                             PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                            No. 13-1495


AMERICAN STEAMSHIP OWNERS MUTUAL PROTECTION AND INDEMNITY
ASSOCIATION, INC.,

                Plaintiff - Appellant,

           v.

DANN OCEAN TOWING, INC., in personam; THE TUG CAPTAIN DANN,
in rem; DANN TOWING COMPANY,

                Defendants - Appellees.



Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Catherine C. Blake, District Judge.
(1:08-cv-02195-CCB)


Argued:   May 13, 2014                    Decided:    June 26, 2014


Before WILKINSON, KEENAN, and DIAZ, Circuit Judges.


Affirmed by published opinion. Judge Keenan wrote the opinion,
in which Judge Wilkinson and Judge Diaz joined.


ARGUED: David H. Fromm, BROWN GAVALAS & FROMM LLP, New York, New
York, for Appellant.    Allen K. von Spiegelfeld, BANKER LOPEZ
GASSLER, PA, Tampa, Florida, for Appellees.    ON BRIEF: Patrick
R. O'Mea, BROWN GAVALAS & FROMM LLP, New York, New York, for
Appellant. James W. Bartlett, III, Alexander M. Giles, SEMMES,
BOWEN & SEMMES, Baltimore, Maryland, for Appellees.
BARBARA MILANO KEENAN, Circuit Judge:

     In    this      appeal,    we     consider      whether     the    district     court

erred in concluding that a choice-of-law provision in a maritime

insurance contract required use of New York’s six-year statute

of limitations, rather than the equitable doctrine of laches

ordinarily      applied        under     maritime         law,   to     determine        the

timeliness      of     certain        claims       brought     under    the    insurance

contract.       Upon our review, we hold that the district court

properly    determined         that    the     choice-of-law        provision       in   the

parties’ contract required application of New York’s statute of

limitations to the claims at issue.                       Therefore, we affirm the

district court’s judgment.



                                             I.

     The     American       Steamship          Owners      Mutual      Protection        and

Indemnity Association, Inc. (the Club) is a non-profit provider

of protection and indemnity insurance, which insurance covers

vessel    owners      and   charterers         against       third-party      liabilities

arising from the ownership and operation of insured vessels.

Members    of   the    Club     pay    insurance        premiums      and   assessments,

which the Club uses to reimburse members for covered losses.

The Club issues to each of its members a Certificate of Entry,

which     reflects     that     the     member      has    entered     into     a   marine



                                               2
insurance contract with the Club subject to the Club’s By-Laws

and Rules (Rules).

      The     Club’s     Rules     include       a   choice-of-law       provision

selecting New York law and a two-year statute of limitations for

claims      against    the   Club,   in       addition    to    requirements     for

exhausting      insurance      disputes       and    selecting     a    forum    for

litigation.     The relevant section of the Rules reads as follows:


      If any difference or dispute shall arise between a
      Member and the [Club] concerning the construction of
      these Rules, or the insurance afforded by the [Club]
      under these Rules, or any amount due from the [Club]
      to the Member, such difference or dispute shall in the
      first instance be referred to and adjudicated by the
      Board of Directors.   No Member shall be entitled to
      maintain any action, suit or other legal proceedings
      against the [Club] upon any such difference or dispute
      unless and until the same has been submitted to the
      Directors and they shall have given their decision
      thereto, or shall have been in default for three
      months in so doing.   These Rules and any contract of
      insurance between the [Club] and a Member shall be
      governed by and construed in accordance with the law
      of the State of New York.   In no event shall suit on
      any claim be maintainable against the [Club] unless
      commenced within two years after the loss, damage or
      expense resulting from liabilities, risks, events,
      occurrences and expenditures specified under this Rule
      shall have been paid by the Member.     Any such suit
      against the [Club] shall be brought in the United
      States District Court for the Southern District of New
      York. (Emphasis added.)


      Dann Ocean Towing, Inc. (Dann) was a member of the Club

between 1995 and 2001.           Dann obtained insurance through the Club

for   a   tugboat,     which   damaged    a     barge    when   the    tugboat   ran


                                          3
aground on a coral reef in 1998.             The barge’s owner asserted a

claim against Dann for property damage, and the United States

asserted a claim against Dann for environmental damage to the

reef.   Dann settled both parties’ claims in November 2001 for a

total amount of $2,170,000.

      The Club originally agreed to contribute $1,170,000 toward

the settlement.        However, one of the underwriters for Dann’s

liability    insurance     became   insolvent       and       could    not    pay   its

portion of the settlement, in the amount of $278,552.55 (the

shortfall).         Although    both        Dann        and    the     Club     denied

responsibility for the shortfall, the Club paid the shortfall to

preserve     a   settlement    offer   that        it     considered        “extremely

favorable,” but indicated that the Club would seek reimbursement

from Dann.

      Dann refused to reimburse the Club for the shortfall.                          In

response,     the   Club   declined    to    reimburse         Dann    for     certain

insurance claims that otherwise would have been payable to Dann,

and withheld a total amount of $131,085.43 in covered losses

that the Club later used to offset the shortfall.                       Thereafter,

Dann refused to pay its insurance premiums to the Club for the

policy years 1999, 2000, and 2001.             The total amount of Dann’s

unpaid premiums was $452,610.23.

      In August 2008, the Club filed a civil action against Dann

and   the   tugboat,   alleging     that     Dann       breached      the    insurance

                                       4
contract by failing to reimburse the Club for the shortfall and

by failing to pay the overdue insurance premiums.                             Dann filed a

counterclaim against the Club, alleging that the Club breached

the insurance contract by failing to indemnify Dann for covered

losses.          The Club and Dann each alleged that the respective

claims against them were time-barred, posted $500,000 bonds as

security and counter-security for the various claims, 1 and filed

cross-motions for summary judgment.

       In August 2010, the district court initially ruled that the

equitable doctrine of laches, rather than New York’s six-year

statute          of     limitations       for    contract        claims,      governed     the

timeliness of the Club’s claims against Dann.                            The court found

that       all    the    Club’s    claims,       except       one   involving    an   unpaid

insurance premium in the amount of $76,925.56, accrued more than

six years before the Club filed suit.                          In its laches analysis,

the    court          concluded    that    the       Club’s    claim    relating      to   the

shortfall was not barred because the Club’s delay in filing suit

was    reasonable,          in    that    the    Club     made      various    out-of-court

attempts to obtain reimbursement from Dann and the delay did not

prejudice Dann.




       1
       Dann posted a $500,000 vessel release bond as security for
the claims against the tugboat, and the Club posted a $500,000
bond as counter-security for Dann’s claims.


                                                 5
       In May 2012, however, upon further briefing by the parties,

the district court reconsidered its ruling.                             The court observed

that    although      there         is    a     “typical      presumption        that     courts

sitting in admiralty jurisdiction apply the equitable doctrine

of laches rather than a specific statute of limitations,” the

choice-of-law        clause         in    the     parties’      contract        “compels    the

application        of     the            elected       jurisdiction’s            statute      of

limitations.”        Accordingly, the district court held that “claims

arising from the maritime insurance contract between [Dann] and

the    Club    are      subject          to     New    York’s     six-year       statute     of

limitations,” which barred all the Club’s claims except for the

one concerning the $76,925.56 premium.

       Because     the    parties’             contract       expressly        provided     that

claims brought against the Club were subject to an even shorter

two-year      limitation,           the       court    ruled    that     Dann’s       indemnity

claims   against        the    Club       were     time-barred         under    the     parties’

contract, but that those claims could be employed defensively

under the doctrine of recoupment to offset the entirety of the

Club’s    surviving       claim          for     the    $76,925.56       unpaid       insurance

premium.      Thus, although the court granted summary judgment to

the Club on its surviving unpaid insurance claim and dismissed

the    parties’      other      claims,          the    court    ultimately        held    that

“neither party can recover against the other,” granted Dann’s

motion   to    reduce         the    amount       of    its     bond    from     $500,000     to

                                                  6
$100,000, and directed that the case be closed.                     The Club timely

appealed.



                                          II.

        We consider on appeal whether the district court erred in

concluding that the timeliness of the Club’s contract claims

against    Dann    is    governed    by   New    York’s    six-year       statute    of

limitations       for    contract     actions,         based   on    the      parties’

agreement that the insurance contract “shall be governed by and

construed in accordance with the law of the State of New York.”

The Club contends that because this case arises under admiralty

jurisdiction,      the    district    court      was    required     to    apply    the

doctrine of laches as the procedural law of the maritime forum,

rather than New York’s statute of limitations.                    We disagree with

the Club’s argument.

     Laches is an equitable doctrine that can be raised by a

defendant as an affirmative defense to a claim, and requires

that the defendant show “(1) lack of diligence by the party

against whom the defense is asserted, and (2) prejudice to the

party asserting the defense.”              Giddens v. Isbrandtsen Co., 355

F.2d 125, 127 (4th Cir. 1966) (citation and internal quotation

marks    omitted).        In   assessing       the   timeliness     of    a   maritime

claim, the doctrine of laches typically applies rather than any

fixed statute of limitations.                  See id. at 126-27.             However,

                                           7
there are many examples of exceptions to this general rule, such

as statutory provisions that impose time bars on personal injury

actions arising out of maritime torts, see 46 U.S.C. § 30106, on

certain cargo loss contract claims under the Carriage of Goods

by Sea Act, see 49 Stat. 1207, 1209 (1936) (codified at 46

U.S.C. § 30701 note), and on maritime salvage actions, see 46

U.S.C. § 80107(c).

     In this case, the district court ultimately agreed with

Dann that parties to a maritime insurance contract may elect to

avoid the doctrine of laches by including in their contract an

enforceable choice-of-law provision that requires application of

another jurisdiction’s law and, implicitly, that jurisdiction’s

statute of limitations.            The court based its analysis on two

cases, namely, Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151

(11th     Cir.   2009),     and   Italia       Marittima,   S.P.A.       v.   Seaside

Transportation Services, LLC, 2010 WL 3504834 (N.D. Cal. Sept.

7, 2010) (unpublished).

     In    Cooper,    the    Eleventh   Circuit      considered      a    claim   for

indemnification and contribution brought by a ship owner against

a ship builder for injuries sustained by a worker on the ship.

The parties’ contract provided that “all disputes arising out of

or in connection with [the contract] . . . shall be construed in

accordance with and shall be governed by the Dutch law.”                          575

F.3d at 1162.        The court held that this provision was “clearly

                                           8
meant to be read broadly” and that the parties’ choice of Dutch

law governed not only the timeliness of pure contract claims,

but also the timeliness of the indemnification and contribution

action for related tort claims.            Id.

     Similarly, in Italia Marittima, a district court considered

claims for negligence and breach of contract arising from the

performance     of     stevedoring       services     aboard      a    vessel          that

sustained a loss of cargo during inclement weather.                           2010 WL

3504834, at *1-3.        The court held that California’s statutes of

limitations applied to both the breach of contract claims and

the negligence claims based on a choice-of-law provision in the

parties’ contract stating that the contract “shall be construed,

interpreted     and    enforced     in   accordance    with      the   laws       of    the

State of California without reference to the laws of any other

jurisdiction,      except    to    the   extent    that    the   laws,    rules         and

regulations of the United States of America shall apply.”                               Id.

at *8.     Because the choice-of-law clause clearly “promote[d]

California law,” and because laches is a common law doctrine

rather than codified federal law, the court reasoned that the

contract    required        application       of   California’s        statutes          of

limitations.     Id.

     We    do   not    discern     any   contrary     authority        preventing         a

federal    court      sitting     in   admiralty    from    enforcing         a    valid

choice-of-law provision in a maritime contract incorporating a

                                          9
statute of limitations, in place of the traditional doctrine of

laches.       Accordingly, we agree with the district court, and with

the reasoning of the decisions in Cooper and Italia Marittima,

that an otherwise valid choice-of-law provision in a maritime

contract       is   enforceable       and     may    require        application      of    a

jurisdiction’s statute of limitations, in lieu of the doctrine

of laches, to govern issues regarding the timeliness of claims

asserted under that agreement.

      We find no merit in the Club’s alternative argument that

the decisions in Cooper and Italia Marittima are distinguishable

because, in contrast to the provision before us, the choice-of-

law     clauses      interpreted      in     those     cases        were    sufficiently

detailed to incorporate the “procedural” rules in addition to

the   “substantive”          rules   of     the    chosen    jurisdictions.              Even

assuming that New York’s statute of limitations constitutes a

“procedural” rule of law in this context, the Club’s argument is

unpersuasive        because,     under      New     York     law,     we    must    accord

unambiguous provisions of an insurance contract their plain and

ordinary meaning.             See, e.g., White v. Cont’l Cas. Co., 878

N.E.2d    1019,      1021    (N.Y.    2007).        The     plain    language       of    the

contract      before    us     unambiguously        provides    that        the    contract

shall    be    “governed      by”    New    York    law.      This     phrase      clearly

signals    the      parties’    intent      that,    subject    to     any    exceptions

stated    in     the   contract,      New     York    law     will     be    applied      as

                                             10
“governing”       the     timeliness          of     claims        asserted      under       the

contract.         Because       the     claims       at    issue    in    this       case    are

contractual       in     nature       and     are    not    subject       to    the     stated

exception     for      claims     brought      against      the     Club,      the    parties’

choice-of-law          clause     amply       encompasses      the       present       claims.

Thus,   the   plain       language       of    the    parties’       contract        fails    to

contain any indication that the parties intended to preserve

application of the doctrine of laches for any claims brought

under the contract.

       Additionally, even if we were to assume, without deciding,

that    the   choice-of-law           provision       is    ambiguous       regarding        the

parties’ intent to incorporate New York’s statute of limitations

for    contract     actions,       we       would,    under       basic     principles       of

contract interpretation, resolve any such ambiguity against the

insurer and in favor of the insured party.                               See id. (stating

that if the terms in an insurance contract are ambiguous, any

ambiguity must be construed in favor of the insured and against

the insurer); see also McCarthy v. Am. Int’l Grp., Inc., 283

F.3d 121, 124 (2d Cir. 2002) (observing that under New York law,

courts construe ambiguities in insurance contracts against the

drafter).      Here, it is undisputed that the Club, as insurer,

supplied Dann with the contract of insurance and drafted the

Rules governing the parties’ insurance contract.                            Therefore, we

construe any ambiguity regarding the intended breadth of the

                                               11
choice-of-law   provision   against     the    Club   and   in   favor   of

applying New York’s statute of limitations to the Club’s claims

against Dann.



                                 III.

     Accordingly,   we   hold   that   the    district   court   correctly

applied New York’s six-year statute of limitations to the Club’s

claims arising under its maritime insurance contract with Dann.

We therefore affirm the district court’s judgment. 2

                                                                  AFFIRMED




     2
       In affirming the district court’s judgment, we also affirm
the court’s decision granting Dann’s motion to reduce the amount
of its bond.     Although Dann requested in its brief that we
discharge the bonds posted by both parties, we do not address
this issue because Dann did not seek a full discharge of the
bonds from the district court in the first instance, and did not
appeal the district court’s order.     Therefore, Dann’s request
for relief is not properly before us on appeal.


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