Court Opinion

ID: 6350015
Source: CourtListenerOpinion
Date Created: 2022-06-15 16:00:29.136642+00
Date Added: 2024-06-11T09:16:03.675940
License: Public Domain

USCA11 Case: 20-14517     Date Filed: 06/15/2022   Page: 1 of 22

                                                     [PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                   ____________________

                         No. 20-14517
                   ____________________

GREAT LAKES INSURANCE SE,
                                               Plaintiff-Counter
                                            Defendant-Appellee,
versus
WAVE CRUISER LLC,

                                        Defendant-Counter
                                       Claimant-Appellant.
                   ____________________

          Appeal from the United States District Court
              for the Southern District of Florida
             D.C. Docket No. 1:20-cv-20397-DLG
                   ____________________
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2                       Opinion of the Court                 20-14517

Before JORDAN, JILL PRYOR, and MARCUS, Circuit Judges.
JILL PRYOR, Circuit Judge:
       This case arises out of an insurance dispute between Great
Lakes Insurance SE (“Great Lakes”) and Wave Cruiser LLC
(“Wave Cruiser”). Wave Cruiser purchased an “all risks” insurance
policy from Great Lakes covering a vessel that Wave Cruiser had
recently acquired. The policy did not cover engine damage unless
an accidental external event caused the damage. After Wave
Cruiser purchased the policy, the vessel suffered catastrophic en-
gine failure. Wave Cruiser submitted a claim on its policy. Great
Lakes denied the claim, explaining that Wave Cruiser had not
shown that an external event caused the engine damage.
        Great Lakes filed suit for a declaratory judgment that Wave
Cruiser’s policy did not afford coverage for the loss. Wave Cruiser
filed counterclaims for breach of contract and breach of the duty of
good faith and fair dealing. The district court granted summary
judgment to Great Lakes. The district court concluded that Wave
Cruiser failed to come forward with evidence that an external
event caused the engine damage.
       On appeal, Wave Cruiser argues that the district court incor-
rectly placed the burden on it to prove at trial that an external event
caused the engine damage. Wave Cruiser also argues that the dis-
trict court abused its discretion by considering expert testimony
from a lay witness. After careful consideration, and with the benefit
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20-14517                     Opinion of the Court                       3

of oral argument, we affirm. We agree with the district court that
Wave Cruiser had the burden to come forward with evidence that
an external event caused the engine failure. We also conclude that
although the district court incorrectly considered expert opinion
from a lay witness, summary judgment was appropriate because
Wave Cruiser failed to create a genuine dispute of material fact as
to whether an external event caused the engine failure.
                           I.      BACKGROUND
        We begin by describing the insurance policy that Wave
Cruiser purchased from Great Lakes. We then turn to the incident
that caused Wave Cruiser to make a claim on that policy and the
litigation that followed.
A.        The Insurance Policy
       Great Lakes issued policy No. CSRYP/175137 (the “Policy”)
to Wave Cruiser. The Policy provided $310,000 in coverage for
Wave Cruiser’s 2003 45’ Viking (the “vessel”) and ran from April
25, 2019 to April 25, 2020. The Policy was “an ‘all risks’ form of
marine insurance policy” that covered “any loss and or damage” to
the vessel that was “accidental, fortuitous in nature and . . . inci-
dental” to the vessel’s use. Doc. 25-1 at 22. 1 But the Policy did not
provide coverage for all types of damage and contained several ex-
clusion provisions identifying types of damage the Policy did not
cover. Under Exclusion r, the Policy provided no coverage for

1   “Doc.” numbers refer to district court docket entries.
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4                          Opinion of the Court                        20-14517

“[d]amage to the Scheduled Vessel’s engines . . . unless caused by
an accidental external event such as collision, impact with a fixed
or floating object, grounding, stranding, ingestion of foreign ob-
ject, lightning strike or fire.” Id. at 6.
       The Policy also included a choice of law provision. This pro-
vision provided that “entrenched principles and precedents of sub-
stantive United States Federal Admiralty law” would govern dis-
putes under the Policy. Doc. 25-1 at 16. If no entrenched federal
admiralty principles or precedents existed, then the Policy called
for the application of New York substantive law.
B.      The Vessel’s Engine Failure
       Before Wave Cruiser purchased the vessel, a surveyor com-
pleted a prepurchase report on it. The surveyor concluded that the
vessel and its machinery were “primarily sound.” Doc. 22-3 at 13.
He also recommended that the engines be inspected to make sure
they worked properly. At some point a marine diesel technician
performed a 2500-hour service inspection on the vessel’s engines
and reported that they were in “great shape.” Doc. 25-5 at 3. A few
months later, however, the vessel’s port engine suffered cata-
strophic engine failure. 2 The vessel’s engines had operated for 17

2 In its brief, Wave Cruiser states that “[t]he engine’s failure occurred well be-
fore the end of the engine’s projected lifespan” but does not cite anything in
the record to support this statement. Appellant Br. at 11. Wave Cruiser sub-
mitted a “Statement of Material Facts” to the district court alongside its mo-
tion for summary judgment which also stated that the engine failed before the
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20-14517                   Opinion of the Court                                 5

hours between the surveyor’s prepurchase inspection and the port
engine failure. The captain of the vessel did not report rough
weather or anything else unusual and described the engine failure
“as sudden and unexpected.” Doc. 25-5 at 2.
       Wave Cruiser’s agent reported the engine failure to Great
Lakes. Great Lakes’ underwriter assigned Arnold & Arnold Inc. to
investigate the claim. An Arnold & Arnold surveyor named Cap-
tain Ian Allen inspected the vessel. Allen had been a surveyor for
Arnold & Arnold since 2012, but he had no “training or certification
on the type of” engine that failed in the vessel. Doc. 49-1 at 8. He
also did not consider himself an expert on internal combustion en-
gines or, more specifically, diesel engines.
        After his inspection, Allen issued his “First Report.” Doc. 22-
5 at 1. In the report, Allen determined that the cause of the engine
failure could only be determined by removing and dissembling the
engine. He found no evidence of an external cause but did posit
some “possible causes” and noted that the “most likely” cause of
the damage was “fatigue failure of one or more parts.” Doc. 25-5 at
4. After completing his inspection, Allen sent Wave Cruiser a letter

end of its lifespan. Doc. 22 at 2. This document does not provide a record cite
to support this statement. A review of the record also provides no support for
this statement. Under Southern District of Florida Local Rules, a fact in a state-
ment of material facts can only be admitted if it is supported by properly cited
record evidence. S.D. Fla. L.R. 56.1(c). Because the statement concerning the
engine’s lifespan was not supported by record evidence, we will not consider
it.
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6                      Opinion of the Court                 20-14517

explaining that Great Lakes reserved its right to deny coverage for
the claim under the policy’s Exclusion r.
       Wave Cruiser notified Allen that it had removed the dam-
aged port engine from the vessel and invited him to examine it
again. Allen submitted another report after inspecting the engine.
See Doc. 25-7. In this report, he observed that the gaskets for the
engine’s cylinder heads and oil pan were old. He noted there were
clamshells on the intake side of the engine’s water pump, but he
could not explain how the clamshells entered the water pump be-
cause the intake strainer was intact. He noted that although clams
could restrict intake flow, “there was no evidence of the engine
overheating.” Doc. 25-7 at 2. Allen next examined engine cylinder
parts that had come off the engine when it failed. He observed
“elongation of a connecting rod top” on one of the engine’s cylin-
ders and reported that “[e]longation is generally a type of damage
that would occur over a period of time, rather than in a sudden
failure.” Doc. 25-7 at 2. Allen ended his report by stating that he
could not determine with certainty which engine part failed first.
But he concluded that “we can say with certainty that there was
excess friction at the cylinder one and six connecting rod journal,
and an internal engine failure did occur in this area.” Id. at 3. Dur-
ing his deposition, Allen testified that he “could not find evidence
of an external event that would have precipitated the” engine fail-
ure. Doc. 49-1 at 6.
       Allen recommended that Great Lakes continue to reserve its
right to deny coverage under the Policy. A short time later, Allen
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20-14517                    Opinion of the Court                                  7

sent Wave Cruiser a letter denying its claim. The letter stated that
there was no evidence of an external cause for the engine failure.
Citing Exclusion r, the letter explained that the Policy did not cover
engine damage unless caused by an accidental external event. 3
C.      Procedural History
       Great Lakes brought this action seeking a declaratory judg-
ment that the Policy did not cover the vessel’s damaged engine.
Wave Cruiser filed a counterclaim alleging that Great Lakes
breached the terms of the Policy by failing to investigate the claim
fully and cover the loss. The counterclaim also alleged that Great
Lakes breached its duty of good faith and fair dealing.
        Wave Cruiser filed a motion for summary judgment on its
breach-of-contract counterclaim. Great Lakes filed a motion for
summary judgment on its declaratory-judgment claim. In its mo-
tion, Great Lakes argued that it “remains Capt. Allen’s expert opin-
ion that there was no evidence that an external event caused the
failure of the port engine.” Doc. 24 at 2. Wave Cruiser then filed a
motion to strike Allen as an expert witness because Great Lakes
failed to disclose that he was an expert in accordance with Federal
Rule of Civil Procedure 26(a)(2)(B). The district court denied the

3 The letter also cited Exclusion b which denies coverage for losses “due to
wear and tear, gradual deterioration, . . . [and] weathering[.]” Although Wave
Cruiser argued that there was no evidence that the engine failure was caused
by the losses included in Exclusion b, see Appellant Br. at 14, it does not cite
to any evidence for that proposition nor does it discuss it further in its briefing.
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8                      Opinion of the Court                20-14517

motion but ordered that Wave Cruiser depose Allen. During his
deposition, Allen testified that he did not have expert knowledge
about engines and did not consider himself an expert witness. After
the deposition, Great Lakes filed a notice withdrawing Allen as an
expert. Great Lakes argued that “[i]nstead, the evidence offered by
Capt. Allen should be considered merely as the evidence of a lay
witness.” Doc. 48 at 1.
       The district court issued an order granting Great Lakes’ mo-
tion for summary judgment and denying Wave Cruiser’s motion
for summary judgment. The district court applied a three-part bur-
den shifting framework to determine whether the Policy covered
Wave Cruiser’s claim. Under this framework, Wave Cruiser had
the initial burden to present evidence that it suffered a fortuitous
loss within the Policy period. Once Wave Cruiser did this, the bur-
den would shift to Great Lakes to establish that a policy exclusion
applied. If Great Lakes established an applicable exclusion, the bur-
den would return to Wave Cruiser to produce evidence that an ex-
ception to the policy exclusion applied.
         The district court determined that Wave Cruiser met its in-
itial burden by presenting evidence that the vessel was well main-
tained and recently serviced and that the engine failed suddenly and
unexpectedly. The district court then considered whether Great
Lakes could show that an exclusion to the Policy applied. Great
Lakes argued that Exclusion r applied because it excluded engine
damage unless caused by an external event, and the district court
agreed. The district court rejected Wave Cruiser’s argument that
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20-14517                  Opinion of the Court                           9

Great Lakes—and not Wave Cruiser—had to prove the cause of
the engine damage. Instead, the district court shifted the burden
back to Wave Cruiser to present evidence that the exception to Ex-
clusion r—engine damage caused by an external event—applied.
The district court concluded that Wave Cruiser failed to carry its
burden of proof, stating that the “total absence of evidence show-
ing an external event necessarily means that there is no evidence
triggering the exception to Exclusion r[.]” Doc. 56 at 23. Thus, the
district court concluded, Great Lakes was entitled to summary
judgment.4
      The district court entered final judgment in favor of Great
Lakes. Wave Cruiser timely appealed to this Court.
                    II.   STANDARD OF REVIEW
       We review the district court’s grant of summary judg-
ment de novo, applying the same legal standards as the district
court. Hurlbert v. St. Mary’s Health Care Sys., Inc., 439 F.3d 1286,
1293 (11th Cir. 2006). Summary judgment is appropri-
ate only “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.” Fed. R. Civ. P. 56(a). The court must draw all rea-
sonable inferences in favor of the non-moving party. Welch v. Ce-
lotex Corp., 951 F.2d 1235, 1237 (11th Cir. 1992).

4After determining that the Policy did not cover Wave Cruiser’s claim, the
district court dismissed Wave Cruiser’s counterclaim for breach of covenant
of good faith and fair dealing.
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10                      Opinion of the Court                 20-14517

       We review a district court’s evidentiary rulings for abuse of
discretion. Cook ex rel. Est. of Tessier v. Sheriff of Monroe Cnty.,
402 F.3d 1092, 1103 (11th Cir. 2005). “However, even a clearly er-
roneous evidentiary ruling will be affirmed if harmless.” Furcron v.
Mail Ctrs. Plus, LLC, 843 F.3d 1295, 1304 (11th Cir. 2016).
                        III.     DISCUSSION
       Wave Cruiser contends that the district court erred in grant-
ing summary judgment to Great Lakes because it incorrectly
placed the burden on Wave Cruiser to prove that an external event
caused the engine failure. In addition, it argues that the district
court abused its discretion by considering expert opinion evidence
from Allen, who conceded that he was not an expert.
       After careful review, we conclude that the district court
properly granted summary judgment to Great Lakes. Wave
Cruiser bore the burden to prove at trial that an external event
caused the engine failure, and it failed to come forward at summary
judgment with evidence to meet this burden. And although the dis-
trict court erred by considering Allen’s opinion testimony, we
nonetheless hold that the error was harmless.
A.     The District Court Correctly Granted Summary Judgment
       Because Wave Cruiser Failed to Come Forward with Evi-
       dence to Meet Its Burden to Prove that an External Event
       Caused the Engine Failure.
       Wave Cruiser contends it did not have to prove that an ex-
ternal event caused the vessel’s engine failure. Instead, it argues, to
establish that Exclusion r applied, Great Lakes bore the burden of
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20-14517                  Opinion of the Court                              11

proving that an internal event caused the engine failure. Before we
can resolve which party had the burden to prove what caused the
vessel’s engine to fail, we must determine what law applies.
       1.      Applying the Parties’ Choice of Law, Wave Cruiser
               Had the Burden to Prove that an External Event
               Caused the Engine Failure.
        Because the Policy provides for marine insurance, it “give[s]
rise to admiralty jurisdiction.” St. Paul Fire & Marine Ins. Co. v.
Lago Canyon, Inc., 561 F.3d 1181, 1184 (11th Cir. 2009). “When
admiralty jurisdiction is invoked, a uniform body of federal mari-
time law applies.” Aqua Log, Inc. v. Lost & Abandoned Pre-Cut
Logs & Rafts of Logs, 709 F.3d 1055, 1061 (11th Cir. 2013). The
Policy’s choice-of-law provision states that disputes should be “ad-
judicated according to well established, entrenched principles and
precedents of substantive United States Federal Admiralty law and
practice but where no such well established, entrenched precedent
exists, this insuring agreement is subject to the substantive laws of”
New York. Doc. 22-1 at 16. Our Circuit has never examined
whether a choice-of-law provision is enforceable under federal
maritime law, making this a question of first impression. Other cir-
cuits have enforced choice-of-law agreements in maritime con-
tracts, however. 5 See e.g., Chan v. Soc’y Expeditions, Inc., 123 F.3d

5Although we have never decided whether a choice-of-law clause is enforcea-
ble under federal maritime choice-of-law rules, we have suggested in dicta that
they are. In GEICO Marine Insurance Company v. Shackleford, 945 F.3d 1135,
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12                        Opinion of the Court                     20-14517

1287, 1296–97 (9th Cir. 1997) (“[W]here the parties specify in their
contractual agreement which law will apply, admiralty courts will
generally give effect to that choice.”). Indeed, the Fifth and Third
Circuits have enforced choice-of-law provisions with the exact
same language as the provision at issue here. See Great Lakes Re-
insurance (UK) PLC v. Durham Auctions, Inc., 585 F.3d 236, 245
(5th Cir. 2009) (“[E]ither the general maritime law . . . or New York
law, . . . governs the parties’ rights under the instant marine insur-
ance policy.”); AGF Marine Aviation & Transp. v. Cassin, 544 F.3d
255, 261 (3rd Cir. 2008) (“[T]he Policy, and its choice of law provi-
sion, was in effect at the time the Yacht sank, and governs this dis-
pute.”). We see no reason to depart from our sister circuits by de-
clining to enforce the parties’ choice-of-law agreement in this case.
We note that the Fifth Circuit applied the choice-of-law provision
in Durham Auctions because no party showed that its application
“would be unreasonable or unjust.” 585 F.3d at 244. We have no
occasion today to decide whether we would refuse to enforce a
choice-of-law clause in a maritime contract if its enforcement
would be unreasonable or unjust because neither party argues that
here.
      The Policy’s choice-of-law provision first directs us to deter-
mine whether there are any entrenched principles or precedents of

1137 (11th Cir. 2019), we examined whether a marine insurance policy cov-
ered damage to a yacht. We applied federal maritime law, noting that “[t]he
parties could have included a choice-of-law provision selecting state law over
federal law[.]” Id. at 1143.
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20-14517                  Opinion of the Court                             13

admiralty law that would govern this dispute. Wave Cruiser points
to two published maritime-law decisions, arguing they establish
that for Exclusion r to apply and bar coverage of Wave Cruiser’s
claim, Great Lakes had to prove the cause of the vessel’s engine
failure. Upon review, we do not believe they answer the question
before us.
        Wave Cruiser’s argument relies primarily on Morrison
Grain Co., Inc. v. Utica Mutual Insurance Co., 632 F.2d 424 (5th
Cir. 1980). 6 That case arose out of an insurer’s refusal to pay its in-
sured’s claim for damage to a ship’s cargo. Id. at 426–27. The policy
at issue insured “against all risks of physical loss or damage to prop-
erty from any external cause.” Id. at 427 (internal quotation marks
omitted). The insured sued; the district court concluded that the
insurer had to pay the insured’s claim for the damaged cargo. Id. at
428. On appeal, the Fifth Circuit had to determine the “respective
burdens of proof” under the policy of the insurer and the insured.
Id. at 427.
        The insurer argued that for coverage to apply, the insured
had the burden to prove that something external damaged the
cargo. Id. at 429. The Fifth Circuit disagreed, reasoning that “[i]t
would seem to be inconsistent with the broad protective purposes
of ‘all risk’ insurance to impose on the insured . . . the burden of

6In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc),
we adopted as binding precedent all decisions of the former Fifth Circuit
handed down prior to October 1, 1981.
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14                      Opinion of the Court                 20-14517

proving the precise cause of the loss or damage.” Id. at 430. The
court held that an insured under an all-risk policy had the “not . . .
particularly onerous” burden to show a fortuitous loss. Id. The in-
sured could meet this burden by showing that the cargo was in
good condition when the insurance company issued the policy and
was found to be damaged when it was unloaded from the vessel.
Id. at 431. Once the insured made this showing, then the burden
shifted to the insurer to establish the applicability of any exclusions
to coverage. Id.
       Wave Cruiser also points to Banco Nacional De Nicaragua
v. Argonaut Insurance Co., 681 F.2d 1337 (11th Cir. 1982), decided
a few years later. That case likewise involved an insurance policy
that covered “all risks of physical harm to [certain cargo] caused by
any external force, subject to certain exceptions.” Id. at 1339. The
insurer denied coverage for the loss and the insured filed suit. Id.
On appeal, we reiterated the burden-shifting framework from Mor-
rison Grain. Id. The insured had the initial burden to show that a
fortuitous loss occurred within the policy period. Id. at 1340. The
burden then shifted to the insurer to show that an exclusion to cov-
erage applied. Id.
       According to Wave Cruiser, these two cases establish that it
did not have the burden to prove that an external event caused the
vessel’s engine failure. The problem for Wave Cruiser is that Mor-
rison Grain and Banco Nacional De Nicaragua do not answer the
ultimate question in this case. Both cases addressed the parties’ re-
spective burdens under an “all risk” policy, holding that insured
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20-14517               Opinion of the Court                        15

parties do not have to show the cause of damage to meet their ini-
tial fortuitous-loss burden under such policies. Neither case exam-
ined a policy with an exclusion that was subject to an exception. In
contrast, here, Exclusion r states that the Policy does not cover en-
gine damage “unless caused by an accidental external event[.]”
Doc. 25-1 at 6. Our review of federal admiralty law has uncovered
no authority or principle to guide us on who bears the burden to
prove the cause of the loss under an exclusion like this one.
       Because federal admiralty precedent sheds no light on how
Exclusion r allocates the burden of proof, the Policy’s choice-of-law
provision points us to New York law. The Court of Appeals of New
York has examined policy exclusion provisions that include excep-
tions. See Northville Indus. Corp. v. Nat’l Union Fire Ins. Co. of
Pittsburgh, 679 N.E.2d 1044 (N.Y. 1997). We find its analysis in-
structive.
      Northville Industries concerned general liability insurance
purchased by a gasoline-storage business. Id. at 1046. The policy
contained an exclusion provision barring coverage for damages
“arising out of the discharge, dispersal, release or escape of toxic
chemicals, liquids or other pollutants into or upon land but this ex-
clusion does not apply if such discharge, dispersal, release or escape
is sudden and accidental.” Id. (alterations adopted) (emphasis in
original). Two of the insured’s facilities released gasoline into the
groundwater. Id. Neighboring properties sued. Id. When the in-
sured sought coverage under the policy, the insurer refused, citing
the exclusion. Id. The insured brought a declaratory judgment
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16                     Opinion of the Court                 20-14517

action to establish that its insurer had an obligation to defend and
indemnify it. Id. On appeal, the Court of Appeals of New York had
to determine whether the exclusion foreclosed coverage. Id. at
1047–49. The court held that once the insurer showed the exclusion
precluded coverage, “the burden shift[ed] to the insured to demon-
strate” that an exception to the exclusion applied. Id. at 1048; see
also Ment Bros. Iron Works Co., v. Interstate Fire & Cas. Co.,
702 F.3d 118, 121 (2d Cir. 2012) (“Once the insurer establishes that
an exclusion applies, however, New York law has evolved to place
the burden of proof on the insured to establish the applicability of
an exception to the exclusion.” (emphasis in original)).
       The court’s analysis in Northville Industries is easily applied
to Exclusion r. Great Lakes had the burden to establish that Exclu-
sion r precluded the claim because the claim was for engine dam-
age. Then the burden shifted back to Wave Cruiser to prove that
the exception to Exclusion r applied because an accidental external
event caused the loss.
       To sum up, the Policy’s choice-of-law provision first points
us to federal admiralty law, which provides that under an all-risk
maritime insurance policy an insured has the initial burden to pro-
vide evidence that a fortuitous loss occurred within the policy pe-
riod. Morrison Grain Co., Inc., 632 F.2d at 430–31; Banco Nacional
De Nicaragua, 681 F.2d at 1339–40. The burden then shifts to the
insurer to demonstrate that an exclusion provision forecloses cov-
erage. Morrison Grain Co., Inc., 632 F.2d at 431. Federal admiralty
law is silent, however, when it comes to which party has the
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20-14517               Opinion of the Court                      17

burden to prove that an exception to the exclusion applies. In the
absence of governing federal admiralty law, the Policy’s choice-of-
law provision directs us to apply New York law, which places this
burden on the insured. Northville Indus. Corp., 679 N.E.2d at 1048.
We conclude that the district court did not err in placing the bur-
den on Wave Cruiser to prove that an external event caused the
engine failure, and therefore the damage fell within the exclusion’s
exception.
      2.     Summary Judgment was Appropriate Because Wave
             Cruiser Failed to Come Forward with Evidence that
             an External Event Caused the Engine Failure.
      Applying the burden shifting framework established by New
York law, we conclude that Wave Cruiser offered sufficient evi-
dence to meet its initial burden. Great Lakes then met its burden
under the framework to demonstrate that Exclusion r applied. But
Wave Cruiser failed to come forward with evidence to create a
genuine issue of material fact on the ultimate issue—on which it
bore the burden of proof at trial—of whether an external event
caused the engine failure.
        As an initial matter, Wave Cruiser had to demonstrate that
the vessel’s engine failure was a fortuitous loss under the Policy.
The evidence shows that a marine diesel technician performed a
2500-hour inspection on the engines and found them to be in great
shape. The vessel’s port “engine was operated seventeen hours be-
tween the time of survey and the time of engine failure.” Doc. 25-
5 at 2. The failure was “sudden and unexpected.” Id. In Morrison
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18                     Opinion of the Court                20-14517

Grain, we held that the insured demonstrated a fortuitous loss by
presenting evidence that the cargo was in good condition when the
ship departed and in a damaged condition when the ship arrived.
Morrison Grain, 632 F.2d at 431–33. Likewise, here, Wave Cruiser
presented evidence that the engine was in good condition at the
time the Policy attached and then stopped working unexpectedly.
This is enough at the summary judgment stage for Wave Cruiser
to meet its “not . . . particularly onerous” burden to provide evi-
dence of a fortuitous loss. Id. at 430.
        The burden then shifted to Great Lakes to establish that Ex-
clusion r applied. Because Exclusion r unambiguously precluded
coverage for damage to the vessel’s engine “unless caused by an
accidental external event,” Great Lakes met this burden by show-
ing that Wave Cruiser’s claimed loss was engine damage. Doc. 25-
1 at 6.
        Wave Cruiser then bore the burden to prove that the excep-
tion to the exclusion applied. “To survive summary judgment, the
nonmoving party bearing the ultimate burden of proof at trial must
come forward with evidence sufficient to withstand a directed ver-
dict motion.” Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d
1256, 1260 (11th Cir. 2004). Wave Cruiser did not present any evi-
dence identifying what caused the engine failure. Instead, Wave
Cruiser argues that the same evidence that satisfied its fortuitous-
loss burden also created a genuine dispute of material fact concern-
ing whether an external event caused the engine failure. We disa-
gree. To survive summary judgment on its fortuitous-loss burden,
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20-14517                   Opinion of the Court                              19

Wave Cruiser did not have to create a genuine dispute of material
fact concerning the “cause of the loss.” Morrison Grain, 632 F.2d at
430. But that is precisely what it had to do once the burden shifted
back to Wave Cruiser to prove that the exception to Exclusion r
applied. The evidence that the vessel received a 2500-hour inspec-
tion and was found to be in great shape says nothing about what
caused the engine failure; thus, it did not create a genuine dispute
of fact on this issue. To hold otherwise would collapse Wave
Cruiser’s two separate burdens into one, with the effect that Exclu-
sion r would, essentially, be read out of the Policy.
        Neither party in this case has submitted evidence of what
caused the engine failure. But Wave Cruiser had the burden at trial
to prove that an external event caused the port engine to fail.
“Where, as here, the non-moving party bears the burden of proof
on an issue at trial, the moving party” may prevail on summary
judgment by “show[ing] that the non-moving party has no evi-
dence to support its case[.]” Hammer v. Slater, 20 F.3d 1137, 1141
(11th Cir. 1994). Great Lakes has shown that Wave Cruiser has no
evidence that an external event caused the engine failure, so the
district court properly granted summary judgment to Great Lakes.7

7 Wave Cruiser argues that Allen testified that the engine failure had an exter-
nal cause, and that Great Lakes improperly changed this testimony with an
errata sheet. Great Lakes’ errata sheet sought to make four changes that sub-
stituted the word “external” for the word “internal” or made similar altera-
tions. Great Lakes maintains that the changes corrected transcription errors.
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20                          Opinion of the Court                        20-14517

B.      The Court Abused Its Discretion by Considering Expert
        Opinion Evidence from Allen, But this Error was Harmless.
       Wave Cruiser also argues that the district court abused its
discretion by considering expert opinion evidence from Allen’s sur-
vey reports and his deposition. Great Lakes withdrew Allen as an
expert witness, but the district court considered his testimony and
survey reports as lay opinion evidence under Federal Rule of Evi-
dence 701. We conclude that the district court abused its discretion
by considering Allen’s opinions, but this error was harmless.
       Under Federal Rule of Evidence 701, “a lay witness may of-
fer opinions that are: ‘(a) rationally based on the perception of the
witness, (b) helpful to a clear understanding of the witness’ testi-
mony or the determination of a fact in issue, and (c) not based on
scientific, technical, or other specialized knowledge within the
scope of Rule 702.’” United States v. Hill, 643 F.3d 807, 840–41 (11th
Cir. 2011) (quoting Fed. R. Evid. 701). “This rule of evidence is de-
signed to prevent parties from proffering an expert in lay witness
clothing by ensuring that testimony that is actually expert passes
the strictures of Rule 702.” Lebron v. Sec’y of Fla. Dep’t of Child.
& Fams., 772 F.3d 1352, 1372 (11th Cir. 2014) (internal quotation

“[A] change of substance which actually contradicts the transcript is impermis-
sible unless it can plausibly be represented as the correction of an error in tran-
scription, such as dropping a ‘not.’” Thorn v. Sundstrand Aerospace Corp., 207
F.3d 383, 389 (7th Cir. 2000). We need not decide which party is correct about
the errata, however, because, as we explain below, Wave Cruiser is correct
that Allen’s opinions on the cause of the engine failure are inadmissible.
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20-14517               Opinion of the Court                        21

marks omitted). Lay opinion testimony cannot “provide special-
ized explanations or interpretations that an untrained layman could
not make if perceiving the same acts or events.” United States v.
Peoples, 250 F.3d 630, 641 (8th Cir. 2001).
        In this case, the district court noted Allen’s observation re-
garding the clamshells found on the intake side of the pump and
his speculation that although “such marine organisms would re-
strict intake flow,” these clams likely did not since “there was no
evidence of the engine overheating.” Doc. 56 at 5. It also consid-
ered Allen’s opinion that the elongation of one of the engine’s con-
necting rods was the kind of damage that occurred over a period of
time. In addition, the district court took into account Allen’s opin-
ion that “there was excess friction at the cylinder one and six con-
necting rod journal and an internal engine failure did occur in this
area.” Doc. 56 at 6. The district court correctly considered Allen’s
testimony about the presence of clams and that the connecting rod
was elongated because this testimony was “based on [his] firsthand
knowledge” and observations. United States v. Rivera, 780 F.3d
1084, 1094 (11th Cir. 2015) (internal quotation marks omitted).
Likewise, it was within the district court’s discretion to consider
Allen’s statement that there was excess friction on cylinders one
and six because it, too, was based on his observations of the engine
parts. But the inferences Allen drew, that the clams did not cause
the engine to overheat and fail, that the elongation took place over
a period of time, and that the excess friction at cylinders one and
six was connected to the engine failure, “blurs into supposition and
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22                     Opinion of the Court                 20-14517

extrapolation [which] crosses the line into expertise.” Lebron, 772
F.3d at 1372. To be admissible, these opinions would have to be
based on “specialized knowledge.” Fed. R. Evid. 701. By his own
admission, Allen does not have specialized knowledge about the
engine in this case or internal combustion engines in general. The
district court therefore abused its discretion by considering Allen’s
opinions about the cause of the engine failure.
       Although the district court abused its discretion, we con-
clude that this error was harmless. The district court’s grant of
summary judgment to Great Lakes was appropriate because Wave
Cruiser failed to produce evidence to create a genuine dispute of
material fact concerning whether an external event caused the ves-
sel’s port engine failure. The inadmissibility of Allen’s opinions
does not change this.
                           IV.   CONCLUSION
        We conclude that (1) the district court did not err by placing
the burden on Wave Cruiser to provide evidence that an external
event caused the vessel’s port engine to fail, and (2) the district
court committed harmless error by considering inadmissible expert
opinion testimony. Accordingly, we affirm the judgment of the dis-
trict court.
       AFFIRMED.