[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
DEC 26, 2006
Nos. 05-14979 & 06-12160
THOMAS K. KAHN
________________________
CLERK
D.C. Docket No. 03-61857-CV-MGC
NORTHERN INSURANCE COMPANY OF NEW YORK,
Plaintiff-Counter Defendant-
Appellant,
versus
CRAIG LAMM,
Defendant-Counter Claimant-
Appellee,
CHARTER ONE BANK, N.A.,
Defendant-Appellee.
________________________
Appeals from the United States District Court
for the Southern District of Florida
________________________
(December 26, 2006)
Before EDMONDSON, Chief Judge, BARKETT and COX, Circuit Judges.
PER CURIAM:
In these consolidated appeals, Northern Insurance Company of New York
(“Northern”) appeals the district court’s denial of its motion for summary judgment,
grant of summary judgment to Craig Lamm and Charter One Bank, N.A. (collectively,
“Defendants”), and awards of attorneys’ fees to Defendants. The district court held
that Northern had breached its insurance contract with Lamm and required Northern
to pay Defendants, under the policy, for the loss that resulted when Lamm’s vessel
caught fire and sank. It also held that Defendants were entitled to attorneys’ fees
pursuant to Illinois law, Federal Rule of Civil Procedure 37, and the bad faith
exception to the American Rule in Admiralty. We affirm.
Northern’s arguments that Lamm breached his common law and contractual
duties to disclose to Northern that he intended to travel to Cuba such that Northern
should not be obligated to cover the loss of Lamm’s vessel are unpersuasive. The
district court did not err in finding that Lamm’s conduct did not void the policy and
that the policy was merely suspended during the time that the vessel was in Cuban
waters. (No. 05-14979 R. 2-135 at 7; No. 05-14979 R.3-201 at 4.) Because (as
Northern conceded at trial) the vessel was not in Cuban waters but rather within the
navigation limits of the policy at the time of loss, coverage was in force at the time
of the loss.
2
Northern argues that the district court erred in finding that the policy term
“illegal” was ambiguous. We do not address this question because the district court
found that there was insufficient proof of “illegal” activity and none of the allegedly
“illegal” activity was material to the risk of loss or related in any way to the loss
suffered. (No. 05-14979 R.3-201 at 12-14). Therefore, whatever the meaning of
“illegal,” the allegation that Lamm was engaged in that conduct is no defense to
liability under the policy.
Northern argues that Defendants were not entitled to attorneys’ fees pursuant
to any of the authorities relied upon by the district court. In adopting the reports and
recommendations of the magistrate judge, the district court found that Northern had
demonstrated vexatious and unreasonable conduct and bad faith in denying coverage
and litigating frivolous coverage-related issues. (No. 05-14979 R.4-222, 236, 248;
No. 06-12160 R.1-256.) We find no clear error in these factual findings and therefore
find no abuse of discretion in the awards of attorneys’ fees to Defendants. (We have
considered the argument that there was legal error in the award to Charter One, and
we reject it.)
3
Lamm has filed motions for attorneys’ fees and costs incurred in these appeals.
The motions are GRANTED; we REMAND to the district court for determination of
the amount of fees and costs due.1
JUDGMENTS AFFIRMED; MOTIONS FOR ATTORNEYS’ FEES AND
COSTS INCURRED ON APPEAL GRANTED AND REMANDED.
1
Lamm’s motion to file an appendix is GRANTED.
4