “for good and valuable consideration received” assigned his rights under the policy to the Macleans for ...


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