               Case: 18-12105       Date Filed: 12/17/2019       Page: 1 of 18


                                                                                 [PUBLISH]



                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                    No. 18-12105
                              ________________________

                      D.C. Docket No. 8:16-cv-02329-JDW-MAP



GEICO MARINE INSURANCE COMPANY,

                                                                        Plaintiff-Appellant,

                                            versus

JAMES SHACKLEFORD,

                                                                       Defendant-Appellee.

                              ________________________

                      Appeal from the United States District Court
                          for the Middle District of Florida
                            ________________________

                                   (December 17, 2019)

Before WILLIAM PRYOR, MARTIN, and KATSAS, * Circuit Judges.

WILLIAM PRYOR, Circuit Judge:


       *
          Honorable Gregory G. Katsas, United States Circuit Judge for the District of Columbia
Circuit, sitting by designation.
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      This appeal requires us to decide whether damage to a yacht was covered

under a marine insurance policy. Geico Marine Insurance Company insured James

Shackleford’s 65-foot sailboat, Sea the World. After a storm damaged the vessel in

Florida, Geico Marine denied Shackleford’s claim under the policy. Geico Marine

then filed a declaratory-judgment action against Shackleford. As one ground for

relief, Geico Marine sought a declaration that a navigational limit in the policy that

required the vessel to be north of Cape Hatteras, North Carolina, during hurricane

season barred coverage. After a bench trial, the district court ruled against Geico

Marine and declared that the policy covered the loss. Because we agree with Geico

Marine that the navigational limit bars coverage, we reverse and remand.

                                I. BACKGROUND

      Shackleford purchased the Sea the World in 2009. He paid about $120,000

for the vessel, and at one point he planned to sail her around the world. But those

plans never came to pass.

      In 2011, lightning struck the vessel. Shackleford took the vessel to Sailor’s

Wharf, a yacht yard in St. Petersburg, Florida, for repairs. But Sailor’s Wharf only

made matters worse. It improperly hauled the vessel from the water and improperly

“blocked” the vessel while storing it on shore, which caused structural damage to

the ship’s hull.

      Shackleford filed an insurance claim with Continental Insurance Company,



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which insured the Sea the World then. In 2014, Continental declared the vessel a

constructive total loss, settled Shackleford’s claim, and canceled the policy.

Continental also waived its subrogation rights and assigned its interest in any claim

against Sailor’s Wharf to Shackleford.

         In 2015, Shackleford sued Sailor’s Wharf for breach of its repair contract.

Shackleford v. Sailor’s Wharf, Inc., No. 8:15-cv-00407-VMC-TBM (M.D. Fla.

filed Feb. 26, 2015). As part of discovery in that litigation, Shackleford arranged to

have the vessel hauled ashore for inspection by expert witnesses at Taylor

Boatworks, a boatyard in Cortez on Florida’s west coast. But before Taylor

Boatworks would haul the vessel from the water, it required Shackleford to obtain

liability insurance on the vessel.

         In March 2016, Shackleford obtained a liability-only policy from Geico

Marine, which insured several of his other watercraft. The policy did not insure the

hull of the vessel against damage but did permit navigation. The General

Conditions section provided the following terms of coverage:

         Where Covered
         Coverage is provided:
         A.   While the boat is afloat within the navigational area shown on
              the Declarations Page; and
         B.   While the boat or its equipment is ashore or being transported
              by land conveyance in the United States or Canada.

The accompanying declarations page, in turn, included the following navigational

limit:

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      CRUISING LIMITS: While afloat, the insured Yacht shall be
      confined to the waters indicated below:
      (There is no coverage outside of this area without the Company’s
      written permission.)
      U.S. Atlantic and Gulf Coastal waters and inland waters tributary
      thereto between Eastport, ME and Brownsville, TX, inclusive and the
      waters of the Bahamas including the Turks and Caicos, however the
      boat must be north of Cape Hatteras, NC from June 1 until November
      1 annually.

      The day after the policy issued, Shackleford asked Geico Marine to change

the policy to “Port Risk Ashore.” That restriction provides no coverage for

navigation; instead, it provides coverage only while the vessel is out of the water.

Geico Marine issued an endorsement and updated declarations page adding the

restriction that same day. Because coverage now applied only if the vessel was

ashore, the updated declarations page removed the original navigational limit that

required the vessel to be north of Cape Hatteras during hurricane season if afloat.

      With the Port Risk Ashore restriction in place, Taylor Boatworks hauled the

vessel ashore so that Shackleford’s expert marine surveyor could inspect her in

connection with the Sailor’s Wharf litigation. Following the inspection,

Shackleford concluded that the damage to the vessel’s hull was less severe than he

originally believed and that the vessel was worth repairing. So he made plans to

sail her from Taylor Boatworks on the west coast of Florida to Fort Lauderdale on

the east coast, where she would undergo extensive repairs.

      In May 2016, Shackleford called Geico Marine to seek removal of the Port



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Risk Ashore restriction so he could sail the vessel to Fort Lauderdale. He also

confirmed that the policy now insured the vessel’s hull for $264,000 and that the

vessel had “full coverage” for the voyage. On May 27, 2016, Geico Marine sent

Shackleford an email confirming that it had removed the Port Risk Ashore

restriction. Attached to the email was an endorsement removing the restriction and

an updated declarations page. The updated declarations page reinstated the original

navigational limit that required the vessel “[w]hile afloat” to be “north of Cape

Hatteras, NC from June 1 until November 1 annually.” Shackleford testified that

he never requested or discussed such a navigational limit with Geico Marine and

that he does not recall seeing the updated declarations page before departing for

Fort Lauderdale.

      On May 28, one day after Geico Marine removed the Port Risk Ashore

restriction and reinstated the navigational limit, Shackleford set sail from Taylor

Boatworks to Fort Lauderdale. After arriving in Fort Lauderdale, Shackleford

anchored the vessel in nearby Lake Sylvia. In June 2016, a storm caused the vessel

to drag anchor and drove her into a sea wall, leading her to take on water and

suffer other damage. Shackleford filed a claim under his insurance policy, but

Geico Marine denied coverage.

      After denying coverage, Geico Marine filed a declaratory-judgment action

against Shackleford, 28 U.S.C. § 2201, and invoked admiralty jurisdiction, id.



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§ 1333. Geico Marine sought a declaration that the policy was void ab initio under

the maritime doctrine of uberrimae fidei, or utmost good faith, because

Shackleford failed to disclose material facts about the vessel when procuring

insurance. And it sought a declaration that coverage was barred by the policy’s

navigational limit, which required the vessel to be north of Cape Hatteras, North

Carolina, during hurricane season.

      Following a bench trial, the district court ruled against Geico Marine on both

counts and declared that the policy covered Shackleford’s loss. As to uberrimae

fidei, the district court ruled that the parties contracted out of the doctrine and that,

even if the doctrine applied, Shackleford did not omit any material facts when

procuring insurance. As to the navigational limit, it ruled that the policy did not

contain a navigational limit at the time of the loss and that, if it did, Geico Marine

implicitly waived the limit when it agreed that Shackleford could sail the vessel to

Fort Lauderdale in late May. Geico Marine challenges both rulings.

                          II. STANDARDS OF REVIEW

      In an appeal from a judgment following a bench trial, we review the

conclusions of law de novo and the factual findings for clear error. U.S.

Commodity Futures Trading Comm’n v. S. Tr. Metals, Inc., 894 F.3d 1313, 1322

(11th Cir. 2018). “Questions of contract interpretation are pure questions of law,”

so we review the interpretation of an insurance contract de novo. Tims v. LGE



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Cmty. Credit Union, 935 F.3d 1228, 1237 (11th Cir. 2019).

                                 III. DISCUSSION

      Marine insurance contracts qualify as maritime contracts, which fall within

the admiralty jurisdiction of the federal courts and are governed by maritime law.

AIG Centennial Ins. Co. v. O’Neill, 782 F.3d 1296, 1302 & n.6 (11th Cir. 2015)

(citing U.S. Const. art. III, § 2, cl. 1 and 28 U.S.C. § 1333). Even so, “it does not

follow that every term in every maritime contract can only be controlled by some

federally defined admiralty rule.” Id. at 1302 (alteration adopted) (quoting Wilburn

Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310, 313 (1955)). “In the absence

of a ‘judicially established federal admiralty rule,’ we rely on state law when

addressing questions of marine insurance.” Id. (quoting Wilburn Boat, 348 U.S. at

314); see also Bryan A. Garner et al., The Law of Judicial Precedent § 69, at 570

(2016). The parties agree that Florida law fills any gaps here.

      Geico Marine argues that the policy’s navigational limit unambiguously

conditioned coverage on the vessel being north of Cape Hatteras, North Carolina,

from June 1 until November 1 annually if the vessel was afloat. Because

Shackleford breached that limit and because maritime law requires absolute

enforcement of express navigational limits, Geico Marine contends the

navigational limit bars coverage.

      Shackleford responds with three reasons why the navigational limit does not



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bar coverage. First, he argues that the policy is ambiguous as to whether it

contained a navigational limit at the time of the loss, and Florida law construes

ambiguities in insurance contracts against the insurer. Second, he argues that Geico

Marine implicitly waived its right to enforce the navigational limit when it agreed

that he could sail the vessel to Fort Lauderdale in late May. And third, he argues

that any breach of the navigational limit does not bar coverage because Florida law

does not strictly enforce express warranties in marine insurance contracts.

      We reject Shackleford’s arguments and agree with Geico Marine that the

navigational limit bars coverage. And because we agree with Geico Marine on this

issue, we need not address its argument that Shackleford breached a duty of

uberrimae fidei. The navigational limit is dispositive.

      No established rule of maritime law governs whether a navigational limit is

part of a marine insurance contract, so we apply Florida law to determine whether

the policy contained a navigational limit. AIG Centennial, 782 F.3d at 1302. Under

Florida law, we first look to the text of the policy and construe the policy “in

accordance with [its] plain language.” Swire Pac. Holdings, Inc. v. Zurich Ins. Co.,

845 So. 2d 161, 165 (Fla. 2003). But “if the relevant policy language is susceptible

to more than one reasonable interpretation, one providing coverage and the other

limiting coverage,” the policy is ambiguous and we must construe it in favor of

coverage. Id. (alterations adopted). That “a provision is complex and requires



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analysis for application” does not “automatically” mean it is ambiguous. Id. Before

concluding that a provision is ambiguous, we must “read [the] policy as a whole,

endeavoring to give every provision its full meaning and operative effect.” Id. at

166 (citation and internal quotation marks omitted).

      Reading the policy as a whole, we readily conclude that it unambiguously

contained a navigational limit when the loss occurred. The policy states that

“[c]overage is provided . . . [w]hile the boat is afloat within the navigational area

shown on the Declarations Page.” And the updated declarations page that issued

the day before Shackleford sailed for Fort Lauderdale includes the following

provision:

      CRUISING LIMITS: While afloat, the insured Yacht shall be
      confined to the waters indicated below:
      (There is no coverage outside of this area without the Company’s
      written permission.)
      U.S. Atlantic and Gulf Coastal waters and inland waters tributary
      thereto between Eastport, ME and Brownsville, TX, inclusive and the
      waters of the Bahamas including the Turks and Caicos, however the
      boat must be north of Cape Hatteras, NC from June 1 until November
      1 annually.

      Four textual clues lead us to conclude that the “cruising limits” section of the

declarations page unambiguously describes the “navigational area” referenced in

the policy. First, the policy states that the declarations page will contain a

“navigational area.” In the maritime context, the term “navigation” means “[t]he

act of sailing vessels on water.” Navigation, Black’s Law Dictionary (11th ed.



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2019). And the declarations page specifies the “area”—specifically, the “waters”—

in which the vessel could be sailed. So the declarations page contains a

“navigational area” within the ordinary meaning of that term. Second, the policy

states that coverage applies “[w]hile the boat is afloat” within the navigational area

on the declarations page, and the declarations page likewise explains that its

navigational restrictions apply to the vessel “[w]hile afloat.” Third, both the policy

and the declarations page make clear that “coverage” is conditioned on the vessel

remaining within the prescribed navigational area while afloat. And fourth, the

“cruising limits” section of the declarations page serves no purpose if not to define

the “navigational area” upon which the policy conditions coverage. We must not

read the “cruising limits” section out of the policy. See Antonin Scalia & Bryan A.

Garner, Reading Law: The Interpretation of Legal Texts § 26, at 174 (2012) (“If

possible, every word and every provision is to be given effect.”); Swire, 845 So. 2d

at 166 (courts must “endeavor[] to give every provision its full meaning and

operative effect” (citation and internal quotation marks omitted)). No other

interpretation of the policy would give effect to the “cruising limits” section of the

declarations page.

      The district court offered two reasons why the policy is ambiguous as to

whether it contained a navigational limit at the time of the loss. One concerns a

discrepancy between the policy and the declarations page, and the other concerns a



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discrepancy between the declarations page and an endorsement to the policy. But

neither reason is persuasive.

      First, the district court suggested the policy is ambiguous because it refers to

the “navigational area” shown on the declarations page, and the declarations page

instead uses the term “cruising limits.” But “navigational area” is not a defined

term in the policy, so it carries its ordinary meaning. See Arguelles v. Citizens

Prop. Ins. Corp., 278 So. 3d 108, 111 (Fla. Dist. Ct. App. 2019). And as explained

above, the cruising limits in the declarations page unmistakably identify a

“navigational area” under the ordinary meaning of that term.

      Second, the district court found ambiguity based on a perceived

inconsistency between the endorsement and the declarations page that Geico

Marine issued the day before Shackleford sailed for Fort Lauderdale. Unlike the

declarations page, the endorsement contained a section titled “Navigation Area,”

which was left blank. The district court ruled that the blank “Navigation Area”

section at the bottom of the endorsement was inconsistent with the “cruising

limits” in the declarations page and that a reasonable interpretation of the blank

“Navigation Area” section was that the policy contained no navigational limit. But

the district court ignored the following language on the endorsement form:

“Nothing herein contained shall vary, alter or extend any provision or condition of

the Policy other than as stated above.” The blank “Navigation Area” section of the



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endorsement appeared below the preceding language, so it could not alter (or

conflict with) any navigational limit the policy imposed.

      The district court erred. The policy is not ambiguous about whether it

contained a navigational limit when the loss occurred. The plain language of the

policy contains a navigational limit. See Taurus Holdings, Inc. v. U.S. Fid. &

Guar. Co., 913 So. 2d 528, 532 (Fla. 2005) (“[I]nsurance contracts are interpreted

according to the plain language of the policy except when a genuine inconsistency,

uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of

construction.” (citation and internal quotation marks omitted)).

      The district court alternatively ruled that Geico Marine “implicitly waived”

the navigational limit when it agreed that Shackleford could sail the vessel to Fort

Lauderdale for repairs in late May. The district court found that Geico Marine

knew on May 27 when it lifted the Port Risk Ashore restriction that the vessel

“would be sailed to Fort Lauderdale within a few days for repairs.” And it found

that a navigational limit “was ‘absolutely’ not discussed” when Shackleford first

inquired about removing the Port Risk Ashore restriction. Even accepting those

factual findings, this ruling was legal error.

      No established rule of maritime law governs the waiver of a navigational

limit, so we apply Florida law to determine whether Geico Marine waived its right

to enforce that provision. AIG Centennial, 782 F.3d at 1302. In Florida, implied



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waiver of a contractual right requires “conduct which implies the voluntary and

intentional relinquishment of a known right.” Raymond James Fin. Servs., Inc. v.

Saldukas, 896 So. 2d 707, 711 (Fla. 2005). Shackleford’s theory of implied waiver

appears to be that Geico Marine waived the navigational limit by agreeing to a

course of conduct that it knew would make it impossible for Shackleford to comply

with the requirement that his vessel be north of Cape Hatteras by June 1. We are

unpersuaded.

      Geico Marine’s decision to lift the Port Risk Ashore restriction on May 27

knowing that Shackleford would soon sail the vessel to Fort Lauderdale for repairs

does not imply waiver of its right to enforce the navigational limit. The

navigational limit required the vessel to be north of Cape Hatteras by June 1 only if

the vessel was “afloat.” The policy provided coverage without regard to geography

“[w]hile the boat . . . is ashore . . . in the United States or Canada.” Geico Marine

knew Shackleford was taking the vessel to Fort Lauderdale for “extensive repairs,”

and it could reasonably have expected that Shackleford would comply with the

navigational limit by having the vessel hauled ashore for repairs in Fort Lauderdale

by June 1. The only way Geico Marine’s conduct could have suggested it intended

to waive the navigational limit is if the voyage to Fort Lauderdale was impossible

to complete by June 1. But Shackleford conceded at oral argument that the vessel

arrived in Fort Lauderdale by June 1 and that he intended to haul the vessel ashore



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upon arrival, which would have complied with the navigational limit. Oral Arg.

Recording at 12:27–12:38, 18:23–18:30 (Dec. 3, 2019). That the vessel arrived in

Fort Lauderdale by June 1 shows that it was possible to complete the voyage by

June 1. So Geico Marine plainly did not agree to a course of conduct that it knew

would make compliance with the navigational limit impossible. Nothing in this

record supports the conclusion that Geico Marine voluntarily and intentionally

relinquished its right to enforce the navigational limit. The district court erred in

ruling otherwise.

      Even if Geico Marine did not waive the navigational limit, Shackleford

argues that his breach of the navigational limit does not bar coverage because

Florida law does not strictly enforce express warranties in marine insurance

contracts. As Shackleford acknowledges, federal maritime law requires “strict” or

absolute enforcement of express navigational warranties. Lexington Ins. Co. v.

Cooke’s Seafood, 835 F.2d 1364, 1366 (11th Cir. 1988); see also Strict, Black’s

Law Dictionary (11th ed. 2019) (“Absolute; requiring no showing of fault.”). And

established federal maritime rules, like the rule requiring absolute enforcement of

express navigational warranties, ordinarily control “even in the face of contrary

state authority.” AIG Centennial, 782 F.3d at 1303 (citation and internal quotation

marks omitted). But Shackleford contends that he and Geico Marine contracted out

of the federal maritime rule of enforcement and instead selected Florida’s more



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forgiving rule.

      Shackleford argues that the parties contracted out of the federal maritime

rule requiring absolute enforcement of express navigational warranties by

including a “Conformity to Law” provision in their policy. The provision states:

“Any terms of this policy that conflict with the laws of the state where this policy

is issued are considered amended to conform to such laws.” Although parties to a

marine insurance policy are generally free to contract out of federal maritime law,

King v. Allstate Ins. Co., 906 F.2d 1537, 1540–42 (11th Cir. 1990), we are not

persuaded that Shackleford and Geico Marine did so.

      Shackleford’s argument that this provision contracts out of the federal

maritime rule has two premises. First, the federal rule of absolute enforcement, as a

default rule of maritime law, was one of the “terms of this policy” to which the

provision refers. Second, the federal rule of enforcement conflicts with Florida law

because Florida allows a marine insurer to avoid coverage based on an insured’s

breach of warranty only if the breach “increased the hazard by any means within

the control of the insured.” Fla. Stat. § 627.409(2). Because the federal rule of

enforcement, an implied term of the policy, conflicts with Florida’s rule,

Shackleford argues that this implied “term” must be amended to conform to

Florida’s more insured-friendly laws.

      Shackleford’s argument fails because its first premise is false. As used in the



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policy, the phrase “terms of this policy” refers only to the policy’s express terms,

not terms implied by law. Florida gives words in an insurance contract their

ordinary meaning, which requires reading the words in context. Swire, 845 So. 2d

at 165–66. We do not doubt that as a matter of ordinary meaning the “terms” of a

contract may include terms implied by law. See Term, Black’s Law Dictionary

(11th ed. 2019) (listing “implied term” as one kind of term). But here context

makes clear that the phrase “terms of this policy” refers only to the policy’s

express terms.

      The phrase “terms of this policy” appears in a provision titled “Conformity

to Law,” and as its name suggests, the provision operates to conform any illegal

policy terms to Florida law. Provisions like this one exist to address conflicts

between the contract the parties wrote and what the law requires. See 16 Samuel

Williston & Richard A. Lord, A Treatise on the Law of Contracts § 49:24, at 138

(4th ed. 2000) (“Many [insurance] policies have a provision, doubtless superfluous,

that in the event of a conflict between the policy’s terms and the requirements of a

state’s insurance law, the latter will control.”). Because the provision exists to save

the policy the parties wrote from invalidity under state law, the phrase “terms of

this policy” refers only to the policy’s express terms—those written by the parties.

      Shackleford effectively asks us to transform the policy’s conformity-to-law

provision into a choice-of-law provision. By default, federal maritime law



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displaces contrary state law when construing a marine insurance contract. AIG

Centennial, 782 F.3d at 1302–03. Shackleford would have us read the conformity-

to-law provision as reversing this default rule, so that state law displaces any

contrary federal maritime rule. But the provision does no such thing. The parties

could have included a choice-of-law provision selecting state law over federal law,

but they did not. And we “may not rewrite [the parties’] contract[], add meaning

that is not present, or otherwise reach results contrary to the intentions of the

parties.” Taurus Holdings, 913 So. 2d at 532 (citation and internal quotation marks

omitted).

      Because the parties did not contract out of maritime law, we must apply the

federal rule requiring absolute enforcement of express navigational limits. Under

that rule, “breach of [an] express [navigational] warranty by the insured releases

the insurance company from liability even if compliance with the warranty would

not have avoided the loss.” Lexington, 835 F.2d at 1366. Here, the policy contained

a navigational limit that conditioned coverage on the vessel being “north of Cape

Hatteras, NC from June 1 until November 1 annually” if the vessel was “afloat.”

The vessel suffered damage while afloat during a storm in Florida in early June.

Because the vessel was outside of the covered navigational area when the loss

occurred, the policy does not cover the loss.




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                                IV. CONCLUSION

      We REVERSE the judgment in favor of Shackleford and REMAND with

instructions for the district court to enter judgment in favor of Geico Marine.




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