Fireman’s Fund Ins. Co. v. Great Am. Ins. Co., No. 14-1346 (2d Cir. 2016)Annotate this Case
Fireman’s Fund, Great American, and MSI issued insurance policies that provided various coverages for a dry dock in Port Arthur, Texas owned by Signal. After the dry dock sank in 2009, Signal and Fireman’s Fund sought contributions from Great American and MSI for the loss of the dry dock and resulting environmental cleanup costs. The district court ruled that the Great American and MSI policies were void in light of Signal’s failure to disclose when it applied for those policies that the dry dock had significantly deteriorated and that repairs recommended by a number of consultants and engineers over several years had not been made. MSI and Signal settled and now Fireman's Fund contends that it may still pursue appeal of the issues relating to the policy issued to Signal by MSI based on the court's decision in Maryland Cas. Co. v. W.R. Grace & Co. The court held that the Great American policy was a marine insurance contract subject to the doctrine of uberrimae fidei and that Signal’s nondisclosure violated its duty under that doctrine, permitting Great American to void the policy. The court also held that MSI’s policy was governed by Mississippi law; that, under that law, Signal materially misrepresented the dry dock’s condition; and that MSI was entitled to void the policy on that basis. Accordingly, the court affirmed the district court's finding that the policies were void.