KOL B'SEDER, Inc. v. Certain Underwriters at Lloyd's of London Subscribing to Certificate No. 154766 Under Contract No. B0621MASRSWV15BND

Court of Appeals for the Eleventh Circuit·Decided March 12, 2019·No. 18-10447·Unpublished

Opinion

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 18-10447

Non-Argument Calendar

D.C. Docket No. 1:16-cv-22237-MGC

KOL B’SEDER, INC., A Florida Corporation,

Plaintiff - Counter Defendant -

Appellant,

versus

CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON SUBSCRIBING TO CERTIFICATE NO. 154766 UNDER CONTRACT NO. B0621MASRSWV15BND,

Defendant - Appellee,

GLASS-TECH CORP., A Florida Corporation,

Defendant - Counter Claimant -

Appellee.

Appeal from the United States District Court for the Southern District of Florida

(March 12, 2019)

Before MARCUS, ROSENBAUM and JILL PRYOR, Circuit Judges. PER CURIAM:

The owner of a yacht that partially submerged while at a boatyard for repairs sued its insurer and the boatyard; the boatyard countersued after the yacht owner refused to reimburse it for rescuing and storing the yacht. The district court granted summary judgment to the insurer and the boatyard, and the yacht owner appealed. After careful review, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND Kol B’Seder, Inc. is a limited liability company that owns a yacht called the Sababa. Kol B’Seder’s sole managing member is Noreen Sablotsky. At all times relevant to this lawsuit, Kol B’Seder insured the Sababa against accidental losses through a policy with Certain Underwriters at Lloyd’s of London (“Underwriters”).

During the eight years leading up to the submersion incident that gave rise to this case, the Sababa suffered engine troubles that required years to fix and underwent major repairs to its rudder and hull. In the two years preceding the submersion, the Sababa continued experiencing problems, even during short trips,

and needed repairs and sometimes replacements for its anchor winch, generator, batteries, bilge pumps, sun pads, vinyl, and isinglass. One to two months before the submersion, it is possible that the Sababa touched bottom in what is known as a “grounding.” Doc. 53-1 at 64. 1 Sablotsky thought at the time that the Sababa’s propellers had only kicked up some mud and that the yacht was undamaged.

While preparing to take the Sababa on a longer trip, Sablotsky decided to sail it to Glass-Tech Corp.’s boatyard on a Friday for it to be hauled out of the water for repairs. Before bringing the boat in, Sablotsky sent a text message to Glass-Tech’s owner asking if she could drop the yacht off that day. The owner texted back, “Yes. That’s fine. I may not be able to haul till Monday. But it will at least be here and so we can haul it Monday. So bring it over when u can.” Doc. 71-1 at 1. Sablotsky understood when she sailed the Sababa to Glass-Tech’s boatyard on Friday that it was possible Glass-Tech would not haul the Sababa out of the water until Monday.

Upon the Sababa’s arrival at Glass-Tech’s boatyard, Sablotsky did not inform Glass-Tech that the boat had not received bottom maintenance in more than three years. Sablotsky also did not ask anyone at Glass-Tech to plug the vessel into shore power, nor did she plug it in herself.

1 “Doc. #” refers to the numbered entries on the district court’s docket.

Glass-Tech did not haul the Sababa out of the water that Friday. Two days later, on Sunday, a Glass-Tech employee discovered that the vessel had become partially submerged. After informing Sablotsky, Glass-Tech hauled the Sababa out of the water and took measures to preserve the vessel. Sablotsky never paid Glass-Tech for the work it performed on the Sababa or for the costs of continuing to store the vessel when no arrangements were made to pick it up.

After learning of the Sababa’s submersion, Kol B’Seder filed an insurance claim with its insurer, Underwriters. Under the terms of the insurance policy, Underwriters was obligated to cover damages resulting from accidents. But the policy excluded from its coverage damage resulting from “[w]ear and tear, gradual deterioration, osmosis, wet or dry rot, corrosion,” “defects in design,” and “[a]ny claims caused by or arising out of . . . lack of repair of [the Sababa] caused by the lack of reasonable care and due diligence in the . . . maintenance of [the Sababa].” Doc. 51-2 at 3-4.

Kol B’Seder contends that the Sababa submerged as a result of the grounding that possibly occurred one to two months earlier and that the loss therefore comes within the policy’s coverage for accidents. Underwriters decided the loss did not qualify for accident coverage, however, and denied Kol B’Seder’s claim. According to the report of the surveyor Underwriters hired to examine the Sababa, it was “possible” that a grounding had occurred, resulting in fracturing to

the starboard rudder log tabbing that could have caused salt water infiltration into the laminates and water pressure that pulled the rudder log backwards. Doc. 68-6 at 8. Yet the surveyor also noted that the yacht suffered from design and installation defects in the external rudder logs, as well as extensive deterioration and water damage in the external rudder, rudder log, fastener, plumbing, transom, and engine—all of which he identified as causes of the submersion. In addition, the surveyor explained that battery-powered bilge pumps previously removed water that infiltrated the engine space, but that the failure to plug the vessel into shore power meant that the pump batteries died, allowing water to flood the vessel. Relying on the surveyor’s report, Underwriters concluded that the submersion resulted from design and installation defects along with Sablotsky’s failure to do preventive maintenance, causes that fell within the policy’s exclusions.

Kol B’Seder sued Underwriters for breach of contract and Glass-Tech for breach of contract, breach of warranty of workmanlike performance, and negligence. Glass-Tech counterclaimed for negligence and breach of contract. Underwriters moved for summary judgment on Kol B’Seder’s single claim against it. Glass-Tech moved for summary judgment on Kol B’Seder’s three claims against it and on its counterclaim for breach of contract. The district court granted both motions and denied Kol B’Seder’s motion for reconsideration. Kol B’Seder timely appealed.

II. STANDARDS OF REVIEW We review de novo the district court’s grant of summary judgment. Brown v. Crawford, 906 F.2d 667, 669 (11th Cir. 1990). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “The moving party bears the initial burden to show . . . that there are no genuine issues of material fact that should be decided at trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “Only when that burden has been met does the burden shift to the non-moving party to demonstrate that there is indeed a[n] . . . issue of [material] fact that precludes summary judgment.” Id. Federal Rule of Civil Procedure 56 “requires the nonmoving party to go beyond the pleadings and[,] by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (internal quotation marks omitted). We view all evidence and draw all inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

We review for abuse of discretion whether the district court erred in denying a motion for reconsideration. Richardson v. Johnson, 598 F.3d 734, 740 (11th Cir. 2010).

III. DISCUSSION

We affirm the district court’s grants of Underwriters’ and Glass-Tech’s motions for summary judgment and denial of Kol B’Seder’s motion for reconsideration.

A. The District Court Did Not Err in Granting Summary Judgment to Underwriters on Kol B’Seder’s Claim Against It.

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KOL B'SEDER, Inc. v. Certain Underwriters at Lloyd's of London Subscribing to Certificate No. 154766 Under Contract No. B0621MASRSWV15BND, (11th Cir. 2019).

KOL B'SEDER, Inc. v. Certain Underwriters at Lloyd's of London Subscribing to Certificate No. 154766 Under Contract No. B0621MASRSWV15BND (KOL B'SEDER, Inc. v. Certain Underwriters at Lloyd's of London Subscribing to Certificate No. 154766 Under Contract No. B0621MASRSWV15BND) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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