IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 9, 2009
No. 08-60898 Charles R. Fulbruge III
Clerk
GREAT LAKES REINSURANCE (UK) PLC
Plaintiff-Appellant
v.
DURHAM AUCTIONS INC.
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
Before KING, GARWOOD and DAVIS, Circuit Judges.
GARWOOD, Circuit Judge.
This case is before us on a certified question under 28 U.S.C. § 1292(b).
An administration panel of this court previously granted the motion of the
parties for leave to appeal under F ED. R. A PP. P. 5. The appeal presents choice
of law questions respecting a marine insurance policy.
Plaintiff-appellant, Great Lakes Reinsurance (UK) PLC (“Great Lakes”),
a United Kingdom non-admitted surplus lines insurer, brought this action in the
district court below against defendant-appellee, Durham Auctions, Inc.
(“Durham”), a Mississippi Corporation with its principal place of business in
Mississippi, to declare void a policy of marine insurance Great Lakes had issued
No. 08-60898
to Durham. The policy covered the vessel “Time Out,” a 48 foot, diesel powered,
model 1979, “Pacemaker” motor yacht, owned by Durham.
Jurisdiction was founded on 28 U.S.C. § 1333(1), admiralty or maritime
jurisdiction. The policy covered the period November 8, 2004, to November 8,
2005, and provided principally hull and protection and indemnity coverage in
respect to the vessel (only the hull coverage is involved here). Durham
counterclaimed for recovery under the policy for loss of the vessel when it sank
in September 2005 while moored in Cedar Lake, Mississippi. The vessel was
normally berthed at Biloxi, Mississippi, and was used by the owners of Durham,
and their family and friends, for sports fishing and general pleasure use in the
Gulf Coast area. The policy quotation provides, in part, “Warranted Private and
Pleasure use only. Navigating Inland & Gulf Coast USA and Gulf of Mexico not
exceeding 100 miles offshore.”
Durham had initially acquired the vessel in November 2002 in Florida,
and promptly moved it across the Gulf, under its own power, to Mississippi,
where it was berthed thereafter. The vessel was apparently insured by another
insurer from November 2002 to November 2004.
To acquire the Great Lakes policy, Durham went through its Mississippi
agent, which in turn retained a Florida broker which in turn retained a United
Kingdom broker, to whom Great Lakes issued the policy and who then delivered
the policy to the Mississippi agent, who delivered it to Durham.1 The policy
expressly provides that the insured may serve process on the insurer by serving
specified attorneys at their stated New York City addresses and that in any such
1
The policy stated: “It is hereby agreed that your brokers or any substituted brokers
(whether surplus line approved or otherwise), shall be deemed to be exclusively the agents of
you and not of us in any and all matters relating to, connected with or affecting this
insurance.”
2
No. 08-60898
suit on the policy “the Underwriters will abide the final decision of the Court or
any Appellate court in the event of an appeal.”2
Great Lakes moved for summary judgment asserting that the policy was
voided at its inception by material misrepresentations by Durham in the
insurance application, which the policy incorporates, including
misrepresentations and failures to disclose concerning the purchase price paid
by Durham for the vessel, its loss history and status of repairs,3 and breaches of
express policy warranties concerning the condition of the vessel and related
matters.4
2
The policy states:
“(a) It is further agreed that the Assured may serve process upon any senior
partner in the firm of:
Goldman & Hellman
730 Fifth Avenue, 9th Floor
New York
NY 10019
and that in any suit instituted against any one of them upon this
contract the Underwriters will abide by the final decision of the Court
or any Appellate Court in the event of an appeal.
(b) The above named are authorised and directed to accept service of process
on behalf of Underwriters in any such suit and/or upon request of the
Assured to give written undertaking to the Assured that they will enter
a general appearance upon the Underwriters behalf in the event such a
suit shall be instituted.”
3
The policy provides that it “is null and void in the event of non-disclosure or
misrepresentation of a fact or circumstance material to our acceptance or continuation of this
insurance. No action or inaction by us shall be deemed a waiver of this provision.” It further
states that “[t]his insuring agreement incorporates in full your application for insurance . . .
.”
4
Other policy provisions include the following: “This insuring agreement does not cover
any loss or damage caused by your failure to exercise due diligence properly to manage the
scheduled vessel or maintain it in a seaworthy condition” and that:
“Unless we agree in writing to the contrary, if we request a survey of the
3
No. 08-60898
Particularly relevant to this appeal is the policy’s “CHOICE OF LAW”
provision, reading as follows:
“It is hereby agreed that any dispute arising hereunder shall be
adjudicated 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
the state of New York.”
In its motion for summary judgment, Great Lakes relied on this clause and
on the maritime law doctrine of uberrimae fidei.5 Great Lakes recognized,
scheduled vessel then such survey must be received by us within 30 days of the
effective date of this agreement. If the survey makes any recommendations
with respect to the scheduled vessel, then it is an express warranty of this
agreement that all such recommendations are completed prior to any loss giving
rise to any claim hereunder, by skilled workmen using fit and proper materials
and that either,
(1) The surveyor who carried out the survey certifies in writing that all
recommendations have been completed to his (the surveyors) satisfaction prior
to any loss and/or claim
Or,
(2) The workmen/repair yard that carried out the said work and/or
recommendations certifies in writing that all recommendations have been
completed prior to any loss and/or claim. Failure to comply with this warranty
will void this agreement from inception.”
5
2 SCHO ENBAUM , ADM IRALTY AND MARITIM E LAW (4th Ed., 2004) generally describes
this doctrine as follows:
“Marine insurance is a contract “uberrimae fidei”, requiring the utmost
good faith by both parties to the contract. Often the insurer lacks the
practicable means to verify the accuracy or sufficiency of facts provided by the
insured for purposes of establishing the contractual terms. Consequently, the
doctrine uberrimae fidei imposes the highest degree of good faith. The assured
is bound, although no inquiry be made, to disclose every fact within his
knowledge that is material to the risk.
Failure by the assured to disclose all available information will allow the
insurer to avoid the policy. In marine insurance, contrary to the general rule
applicable to other kinds of insurance, any misrepresentation or omission to
communicate a material fact will vitiate the policy whether such omission is
intentional or results from mistake, accident, forgetfulness, or inadvertence.
Moreover, this representation and disclosure requirement in marine insurance
utilizes a broad definition of materiality in defining which facts necessitate
4
No. 08-60898
however, that in Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 75 S.Ct. 268
(1955), the Court held that, because there was no “judicially established federal
admiralty rule governing” the warranties at issue in the insurance policy
covering the fire damaged vessel in that case, id. at 370, the federal courts
should not “attempt to fashion an admiralty rule governing [those] policy
provisions.” Id. at 373-74. The case was accordingly remanded “for a trial under
appropriate state law.” Id. at 374. And, Great Lakes further recognized that in
Albany Ins. Co. v. Kieu, 927 F.2d 882 (5th Cir. 1991), this court held “albeit with
some hesitation, that the uberrimae fidei doctrine is not ‘entrenched federal
precedent’” so that, under the Supreme Court’s Wilburn Boat opinion, state law,
rather than federal uberrimae fidei, applied. Kieu at 889.6 Accordingly, Great
Lakes took the position that even if the first clause of the policy’s above
“CHOICE OF LAW” provision, concerning “well established, entrenched
principles and precedents of substantive United States Federal Admiralty law
and practice” did not apply, nevertheless the second clause thereof, calling for
application of “the substantive laws of the state of New York” would apply, and
further, that “New York law echoes the doctrine of uberrimae fidei as described.”
The district court denied Great Lakes’ motion for summary judgment. It
ruled that Mississippi law, not uberrimae fidei nor New York law, applied. As to
New York law, the court observed that “the parties have not made it sufficiently
disclosure. A fact is material if, to a prudent insurer, its existence would affect
decisions on the risk assumed. The policy may be in a proper form, yet a
showing of lack of the utmost good faith as required under the doctrine of
uberrimae fidei will void the contract ab initio or even after the risk has
attached.”
Id. at 297-300 (footnotes omitted).
6
We went on to say in Kieu: “This Court does not hold that federal maritime law no
longer embraces the uberrimae fidei doctrine . . . Neither does this Court hold that state
insurance law always will supercede the uberrimae fidei doctrine.” Id. at 890.
5
No. 08-60898
clear that New York has any substantial relationship to the parties or the
transaction, or that there is any other reasonable basis for this choice of law.”
The court went on to hold that there were genuine issues of material fact as to
whether certain misrepresentations by Durham (including representing the
purchase price of the vessel as $150,000 when it was actually $100,000) were
material and that Durham’s failure to disclose certain matters was not grounds
for policy cancellation because under Mississippi law there was no such duty as
to matters not specifically inquired about although recognizing that the duty to
disclose was not so limited under uberrimae fidei.7
Thereafter, Great Lakes filed a Motion in Limine to declare choice of law,
requesting that the court rule that, pursuant to the policy’s choice of law
provision the applicable law was that of New York, or, alternatively, that Kieu
was wrongly decided and that uberrimae fidei was firmly entrenched federal
precedent and should be applied either as such or under the choice of law
provision. In support of this motion, Great Lakes submitted an affidavit
reflecting that: Great Lakes, a United Kingdom business entity with its
principal place of business in the United Kingdom, maintained its agent for
service of process in New York; that New York was the first state in which Great
Lakes was approved as a surplus lines carrier; that Great Lakes maintains its
United States Trust Fund account in New York; and that “Great Lakes’ most
substantial relationship in the United States is with the state of New York.”
The district court denied this motion, and subsequent motion for
reconsideration, essentially ruling that it had already determined the issue on
its denial of Great Lakes’ motion for summary judgment and the evidence and
7
The district court had previously correctly denied Durham’s motions to dismiss based
in part on Durham’s erroneous theory that since state law applied under Wilburn Boat that
there was no admiralty jurisdiction under 28 U.S.C. § 1333(1). See Wilburn Boat, 75 S.Ct. at
370 (“Since the insurance policy here sued on is a maritime contract the Admiralty Clause of
the Constitution brings it within federal jurisdiction.”).
6
No. 08-60898
arguments thereafter submitted by Great Lakes were too late. We note,
however, that there was no grant of summary judgment, partial or otherwise, as
to whether uberrimae fidei or New York or Mississippi law applied, nor had there
been any pretrial conference or any pretrial order under Rule 16, F ED. R. C IV. P.,
relating thereto, and hence the choice of law issue remained open for trial on the
merits.
Subsequently, and prior to any pretrial order under Rule 16, Great Lakes
and Durham filed with the district court their joint motion for certification of an
interlocutory appeal under section 1292(b). They advised the district court that
they had reached a bracketed settlement agreement contingent only upon the
resolution on appeal of the choice of law issue, and requested the court to certify
under section 1292(b) its rulings on Great Lakes’ motion for summary judgment,
its motion in limine to declare choice of law and its motion for reconsideration
insofar as they addressed that issue. The district court granted the motion,
stating in its order that,
“According to the Joint Motion, the parties have reached a
bracketed settlement agreement contingent only upon the outcome
of the choice of law issue on appeal. . . . [t]he sole remaining issue to
be determined is the applicable law.
...
This Court’s earlier opinions addressed several issues relevant
to the choice of law question. The parties’ settlement agreement is
contingent only upon the outcome of the choice of law issue on
appeal; specifically whether Mississippi law, New York law or the
General Maritime Law doctrine of Uberrimae Fidei, governs the
parties’ rights under a contract of marine insurance. The parties
have agreed to submit the choice of law issue based upon the
current record, having stipulated that the record of the District
Court is complete as to all factual contentions relevant to this
determination, and have further agreed not to ask the Court of
7
No. 08-60898
Appeals to remand the case for further proceedings at the trial court
level.8
At oral argument the parties confirmed that pursuant to their bracketed
settlement agreement, their motion and the district court’s order, the only issue
to be resolved is whether, on the basis of the current record, the applicable
substantive law is, on the one hand, Mississippi law, in which event Durham will
receive from Great Lakes a specified settlement amount, or, on the other hand,
is either the General Maritime law doctrine of Uberrimae Fidei or New York law,
in which event Durham will receive from Great Lakes, a different (lesser)
specified settlement amount.9 The parties have made it clear that we are called
upon only to determine whether either Uberrimae Fidei or New York law, not
which one, is applicable rather than Mississippi law.
DISCUSSION
Great Lakes contends that we should invoke the first clause of the policy’s
choice of law provision, calling for application of “well established, entrenched
principles” of federal admiralty law, and thus should apply uberrimae fidei
because it is such a principle. Recognizing that this is contrary to our decision
in Kieu, Great Lakes contends that we should overrule Kieu because it was
wrongly decided and stands alone among the circuits which have considered that
8
The district court’s order further provides that the orders certified “involve controlling
questions of law as to which there is substantial ground for difference of opinion and that an
immediate appeal from these rulings will materially advance the ultimate termination of the
litigation.”
9
The agreement of the parties provides that “after completing their rights on appeal,
the parties will return to the trial court only for the purpose of entering a final order of
dismissal.”
8
No. 08-60898
issue.10 However, it is settled that one panel of this court may not overrule
another.
We turn, thus, to Great Lakes’ alternative contention, namely that, under
the final clause of the policy’s “Choice of Law” provision, New York law applied.
We agree with this contention. Assuming that the first provision of the
policy’s choice of law clause does not apply because, under Kieu, uberrimae fidei is
not considered a well established maritime law principle, then the second
provision of the policy’s choice of law clause applies and properly calls for the
application of new York law. Kieu is not to the contrary. As Kieu states, “the
court in maritime cases must apply general federal maritime choice of law rules.”
Id. at 890 (emphasis added; citing Gonzalez v. Naviera Neptuno A.A., 832 F.2d
876, 880 n.3 (5th Cir. 1987), where we said “[a]lthough a federal court
customarily applies the forum’s choice of law analysis, sitting in admiralty, we
apply admiralty choice of law.”). Kieu went on to apply the “most significant
relationship approach” applying the factors set out in Restatement (Second) of
Conflict of Laws § 188. Kieu, however, did not involve a choice of law clause in
the maritime insurance policy at issue there. We also note that section 188(2)
of the Restatement, listing the relevant factors to be considered, commences by
stating “[i]n the absence of an effective choice of law by the parties (see § 187).”
Generally speaking, under section 187(1) the law of the jurisdiction chosen by
10
See, e.g., AGF Marine Aviation Transport v. Cassin, 544 F.3d 255, 263 (3d Cir. 2008)
(“The Fifth Circuit is the only circuit to disavow the doctrine of uberrimae fidei as not
‘entrenched federal precedent’”); Certain Underwriters At Lloyd’s v. Inlet Fisheries, 518 F.3d
645, 653 (9th Cir. 2008) (“Not surprisingly, no other circuit has followed Anh Thi Kieu . . . .).
See also, e.g., the following stating that uberrimae fidei is entrenched maritime law: HIH
Marine Services Inc. v. Fraser, 211 F.3d 1359, 1362 (11th Cir. 2000); Knight v. U.S. Fire Ins.
Co., 804 F.2d 9, 13 (2d Cir. 1986); SCHO ENBAUM , note 5 supra, and at 297 n.1 (“The duty of
good faith is well established as the federal maritime law rule in marine insurance. . . . In
summary, the principle of good faith is alive and well despite the Fifth Circuit’s decision in
Anh Thi Kieu”); G. Gilmore & C. Black, Law of Admiralty 62 (2nd Ed. 1975) (“The marine
insurance contract is uberrimae fidei. . .”).
9
No. 08-60898
the parties will be applied to the issue in question if the parties could have
resolved the issue by an explicit provision in their agreement directed to that
issue. Even if that is not the case, the law of the chosen jurisdiction will still
apply unless either of conditions (a) and (b) following is met, viz (a) the chosen
state has no substantial relationship to the parties or the transaction, and “there
is no other reasonable basis for the parties’ choice,” or (b) the application of the
chosen state’s law “would be contrary to a fundamental policy of a state” whose
law would be the applicable law determined under the section 188 analysis in
the absence of an effective choice of law by the parties.11
Under federal maritime choice of law rules, contractual choice of law
provisions are generally recognized as valid and enforceable. Thus,
S CHOENBAUM states: “A choice of law provision in a marine insurance contract
11
Section 187 states:
Ҥ 187. Law of the State Chosen by the Parties
(1) The law of the state chosen by the parties to govern their contractual rights
and duties will be applied if the particular issue is one which the parties could
have resolved by an explicit provision in their agreement directed to that issue.
(2) The law of the state chosen by the parties to govern their contractual rights
and duties will be applied, even if the particular issue is one which the parties
could not have resolved by an explicit provision in their agreement directed to
that issue, unless either
(a) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties’ choice,
or
(b) application of the law of the chosen state would be contrary to
a fundamental policy of a state which has a materially greater
interest than the chosen state in the determination of the
particular issue and which, under the rule of § 188, would be the
state of the applicable law in the absence of an effective choice of
law by the parties.
(3) In the absence of a contrary indication of intention, the reference is to the
local law of the state of the chosen law.”
10
No. 08-60898
will be upheld in the absence of evidence that its enforcement would be
unreasonable or unjust.” Id. at 276. See also id. at 283 (same). The identical
choice of law provision as that involved in this case was likewise before the Third
Circuit in AGF Marine Aviation & Transport v. Cassin, 544 F.3d 255, 262 (3d
Cir. 2008). The court specifically invoked this provision in holding that New
York law applied to the issue of whether a loss payee could recover
independently of the insured, there being no well established admiralty principle
governing that particular issue. Id. at 265 & n.9. Other courts are in accord.
Thus, in Chan v. Society Expeditions, Inc., 123 F.3d 1287 (9th Cir. 1997), the
Ninth Circuit stated:
“In the absence of a contractual choice-of-law clause, federal courts
sitting in admiralty apply federal maritime choice-of-law principles
derived from the Supreme Court’s decision in Lauritzen v. Larsen,
345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953), and its progeny.
See Sundance Cruises Corp. v. The American Bureau of Shipping,
7 F.3d 1077, 1081 (2d Cir. 1993); see also S CHOENBAUM § 6-13, at
280-82. But where the parties specify in their contractual
agreement which law will apply, admiralty courts will generally give
effect to that choice. See Milanovich v. Costa Crociere, S.p.A., 954
F.2d 763, 767 (D.C. Cir. 1992). The D.C. Circuit has held,
[C]ourts should honor a contractual choice-of-law
provision in a passenger ticket unless the party
challenging the enforcement of the p r o v i s i o n c a n
establish that enforcement would be unreasonable and
unjust, the clause was invalid for such reasons as fraud
or overreaching, or enforcement would contravene a
strong public policy of the forum in which suit is
brought.
Id. at 768 (internal quotations omitted).”12
12
The Chan court went on to hold that even though, in the absence of a choice of law
clause in the maritime contract involved, another jurisdiction’s law would have been
applicable, the choice of law provision in the contract nevertheless controlled. Id. at 1296-97.
11
No. 08-60898
This court has likewise recognized and enforced maritime contract choice
of law provisions. In Stoot v. Fluor Drilling Services, Inc., 851 F.2d 1514 (5th
Cir. 1988), we considered a suit based on an indemnity clause contained in a
contract by which D&D Catering, a Louisiana corporation, the designated
indemnitor, agreed to provide catering services to Fluor Drilling on diverse
offshore drilling rigs. We held that the district court correctly determined that
the contract was a maritime one and that the indemnity provisions were
generally governed by maritime law, under which they were valid. However, we
held that the district court erred by not applying the Louisiana Oilfield Anti-
Indemnity Statute, which voids such indemnity provisions, because the contract
stated that Louisiana law governed, viz:
“In the absence of a choice of law clause, the construction of
indemnity provisions in a contract involving maritime obligations
is governed by maritime law. . . . However, under admiralty law,
where the parties have included a choice of law clause, that state’s
law will govern unless the state has no substantial relationship to
the parties or the transaction or the state’s law conflicts with the
fundamental purposes of maritime law. Hale v. Co-Mar Offshore
Corp., 588 F. Supp. 1212, 1215 (W.D. La. 1984).” Id. at 1517.13
13
The cited passage in Hale v. Co-Mar Offshore Corp., reads as follows (id., 588 F.
Supp. at 1215):
“Under admiralty law, the law of the state chosen by the parties to govern their
contractual rights and duties will be applied unless either (a) the chosen state
has no substantial relationship to the parties or the transaction and there is no
other reasonable basis for the parties’ choice, or (b) application of the law of the
chosen state would be contrary to a fundamental policy of the jurisdiction which
would provide the rule of decision for the particular issue involved in the
absence of an effective contrary choice of law by the parties.4
4. See Restatement (Second) of Conflict of Laws § 187(2) (1971);
cf. The Bremen v. Zapata Offshore Co., 407 U.S. 1, 10, 15, 92
S.Ct. 1907, 1913, 32 L.Ed.2d 513 (1972) (a choice of forum clause
is valid unless it is either unreasonable or contrary to a strong
public policy of the forum in which suit is brought).”
In Hale, Noble Drilling, an Oklahoma corporation, contracted with Anadarko Production to
12
No. 08-60898
We hold that Durham has not carried its burden of showing that
application of New York law, as provided in the policy, would be unreasonable
or unjust. There is no showing that the fact that Great Lakes, a United
Kingdom entity whose most substantial relationship in the United States is with
New York, where it maintains its agent for service of process (as also reflected
in the policy) and its United States Trust Fund account, does not constitute a
reasonable basis for the choice of New York law to govern its marine insurance
policy providing hull coverage to an ocean going vessel expected to travel up to
100 miles offshore along the United States Gulf Coast and the Gulf of Mexico.
Nor is there any showing that New York law conflicts with any fundamental
purpose of maritime law. While New York insurance law apparently does apply
uberrimae fidei, and, under Kieu, that doctrine is not “entrenched federal
precedent,” nevertheless Kieu expressly does not hold that that federal maritime
law no longer embraces the uberrimae fidei doctrine. Id. at 890. To hold that New
York law, because it applies uberrimae fidei, conflicts with any fundamental
purpose of maritime law, would be to unduly extend Kieu and to run counter to
the great weight of authority which has embraced that doctrine in maritime
insurance cases. See note 10 supra. And, as applied to hull insurance on a
vessel sailing the high seas, such a holding would also seem to be in considerable
tension, if not fundamentally inconsistent, with the rationale of Kossick v.
United States, 81 S.Ct. 886 (1961).
conduct drilling operations on a fixed platform on the Outer Continental Shelf off the coast of
Texas. The contract provided that Anadarko indemnify Noble for claims against Noble by
employees of Anadarko or its subcontractors, without regard to Noble’s negligence. The
contract stated that the parties’ rights would be determined according to Oklahoma law. The
court held that the underlying claim in question arose from a separable maritime obligation
under the drilling contract and that under maritime law the Oklahoma choice of law provision
was valid and enforceable. As to claims that the Texas Anti-Indemnity statute would arguably
apply, the court noted that “the critical inquiry focuses not upon Texas law and policy, but
upon maritime law and policy.” Id. at 1214.
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No. 08-60898
Durham argues that application of new York law would be contrary to
fundamental policy of Mississippi. Assuming, arguendo, that this would be
determinative, it has not been shown. Durham cites nothing to support that
view except section 83-5-7, Mississippi Code of 1972.14 That statute, however,
does not expressly speak to any relevant substantive rule concerning insurance
policies or choice of law. The only case cited by either party concerning the
statute is Hartford Accident & Indemnity Co. v. Delta & Pine Lane Co., 54 S.Ct.
634 (1934), cited by Great Lakes. There the United States Supreme Court
reversed the Mississippi Supreme Court’s decision, 150 So. 205 (Miss. 1933),
holding, apparently in partial reliance on section 83-5-7, that, in a Mississippi
suit on a fidelity bond for a Mississippi corporation’s loss in Mississippi,
Mississippi law applied to invalidate the time to sue restrictions stated in the
bond, not withstanding that the bond was issued and delivered in Tennessee
where the restrictions were valid. The United States Supreme Court held this
application of Mississippi law violated the due process rights of the bonding
company. What apparently drove the result in the Mississippi Supreme Court
was the Mississippi statute (section 2294, Code of 1930) providing that
contractual stipulations purporting to change the limitations periods prescribed
by the Mississippi Code were void. Id., 84 S.Ct. at 635. There is no Mississippi
statute which speaks to anything in this case analogously to the role of section
2294 in the Hartford case. To the extent that section 83-5-7 impliedly addresses
Mississippi conflict of law rules, it is not controlling because in this marine
14
§ 83-5-7. Situs of contract.
It shall be unlawful for any company to make any contract of insurance
upon or concerning any property or interest or lives in this state, or with any
resident thereof, or for any person as insurance agent or insurance broker to
make, negotiate, solicit, or in any manner aid in the transaction of such
insurance unless and except as authorized under the provisions of this chapter.
All contracts of insurance on property, lives, or interests in this state shall be
deemed to be made therein.”
14
No. 08-60898
insurance case it is maritime, not state, conflict of law rules that govern.15 We
also note that Durham has not demonstrated that any relevant principle of New
York law would produce as to any particular issue in this case a result which the
parties could not have validly resolved (under Mississippi or general maritime
law) by an explicit provision in the policy directed to that issue. For example,
Durham has not shown that the policy could not have validly expressly provided
that the obligation to disclose extended to known facts material to the risk
whether or not specifically inquired about by the insurer.
CONCLUSION
In conclusion, our answer to the certified question is that either the
general maritime law doctrine of uberrimae fidei or New York law, rather than
Mississippi law, governs the parties’ rights under the instant marine insurance
policy.16
QUESTION ANSWERED, CAUSE REMANDED
15
Moreover, and in any event, we observe the Mississippi Supreme Court has clearly
indicated the propriety of applying the choice of law provision stated in an insurance policy.
See Zurich American Ins. Co. v. Goodwin, 920 So. 2d 427, 435 n.7 (Miss. 2006) (en banc) (in
a prior Mississippi Supreme Court decision “Illinois law applied not because that was where
the contract [insurance policy] was issued but because the parties included a choice of law
provision in their contract making such an analysis unnecessary”).
16
The cause is remanded to the district court for purpose of entry of judgment of
dismissal on motion of the parties pursuant to their agreement (see note 9, supra).
15