Of the District of Massachusetts, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 05-2151

COMMERCIAL UNION INSURANCE COMPANY,

Petitioner, Appellant,

v.

DEAN PESANTE,

Respondent, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ernest C. Torres, U.S. District Judge]

Before

Torruella and Lynch, Circuit Judges,

and Young, District Judge. *

Robert J. Murphy, with whom Holbrook & Murphy was on brief,

for petitioner-appellant.

Stephen T. Morrissey, was on brief, for respondent-appellee.

August 9, 2006
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TORRUELLA, Circuit Judge. Appellant Commercial Union

Insurance Company ("Commercial Union") brought a declaratory

judgment action against appellee Dean Pesante ("Pesante") in the

United States District Court for the District of Rhode Island,

seeking a declaration that it was not liable under a marine

insurance policy issued to Pesante for losses incurred by Pesante's

vessel. During the ensuing litigation, Commercial Union filed a

motion for summary judgment, which the district court denied.

Following the denial, the parties filed a Joint Motion for Entry of

Final Judgment. The district court then entered final judgment in

favor of Pesante. Commercial Union now appeals the district

court's entry of judgment for Pesante and denial of its motion for

summary judgment. After careful review, we reverse.

I.

In 1997, Pesante purchased the F/V Oceana ("Oceana").

Pesante used the Oceana for gill-net fishing ("gill netting"),

which entails the use of entangling stationary nets to catch fish.

Until 2001, Pesante obtained his marine insurance from the Ocean

Marine Insurance Agency. Due to rising premiums, Pesante decided

to seek a new policy. He contacted Philip Christopher

("Christopher") of Christopher & Regan Insurance ("C & R") to help

him obtain a policy with the lowest possible premiums. Through

Christopher, Pesante submitted an Application for Fishing Vessel

Insurance (the "Application") to Commercial Union on March 23,
 Under his prior insurance, Pesante had always identified the 1

Oceana as a gill net vessel.

 According to Pesante, Christopher was the one who identified the 2

Oceana as a lobster vessel and filled out that part of the

Application before sending it to Pesante. Pesante claims that he

did not notice the mistake.

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2001. The Application identified the Oceana as a lobster boat.1

Pesante has admitted that this was an inaccurate description of the

vessel. A document accompanying the Application indicated that 2

Pesante was paying a yearly premium of $1,535 and that C & R needed

to match that premium in order to secure Pesante's business.

On March 27, 2001, Russell Bond ("Bond"), an underwriter

at Commercial Union, faxed Christopher a quote which identified the

Oceana as a thirty-eight foot lobster boat and quoted a premium of

$1,550. In an affidavit, Bond stated that had he known the vessel

was a gill net vessel, the quote would have been twenty-five

percent higher because gill net vessels pose a higher risk than

lobster vessels. On March 30, 2001, Christopher responded to Bond

via fax and requested certain changes. In his fax, Christopher

also identified the Oceana as a thirty-eight foot lobster boat.

On April 5, 2001, Commercial Union issued the policy,

which was renewed the following year. The policy contained an

express warranty that "the only commercial use of the insured

vessel(s) shall be for lobstering." Pesante has admitted that he

never engaged in lobstering, which he described as "radically

different" from gill netting.
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On September 25, 2002, while returning to port from a

gill netting trip, the Oceana was involved in a collision with a

Boston Whaler. Occupants of the Boston Whaler sustained serious

injuries and brought claims against the Oceana. Several months

after the accident, Pesante sought to correct the policy. He

crossed out "lobstering" on the form and sent it to C & R along

with a handwritten note stating that he had never done lobstering

and did not intend to engage in lobstering in the future.

Christopher faxed the form and note to Bond on December 30, 2002.

On December 31, 2002, Commercial Union issued a denial of insurance

coverage based on Pesante's misrepresentation and breach of the

express warranty found in the policy. Commercial Union, on

January 22, 2003, issued a reservation of rights letter under which

it agreed to defend the claims arising from the September 25, 2002

incident.

On May 16, 2003, Commercial Union filed a Petition for

Declaratory Judgment in the district court seeking a declaration of

its rights and responsibilities under the policy. On July 29,

2003, Pesante filed an answer and counterclaim. On November 3,

2003, Commercial Union filed a motion for summary judgment and

statement of undisputed material facts. In its opposition to the

motion for summary judgment, Pesante stated that Commercial Union's

statement of undisputed material facts "appears accurate." On

March 3, 2004, the district court entered its Memorandum and Order
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denying Commercial Union's motion for summary judgment. The court

based its decision on a finding that there was no causal

relationship between Pesante's breaches and the losses suffered.

The court reasoned that, since Pesante was steaming home when the

accident occurred, he technically was not gill netting and

therefore was not in breach of the warranty at the time of the

loss.

On June 21, 2005, the parties executed a stipulation of

dismissal as to Pesante's counterclaim, then filed a Joint Motion

for Entry of Final Judgment. In the motion, the parties stated

that, based on the district court's denial of Commercial Union's

motion for summary judgment and the stipulated dismissal of

Pesante's counterclaim, there were no longer any factual matters to

be resolved at a trial. On July 20, 2005, the district court

found that there were no genuine issues of material fact that would

prevent the entry of judgment. It therefore entered final judgment

in favor of Pesante. Commercial Union has timely appealed from

this final judgment, arguing that the district court erred in

denying its motion for summary judgment and entering judgment for

Pesante.

II.

We begin by noting that "we do not have jurisdiction over

denials of summary judgment motions . . . where a genuine issue of

material fact remains in dispute." Rivera-Jiménez v. Pierluisi,
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362 F.3d 87, 93 (1st Cir. 2004). We thus often do not have

jurisdiction over denials of motions for summary judgment, because

"a denial of a motion for summary judgment is merely a judge's

determination that genuine issues of material fact exist. It is

not a judgment, and does not foreclose trial on issues on which

summary judgment was sought." Rivera-Torres v. Ortiz Vélez, 341

F.3d 86, 92 (1st Cir. 2004). Here, however, following the denial

of summary judgment and the stipulation of dismissal as to

Pesante's counterclaim, the parties filed a Joint Motion for Entry

of Final Judgment in which they stated that there were no longer

any factual matters to be resolved at a trial. The district court

agreed and entered final judgment. It is from this final judgment,

based on undisputed facts, that Commercial Union appeals, and we

therefore have jurisdiction. See 28 U.S.C. § 1291.

Our review of a district court's decision granting or

denying a summary judgment motion is de novo. Rodríguez v. Am.

Int'l Ins. Co. of Puerto Rico, 402 F.3d 45, 46 (1st Cir. 2006).

Summary judgment is appropriate "if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a

judgment as a matter of law." Fed. R. Civ. P. 56(c).

Commercial Union makes two arguments on appeal. First,

it argues that Pesante made a material misrepresentation in his
 There appears to have been some confusion as to Commercial 3

Union's argument below. In its motion for summary judgment,

Commercial Union argued that Pesante's use of the vessel for gill

netting instead of lobstering voided the policy because it affected

the insurer's acceptance of risk and premium charged. However,

Commercial Union labeled this argument not as a "material

misrepresentation" argument but as a "breach of warranty" argument.

The district court dismissed the argument, stating that Commercial

Union seemed "to be making a hybrid claim that seeks to convert a

breach of warranty occurring after the policy was issued into a

reason why the breach affected the issuance of the policy." On

appeal, Commercial Union has clarified that it is arguing that the

policy is voidable due to a material misrepresentation in the

application. We were initially troubled by the confusion below,

inasmuch as a failure to raise an argument before the district

court generally forfeits the argument, meaning that on appeal we

would review only for plain error. See, e.g., Metro. Prop. and

Cas. Ins. Co. v. Shan Trac, Inc., 324 F.3d 20, 24 (1st Cir. 2003).

However, after further consideration, we believe that, while

Commercial Union could have been clearer about its argument below,

it adequately raised the issue so as to avoid plain error review.

We also note that Pesante has not argued that our review on this

issue is for plain error.

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application for insurance and that the policy was therefore

voidable under either federal or Rhode Island law. Second, it 3

argues that Pesante breached an express warranty in the policy --

by using the Oceana for gill netting and not lobstering –- and that

this breach rendered the policy voidable, regardless of whether

there was any causal connection between the breach and the

accident. Because we find the first argument determinative, we do

not address the second argument.

This case arises under our admiralty jurisdiction since

it involves a marine insurance policy. Windsor Mount Joy Mut. Ins.

Co. v. Giragosian, 57 F.3d 50, 54 (1st Cir. 1995). Generally, in

cases involving a marine insurance contract, we will apply state
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law unless an established "maritime rule controls the disputed

issue, and that rule is materially different from state law." Id.

(emphasis in original). Commercial Union argues that the doctrine

of uberrimae fidei is an established rule of maritime law and

determines the outcome of this case. Pesante argues that the

doctrine of uberrimae fidei is not an established rule of maritime

law and that Rhode Island law should therefore apply.

"Uberrimae fidei" roughly means "of the utmost good

faith." Grande v. St. Paul Fire & Marine Ins. Co., 436 F.3d 277,

282 (1st Cir. 2006). Under this doctrine, the insured is required

"to disclose to the insurer all known circumstances that materially

affect the insurer's risk, the default of which . . . renders the

insurance contract voidable by the insurer." Giragosian, 57 F.3d

at 54-55. "[O]ne treatise says that in the marine insurance

context, a material fact is 'that which can possibly influence the

mind of a prudent and intelligent insurer in determining whether it

will accept the risk.' 4A Appleman & Appleman, Insurance Law and

Practice § 2651 (rev. ed. Supp. 2005)." Grande, 436 F.3d at 282-

83. Commercial Union argues that Pesante's failure to disclose

that the Oceana was a gill netting vessel -- and not a lobster

vessel -- was a material false statement because the underwriter

would have charged a twenty-five percent higher premium had it

known that the vessel was used solely for gill netting. We agree.

Therefore, if we were to find that the doctrine of uberrimae fidei
 It is undisputed that the policy at issue here is "covered by 4

this chapter" as required by the statute.

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is an established rule of maritime law, we would hold that the

policy was voidable as a matter of law.

While we have never actually decided the issue, it is

true that we have questioned whether uberrimae fidei is an

established rule of maritime law. See Giragosian, 57 F.3d at 54

n.3. However, we need not decide the issue today, because even

under Rhode Island law, the insurance policy was voidable as a

matter of law due to the misrepresentations in the Application.

Under Rhode Island law, "[t]he falsity of any statement

in the application for any policy covered by this chapter may not

bar the right to recovery under the policy unless the false

statement materially affected either the acceptance of the risk or

the hazard assumed by the insurer." R.I. Gen. Laws § 27-18-16

(2006). The Rhode Island Supreme Court has concluded that, under 4

this statute, "a material misrepresentation, even though innocently

made, is a basis for rescinding a contract." Guardian Life Ins.

Co. Of Am. v. Tillinghast, 512 A.2d 855, 859 (R.I. 1986). A

material misrepresentation is one that affects the insurer's

decision to accept the risk and insure the applicant. See Grande,

436 F.3d at 282-83; Evora v. Henry, 559 A.2d 1038, 1040 (R.I.

1989). Here, there is uncontroverted testimony that, had the

underwriter known that the Oceana was used for gill netting and not
At oral argument, Pesante conceded that the misrepresentation 5

was material.

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lobstering, Pesante would have been charged a premium twenty-five

percent higher than the $1,550 that was quoted. It is therefore

clear that Commercial Union would not have insured Pesante at the

quoted price had it known the true nature of the vessel's use. We

therefore find that the misrepresentation was material.5

Pesante argues that we should first address the breach of

warranty issue, looking to whether the alleged breach caused the

harm or whether Pesante was in breach of the policy at the time of

the accident. We reject this argument. Whether Pesante was in

breach of the express warranty at the time of the accident and

whether any such breach caused the accident are irrelevant to the

material misrepresentation inquiry. Because of the material

misrepresentation made in Pesante's application, the policy was

voidable from the beginning. Under Rhode Island law, the insurer's

decision to rescind on the basis of the material misrepresentation

must be upheld. See Tillinghast, 512 A.2d at 859. There is no

reason to address the alternative arguments on breach of warranty.

III.

For the foregoing reasons, we reverse the judgment of the

district court and direct entry of judgment for Commercial Union.

Reversed.