U.S. Court of Appeals for the Fourth Circuit, Foodbuy, LLC v. Gregory Packaging, Inc., Docket No. 19-1692

 

Distribution Agreement

Supplier Agreement (The “Agreement”)

Non-Exclusive Commercial Relationship

Group Purchasing Organization (“GPO”)

Contract Drafting

Contract Interpretation: Custom or Usage

 

Unfair and Deceptive Trade Practice

Unfair Competition

Consumer Law

North Carolina Law

 

 

GPI manufactures juice cups, which it supplies to institutions like schools and hospitals. Foodbuy is a Group Purchasing Organization (“GPO”), which pools institutional purchasers so that their aggregated buying power can be used as leverage to negotiate favorable pricing with manufacturers. From 2011 through 2015, GPI and Foodbuy were engaged in a non-exclusive commercial relationship, which was memorialized in a supplier agreement (the “Agreement”). That Agreement lies at the heart of this dispute.

 

(…) The third way GPI (and similar manufacturers) sells its products—which is the most relevant here—is known as a “GPO sale.” As with a direct deal, the customer pays the distributor directly, but does so at the GPO-negotiated price rather than a price negotiated directly with the manufacturer. When supplying the customer, the distributor deviates to that price. The GPO then invoices GPI for a “volume allowance” rebate for each case of juice sold. The GPO passes along some—but not all—of that allowance to the customer. As a result, the customer’s net price is the GPO-negotiated price minus the portion of the volume allowance that GPO passes along to it.

 

Consistent with this industry practice, Foodbuy and GPI negotiated the Agreement in 2011. Under its terms, GPI agreed to pay Foodbuy a volume allowance based on the quantity of its products purchased “through the Foodbuy program at the Foodbuy price” by Committed Customers through Foodbuy Distributors. GPI also contracted to pay Foodbuy various “growth incentives” based on incremental increases in GPI’s products purchased by Committed Customers through Foodbuy Distributors. Under the Agreement, Foodbuy invoiced GPI for the allowance due each month based on data it received from Foodbuy Distributors.

 

The Agreement defined “Committed Customer” as “a client of Foodbuy that has agreed in writing to authorize Foodbuy to negotiate the commercial terms of purchasing contracts on its behalf or has outsourced all or a portion of its purchasing functions to Foodbuy by written agreement.” J.A. 1559. Significantly, Committed Customers were allowed to buy “off-contract,” outside of Foodbuy’s program. Thus, Foodbuy customers could buy at other pricing when a better option was available to them, when they had a direct deal, or when a certain distributor was out of stock for a product and they had to go to another distributor. Indeed, on occasion, distributors would offer better pricing than the Foodbuy price.

The Agreement also contained a non-solicitation provision in Section 18, which provided:

During the term of this Agreement, absent prior written consent from Foodbuy, GPI will refrain from (i) soliciting any Foodbuy Committed Customer to procure products from GPI outside of the Committed Customer’s relationship with Foodbuy, or (ii) otherwise arranging any procurement relationship, directly, with any Committed Customer, wherein GPI procures products for such Committed Customer.

J.A. 1561–62. At trial, one of Foodbuy’s witnesses testified that it included the solicitation ban because it did not want GPI “going directly to the Committed Customer without Foodbuy’s written consent and engaging them directly and excluding Foodbuy from the commercial relationship.” J.A. 821.

 

(…) (Citing Bank of Am., N.C. v. Old Republic Ins. Co. 4 F. Supp. 3d 790, 796 (W.D.N.C. 2014) (“A custom or usage may be proved in explanation and qualification of terms of a contract which otherwise would be ambiguous.”)). “The evidence showed both Foodbuy and GPI approached the negotiation and decision to enter into the Agreement as actors intimately familiar with the usual and standard practices of the food service industry.” And “the evidence showed the custom and practice of the industry is that a volume allowance is not owed for cases of product sold outside of a GPO’s (Foodbuy’s) program. Indeed, that is why ‘off-contract’ is an industry term.”

 

(…) As a result, the court held that Foodbuy had breached the Agreement by charging GPI for every case of juice sold regardless of whether it was purchased through the Foodbuy program.

 

Unfair and deceptive trade practice under North Carolina law?

Under the UDTPA, commercial entities can pursue treble damages against parties who commit unfair and deceptive trade practices or unfair methods of competition. To succeed on such a claim, the plaintiff must show that the defendant committed: “‘(1) an unfair or deceptive act or practice, or an unfair method of competition; (2) in or affecting commerce; (3) which proximately caused actual injury to the plaintiff or to his business.’”

 

McLamb v. T.P. Inc., 619 S.E.2d 577, 582 (N.C. Ct. App. 2005). “‘A practice is unfair when it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.’” Walker v. Fleetwood Homes of N.C., Inc., 653 S.E.2d 393, 399 (N.C. 2007). A practice is deceptive if it has a “tendency or capacity to deceive.” RD & J Props. v. Lauralea-Dilton Enters., LLC, 600 S.E.2d 492, 501 (N.C. Ct. App. 2004). Though “‘a mere breach of contract, even if intentional, is not sufficiently unfair or deceptive to sustain an action under’” the UDTPA, North Carolina courts have consistently held that a party may demonstrate and prove such a claim in conjunction with a breach of contract claim if it can show substantially aggravating and egregious circumstances attending the breach. See, e.g., Post v. Avita Drugs, LLC, No. 17-CVS-798, 2017 WL 4582151, at *4 (N.C. Super. Oct. 11, 2017). Examples of such aggravating and egregious behavior include: (1) lying and concealing a breach combined with acts to deter further investigation; and (2) intentional deception for the purpose of continuing to receive the benefits of an agreement.

 

(…) The UDTPA is not a tort; it is “‘the creation of statute’” and “‘neither wholly tortious nor wholly contractual in nature.’” Bernard v. Cent. Carolina Truck Sales, Inc., 314 S.E.2d 582, 584 (N.C. Ct. App. 1984) (alteration omitted). To the contrary, “an unfair and deceptive trade practices claim . . . is a different legal creature and not subject to the same defenses as traditional contract and tort claims.” Media Network, Inc. v. Long Haymes Carr, Inc., 678 S.E.2d 671, 683 (N.C. Ct. App. 2009).

 

Turning to the question of aggravating circumstances, we also agree with GPI that the court erred in conflating GPI’s UDTPA and fraud claims. “The elements required to be proved for fraud claims are dissimilar from those required under the UDTPA. Fraud contains elements of subjectivity of the perpetrator (intent) and the victim (actual reliance) . . . . UDTPA claims require neither intent of the actor nor actual reliance of the victim.” CBP Res., Inc. v. SGS Control Servs., Inc., 394 F. Supp. 2d 733, 740 (M.D.N.C. 2005); accord Marshall v. Miller, 276 S.E.2d 397, 401 (N.C. 1981) (explicitly rejecting any possible implication that a party must show bad faith in order to recover treble damages for a violation of the UDTPA). “Furthermore, what constitutes an unfair and deceptive trade practice is a matter of law and requires less burdensome elements of proof than fraud.” CBP Resources, Inc., 394 F. Supp. 2d at 740.

 

 

(U.S. Court of Appeals for the Fourth Circuit, Feb 1, 2021, Foodbuy, LLC v. Gregory Packaging, Inc., Docket No. 19-1692, Published)

Swiss Customs Tariff Information - HS - Tares

 

Swiss Customs Tariff Information

The content is available in German, French or Italian

 

https://www.ezv.admin.ch/ezv/fr/home/infos-pour-entreprises/tarif-des-douanes---tares/renseignements-en-matiere-de-tarif.html

 

Swiss Customs Website, Republication

 

Renseignements en matière de tarif

L'Administration fédérale des douanes fournit sur demande des renseignements tarifaires contraignants. Le traitement s'effectue dans l'ordre chronologique de réception des demandes. Le renseignement est habituellement fourni dans les 40 jours si toutes les indications requises sont présentes.

Il n'appartient pas à l'administration des douanes de donner des renseignements tarifaires pour des gammes complètes de marchandises.

Les demandes de renseignements tarifaires doivent être soumises exclusivement par courrier électronique (mailto: tarifauskunft@ezv.admin.ch) à l'aide du questionnaire
40.10 - Demande de classement (voir ci-dessous > Services > 40.10 Demande de classement).

Les indications suivantes sont nécessaires:

• description de la marchandise avec indication
  -  de sa nature et de son état d'ouvraison,
  -  de son conditionnement (notamment de son emballage) et
  -  de son emploi;
• pour les marchandises composées de plusieurs matières: la composition avec la proportion en poids (%) de chaque constituant;
• liens internet ainsi que références à la littérature spécialisée;
• photos de bonne qualité (haute résolution);
• catalogues (ou extraits de ces derniers), prospectus, modes d'emploi, fiches de produit, plans, informations concernant le procédé de fabrication ainsi que tout autre document utile.

Il ne faut pas envoyer d'échantillons, ceux-ci seront réclamés si nécessaire par l'administration des douanes. En cas de doute, il est recommandé de prendre préalablement contact avec l'autorité compétente selon le tableau ci-après. 

Caractère contraignant

En principe, les renseignements tarifaires ne sont donnés que sur la base des indications fournies. D'un point de vue juridique, les renseignements tarifaires fournis par écrit ne constituent pas des décisions. Ils ne comportent par conséquent pas d'indication des voies de droit et ne sont pas susceptibles de recours.

Outils disponibles permettant de déterminer le classement tarifaire

Sur Internet, le tarif douanier électronique (Tares; www.tares.ch), la liste des positions tarifaires, le tarif général ainsi que diverses circulaires et informations sont à disposition. Le Tares contient en outre des liens vers les documents «Décisions de classement des marchandises» et «Notes explicatives du tarif».

 

Union européenne (PDF, 322 kB, 15.01.2018)Adresses des autorités douanières fournissant des renseignements tarifaires contraignants

U.S. Court of Appeals for the Eleventh Circuit, Acrylicon USA, LLC v. Silikal GmbH, Docket No. 17-15737

 

Distribution Agreement

 

Licensing Agreement

 

Trade Secret

 

Contract Drafting

 

Remedies:

 

Money Recovery for Both Unjust Enrichment and Actual Damages

 

Direct and Consequential Damages

 

Lost Profits

 

Liquidated Damages

 

Nominal Damages

 

Georgia Law

 

Evidence: Videotaped Depositions

 

 

 

The agreement provided that AC-USA and its affiliate, AcryliCon International, Ltd. (“AC-International”), would be Silikal’s exclusive distributors of 1061 SW and that Silikal would not sell the resin without AcryliCon’s written permission.

 

According to AC-USA, Silikal breached the agreement by selling 1061 SW without its written permission, so it sued Silikal under common law for breach of contract (“Contract” claim) and under the Georgia Trade Secrets Act of 1990 (“GTSA”) for misappropriation of the shared trade secret (“Misappropriation” claim).

 

In 2008, AC-USA was incorporated. That same year, AC-USA entered into a licensing agreement with two affiliates of AC-International—Raliz AG and AcryliCon Distribution Est.—that gave AC-USA the right to import, market, and sell « AcryliCon Systems » in the United States, including the 1061 SW resin. AC-USA was not permitted to sell AcryliCon Systems outside of the United States without permission from AC-International.

 

AC-USA’s Contract claim is based on Paragraph 5 of the GSA Contract, titled “Confidentiality and Use of 1061 SW.” Paragraph 5 provides in full:

Silikal represents and warrants that it has not disclosed the formula for 1061 SW resin or sold or distributed 1061 SW resin, directly or indirectly, to anyone other than AcryliCon during the pendency of the Silikal/AcryliCon relationship. Silikal hereby covenants and agrees that it will preserve the secrecy of the formula for the 1061 SW resin. Silikal will not disclose or use in any way, directly or indirectly, the 1061 SW resin or formula for the 1061 SW resin. Silikal further covenants and agrees NOT to sell or distribute 1061 SW resin to anyone other than AcryliCon, or as expressly permitted in writing by AcryliCon. Within 10 days of this Settlement Agreement, Silikal shall ship by DHL to Bjorn Hegstad . . . all laboratory records and other available documents regarding the formulation and development of the 1061 SW resin.

 

(…) AC-USA presented the testimony of seven witnesses via videotaped depositions.

 

To prove a claim for misappropriation of trade secrets under the GTSA, a plaintiff must show that “(1) it had a trade secret and (2) the opposing party misappropriated the trade secret.” Penalty Kick Mgmt. Ltd. v. Coca Cola Co., 318 F.3d 1284, 1290–91 (11th Cir. 2003).

O.C.G.A. § 10–1–761(2) reads in full: (2) “Misappropriation” means:

(A) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

(B) Disclosure or use of a trade secret of another without express or implied consent by a person who:

(i) Used improper means to acquire knowledge of a trade secret;

(ii) At the time of disclosure or use, knew or had reason to know that knowledge of the trade secret was:

(I) Derived from or through a person who had utilized improper means to acquire it;

(II) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

(III) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or

(iii) Before a material change of position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

 

(…) Silikal’s violation of the duties created by the GSA Contract gave AC-USA a claim for breach of contract, not for misappropriation of a trade secret.

 

(…) Silikal argues in its supplemental brief that the District Court erred in entering the revised judgment for AC-USA on its Contract claim because AC-USA failed to prove actual damages from Silikal’s breach. We agree, and hold that AC-USA is instead entitled only to an award of nominal damages.

 

(…) Actual damages for breach of contract, by contrast, “are given as compensation for the injury sustained as a result of the breach of a contract.” O.C.G.A. § 13–6–1 (emphasis added). The fundamental difference between restitution and actual damages, therefore, is that the former is measured by the defendant’s gain, while the latter is measured by the plaintiff’s loss. Dan B. Dobbs, Law of Remedies § 4.1(1), at 555 (2d ed. 1993).

 

A plaintiff who proves misappropriation of a trade secret under O.C.G.A. § 10–1–763 may recover money for both unjust enrichment and actual damages.

 

Actual damages under Georgia law may be direct or consequential. Direct damages “arise naturally and according to the usual course of things from the breach.” Denny v. Nutt, 375 S.E.2d 878, 879 (Ga. App. 1988) (quoting Quigley v. Jones, 334 S.E.2d 664, 665 (Ga. 1985)). Consequential damages, by contrast, arise “as the probable result of the breach.” Id. The key distinction between direct damages and consequential damages is that the former compensate for the value of the promised performance, while the latter compensate for additional losses incurred as a result of the breach. See Imaging Systems Int’l., Inc. v. Magnetic Resonance Plus, Inc., 490 S.E.2d 124, 127 (Ga. Ct. App. 1997) (noting that consequential damages “may include profits which might accrue collaterally as a result of the contract’s performance,” while direct damages “may include profits necessarily inherent in the contract”).

 

A plaintiff may not recover consequential damages for breach unless such damages are within the contemplation of the parties at the time the contract was made, are “capable of exact computation,” and “are independent of any collateral enterprise entered into in contemplation of the contract.” O.C.G.A. § 13–6–8.

 

Lost profits that are not part of the benefit of the bargain may be recovered as consequential damages. Imaging Systems Int’l., 490 S.E.2d at 127. However, “the profits of a commercial business are dependent on so many hazards and chances, that unless the anticipated profits are capable of ascertainment, and the loss of them traceable directly to the defendant’s wrongful act, they are too speculative to afford a basis for the computation of damages.” Johnson Cnty. School Dist. v. Greater Savannah Lawn Care, 629 S.E.2d 271, 273–74 (Ga. Ct. App. 2006). Accordingly, a plaintiff seeking lost profits must provide “information or data sufficient to enable the trier of fact to estimate the amount of the loss with reasonable certainty.” Bearoff v. Craton, 830 S.E.2d 362, 373 (Ga. Ct. App. 2019) (quoting Pounds v. Hosp. Auth. Of Gwinnett Cnty., 399 S.E.2d 92, 94 (Ga. Ct. App. 1990). “This ‘information or data’ must include evidence showing that the business claiming lost profits had ‘a proven track record of profitability.’” Id. (quoting EZ Green Associates v. Georgia-Pacific Corp., 770 S.E.2d 273, 277 (Ga. Ct. App. 2015)). “The plaintiff must also show the expected profit for the relevant time period” including “the business’s projected revenues, as well as its projected expenses, for that time frame.” Id. (quoting Johnson Cnty., 629 S.E.2d at 274).

 

(…) In line with this principle, we note that while Georgia law enforces provisions for liquidated damages, O.C.G.A. § 13–6–7, it only does so to the extent such provisions are not penal in nature, Broadcast Corp. of Ga. v. Subscription Television of Greater Atlanta, 338 S.E.2d 775, 776–77 (Ga. Ct. App. 1985). A provision for liquidated damages will be treated as an unenforceable penalty unless (1) the injury caused by the breach is difficult or impossible to accurately estimate; (2) the parties intended to provide for damages rather than a penalty; and (3) the stipulated sum is a reasonable pre-estimate of the probable loss resulting from the breach. Southeastern Land Fund v. Real Estate World, 227 S.E.2d 340, 343 (Ga. 1976). “Where a designated sum is inserted into a contract for the purpose of deterring one or both of the parties from breaching it, it is penalty.” Broadcast Corp. of Ga., 338 S.E.2d at 777 (quoting Florence Wagon Works v. Salmon, 68 S.E. 866, 866 (Ga. Ct. App. 1910)).

 

If a plaintiff proves a breach of contract but fails to prove actual damages, the plaintiff “may recover nominal damages sufficient to cover the costs of bringing the action.” O.C.G.A. § 13–6–6.

 

Georgia law permits recovery of attorney’s fees “where authorized by some statutory provision or by contract.” Smith v. Baptiste, 694 S.E.2d 83, 87 (Ga. 2010).

An award of nominal damages is sufficient to make the plaintiff a prevailing party. King v. Brock, 646 S.E.2d 206, 207 (Ga. 2007).

 

 

(U.S. Court of Appeals for the Eleventh Circuit, January 26, 2021, Acrylicon USA, LLC v. Silikal GmbH, Docket No. 17-15737, Publish)

 

 

U.S. Court of Appeals for the First Circuit, QBE Seguros v. Carlos A. Morales-Vázquez, Docket No. 19-1503

 

Maritime Law

 

Admiralty

 

Marine Insurance Contracts

 

Doctrine of Uberrimae Fidei

 

Duty of Utmost Good Faith

 

Warranty of Truthfulness

 

False Statement

 

Actual Reliance is Not a Necessary Prerequisite for an Insurer to Void a Marine Insurance Policy under the Doctrine of Uberrimae Fidei

 

Materiality of a False Statement or an Omission, Without More, Provides a Sufficient Ground for Voiding Such a Policy

 

Waiver and Estoppel May Be Affirmative Defenses

 

Should Federal or State Common Law Apply?

 

English Admiralty Law

 

 

This appeal involves a dispute between a boat owner (who purchased a policy of marine insurance without disclosing, among other things, a prior grounding) and his insurance company. Resolving the appeal requires us to revisit the doctrine of uberrimae fidei — an entrenched principle of maritime law that imposes a duty of utmost good faith on the parties to marine insurance contracts. Concluding, as we do, that the district court faithfully applied this doctrine, we affirm the entry of judgment in favor of the insurer.

 

As part of his application for this insurance policy, Morales left blank the spaces provided for answers to questions asking him to describe his prior boating history and all accidents related to any vessel he had previously owned, controlled, and/or operated.

 

He omitted the remaining information called for by section six even though the application form plainly stated that "if incorrect answers are provided (either by error, omission or neglect), I will be in breach of this warranty and the policy, if issued, will be void from inception."

 

We think it useful to start by sketching the evolution of the doctrine of uberrimae fidei. The Latin phrase "uberrimae fidei" loosely translates as "utmost good faith." See Black's Law Dictionary (10th ed. 2014). As relevant here, the doctrine requires parties to a marine insurance contract to disclose all known facts or circumstances material to an insurer's risk. See Windsor Mount Joy Mut. Ins. Co. v. Giragosian, 57 F.3d 50, 54-55 (1st Cir. 1995). Under the doctrine, an insurer may void a marine insurance policy if its insured fails to disclose "all circumstances known to the insured and unknown to the insurer" that materially impact the insurer's risk calculus. Caitlin at Lloyd's v. San Juan Towing & Marine Servs., Inc., 778 F.3d 69, 83 (1st Cir. 2015) (emphasis in original); cf. Stipcich v. Metro. Life Ins. Co., 277 U.S. 311, 316 (1928) (holding to like effect with respect to certain contracts outside marine insurance context).

 

The origins of the doctrine can be traced back to eighteenth-century London, which was — and remains — a global insurance hub. In its nascent form, the doctrine applied to a myriad of insurance contracts across a wide swath of industries. As early as 1766, Lord Mansfield recognized that insurance contracts impose a heightened duty of good faith to prevent a party from omitting or concealing facts that would induce the counterparty "into a bargain, from his ignorance." Carter v. Boehm (1766) 97 Eng. Rep. 1162, 1164 (K.B.). Such a requirement was rooted in practical wisdom, recognizing that an insurer often lacked the ability to verify the insured's representations before issuing a policy. See Thomas J. Schoenbaum, Admiralty and Maritime Law § 19:14, at 460 (6th ed. 2018). This practical wisdom still rings true when applied to marine insurance — an industry in which, for example, a policy may have to be issued in London, on a time-sensitive basis, for a vessel berthed halfway across the globe.

 

American courts first recognized the doctrine of uberrimae fidei in connection with marine insurance contracts in the early nineteenth century. See McLanahan v. Universal Ins. Co., 26 U.S. (1 Pet.) 170, 185 (1828). In 1882, the Supreme Court confirmed the strict disclosure requirements that the doctrine imposed on an insured. See Sun Mut. Ins. Co. v. Ocean Ins. Co., 107 U.S. 485, 510-11 (1883).

 

For some time, American and English law concerning marine insurance continued to develop in parallel through a parade of judicial decisions. Parliament, however, codified the by-then-venerable doctrine of uberrimae fidei by including it in the Marine Insurance Act of 1906 (1906 MIA). See Marine Insurance Act 1906, 6 Edw. 7 c. 41, § 17 (U.K.). Congress, however, remained silent; and American courts continued to develop their own federal common law of admiralty and continued to interpret marine insurance policies as incorporating, by implication, the doctrine of uberrimae fidei. See, e.g., San Juan Towing, 778 F.3d at 82; N.Y. Marine & Gen. Ins. Co. v. Cont'l Cement Co., 761 F.3d 830, 839 (8th Cir. 2014); AGF Marine Aviation & Transp. v. Cassin, 544 F.3d 255, 263 (3d Cir. 2008); Certain Underwriters at Lloyd's, London v. Inlet Fisheries Inc., 518 F.3d 645, 650 (9th Cir. 2008); HIH Marine Servs., Inc. v. Fraser, 211 F.3d 1359, 1362 (11th Cir. 2000); Puritan Ins. Co. v. Eagle S.S. Co. S.A., 779 F.2d 866, 870 (2d Cir. 1985).

 

Parliament lately adopted a number of insurance reforms. As relevant here, Parliament passed the Insurance Act of 2015, which (among other things) effectively amended the 1906 MIA to preclude an insurer from voiding a marine insurance policy by recourse to the doctrine of uberrimae fidei. See Insurance Act 2015, c.4, § 14 (U.K.) ("Any rule of law permitting a party to a contract of insurance to avoid the contract on the ground that the utmost good faith has not been observed by the other party is abolished."). Even so, Congress did not follow Parliament's lead.

 

This lack of congressional action is significant. As the federal common law of admiralty developed, the Supreme Court acknowledged that congressional silence left room for courts, among others, to fill the vacuum. See Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 321 (1955) ("We, like Congress, leave the regulation of marine insurance where it has been — with the States.").

 

(This means, of course, that questions sometimes arise in maritime cases as to whether federal or state common law should apply. See San Juan Towing, 778 F.3d at 76-80. Here, however, the parties present their uberrimae fidei arguments exclusively in terms of federal common law, and we therefore may accept the parties' plausible view that federal common law supplies the substantive rules of decision. Cf. Borden v. Paul Revere Life Ins. Co., 935 F.2d 370, 375 (1st Cir. 1991) (holding that, in diversity jurisdiction, court may accept parties' plausible agreement as to which state's law applies).)

 

Standard Oil offers us two important takeaways. First, American courts are not bound by legal developments in the United Kingdom. And even though the Standard Oil Court was speaking of judicial decisions, we think it follows, a fortiori, that acts of Parliament are equally non-binding. Second, although harmony between American and English admiralty law is desirable, "our practice is no more than to accord respect to established doctrines of English maritime law." The respect accorded by American courts to English maritime law stems from the wisdom of the particular doctrine, not from either the acceptance or the rejection of that doctrine by Parliament. It follows, we think, that federal courts tasked with hearing admiralty cases should take heed of developments in English law, but they are not obliged to change course merely because Parliament acts to alter a previously entrenched principle.

 

(…) We have never held that actual reliance is a necessary prerequisite for an insurer to void a marine insurance policy under the doctrine of uberrimae fidei. Rather, we have held that the materiality of a false statement or an omission, without more, provides a sufficient ground for voiding such a policy.

 

(If the named insured has, before or after a loss made a false statement or representation with respect to this insurance or has concealed or misrepresented any material fact or circumstance relating to this insurance, this policy shall be void and without effect. The false statement or representation or concealment need not be related to the damages or loss claimed in order to void the entire policy.

This language embodies the core of the uberrimae fidei
that omission or misrepresentation of a material fact is a sufficient ground, in and of itself, to allow an insurer to void a policy of marine insurance).

 

(…) Contractual requirements may operate as affirmative defenses. For example, waiver and estoppel may be affirmative defenses to a claim that an insured has committed a breach of a policy warranty.

 

 

Secondary sources: Thomas J. Schoenbaum, Admiralty and Maritime Law § 19:14, at 460 (6th ed. 2018); Thomas J. Schoenbaum, The Duty of Utmost Good Faith in Marine Insurance Law: A Comparative Analysis of American and English Law, 29 J. Mar. L. & Com. 1, 11 (1998).

 

 

(U.S. Court of Appeals for the First Circuit, Jan 19, 2021, QBE Seguros v. Carlos A. Morales-Vázquez, Docket No. 19-1503)