Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00630/USCOURTS-casd-3_15-cv-00630-4/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1331in Fed. Question: Insurance Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CERTAIN INTERESTED 

UNDERWRITERS AT LLOYD’S, 

LONDON,

Plaintiff,

v.

BEAR, LLC, et al.,

Defendant.

Case No.: 15-cv-630-BTM-BLM

ORDER GRANTING IN PART 

AND DENYING IN PART THIRDPARTY DEFENDANT’S MOTION 

FOR SUMMARY JUDGMENT 

[ECF NO. 71] AND DENYING

MOTION TO STRIKE [ECF No. 

110]

AND RELATED COUNTER- AND

THIRD-PARTY ACTIONS

Third-Party Defendant Marsh, USA Inc. (“Marsh”) has filed a motion for 

summary judgment. (Marsh’s Mot. Summ. J. (“Marsh’s MSJ”), ECF No. 71.) For 

the reasons set forth below, the motion is granted in part and denied in part. 

I. FACTUAL BACKGROUND

This action arises out of an insurance coverage dispute under a marine 

insurance policy that Marsh brokered for a 102-foot motor vessel (“the Polar Bear”) 

owned by Third-Party Plaintiff, Bear, LLC (“Bear”). 

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A. Obtaining Coverage for the Polar Bear

In 2006, Mr. Larry Jodsaas (“Jodsaas”), the owner and managing member 

of Bear, with the help of Roger Trafton (“Trafton”), the Polar Bear’s captain, entered 

into a contract with Aleutian Yachts, LLC to build the Polar Bear. (Decl. of Roger 

Trafton, in Supp. of Bear’s Opp’n to Marsh’s MSJ (“Bear Opp’n”), ECF No. 101–

14, ¶ 5.) After construction for the Polar Bear was completed in 2011, marine 

surveyors valued the Polar Bear at $17 million. (Marsh’s Ex. 23 in Supp. of Marsh’s 

MSJ (“Marsh’s Ex.”), ECF No. 71–4.) Having contracted for personal and yacht 

insurance with Marsh before, Jodsaas sought to obtain insurance for the Polar 

Bear through Marsh’s Yacht Group. (Trafton Decl. ¶ 9.) The yacht insurance was 

handled by its broker and Client Advisor, Kathleen Harris Johnson (“Johnson”). 

(Id.) Marsh submitted requests for insurance quotes for the Polar Bear to several 

insurers, including Plaintiff Underwriters, Chartis, ACE, Chubb, Travelers, and 

LEAD. (Marsh’s Ex. 7, ECF No. 71–3.) On November 2, 2010, Marsh provided 

Bear with a “Yacht Insurance Proposal” (“2010 Proposal”), which outlined the key 

terms and provided a comparison of the coverage and exclusions contained in four 

different policies. (Marsh’s Ex. 9, ECF No. 71–3.) On November 8, 2010, Johnson 

held a conference call with Jodsaas and Trafton and discussed the 2010 Proposal. 

(Marsh’s Ex. 56, Tr. of Kathleen S. Johnson’s Dep. 245:11–246:6; 246:21–247:10, 

ECF No. 71–7.) The 2010 Proposal specifically warned Bear of policy conditions 

that applied during yard periods, including the “Maintenance and Repair Clause”

(“Repair Clause”) contained within the Underwriters policy. (Marsh’s Ex. 9, 139–

140.) In August 2011, Jodsaas authorized Marsh to bind coverage with 

Underwriters. (Marsh’s Ex. 26, 246, ECF No. 71–4.) On August 23, 2011, Jodsaas 

signed an “Acknowledgment Form” with Marsh, acknowledging, among other 

things, that he understood that the policy contained warranties. (Id. at 248.) 

On October 20, 2011, Johnson forwarded Jodsaas a copy of the 2011–2012 

policy along with a cover note which reminded Jodsaas “to keep in mind the 

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warranties and exclusions of the policy, especially those related to liabilities 

assumed under contract which are excluded unless approved by underwriters 

beforehand.” (March’s Ex. 28, ECF No. 71–4.) 

B. Renewing Coverage for the Polar Bear in 2012

In August 2012, Johnson sent Bear a “Yacht Insurance Renewal Proposal” 

(“2012 Proposal”) which outlined the renewed terms of the Underwriters policy. 

(Marsh’s Ex. 31, ECF No. 71–4.) The 2012 Proposal again warned Bear about the 

Repair Clause. Bear decided to renew its coverage with Underwriters. (Marsh’s 

Ex. 32, 348, ECF No. 71–5.) On September 27, 2012, Johnson sent Bear a copy 

of the 2012–2013 policy. (Marsh’s Ex. 33, ECF No. 71–5.) That letter also advised 

Bear to keep in mind the policy’s warranties and exclusions. (Id.) 

C. Renewing Coverage for the Polar Bear in 2013

In August 2013, Johnson obtained a renewal quote from Underwriters and 

sent Bear a “Yacht Insurance Proposal” (“2013 Proposal”) outlining the policy’s key 

terms and exclusions. (Marsh’s Ex. 37, ECF No. 71–5.) Like the prior two 

proposals, the 2013 Proposal warned Bear about the Repair Clause in the policy. 

(Marsh’s Ex. 37, 437.) It stated:

Policy Conditions that Apply During Yard Periods

Maintenance and Repair Clause: 

The policy will remain in full force while the yacht is undergoing maintenance, 

repair of any part or replacement of any part like for like. However, NO 

COVERAGE is provided in respect of refit, alteration, rebuild, remodeling, 

major repairs, any and all hot work other than soldering, OR where the yard 

has requested any waiver of subrogation.

Prior to any coverage being provided, the insured must submit the following 

for underwriters’ specific agreement in writing:

 Full details and schedule of the work;

 Provide underwriters with a copy of the shipyard’s Ship Repairers 

Liability Insurance

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Non compliance of any of the timeframes stated above will, in normal 

circumstances, void the insurance, at the discretion of the participating 

underwriters. Underwriters reserve the right to amend the terms and 

conditions hereunder, and to charge the appropriate additional premium. 

(Id. (emphasis in original).) 

On August 22, 2013, Trafton, who acted as Jodsaas’ agent, signed an 

“Acknowledgment Form,” taking notice of “important policy terms and conditions” 

in the policy. (Marsh’s Ex. 39, ECF No. 71–5.) On August 23, 2013, Johnson sent 

Bear a Confirmation of Coverage, which contained the same warning regarding 

the Repair Clause as the 2013 Proposal did. (Marsh’s Ex. 40, 464, ECF No. 71–

6.) Lastly, on October 9, 2013, Johnson emailed Bear a copy of the 2013 policy 

with a cover letter that again advised Jodsaas to “keep in mind the warranties and 

exclusions of the policy . . . .” (Marsh’s Ex. 41, ECF No. 71–6.) 

The 2013 policy contained the following relevant provisions:

CONDITIONS PRECEDENT 

Maintenance and Repair Clause

It is hereby understood and agreed that this insurance will remain in 

full force whilst your yacht is undergoing annual maintenance, repair of 

any part or replacement of any part like for like. 

Notwithstanding the foregoing it is a conditions precedent that if 

the vessel is currently undergoing or may undergo major refit or 

repairs, alterations, remodeling or where hot work is being 

undertaken (other than soldering) or that the yard has requested 

a waiver of subrogation from the Owner or his Legal 

Representative(s), then prior agreement must be obtained from 

participating insurers hereunder. 

Furthermore the Owner or his Legal Representative(s) must provide a 

copy of the current shipyards Ship Repairers Legal Liability insurance 

documentation and a full update or schedule of works being carried out 

during the period of this insurance and obtain Underwriters specific 

agreement (in writing). 

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Underwriters participating hereon reserve their rights to amend the 

terms and conditions of this insurance and to charge an appropriate 

additional premium. 

(Marsh’s Ex. 42, 489.) 

D. Destruction of the Polar Bear

On May 6, 2014, the Polar Bear ran aground at the entrance of the San Diego 

Harbor damaging the bottom of the hull, port and starboard sides of the keel, and 

the aft port stabilizer shaft. (Trafton Decl. ¶¶ 61, 65.) Because of the damage, 

water began to leak through the damaged area around the stabilizer shaft. (Id. at 

¶ 66.) The Polar Bear traveled on its own to the Marine Group Boat Works, LLC 

(“MGBW”) boatyard in Chula Vista arriving on May 7, 2014, where it was to be 

repaired. (Id. at ¶ 68–69.) As a safety measure, the Polar Bear was accompanied 

by a diver and two small towboats. (Id. at ¶ 69.) 

On May 7, 2014, just before the Polar Bear was hauled out, Trafton signed 

a written contract with MGBW. (Id. at ¶ 74.) The service contract provided that 

the Polar Bear would be hauled out, blocked and launched for a total of $3500. 

(Marsh’s Ex. 44, 540, ECF No. 71–6.) The contract was double-sided but Trafton 

only signed the front-side. (Id.) The back-side contained several provisions, 

including an “owner assumption of risk” clause, an “owner’s exclusive remedy” 

clause, and an “indemnity, insurance and waiver of subrogation” clause. (Id. at 

541.) Bear did not notify nor acquire Underwriters’ consent prior to signing the 

contract. (Marsh’s Ex. 55, Tr. of Roger Trafton’s Dep. 640:10–641:7, ECF No. 71–

7; Trafton Decl. ¶ 84.) 

From May 22, 2014 through early June, 2014, Trafton executed numerous 

work change orders for repairs to the Polar Bear, including a May 22, 2014 order 

for hot work repairs to the hull. (Marsh’s Ex. 44, 543–565, ECF No. 71–6.) Bear 

did not notify nor acquire Underwriters’ consent prior to executing the work change 

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orders. (Marsh’s Ex. 55, Trafton’s Dep. Tr. 647:3–23.) On June 17, 2014, Jodsaas 

spoke with Patrice M. Grossinger of Marsh and informed her that the Polar Bear

hit some rocks as it traveled back from Mexico. (Decl. of Jeffrey M. Posner, in 

Supp. of Bear’s Opp’n, Ex. E, ECF No. 101–28.) He communicated to her that it 

resulted in $250,000 in damages, but that he had not filed a claim with Johnson. 

(Id.) Grossinger advised him to contact Johnson if costs got any higher. (Id.) On 

June 19, 2014, the Polar Bear caught fire while welders were performing hot work. 

(Trafton Decl. ¶ 90.) The fire resulted in the Polar Bear’s total loss. (Id. at ¶ 6.) 

On June 20, 2014, Marsh confirmed that the Polar Bear had been consumed 

by a fire and provided Underwriters with a notice of loss thereafter. (Marsh’s Ex. 

47, ECF No. 71–6.) On March 20, 2015, Underwriters denied coverage on the 

grounds that Bear had failed to satisfy the conditions precedent under the Repair 

Clause. (Marsh’s Ex. 50, 593–600, ECF No. 71–7.) 

In March 2015, Underwriters filed this action seeking declaratory relief that it 

justifiably denied coverage for Bear’s claim relating to the losses suffered to the 

Polar Bear. (Compl. ECF No. 1.) Bear filed counterclaims against Underwriters

and a third-party complaint against Marsh, asserting claims for breach of oral 

contract, breach of fiduciary duty, and negligence. (Bear’s Second Countercl. and 

Second Third-Part Compl., ECF No. 63.) 

II. STANDARD

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil 

Procedure if the moving party demonstrates the absence of a genuine issue of 

material fact and entitlement to judgment as a matter of law. Celotex Corp. v. 

Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing 

substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 

1997). A dispute as to a material fact is genuine if there is sufficient evidence for 

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a reasonable jury to return a verdict for the nonmoving party. Anderson, 477 U.S. 

at 323 (1986). 

A party seeking summary judgment always bears the initial burden of 

establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 

323. The moving party can satisfy this burden in two ways: (1) by presenting 

evidence that negates an essential element of the nonmoving party’s case; or (2) 

by demonstrating that the nonmoving party failed to establish an essential element 

of the nonmoving party’s case on which the nonmoving party bears the burden of 

proving at trial. Id. at 322-23. “Disputes over irrelevant or unnecessary facts will 

not preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pacific Elec. 

Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987).

Once the moving party establishes the absence of genuine issues of material 

fact, the burden shifts to the nonmoving party to demonstrate that a genuine issue 

of disputed fact remains. Celotex, 477 U.S. at 314. The nonmoving party cannot 

oppose a properly supported summary judgment motion by “rest[ing] on mere 

allegations or denials of his pleadings.” Anderson, 477 U.S. at 256. Rather, the 

nonmoving party must “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, 477 U.S. at 

324 (quoting Fed.R.Civ.P. 56(e)).

The court must view all inferences drawn from the underlying facts in the 

light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith 

Radio Corp., 475 U.S. 574, 587 (1986). “Credibility determinations, the weighing 

of evidence, and the drawing of legitimate inferences from the facts are jury 

functions, not those of a judge, [when] he [or she] is ruling on a motion for summary 

judgment.” Anderson, 477 U.S. at 255.

//

//

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III. DISCUSSION

A. Breach of Contract

Bear asserts a claim against Marsh for a breach of an oral contract to procure 

insurance coverage for the Polar Bear. 

1. Breach of Oral Contract 

Under Florida law1, to prevail on a breach of contract claim a plaintiff must 

establish: (1) the existence of a contract; (2) a material breach of that contract; and 

(3) damages resulting from that breach. Friedman v. N.Y. Life Ins. Co., 985 So.2d 

56, 58 (Fla. Dist. Ct. App. 2008). It is undisputed that Marsh agreed to procure an 

insurance policy covering the Vessel’s total loss from any cause at an agreed value 

of $17 million. Marsh now moves for summary judgment on Bear’s breach of oral 

contract claim, arguing that there is no dispute that it obtained the insurance that 

Bear requested. 

To support its position, Marsh submits that Underwriters themselves interpret 

the policy to provide $17,250,000 in coverage for the Polar Bear and all other 

property insured under the policy, assuming that Bear satisfies the terms and 

conditions contained in the policy. (Marsh’s Ex. 52, 622, ECF No. 71–7.) 

Additionally, Marsh provides Trafton’s deposition testimony, where he concedes 

that Marsh obtained the policy Bear requested. (Marsh’s Ex. 55, Trafton’s Dep. 

Tr. 575:10–13.) Bear, on the other hand, argues that the policy does not provide 

such coverage because it contained a Repair Clause that “limits coverage while 

the Vessel is undergoing major repairs and hot work, or following a yard’s request 

for a waiver of subrogation.” (Bear’s Opp’n 11.) However, as already held by the 

Court in its order granting Underwriters’ MSJ, the Repair Clause is not an 

exclusion, but instead a condition precedent or warranty by Bear. Had Bear 

 

1

In the Court’s order denying Marsh’s motion to dismiss, it found that in absence of established federal maritime 

law regarding an insurance broker’s duties, Florida law applied to Bear’s claims against Marsh. (ECF No. 56, 4.) 

As such, the Court continues to apply Florida law. 

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satisfied these conditions precedent, the policy would have provided $17.25 million 

of coverage for the loss of the Polar Bear. Additionally, it is undisputed that the 

2010 Proposal explained the effect of the Repair Clause on the Underwriters 

policy. Despite the warning, Bear ultimately chose the Underwriters policy and 

consented to its terms. Thus, there is no evidence to dispute that Marsh obtained 

a policy for the agreed upon value. 

Bear also alleges that Marsh breached its contract by failing to fulfill several 

promises, such as failing to provide the “best risk solution for [Bear’s] exposures,” 

failing to “ensure that the most comprehensive and cost-effective insurance 

program is purchased,” failing to obtain insurance “specifically designed to address 

the exposures and risks unique to yachts and their owners,” failing to “work on 

Bear’s behalf to provide efficient and effective claims resolution in the event of any 

incident with the Polar Bear,” and failing to be “accountable for the service” it 

provides. (Bear’s Opp’n 12.) The alleged contract at issue is an oral one. Under 

Florida law, a plaintiff asserting a breach of oral contract must prove that the parties 

“mutually assented to a certain and definite proposition and left no essential terms 

open.” W.R. Townsend Contracting, Inc. v. Jensen Civic Constr., Inc., 728 So.2d 

297, 301 (Fla. Dist. Ct. App. 1999) (internal citations omitted). Bear takes 

statements2from the 2012 and 2013 insurance proposals that Marsh sent Bear 

and construes them as oral contracts. However, Bear has presented no evidence 

that Marsh assumed these contractual obligations. These statements are also not 

certain and definite propositions. 

As such, the Court grants summary judgment in Marsh’s favor on Bear’s 

breach of oral contract claim. 

 

2

“We strive to be responsive to your direction and instructions to ensure that the most comprehensive and cost 

effective program is purchased.” (Trafton Decl. Ex. A 3.) “We are dedicated to providing the best risk solution for 

your exposures and to protect your valuable asset.” (Id. at 4.) “Our claims professional is dedicated to work on 

your behalf to provide efficient and effective claims resolution in the event of an incident with your yacht.” (Id.) 

“You Marsh Team is accountable for the service we provide and plan to provide on your account.” (Id. at 3.) 

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B. Breach of Fiduciary Duty

To prevail on a claim for breach of fiduciary duty, a plaintiff must prove that: 

(1) a fiduciary duty exists; (2) the duty was breached; and (3) the breach 

proximately caused plaintiff’s damages. Gracey v. Eaker, 837 So.2d 348, 353 (Fla. 

2002). Under Florida law, an insurance broker has a fiduciary relationship with the 

insured that requires the broker to inform and explain the coverage it has secured 

at the client’s directions. Wachovia Ins. Servs. V. Toomey, 994 So.2d 980, 987 

(Fla. 2008). 

Marsh moves for summary judgment on Bear’s second claim for breach of 

fiduciary duty arguing that it fulfilled its duty by warning Bear more than a dozen 

times about the conditions precedent in the policy, including the Repair Clause. 

Bear, on the other hand, argues that these warnings were not enough. Bear relies 

on Trafton’s declaration in which he insists that Johnson never explained the 

Repair Clause to him or Jodsaas during a November 8, 2016 conference call. 

(Trafton ¶¶ 22–26.) Marsh urges the Court to apply the Ninth Circuit’s sham 

affidavit rule and disregard Trafton’s declaration because it contradicts his prior 

deposition testimony, specifically those portions related to the substance of that 

conference call. “The sham affidavit rule prevents a party who has been examined 

at length on deposition from raising an issue of fact simply by submitting an affidavit 

contradicting his own prior testimony, which would greatly diminish the utility of 

summary judgment as a procedure of screening out sham issues of fact.” Yeager 

v. Bowlin, 693 F.3d 1076, 1080 (9th Cir. 2012) (internal citations omitted). In order 

to apply the rule, a district court must make “a factual determination that the 

contradiction is a sham, and the “inconsistency between a party’s deposition 

testimony and subsequent affidavit must be clear and unambiguous to justify 

striking the affidavit.” Id. In Yeager, the Ninth Circuit affirmed a district court’s 

finding that a declaration was a sham when it contained facts that the affiant 

previously testified he could not remember. 

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Here, the Court declines to apply the rule because it cannot find that the 

inconsistencies between Trafton’s testimony and deposition are “clear and 

unambiguous.” Notwithstanding Bear’s dispute with the substance of the 

November 8, 2014 conference call, the Court finds that as a matter of law, Marsh 

fulfilled its fiduciary duty to inform and explain the coverage it secured for Bear. 

Marsh warned and advised Bear of the policy’s warranties and conditions 

precedent numerous times and over the course of three years. In its insurance 

proposals it explained to Bear the conditions precedent attached to major repairs, 

hot work or when a shipyard required a waiver of subrogation. During his 

deposition, Trafton acknowledged that he and Jodsaas read and discussed the 

2010 insurance proposal to determine the cost of insurance for the Polar Bear. 

(Marsh’s Ex. 55, Trafton’s Dep. Tr. 446:6–22; 450:20–22.) Additionally, before 

binding coverage, Marsh required Bear to sign acknowledgment forms certifying 

Jodsaas and/or Trafton’s understanding of the policy. It is undisputed that Jodsaas 

and Trafton willingly signed these forms. Marsh also provided Bear with warnings 

in the confirmations of coverage it sent to Bear after binding coverage every year, 

as well as the cover letters attached to the actual policies it sent to Bear. Contrary 

to Bear’s argument, these warnings were not buried in insurance materials. Given 

that the majority of their communications occurred via letters and emails, it was 

reasonable for Johnson to have warned Bear of these provisions in these 

documents. Trafton also testified that he was aware that when the Polar Bear went 

in for a yard visit, he was supposed to notify Marsh so that Marsh in turn, notified 

the insurer. (Marsh’s Ex. 55, Trafton’s Dep. Tr. 647:7–17.) Finally, though 

Johnson could not recall the exact date, she testified to having warned Jodsaas 

and Trafton about the limitations applied to yard periods specifically. (Marsh’s Ex. 

56, Johnson’s Dep. Tr. 300:13–301:17.) 

Bear argues that Trafton did not read the insurance proposals and as such, 

Marsh’s breach of duty is not overcome by Bear’s failure to read the underlying 

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documentation. Its argument fails for several reasons. First, Trafton testified that 

he did review and discuss the 2010 insurance proposal with Jodsaas. Second, the 

insurance proposals were not the only documents that contained warnings and 

explanations. Jodsaas and Trafton signed acknowledgment forms with every 

policy Marsh obtained and while not conclusive evidence of their understanding, it 

certainly lends support. Cf. Adams v. Aetna Casualty & Surety Co., 574 So. 2d 

1142, 1155 (Fla. Dist. Ct. App. 1991) (holding that while a signed acknowledgment 

form can be appropriately considered by the trier of fact along with all the other 

evidence of the insured’s knowledge, it is alone insufficient to support a ruling as 

a matter of law). Moreover, the cases that Bear relies on to assert that Bear had 

no legal obligation to read the policies are inapplicable, as they do not deal with a 

claim for breach of fiduciary duty to inform and explain coverage. 

The Court finds that as a matter of law, Marsh satisfied its fiduciary duty by 

providing Bear with over a dozen explanations and warnings. As such, Marsh’s 

motion for summary judgment as to Bear’s breach of fiduciary duty claim with 

respect to the procurement of the policy is granted. 

C. Negligence 

Under Florida law, an insurance broker has a duty “to use reasonable skill 

and diligence” when procuring the insurance coverage requested by the insured. 

Warehouse Foods, Inc. v. Corporate Risk Management Services, Inc., 530 So.2d 

422, 424 (Fla. Dist. Ct. App. 1988). As already discussed above, the undisputed 

facts demonstrates that Marsh obtained the requested coverage for $17 million, 

and adequately informed and explained to Bear the terms and conditions of the 

policy. 

Therefore, as a matter of law, it did not breach its duty of reasonable care in 

performing the agreement to procure insurance coverage for the Polar Bear. 

Accordingly, Marsh’s motion for summary judgment as to its negligence claim with 

respect to the procurement of the policy is granted. 

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D. Heightened Fiduciary and Common Law Duties 

1. Marsh’s Breach of Duty to Advise and Recommend 

Bear also seeks to impose a heightened duty on Marsh to advise and 

recommend certain policies based on its needs. Relying on an alleged “special 

relationship,” Bear argues that Marsh breached both its fiduciary and common law 

duties by failing to advise and recommend the Chubb and/or Shipyard Repairer’s 

Liability (“SRL”) policies. 

Ordinarily, an insurance broker has no duty to advise an insured as to the 

insured’s coverage needs. Tiara Condo. Ass’n v. Marsh, USA Inc., 991 F. Supp. 

2d 1271, 1280 (S.D. Fla. 2014). However, as the court in Tiara Condo. Ass’n v. 

Marsh, USA Inc. recognized, there is a “special relationship” exception to the 

general rule of no duty to advise. Id. “The exception becomes operative when an 

insurance broker encourages and engages in a ‘special relationship’ with its client, 

thereby triggering an enhanced duty of care to advise the client about the amount 

of coverage prudently needed to meets its complete insurance needs.” Id. at 1281. 

After reviewing cases supporting a finding of a “special relationship,” the court 

identified several factors for a trier of fact to consider when determining whether a 

broker shared a “special relationship” with its clients: “(1) representations by the 

broker about its expertise; (2) representations by the broker about the breadth of 

coverage obtained; (3) the length and depth of the relationship; (4) the extent of 

the broker’s involvement in the client’s decision making about its insurance needs; 

(5) information volunteered by the broker about the client’s insurance needs; and 

(6) payment of additional compensation for advisory services.” Id. at 1281. 

Here, the parties dispute whether a special relationship exists. Bear argues 

that “[b]ecause it is undisputed that Marsh held itself out as an expert in yacht 

insurance and Bear relied on that expertise,” Marsh owed Bear an enhanced duty 

of care. (Bear’s Opp’n 17.) Marsh, on the other hand, argues that such a duty 

should not be imposed. Bear has presented evidence of a long-term relationship 

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with Marsh, as well as its reliance on Marsh’s expertise in making its purchasing 

decisions. These facts, therefore, could support a finding by the trier of fact of a 

special relationship. And if a special relationship did exist, there is evidence on 

which a trier of fact could conclude that Marsh breached its duty for failing to advise 

against a policy with the Repair Clause for a steel hull vessel. 

Notwithstanding a dispute of fact as to a “special relationship,” Marsh argues 

that summary judgment is appropriate because Bear cannot establish that a 

recommendation of the Chubb or SRL policies would have resulted in coverage. 

i. The Chubb Policy 

Bear argues that Marsh breached its fiduciary duty by failing to recommend 

the Chubb policy over the Underwriters policy in 2010, which would have allegedly 

covered the loss. Marsh moves for summary judgment on this claim because it 

argues that Bear cannot establish causation. The causation question depends on 

several factual issues. It requires a trier of fact to determine: (1) would Bear have 

chosen the Chubb policy had Marsh recommended it in 2010, despite its concerns 

about pricing; (2) whether Chubb would have renewed on the same terms every 

year and Bear would have elected it every year; and (3) whether the Chubb policy 

would have covered the loss despite Bear’s failure to notify. 

To prove that Bear would have elected the Chubb policy had Marsh 

recommended it, Bear submits as evidence Trafton’s Declaration. Trafton states 

that “[i]f Johnson had pointed out the superior coverage aspects of the Chubb 

policy, together with the huge gap in coverage created by the Maintenance and 

Repair Clause, and recommended the purchase of the Chubb policy, I would have 

concurred, and believe that Johnson would have done so as well. We had a $17 

million boat at stake, and had already experience a fire caused by welding while 

the Polar Bear was being built.” (Trafton Decl. ¶ 27.) Bear also submits the 

testimony of Michael Fitzgerald who submits that it is highly probable that Chubb 

would have continued to offer the same policy, Bear would have continued to 

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renew it, and it would have covered the loss. (Decl. of Michael Fitzgerald, in Supp. 

of Bear’s Opp’n to Marsh’s MSJ (“Bear Opp’n”), ECF No. 101–31, ¶¶ 53–56.) At 

this stage, there is a material dispute of fact on this issue. Thus, Marsh’s motion 

for summary judgment on this claim is denied. 

Because the Court finds that there is a triable case as to Bear’s claim for 

breach of an enhanced duty, at least as it relates to the Chubb policy, the Court 

need not consider Plaintiff’s SRL theory. 

2. Grossinger’s Breach of Duty to Act After Learning of the Repairs

Bear also alleges that Grossinger, while acting as its agent, had a duty to

take appropriate action after its June 17, 2014 conversation with Jodsaas. It 

contends that after Grossinger spoke to Jodsaas and learned that the Polar Bear

was undergoing repairs, she should have either notified Underwriters of the 

ongoing repairs, and/or advised Trafton to stop all repair work on the Polar Bear

until the issue of coverage was addressed with Underwriters. Though ordinarily 

the issue of agency is a question of fact, a court may resolve it on summary 

judgment where the evidence compels only one interpretation. Underwriters of 

Lloyd’s of London v. CZX Prods., 686 So.2d 706, 708 (Fla. Dist. Ct. App. 1996). 

Here, the evidence only compels one interpretation—no agency relationship 

existed between Grossinger and Bear. 

To establish the existence of an agency relationship, a plaintiff must show: 

(1) acknowledgment by the principal that the agent will act on his or her behalf; (2) 

acceptance by the agent; and (3) control by the principal over the agent’s actions. 

Graham v. Lloyd’s Underwriters at London, 964 So.2d 269, 275 (Fla. Dist. Ct. App. 

2007). Alternatively, “such authority may be presumed from a long course of 

dealing between the parties.” Id. (internal citations omitted). Under Florida law, it 

is well-settled law that once a broker or agent procures the insurance requested 

by the insured, his or her employment and duty end. Graham, 964 So.2d at 275. 

However, where “a broker or agent is instructed by an owner with the duty of 

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keeping the owner’s property insured, taking out policies thereon, and authorized 

to obtain insurance in lieu of expired or canceled policies, the broker or agent is 

the general agent of the owner in these respects as to the latter’s insurance.” Cat’N 

Fiddle, Inc. v. Century Ins. Co., 213 So.2d 701, 704 (Fla. 1968) (quoting 

Stuyvesant Ins. Co. v. Barkett, 11 S.W. 2d 87, 89 (Ky. Ct. App. 1928)). 

Here, Bear relies on Marsh’s insurance proposals as well as its internal 

professional standards to argue that Marsh, and specifically Grossinger, expressly 

agreed to act as Bear’s agent after procuring insurance. As discussed above, the 

statements made in Marsh’s insurance proposals fall short of oral contracts. Thus, 

they cannot be construed as the parties’ express agreement of Marsh’s general 

agency. Bear also does not cite to any legal authority to support its claim that 

Marsh should be bound by its internal professional standards. 

While Bear did have a long history of obtaining yacht insurance policies 

through Marsh, it obtained these policies through Marsh’s Yacht Group and worked 

with Johnson as its broker. Grossinger, on the hand, brokered Jodsaas’ personal 

insurance lines. She was never involved, in any capacity, with the procurement of

the yacht insurance for the Polar Bear. (Marsh’s Ex. 57, Tr. of Patricia Grossinger’s 

Dep. 63:8–14.) Accordingly, Bear has failed as a matter of law to establish the 

existence of a general agency relationship. See Burgos v. Indep. Fire Ins. Co., 

371 So.2d 539, 541 (Fla. Dist. Ct. App. 1979) (affirming a lower court’s grant of 

summary judgment on a claim for failure to procure replacement coverage where 

the record contained no evidence that the insurance broker acted as a general 

agent for the insurer). On these facts, Grossinger was under no duty to inform 

Underwriters or Johnson of Jodsaas’ phone call, or to maintain adequate coverage 

for the Polar Bear. 

The Court grants summary judgment as to this claim. 

E. Objections and Mash’s Motion to Strike 

Both parties raise objections to several declarations, exhibits, and 

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undisputed material facts submitted in support of the opposing parties’ papers. 

Having reviewed the parties’ objections and responses, the Court rules as follows:

 Bear’s Objections to Marsh’s Exhibits 7, 9, 23, 26, 28, 31–33, 37, 39–41, 44, 

and 47 are overruled. 

 Marsh’s Objection to Michael Fitzgerald’s Decl. ¶¶ 51–54 is overruled without 

prejudice. 

Because the Court did not rely on the remaining materials in reaching its decision, 

it overrules those objections as moot. 

Additionally, on September 30, 2016, pursuant to this Court’s chambers 

rules, Bear filed a sur-reply addressing evidentiary matters arising out of Marsh’s

reply brief. (ECF No. 105.) On October 12, 2016, Marsh filed a motion to strike 

certain portions of Bear’s sur-reply, arguing that its scope goes beyond merely 

responding to the objections in Marsh’s reply brief. (ECF No. 111.) The rule 

provides in relevant part: 

Responses to objections contained in a reply brief may be made in a surreply brief that does not exceed five pages. The scope of such a sur-reply is 

limited to responses to objections; any additional argument will be 

disregarded. Any separately filed objections shall be stricken and will not be 

considered by the Court.

Hon. Barry Ted Moskowitz Civ. Chambers Rules at 2, Objections, (Feb. 24, 

2015), https://www.casd.uscourts.gov/Rules/SitePages/Home.aspx.

Having reviewed Bear’s sur-reply brief, the Court finds that pages 3:23–5:23

of Bear’s response exceed the permitted scope under the chambers rules. 

However, there is no prejudice to Marsh. Accordingly, Marsh’s motion to strike 

certain portions of Bear’s sur-reply brief is DENIED.

IV. CONCLUSION

For the reasons discussed above, Marsh’s motion for summary judgment 

(ECF No. 71) is GRANTED IN PART AND DENIED IN PART. Marsh’s motion to 

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strike (ECF No. 110) is DENIED. The Clerk shall enter judgment for Marsh on 

Bear’s claims for breach of contract, breach of general fiduciary duty, negligence, 

and breach of duty to act after learning of the repairs. Bear’s claim for breach of a

heightened duty to advise and recommend certain policies shall proceed to trial. 

IT IS SO ORDERED.

DATED: May 17, 2017

BARRY TED MOSKOWITZ

Chief Judge, United States District Court

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