St. Paul Fire & Marine Ins. v. Abhe & Svoboda, Inc., No. 14-2234 (8th Cir. 2015)
Annotate this CaseAbhe, an industrial painting contractor, used stationary leased barges as platforms while painting Pell Bridge over Narragansett Bay. Abhe changed insurance carriers three months into the project. St. Paul Fire did not request that Abhe complete an application, but accepted the application provided to its previous insurer in 2010. The attached schedule of vessels was outdated and did not include vessels leased for the Pell Bridge project. Abhe sent St. Paul an updated schedule in 2011, listing those vessels, but did not provide a 2010 survey that showed that one barge had non-watertight bulkheads. St. Paul did not attempt to survey any of the equipment, as it was entitled to do under the policy. After the barge sunk in a storm, St. Paul denied Abhe’s claims and sought a declaration that the policy was void under the doctrine of uberrimae fidei, which requires that parties to an insurance contract accord each other the highest degree of good faith. Abhe counterclaimed, alleging negligence. The district court granted St. Paul summary judgment, finding the package policy void because Abhe failed to disclose the survey. The Eight Circuit remanded, stating that reliance is an element of the defense, and that there are disputed issues of fact as to whether it is satisfied.
Court Description: Colloton, Author, with Wollman and Beam, Circuit Judges] Civil Case - diversity. District court's grant of summary judgment to insurer, concluding the insurance policy was void ab initio because insured breached its duty of good faith under the doctrine of uberrimae fidei, is reversed. The showing of actual reliance and objective materiality are necessary elements to void an insurance policy under the doctrine of uberrimae fidei. Because there were genuine issues of material fact as to whether the insurer relied of the insured's failure to disclose information about the lack of watertight bulkheads and the value of the vessel, the grant of summary judgment is reversed.
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