Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-akd-1_15-cv-00009/USCOURTS-akd-1_15-cv-00009-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Declaratory Judgment (Insurance)

---

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

ATLANTIC SPECIALTY INSURANCE 

COMPANY, a New York corporation, et 

al.,

Plaintiffs,

v.

JAY THOMASSEN, an individual and 

Alaska resident,

 Defendant.

Case No. 1:15-cv-00009-SLG

ORDER RE PENDING MOTIONS

Before the Court at Docket 18 is Defendant Jay Thomassen’s Motion for Summary 

Judgment. Plaintiffs Atlantic Specialty Insurance Company, Travelers Property Casualty 

Company of America, Navigators Insurance Services of Washington, Inc., and Great 

American Insurance Company (collectively, Underwriters) filed an opposition and crossmotion for summary judgment at Docket 21. Both motions are fully briefed. Also before 

the Court, at Docket 22, is a motion to intervene filed by Yolanda Perez Orozco, a crew 

member of the vessel at the center of this dispute.

1 Plaintiffs opposed that motion at 

Docket 31; Ms. Perez replied at Docket 33. The Court heard oral argument on the 

motions for summary judgment on March 31, 2016. Oral argument was not requested on 

the motion to intervene, and was not necessary to the Court’s determination of that issue.

//

//

 

1 Yolanda Perez Orozco signed her declaration “Yolanda Perez” and refers to herself as Ms. 

Perez. Docket 23-2 (Perez Decl.) at 3. The Court will do the same.

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BACKGROUND

Mr. Thomassen is the sole owner of Angelette, LLC.2 Angelette, LLC, purchased 

the KUPREANOF, a 73-foot tender vessel, in March 2015.3 On or about March 18, 2015, 

through an insurance agent, Sea-Mountain Insurance, Plaintiffs agreed to underwrite for 

Mr. Thomassen a marine insurance policy providing coverage for the KUPREANOF.4 Mr. 

Thomassen is listed as the “Named Insured.” The policy includes the following two 

provisions relevant to this dispute:

Layup Warranty

Vessel warranted laid up and out of commission from August 20 to June 20, 

annually. Permission granted to make alterations and repairs, to dock and 

undock, go on or off ways, gridirons and drydocks and to move about port 

for said purposes.

Held Covered Clause: Held covered in respect to breach of trading 

warranty, and/or lay-up warranty provided Underwriters are advised within 

72 hours from inception of the breach, at additional premiums, if any, to be 

determined by Underwriters.5

On or before June 6, 2015, Mr. Thomassen had hired a captain, Stephen Berry, 

and a crew that included Ms. Perez for the vessel’s 2015 season.

6 In early June 2015, 

the vessel was in Petersburg, Alaska undergoing repairs at Piston and Rudder Services. 

On June 6, 2015, the vessel left Piston and Rudder Services and moved a few hundred 

 2 Docket 12 (Answer) at 2.

3 Docket 19-1 (Thomassen Aff.) at 2.

4 Docket 1-1 (Insurance Policy) at 1.

5 Docket 1-1 at 1, 13. 

6 Docket 21-4 at 1–8 (Berry Contract), 25–32 (Perez Contract). Mr. Berry’s contract indicates a 

“Date of Hire” of June 1, 2015 but a signature date of June 6, 2015. The date of hire on Ms. 

Perez’s contract indicates “8-22-68” with a signature date of June 6, 2015.

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yards to the dock at Petro Marine Services in order to take on hydraulic fluid.7 The 

KUPREANOF left the dock at Petersburg sometime in the morning of June 7, 2015. The 

precise time of the departure is disputed. Plaintiffs assert “the KUPREANOF departed 

Petersburg for Juneau at approximately 0400 on June 7, 2015 with Captain Berry and the 

three crew members.”8 In support of this position, Plaintiffs cite to a copy of a U.S. Coast 

Guard Report of Marine Casualty Form 2892 that states the departure was at “6/7 4:AM.”9 

Mr. Thomassen has stated that he “was not at the dock at the time” and “[o]n information 

and belief, according to Captain Berry, the Vessel left Petersburg dock as late as 8:00 

a.m. or 9:00 a.m. or later Alaska time and not at ‘4 AM’ as stated on the Coast Guard 

Form 2892.”10 Ms. Perez’s declaration in support of her motion to intervene states the 

“KUPREANOF left the dock on June 7, 2015 at around 0800 ADT. . . . We left the waters 

of the Petersburg area around 0830 ADT.”11 

Early in the day on June 10, 2015, the vessel sank, although all crewmembers 

were successfully rescued. Captain Berry informed Mr. Thomassen of the sinking, and 

Mr. Thomassen has indicated that he was not aware of any potential breach of the 

 7 See Docket 25-2 (Defendant’s Response to Plaintiffs’ First Discovery to Defendant) at 4.

8 Docket 21 (Plaintiffs’ Opp’n & Mot.) at 3.

9 Docket 25-5 (Coast Guard Report) at 1.

10 Docket 25-2 at 4.

11 Docket 23-2 (Perez Decl.) at 2. It is true that Mr. Thomassen did not refer to this declaration 

(indeed, it had not yet been made) in his initial motion for summary judgment. But he did refer to 

it in his opposition to Plaintiffs’ cross motion for summary judgment. See Docket 24 at 16. In any 

event, while a district court is obligated to consider “the papers submitted on the motion and such 

other papers as may be on file and specifically referred to and facts therein set forth in the motion 

papers,” it “has discretion in appropriate circumstances to consider other materials.” Carmen v. 

San Francisco Unified Sch. Dist., 237 F.3d 1026, 1031 (9th Cir. 2001).

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insurance policy prior to that point.12 All parties agree that Mr. Thomassen notified the 

Underwriters (through Sea-Mountain) of the sinking at 8:04 a.m. Alaska time.13

Plaintiffs filed suit on August 25, 2015, seeking a declaratory judgment that there 

is no coverage under the policy for hull or protection and indemnity (P&I) claims because 

the KUPREANOF and crew claims arise “from the sinking on June 10, 2015 that occurred 

in breach of the lay-up warranty.”14 Several months later, on November 19, 2015, Mr. 

Thomassen wrote to Sea-Mountain, “I advised Underwriters via your office of the breach 

within 72 hours from inception of the breach of the lay-up warranty. Would you discuss 

with the Underwriters what ‘additional premiums, if any, to be determined by Underwriters’ 

are required to be forwarded by me to continue coverage?”15 One of the Underwriters 

responded on December 7, 2015 that “[w]ith respect to the question regarding additional 

premium pursuant to the held covered provision of the policy, Counsel has determined 

factually that there was no notice of the breach within the 72 hours after inception. We 

 12 See Docket 19-1 (Thomassen Aff.) at ¶ 13.

13 Mr. Thomassen states that, after learning of the sinking from Captain Berry, he left a message 

with Sea-Mountain that same day at or about 8:04 a.m. Alaska time, “providing notice that the 

Vessel sank and everyone got off safely.” Docket 19-1 (Thomassen Aff.) at 3. Plaintiffs concur in 

the timing of this notice: “Underwriters were not advised that the vessel was ‘in commission’ and 

therefore not laid up until 0804 Alaska time on June 10, 2015; at that time, Underwriters were 

informed that the vessel sank in deep waters in the Gulf of Alaska.” Docket 21 (Plaintiffs’ Opp’n & 

Mot.) at 19.

14 Docket 1 (Compl.) at 5.

15 Docket 19-1 at 8 (Thomassen letter dated November 19, 2015); see also Docket 1-1 (Insurance

Policy) at 13 (providing for payment of additional premiums when held covered clause is invoked).

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will pass the assured’s inquiry to underwriters with Counsel’s comments in that regard.”16 

The parties’ cross-motions for summary judgment followed.

DISCUSSION

I. Jurisdiction

Plaintiffs have designated this as a suit in admiralty under Federal Rule of Civil 

Procedure 9(h), and Defendant agrees that the Court has original admiralty jurisdiction 

pursuant to 28 U.S.C. § 1333. The Court also has jurisdiction under 28 U.S.C. § 1332

because there is complete diversity between the parties and the amount in controversy 

exceeds $75,000, and under 28 U.S.C. § 2201, the Declaratory Judgment Act.

II. Summary Judgment Standard

Federal Rule of Civil Procedure 56(a) directs a court to “grant summary judgment 

if the movant shows that there is no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law.” The burden of showing the absence 

of a genuine dispute of material fact lies with the moving party.17 If the moving party 

meets this burden, the non-moving party must present specific factual evidence 

demonstrating the existence of a genuine issue of fact.18 The non-moving party may not 

rely on mere allegations or denials.19 Rather, that party must demonstrate that enough 

 16 Docket 19-1 at 5 (Underwriter e-mail dated December 7, 2015).

17 Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

18 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986).

19 Id. at 248–49.

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evidence supports the alleged factual dispute to require a finder of fact to make a 

determination at trial between the parties’ differing versions of the truth.20 

When considering a motion for summary judgment, a court views the facts in the 

light most favorable to the non-moving party and draws “all justifiable inferences” in the 

non-moving party’s favor.21 When faced with cross-motions for summary judgment, a

court “review[s] each separately, giving the non-movant for each motion the benefit of all 

reasonable inferences.”22 To reach the level of a genuine dispute, the evidence must be 

such “that a reasonable jury could return a verdict for the non-moving party.”23 If the 

evidence provided by the non-moving party is “merely colorable” or “not significantly 

probative,” summary judgment is appropriate.24 

III. Applicable Law

Here, the parties dispute the meaning of two clauses in the marine insurance 

policy: the lay-up warranty and the held covered clause. To interpret these disputed 

terms, the Court must first determine whether to apply state or federal law.25 The general 

rule is that courts “apply state law unless an established federal rule address[es] the 

 20 Id. (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253 (1968)). 

21 Id. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59 (1970)).

22 Flores v. City of San Gabriel, 824 F.3d 890, 897 (9th Cir. 2016) (citing Ctr. for Bio–Ethical 

Reform, Inc. v. L.A. Cty. Sheriff Dep’t, 533 F.3d 780, 786 (9th Cir. 2008)).

23 Anderson, 477 U.S. at 248.

24 Id. at 249.

25 See Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310, 313–14 (1955).

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issues raised, or there [is] a need for uniformity in admiralty practice.”26 “In Wilburn Boat 

Co. v. Fireman’s Fund Insurance Co., the Supreme Court declared that no established 

federal rule addressed marine insurance policy warranty clauses, and that the clauses 

should be interpreted using state law.”27 Therefore, the Court will apply Alaska law to the 

lay-up warranty.28 

As to the held covered clause, Plaintiffs contend that state law also controls.29 But 

Mr. Thomassen urges the Court to find that there is “judicially established and entrenched 

federal admiralty law” that continues coverage pursuant to a held covered clause so long 

as the owner notifies the insurer of the breach promptly upon learning of the breach, and 

pays an additional premium.

30 Mr. Thomassen extrapolates this proposed federal rule 

from a collection of federal cases interpreting held covered clauses. But those held 

covered clauses contain language quite different from the language at issue here. For 

example, in Kalmbach, Inc. v. Insurance Co. of the State of Pennsylvania, Inc., the first 

 26 Yu v. Albany Ins. Co., 281 F.3d 803, 808 (9th Cir. 2002).

27 Guam Indus. Servs., Inc. v. Zurich Am. Ins. Co., 787 F.3d 1001, 1004 n.1 (9th Cir. 2015).

28 See id. The Court is aware that the Ninth Circuit did not disclaim the existence of a federal 

“strict compliance” rule regarding maritime insurance warranties in either Guam Indus. Servs. or 

Yu. But neither did the Ninth Circuit hold that such a rule existed and displaced state law on the 

matter. In both cases, the Court emphasized that there was no conflict with state law and so it 

did not need to decide whether a federal rule applied or even existed. See Guam Indus. Servs., 

787 F.3d at 1004; Yu, 281 F.3d at 808–09. The Circuit Court applied the majority rule of strict 

compliance that it concluded would be followed in both Guam, see Guam Indus. Servs., 787 F.3d 

at 1005, and Hawaii, see Yu, 281 F.3d at 809.

29 See Docket 21 (Plaintiffs’ Opp’n & Mot.) at 9.

30 Docket 24 (Defendant’s Reply) at 11 & n.3 (citing Hilton Oil Transport v. Jonas, 75 F.3d 627, 

630 (11th Cir. 1996)); Docket 19 (Defendant’s Mem.) at 14 (citing Campbell v. Hartford Fire Ins. 

Co., 533 F.2d 496 (9th Cir. 1976)).

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of the cases Mr. Thomassen relies on, the Ninth Circuit applied “local” law—relying on 

state law authorities from both California and Alaska—“because both parties urge us to 

do so, and because there is no statutory or judicially established federal admiralty rule 

governing the provisions in question.”31 Accordingly, Kalmbach does not establish any 

federal rule for the interpretation of held covered clauses. Nor does Campbell v. Hartford 

Fire Insurance Co.,

32 also cited by Mr. Thomassen. In Campbell, the parties stipulated 

that coverage under the policy should be governed by English law, and the court then 

relied on English authorities to interpret the held covered clause.33

Mr. Thomassen also cites Northwestern National Insurance Co. v. Federal 

Intermediate Credit Bank of Spokane, in which the Ninth Circuit held that, consistent 

Kalmbach, “[w]hen the held-covered clause is unambiguous, courts must apply it as 

written.”34 Based on the unambiguous terms of that particular held covered clause, the 

Court of Appeals held that “[e]ven if the assured does not notify the insurer until after the 

loss, the held-covered clause extends coverage, provided the assured did not know of 

the breach before that time.”35 But the outcome in that case derived not from an 

“established and entrenched federal admiralty rule,” but instead from the explicit and 

 31 529 F.2d 552, 555 (9th Cir. 1976).

32 533 F.2d 496 (9th Cir. 1976).

33 Id. at 497–98.

34 839 F.2d 1366, 1368 (9th Cir. 1988) (citing Kalmbach, 529 F.2d at 556). 

35 Id. at 1368.

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unambiguous terms of the contract.36 Northwestern does not support the existence of an 

established federal rule.37

Finally, Mr. Thomassen cites to Hilton Oil Transport v. Jonas, in which the Eleventh 

Circuit observed that “in the absence of a ‘held covered’ clause, federal admiralty law, not 

state law, would control.” 38 Here, in the contract before the Court, there is a held covered 

clause. Thus, even if the Ninth Circuit were to follow the Eleventh Circuit’s approach, the 

Hilton rule would not apply.

The Court is not persuaded that Mr. Thomassen’s proposed rule is an “established 

federal rule” that should be applied in this case. If the cases cited by Mr. Thomassen 

support any federal rule, it is that marine insurance held covered clauses should be 

interpreted according to their terms. And Congress has expressly discouraged federal, 

as opposed to state, regulation of insurance.39 Accordingly, under the presumption that 

state law applies established by Wilburn Boat and under Ninth Circuit precedent, the 

 36 The clause at issue in Northwestern reads: “The Vessel is held covered in case of any breach 

of conditions as to cargo, trade, locality, towage or salvage activities, or date of sailing, or loading 

or discharging cargo at sea, provided (a) notice is given to the Underwriters immediately following 

receipt of knowledge thereof by the Assured, and (b) any amended terms of cover and any 

additional premium required by the Underwriters are agreed to by the Assured.” Id. at 1367.

37 Indeed, the Northwestern court did not discuss the choice-of-law issue at all in this context. 

The court did consider—and reject—the existence of a federal rule to govern whether the 

insurance broker was an agent of the marine insurer such that notice to the broker satisfied the 

held covered clause’s notice requirement. Id. at 1368–69.

38 75 F.3d 627, 630 (11th Cir. 1996).

39 McCarran Act of 1945, 15 U.S.C. § 1011–12. Cf. Rhea D. Pappas-Ward, Strict Compliance 

with Marine Insurance Contracts: Conflicting Rules in the Ninth Circuit, 70 Wash. L. Rev. 519, 535 

(1995) (“State insurance laws are one example of an area where Congress has expressly 

mandated that comprehensive state regulation is preferable to national insurance laws. However, 

the Supremacy Clause still prevents even permissible state regulation from displacing established 

federal admiralty law.”).

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Court will apply Alaska’s interpretive framework to the held covered clause at issue in this 

case as well as to the lay-up warranty.

IV. Interpretation of the Policy

a. General Principles of Alaska Insurance Law

Under Alaska law, “[t]he construction of an insurance contract is a matter for the 

court, unless its interpretation is dependent upon the resolution of controverted facts.”40 

The Alaska Supreme Court has observed that “[t]he first and generally most important 

rule is that ‘[w]ords and other conduct are interpreted in the light of all the circumstances, 

and if the principal purpose of the parties is ascertainable it is given great weight.”41 But 

“insurance policies are contracts of adhesion and must be interpreted according to the 

reasonable expectations of the insured.”42 “To determine the parties’ reasonable 

expectations, we examine (1) the language of the disputed policy provisions; (2) the 

language of other provisions in the same policy; (3) extrinsic evidence; and (4) case law 

interpreting similar provisions.”43 “When the language of a contract provision is 

unambiguous, we determine ‘the parties’ intention from the instrument itself.’”44 “[W]here 

a clause in an insurance policy is ambiguous in the sense that it is reasonably susceptible 

 40 O’Neill Investigations, Inc. v. Illinois Emp’rs. Ins. of Wausau, 636 P.2d 1170, 1173 (Alaska 1981).

41 Estate of Polushkin ex rel. Polushkin v. Maw, 170 P.3d 162, 168 (Alaska 2007) (citing 

Restatement (Second) of Contracts § 202(1) (1981)).

42 Attorneys Liab. Prot. Soc’y, Inc. v. Ingaldson Fitzgerald, P.C., 370 P.3d 1101, 1108 (Alaska 

2016).

43 Devine v. Great Divide Ins. Co., 350 P.3d 782, 786 (Alaska 2015).

44 Ellingstad v. State, Dep’t of Nat. Res., 979 P.2d 1000, 1004 (Alaska 1999) (quoting Klosterman 

v. Hickel Inv. Co., 821 P.2d 118, 124 (Alaska 1991)).

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to more than one interpretation, we accept the interpretation that most favors the 

insured.”45 And “‘[a]n interpretation which gives a reasonable, lawful, and effective 

meaning to all the terms is preferred to an interpretation which leaves a part 

unreasonable, unlawful, or of no effect.’”46

b. Lay-up Warranty

The lay-up provision consists of two sentences. The first sentence is “Vessel 

warranted laid up and out of commission from August 20 to June 20, annually.” Neither 

party seems to assert that this sentence is ambiguous, and the Court finds it clear: to be 

covered under the policy, the default status of the KUPREANOF from August 20 to June 

20 is meant to be “removed from active operation or navigation.”47 

The second sentence is “Permission granted to make alterations and repairs, to 

dock and undock, go on or off ways, gridirons and drydocks and to move about port for 

said purposes.” The parties dispute the meaning of this provision, but “[t]he fact that the 

parties dispute a contract’s meaning does not establish that the contract is ambiguous.”48 

Defendant’s position appears to be that he could reasonably interpret this provision 

to allow the vessel to transit from Petersburg to Juneau and head to the fishing grounds, 

 45 Kalenka v. Infinity Ins. Cos., 262 P.3d 602, 607 (Alaska 2011) (quoting C.P. ex rel. M.L. v. Allstate 

Ins. Co., 996 P.2d 1216, 1222 (Alaska 2000)).

46 Polushkin, 170 P.3d at 172 (quoting Restatement (Second) of Contracts § 203(a) (1981)).

47 See Glossary of Marine Insurance and Shipping Terms, 14 U.S.F. Mar. L.J. 305, 369 (2002)

(defining “Laid-Up” as “[a] vessel removed from active operation or navigation.”).

48 Kennewick Irrigation Dist. v. United States, 880 F.2d 1018, 1032 (9th Cir. 1989) (quoting Int’l 

Union of Bricklayers & Allied Craftsman Local No. 20 v. Martin Jaska, Inc., 752 F.2d 1401, 1406 

(9th Cir. 1985)).

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all without breaching the lay-up warranty.49 This is not a reasonable interpretation of the 

“permission granted” clause because it entirely swallows up the “laid-up” provision: the 

KUPREANOF would be covered year-round, in and out of port, virtually without limit. Mr. 

Thomassen could not have a reasonable expectation that this policy would provide such 

extensive coverage when the policy specifies that the KUPREANOF is to be “laid up and 

out of commission” for ten months of the year.

Plaintiffs offer their own equally unconvincing interpretation. They argue that it 

does not matter what time the vessel left the dock on June 7 because, under their 

interpretation of the “permission granted” clause, the vessel was already in breach on 

June 6.50 Plaintiffs assert that under the “permission granted clause” “the only permitted 

activity was making alterations and repairs,”51 such that the vessel was no longer laid up 

once its repairs were completed and it had started getting ready to leave Petersburg. In 

Plaintiffs’ view, “[w]hen the KUPREANOF left Piston and Rudder Services on June 6, 

2015 and docked at Petro Marine Services in Petersburg where hydraulic oil was put in 

the tank, it was not docking or moving about the port for the purpose of making alterations 

and repairs.”52 Plaintiffs assert that “it cannot be reasonably disputed that the vessel was 

not ‘laid up and out of commission’ where it was moored with fuel and a full crew ready 

 49 Mr. Thomassen averred that “I believe that the activities of the T/V KUPREANOF on and around 

June 7 to June 10 generally complied with the general activities described and allowed in the 

‘Layup Warranty.’” Docket 19-1(Thomassen Aff.) at 2. See also Docket 21-2 at 4.

50 Docket 32 (Plaintiff’s Reply) at 8-10.

51 Docket 32 at 8.

52 Id.

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for the imminent voyage to Juneau on the morning of June 7th.”53 But, in light of the

permission granted clause, “laid up and out of commission” is not the only status allowed 

of the vessel during the lay-up period.54

The Court finds the “permission granted” provision unambiguous. It uses three 

distinct infinitives to permit three distinct classes of activity. The policy first provides 

permission “to make alterations and repairs.” Second, it provides permission “to dock 

and undock, go on or off ways, gridirons and drydocks.” And third, it provides permission 

“to move about port for said purposes,” that is, for the purposes of “mak[ing] alterations 

or repairs” or “dock[ing] and undock[ing], go[ing] on or off ways, gridirons and drydocks.”55 

 53 Docket 32 (Plaintiffs’ Reply) at 8. Plaintiffs urge the Court to adopt a crew hire date of June 1, 

2016 as the “date the vessel was no longer ‘laid up.’” Docket 21 (Plaintiffs’ Opp’n & Mot.) at 13 & 

n.2. But the policy permits certain operations within the port such that Mr. Thomassen could 

reasonably expect the policy allows a crew to operate the vessel in conformity with the permission 

granted clause. 

54 Plaintiffs maintain that “had a crew member suffered injury at any time between June 1, 2015 

and the sinking, this court would surely conclude that the vessel was ‘in navigation’ for purposes 

of seaman status under the Jones Act. The vessel cannot be both ‘laid up and out of commission’ 

and ‘in navigation’ at the same time.” Docket 21 (Plaintiffs’ Opp’n & Mot.) at 18; see also Docket 

23 (Mem. ISO Mot. to Intervene) at 6-7 n.18. But the Court need not decide when a vessel is “in 

navigation” for the purposes of the Jones Act because it has no bearing on whether the vessel 

was in compliance with the lay-up warranty.

55 Neither party has presented definitions of the terms “ways,” “gridirons,” or “drydocks” as used 

in the “permission granted” clause. In the marine insurance context, “ways” means “[t]he 

framework on which a vessel is built and from which it slides into the water upon launching.” See 

Glossary of Marine Insurance and Shipping Terms, 14 U.S.F. Mar. L.J. 305, 421 (2002); see also 

Way, 20 THE OXFORD ENGLISH DICTIONARY 17 (2nd Ed. 2001) (In nautical terms, “Ways, balks 

laid down for rolling weights along. Launching ways, two parallel platforms of solid timber, one 

on each side of the keel of a vessel while building, and on which her cradle slides on launching.”). 

A gridiron in this context is “[a] heavy framework of beams in parallel open order (suggesting a 

gridiron) used to support a ship in dock.” 4 THE OXFORD ENGLISH DICTIONARY 1092 (2nd Ed. 

2001). A drydock is “[a] dock from which the water is or may be let out, for repairing (or building) 

a ship.” 6 THE OXFORD ENGLISH DICTIONARY 834 (2nd Ed. 2001). Accord INTERNATIONAL 

MARITIME DICTIONARY 438 (Launching Ways); 904 (Ways); 338 (Gridiron); 246 (Dry Dock) (2nd 

Ed. 1961).

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Plaintiffs’ interpretation is unreasonable because it would deny permission to move the 

vessel to and from the designated locations within the port—docks, ways, gridirons, and 

drydocks—unless that movement was for the purpose of making alterations and repairs.56 

Contrary to Plaintiffs’ argument, the policy necessarily permits receiving fuel and hydraulic 

oil because—if the vessel may move about the port for the stated purposes—Mr. 

Thomassen could reasonably expect the policy allows him to keep the vessel operational. 

Moreover, the clause expressly grants permission “to dock” and “to move about port” for 

the purpose of docking—precisely what the vessel did when it left Piston and Rudder 

Services and docked at Petro Marine Services on June 6, 2015.

The Court finds that the lay-up warranty would be breached when the vessel left a 

particular location for any purpose other than (1) to make alterations and repairs, or (2) 

to dock and undock, or to go on or off ways, gridirons, and drydocks within the port. For 

example, the vessel could move about port as necessary to conduct repairs or alterations, 

such as when testing newly installed equipment. Or, the vessel could be taken out of a 

drydock and moved to a dock within the same port when—repairs completed—the 

drydock was needed for another vessel. There would be no breach if the vessel relocated 

from Dock A to Dock B within the same port when directed to do so by the port operators, 

even if such movement was not related to alterations or repairs. And, based on the 

current record, there was no breach when, on June 6, 2015, the vessel “move[d] about 

port” “to dock” at Petro Marine Services. But it would violate the lay-up warranty when 

 56 In essence, Plaintiffs ask the Court to read the provision as “Permission granted to make 

alterations and repairs, and to dock and undock, go on or off ways, gridirons and drydocks and to

move about port for said purposes.”

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the vessel left a dock in Petersburg for the purpose of heading out to sea, even when it 

was still within the harbor, because such movement would not be one of the permitted 

activities in the permission granted clause. Thus the lay-up warranty would be breached 

when the vessel moved about the port—that is, at the moment the last line was cast 

away—for purposes other than of making alterations or repairs, docking or undocking, or 

going on or off ways, gridirons, or drydocks within the same port.

c. Held Covered Clause

The policy provides that the KUPREANOF is “[h]eld covered in respect to breach 

of trading warranty, and/or lay-up warranty provided Underwriters are advised within 72 

hours from inception of the breach, at additional premiums, if any, to be determined by 

Underwriters.”57 Mr. Thomassen asserts that “[e]very interpretation of a ‘held covered’ 

clause states that the owner must not be aware of a breach and then, when the owner is 

aware of a breach, must provide immediate notice to underwriters.”58 But “[a] typical [held 

covered] clause is as follows: . . . The Vessel is held covered . . . provided (a) notice is 

given to the Underwriters immediately following receipt of knowledge thereof by the 

assured . . . .”59 The held covered clause in this case is not typical, as it contains no such 

provision. Plaintiffs correctly assert that, in this case, “the held covered clause does not 

require notice only after ‘becoming aware’ of the event and does not require privity on the 

part of the owner. Rather, the held covered clause extends coverage in the event of a 

 57 Docket 1-1 (Insurance Policy) at 13.

58 Docket 24 (Defendant’s Reply) at 10.

59 THOMAS J. SCHOENBAUM, ADMIRALTY & MARITIME LAW 448 (5th ed. 2011).

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breach of the lay-up warranty ‘provided Underwriters are advised within 72 hours from 

inception of the breach.’”60 By the policy’s plain and unambiguous terms, the 

KUPREANOF was covered under the policy only if the Underwriters were notified within 

72 hours of the precise time a breach of the lay-up warranty began, without regard to 

when Mr. Thomassen learned of the breach. 

V. Application

Applying the foregoing interpretation of the policy, it is clear that a genuine dispute 

of material fact precludes summary judgment for either party. Both parties agree that the 

Underwriters were notified that the vessel had sunk on the open seas, and thereby 

informed that the vessel had not been laid up, at 8:04 a.m. Alaska time on June 10, 

2015.61 Under the contract, as explained above, this notification properly invoked the 

held covered clause only if the breach began not more than 72 hours prior to that time.

62 

That breach, as explained above, occurred when the vessel left the dock in Petersburg 

to begin transit to Juneau. The essential question, then, is whether the vessel left the 

dock before or after 8:04 a.m. on June 7, 2015.

There is a genuine dispute between the parties as to when, precisely, the vessel 

cast off. If the KUPREANOF left the dock headed for open water at or after 8:04 a.m. 

Alaska time, the June 10 notice was sufficient to invoke the held covered clause. If the 

vessel cast off before 8:04 a.m. on June 7, 2015, then the notice requirement of the held 

 60 Docket 21 (Plaintiffs’ Opp’n & Mot.) at 13.

61 Docket 21 at 19; Docket 19-1 (Thomassen Aff.) at 3.

62 The Court interprets “within” to include the full 72 hours as “the interpretation that most favors 

the insured.” Kalenka, 262 P.3d at 607 (quoting C.P. ex rel. M.L., 996 P.2d at 1222).

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covered clause was not met. Plaintiffs have asserted, relying on an official document 

filed by Captain Berry with the U.S. Coast Guard, that “the KUPREANOF departed 

Petersburg for Juneau at approximately 0400 on June 7, 2015.”63 Mr. Thomassen 

responded to an interrogatory that “[o]n information and belief, according to Captain 

Berry, the Vessel left the Petersburg dock as late as 8:00 a.m. or 9:00 a.m. or later Alaska 

time and not at ‘4 AM’ as stated on the Coast Guard Form 2892,”64 and Ms. Perez stated 

in her declaration that “KUPREANOF left the dock on June 7, 2015 at around 0800 

ADT.”65 

Both motions for summary judgment will be denied because the evidence as to 

when precisely the breach began is such that a reasonable jury could return a verdict for 

either party.

VI. Motion to Intervene

Ms. Perez seeks to intervene under Rule 24, and her memorandum in support of 

that motion focuses on intervention as of right.66 Mr. Thomassen did not respond to Ms. 

Perez’s motion. Plaintiffs oppose the motion and dispute each element of the test for 

intervention.67 

 63 Docket 21 at 3.

64 Docket 25-2 (Defendant’s Response to Plaintiffs’ First Discovery to Defendant) at 4.

65 Docket 23-2 (Perez Decl.) at 2.

66 Docket 22 (Mot. to Intervene); Docket 23 (Mem. in Support of Mot. to Intervene).

67 See Docket 31 (Opp’n).

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a. Intervention as of Right

Federal Rule of Civil Procedure 24(a)(2) gives a person a right to intervene when 

“[o]n timely motion,” the applicant “claims an interest relating to the property or transaction 

that is the subject of the action, and is so situated that disposing of the action may as a 

practical matter impair or impede the movant's ability to protect its interest, unless existing 

parties adequately represent that interest.” “The Ninth Circuit requires an applicant for 

intervention as of right under Fed. R. Civ. P. 24(a)(2) to demonstrate that (1) it has a 

significant protectable interest relating to the property or transaction that is the subject of 

the action; (2) the disposition of the action may, as a practical matter, impair or impede 

the applicant's ability to protect its interest; (3) the application is timely; and (4) the existing 

parties may not adequately represent the applicant's interest.”68 “Each of these four 

requirements must be satisfied to support a right to intervene.”69 “While Rule 24 

traditionally receives liberal construction in favor of applicants for intervention, it is 

incumbent on the party seeking to intervene to show that all the requirements for 

intervention have been met.”70 

“An applicant for intervention has a significantly protectable interest if the interest 

is protected by law and there is a relationship between the legally protected interest and 

the plaintiff’s claims.”71 A “specific legal or equitable interest” is not required, and it is 

 68 Chamness v. Bowen, 722 F.3d 1110, 1121 (9th Cir. 2013) (citing United States v. Alisal Water 

Corp., 370 F.3d 915, 919 (9th Cir. 2004)).

69 Id. (quoting Arakaki v. Cayetano, 324 F.3d 1078, 1083 (9th Cir. 2003)).

70 Id. (internal quotation marks, formatting, and citations omitted).

71 Alisal Water Corp., 370 F.3d at 919.

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“generally enough that the interest is protectable under some law, and that there is a 

relationship between the legally protected interest and the claims at issue.”72 Ms. Perez 

asserts that the insurance “policy at issue contains provisions of direct interest and 

obligations regarding the no-fault cure claims of the crew of the vessel KUPREANOF.”73 

Plaintiffs maintain that Ms. Perez’s “contingent economic interest in insurance policy 

proceeds is insufficient to satisfy the [protectable interest] requirement for intervention as 

of right.”74 They maintain that she “is not an intended beneficiary of the insurance policy 

and she may not sue to enforce the insurance contract.”75 

Ms. Perez’s interest in the outcome of this litigation is in obtaining a source of funds 

for any future cure that she may be awarded.76 She does not have an independent 

interest in the contractual relationship between Mr. Thomassen and Plaintiffs. Ms. Perez 

may or may not obtain a judgment on her cure claims, and the outcome of this case may 

impact the likelihood of her collecting on such a judgment. But the Ninth Circuit has held 

 72 Wilderness Soc’y v. U.S. Forest Serv., 630 F.3d 1173, 1179 (9th Cir. 2011) (en banc) (citations 

omitted).

73 Docket 22 (Mot. to Intervene) at 2. “Cure” is the right of certain maritime workers (known as 

“seamen” in admiralty law) to necessary medical services, protected by the general maritime law. 

See THOMAS J. SCHOENBAUM, 1 ADMIRALTY AND MARITIME LAW 505, 522 (5th Ed. 2011). The policy 

provision here provides that “this Company hereby undertakes to pay up to the amount hereby 

insured . . . such sums as the Assured . . . shall have become legally liable to pay and shall have 

paid on account of . . . Hospital, medical, or other expenses necessarily and reasonably incurred 

in respects of loss of life of, injury to, or illness of any member of the crew of the vessel named 

herein.” Docket 23-1 at 10, lines 10-16. The Court assumes without deciding that this provision 

refers to any maintenance and cure claims of the type Ms. Perez may be asserting.

74 Docket 31 (Opp’n) at 6.

75 Docket 31 at 11.

76 See Docket 23 at 9 (“Ms. Perez’ interest in the policy for payment of her medical expenses is 

clear.”) 

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that “an allegedly impaired ability to collect judgments arising from past claims does not, 

on its own, support a right to intervention.”77

Ms. Perez argues that “[u]nlike a standard tort victim, Ms. Perez is an intended 

beneficiary under the subject policy.”78 But there is nothing in the policy itself that 

distinguishes between a tort claimant and a cure claimant. Coverage for both types of 

claims is detailed in the P&I Clauses, and are subject to the same requirements.79

Ms. Perez argues that she will “suffer a practical impairment of [her] interests” if 

Plaintiffs prevail, and that this is a sufficient interest for intervention purposes.80 But to 

satisfy this test, Ms. Perez must show that she will suffer a practical impairment to an

“interest” that is protectable. Ms. Perez’s protectable interest is her legal right to seek 

cure. But the outcome of this litigation will have no practical impact on that protectable 

interest. 

The Ninth Circuit caselaw on this point illustrates the distinction. In California ex 

rel. Lockyer v. United States, the case on which Ms. Perez relies, California challenged 

 77 United States v. Alisal Water Corp., 370 F.3d 915, 919-20 (9th Cir. 2005) (denying a judgment 

creditor the right to intervene in an environmental civil enforcement action brought by the United 

States against the debtor because “the prospective collectability of a debt . . . is several degrees 

removed from the overriding public health and environmental policies that are the backbone of 

this litigation”); cf. Cal. Edison Co. v. Lynch, 307 F.3d 794, 803 (9th Cir. 2002) (finding that “a 

contingent, unsecured claim against a third-party debtor” did not support intervention).

78 Docket 23 at 2.

79 See Docket 23-1 at 10-11. Ms. Perez is correct that proving up a claim for maintenance and 

cure is less of a burden than proving up a negligence claim. See Docket 33 at 7-8. But liability 

is not automatic. As discussed below, Ms. Perez still must prove both that she was a seaman 

and that she was injured while in service of the ship.

80 Docket 23 at 9 (quoting California ex rel. Lockyer v. United States, 450 F.3d 436, 441 (9th Cir. 

2006)).

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the constitutionality of a federal statute designed to “keep doctors who have moral qualms 

about performing abortions from being put to the hard choice of acting in conformity with 

their beliefs, or risking imprisonment or loss of professional livelihood.”81 Two groups of 

doctors sought to intervene to defend the federal law; California and the United States 

opposed intervention. The Ninth Circuit reversed the district court’s denial of intervention 

as of right. The Circuit Court reasoned that the challenged law “provides an important 

layer of protection” for the doctors and that its invalidation would necessarily impair that 

interest. And the court distinguished Donnelly v. Glickman, in which the Ninth Circuit 

denied the intervention of male Forest Service employees in a discrimination suit brought 

by female employees because “the fate of the women’s claims wouldn’t affect the men’s 

claims at all.”82 Ms. Perez’s interest falls closer to Donnelly: the fate of the Underwriters’ 

and Mr. Thomassen’s claims in this action won’t affect the validity of her legal claims for 

cure.

The Ninth Circuit’s reasoning in United States v. Aerojet General Corp. also 

reveals the limits of the “practical impairment” test.83 In that case, the Court of Appeals 

held that parties potentially liable for cleanup costs under federal environmental laws 

could intervene as of right in other parties’ consent decree proceedings. The applicable 

statutes would permit the intervenors to seek contribution from the settling parties, but 

also permitted the United States to effectively immunize parties who entered consent 

 81 Lockyer, 450 F.3d at 441.

82 Lockyer, 450 F.3d at 442 (citing Donnelly v. Glickman, 159 F.3d 405, 409-10 (9th Cir. 1998)).

83 606 F.3d 1142 (9th Cir. 2010).

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decrees. The Circuit Court rejected the argument that because the intervenors had not 

yet incurred liability on which to seek contribution, their interest was too speculative. The 

court reasoned that the intervenors’ legally protected interest was their right to seek 

contribution from other responsible parties once they were sued, and that this right could 

be practically impaired by the proceedings: if the consent decree was approved, the 

intervenors’ right to seek contribution from the settling parties would be extinguished.84 

Here, by contrast, the outcome of the litigation will have no impact on Ms. Perez’s legal 

right to seek cure.

Ms. Perez does not have a significant protectable legal interest that is directly 

related to the insurance coverage dispute that is the subject of this action. Her protectable 

interest is the legal right to seek cure, and that right will not be directly impaired by the 

outcome of this litigation. Because “[f]ailure to satisfy any one of the requirements is fatal 

to the application” to intervene, the Court “need not reach the remaining elements . . . .”85 

The Court will not permit intervention as of right.

b. Permissive Intervention

Intervention under Federal Rule of Civil Procedure 24(b) is not entirely within the 

discretion of a district court. Rather, the movant must meet one of two sets of

requirements before a court may permit intervention. Permissive intervention under Rule 

24(b)(1)(A) may apply if a movant “is given a conditional right to intervene by a federal 

 84 See Aerojet General, 606 F.3d at 1150-51.

85 Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 2009).

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statute” fact.”86 The Court is unaware of, and the parties have not pointed to, any federal 

statute that gives Ms. Perez a conditional right to intervene. Accordingly, the Court will 

not permit intervention under Rule 24(b)(1)(A).

Alternatively, “[a] district court may grant permissive intervention under Federal 

Rule of Civil Procedure 24(b)(1)(B) where the applicant ‘shows (1) independent grounds 

for jurisdiction; (2) the motion is timely; and (3) the applicant's claim or defense, and the 

main action, have a question of law or a question of fact in common.’”87 Ms. Perez’s own 

claim is for maintenance and cure.

88 To prevail on such a claim, Ms. Perez must show 

that she was a “seaman,” that she was injured or became ill while in the service of the 

vessel, and the amount of maintenance and cure to which she is entitled.89 In the present 

action, the issues are only the scope of the insurer’s contractual obligations to the insured, 

and, as explained above, whether and when the KUPREANOF was in breach of the 

applicable warranties. There is no overlap of either law or fact between the claims in this 

action and the claims that Ms. Perez has brought (or might bring). Accordingly, the Court 

will deny permissive intervention under Rule 24(b)(1)(B).

In light of the foregoing, Ms. Perez will not be allowed to intervene under Rule 24.

 86 Fed. R. Civ. P. 24(b)(1).

87 Perry, 587 F.3d at 955 (quoting Nw. Forest Res. Council v. Glickman, 82 F.3d 825, 839 (9th Cir. 

1996), as amended on denial of reh'g (May 30, 1996)).

88 Ms. Perez appears to concede that intervention cannot be premised on her other, “fault”-related 

claims. See Docket 22 at 2; Docket 23 at 10. In any event, none of those other claims raises any 

issue of law or fact common to this action.

89 See Lipscomb v. Foss Maritime Co., 83 F.3d 1106, 1109 (9th Cir. 1996); see also

Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 527-28 (1938) (discussing the origins of the right to 

maintenance and cure).

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CONCLUSION

Therefore, IT IS ORDERED that Defendant’s Motion for Summary Judgment at 

Docket 18, and Plaintiffs’ Cross-Motion for Summary Judgment at Docket 21 are 

DENIED. Ms. Perez’s Motion to Intervene at Docket 22 is DENIED.

DATED this 6th day of September, 2016 at Anchorage, Alaska.

 /s/ Sharon L. Gleason

 UNITED STATES DISTRICT JUDGE

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