Hamilton

HAMILTON, MILLER & BIRTHISEL ATTORNEYS WIN MOTION FOR SUMMARY JUDGMENT ON LACK OF FORTUITY AND EXPRESS POLICY EXCLUSION FOR WEAR AND TEAR
Axis Reinsurance Co. v. Resmondo, 2009 WL 1537903 (M.D. FL. 2009)

Axis filed a declaratory action seeking a determination as to its rights and responsibilities arising from a marine insurance policy it issued to Resmondo. Axis argued that Resmondo's damages arising from the partial sinking or hull failure of his insured vessel were not covered by the insurance contract. On November 7, 2008, Axis moved for summary judgment, and the motion was referred to the magistrate judge for issuance of a report and recommendation. The court heard oral arguments on the motion on April 13, 2009. On June 2, 2009, the court adopted the magistrate judge's recommendation that Axis's motion for summary judgment be granted as to Counts I and II of its complaint, because (1) the partial sinking of Resmondo's vessel was not a "fortuitous" event as that term is used in the subject insurance policy, and (2) the "wear and tear" exclusion to coverage contained in the policy should be applied to bar Resmondo's claims.

In granting summary judgment on lack of fortuity, the court examined the proximate cause of the loss. The court found the undisputed evidence in Axis's expert's report established that the efficient cause of the loss was the gradual corrosion of the gimbal ring, and thus the sinking of the vessel was a non-fortuitous loss that is not covered under the marine insurance policy.

Resmondo argued that the Florida Insurance Code prevented Axis from denying him coverage because any breach on his part did not increase the hazard by means within his control. The court rejected this argument, finding that the Florida Insurance Code's provision relied on by Resmondo does not apply to exclusionary provisions in a contract or policy of insurance. Further, the court acknowledged that courts are not to rewrite insurance policies and insurers may decide which risks they will not insure against.

Finding the efficient cause of Resmondo's loss was wear and tear, corrosion, and the resultant gradual deterioration of the gimbal ring, the court held Resmondo's loss fell within the wear and tear exclusion and was not covered by the marine insurance policy issued by Axis. After the parties voluntarily dismissed the third count (unseaworthiness), the court closed the case.