
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 97-1817                             DRAKE FISHING, INC., ET AL.,                               Plaintiffs, Appellants,                                          v.                          CLARENDON AMERICAN INSURANCE CO.,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Reginald C. Lindsay, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                Torruella, Chief Judge,                                           ___________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Boudin, Circuit Judge.                                          _____________                                 ____________________            John A. Birknes, Jr. for appellants.            ____________________            Thomas  J. Muzyka  with whom  Clinton  & Muzyka  was on  brief for            _________________             _________________        appellee.                                 ____________________                                  February 20, 1998                                 ____________________                      ALDRICH,  Senior Circuit  Judge.    The F/V  DRAKE,                                _____________________            dragging for scallops on February 28, 1995, "hung" her dredge            on  the bottom.   She was unable to  free by maneuvering, and            ended up  with the wire  at 90 degrees (downward),  her stern            quarter   into  the  wind,   and  seas  splashing   into  the            lazarettes, the hatch  covers having come  off, and the  crew            unable  to replace them.   The  hydraulic winch  jammed, and,            because of the  rain and weather, the crew could  not light a            torch to cut the wire.  Meanwhile, the seas were  filling the            lazarettes  faster than  the bilge  pumps  could handle.   In            response to  a May Day  call, another vessel arrived  and the            crew was  saved, but  the DRAKE was  lost.   This action  was            brought to recover  the agreed value, on  defendant Clarendon            American Insurance Company's hull policy.  On the basis of an            unsatisfied condition  precedent, plaintiffs-appellants  lost            on summary judgment in the district court.  We affirm.                      When the  DRAKE put to  sea on this voyage,  it had            various  minor  deficiencies,  including  no lazarette  bilge            alarm warning  lights and  no  required spare  communications            battery  in  the pilot  house.    The audible  bilge  alarms,            however, were working,  and the crew  was obviously aware  of            the water.  The battery's  absence was also irrelevant to the            loss.   Accordingly,  Mass.  G.L. ch.  175,   186  might have            precluded either of these defects, or a number of other minor            ones, from giving  rise to a successful  misrepresentation or                                         -2-            breach of warranty  defense on the policy,1 but  this was not            the   set-up.    Defendant   had  a  stronger   defense,  the            Massachusetts law of condition precedent.                      Conformance with stated  conditions that are agreed            to  govern  the  attachment  of  the  policy  is  obligatory,            regardless  of their  irrelevancy to  the actual  loss.   See                                                                      ___            Charles, Henry & Crowley Co. v. Home Ins. Co., 349 Mass. 723,            ____________________________    _____________            724-25,  212 N.E.2d  240 (1965);  see also Edmonds  v. United                                              ___ ____ _______     ______            States, 492  F. Supp.  970, 974 (D.  Mass. 1980),  aff'd, 642            ______                                             _____            F.2d 877 (1st Cir. 1981).   It is enough that the  statements            relate essentially  to the insurer's  intelligent decision to            issue  the policy.   See  Charles, Henry  & Crowley  Co., 349                                 ___  ______________________________            Mass. at 726.  This question is an objective one:   would the            matter be considered  of importance by a  reasonable insurer.            See Krause  v. Equitable Life  Ins. Co., 333 Mass.  200, 204,            ___ ______     ________________________            129 N.E.2d 617 (1955); Lopardi v. John Hancock Mut. Life Ins.                                   _______    ___________________________            Co.,  289 Mass.  492, 496,  194  N.E. 706  (1935); Kravit  v.            ___                                                ______            United  States Cas.  Co., 278  Mass. 178,  180, 179  N.E. 399            ________________________            (1932); see also Edmonds, 642 F.2d at 883.                    ___ ____ _______                      Involved  here, among  others,  were the  following            conditions.  The DRAKE was  to undergo and pass an inspection            by the  United States  Coast Guard  and display  a compliance            sticker.   There  was  to  be a  back-up  radio battery  with                                            ____________________            1.  It  is  agreed that,  though  this was  a  marine policy,            Massachusetts law governs.  See generally Wilburn Boat Co. v.                                        ___ _________ ________________            Fireman's Fund Ins. Co., 348 U.S. 310 (1955).            _______________________                                         -3-            associated  charging equipment.   And, the DRAKE  was to have            both audible and visual bilge alarms in the lazarettes, wired            to  the  pilot  house.     All  are  conceded  to  have  been            unsatisfied  at the  relevant  times.    The  district  court            focussed on  the first, finding  that "as  a matter of  law a            reasonable maritime  insurer would  have wanted  to know  and            would  not as  a matter of  law, not fact,  have issued th[e]            policy  had  it  known that  there  wasn't  that  Coast Guard            sticker."  We agree.  Cf. Edmonds, 642 F.2d at 883 & n.2 (FAA                                  ___ _______            biennial flight review requirement).                      There  is   a  further  question   raised  by   the            plaintiffs:  were these matters truly expressed as conditions            precedent.  Whether a policy term is a condition precedent or            a warranty is a question of law.  See Shaw v. Commercial Ins.                                              ___ ____    _______________            Co., 359 Mass. 601, 605-06, 270 N.E.2d 817 (1971).  Here, the            ___            requirement  that  the words  "condition precedent"  or their            equivalent be  used was  met.  See  Charles, Henry  & Crowley                                           ___  _________________________            Co.,  349  Mass.   at  726.     The  Fishing  Vessel   Safety            ___            Requirements Clause, expressly attached to and forming a part            of the policy, stated,                      It  is  a  condition  precedent  of  this                      coverage that these  requirements must be                      complied  with  prior to  the  attachment                      date  of this policy and as proof of such                      compliance  this  Fishing  Vessel  Safety                      Requirements Clause must be signed by the                      Assured   and   be   returned   to   this                      company . . . .                                         -4-            The  listed "requirements"  included the  inspection sticker,            the battery, and the bilge alarms.  The captain of the DRAKE,            who was also the  son of its owner, signed the  clause as the            assured, one month before the final voyage.2                        Plaintiffs attempt to save their case by contending            that  valid conditions  precedent must  appear,  initially at            least,  in the  application  for  insurance.    Although  the            language in  Charles, Henry  & Crowley Co.  might be  read to                         _____________________________            support this, see 349 Mass. at 726 ("[A] statement made in an                          ___            application  for a policy of insurance may become a condition            of the policy rather than remain a warranty or representation            if . . . ."),  other cases reveal a broader view, see Shurdut                                                              ___ _______            v. John Hancock Mut.  Life Ins. Co., 320  Mass. 728, 731,  71               ________________________________            N.E.2d  391  (1947)  (application  for  reinstatement   after            lapse); Lopardi,  289 Mass.  at 495  (provisions in  policy);                    _______            Kravit, 278 Mass. at 179 (policy schedule); see also Edmonds,            ______                                      ___ ____ _______            492 F. Supp. at  972-73 (amendments added in connection  with            renewal).                      There  can be no  dispute here that  plaintiffs had            notice  of  the  conditions,  or that  they  related  to  the            insurer's decision to  take the risk.  Cf.  Edmonds, 642 F.2d                                                   ___  _______                                            ____________________            2.  Although  the insured's  signature  is dated  January 27,            1994 rather  than 1995, it  is clear  that this was  simply a            mistake.  Despite a later,  and feeble, effort to cast doubt,            plaintiffs-appellants essentially admitted  as much.  In  any            event,  plaintiffs-appellants can  make  no  claim  that  the            Fishing Vessel Safety  Requirements Clause was not  a part of            the policy or that they had no notice.                                         -5-            at 882.  Clarendon reinstated the policy on February 2, 1995,            after issuing notice  of cancellation, only after  plaintiffs            had separately  executed  and submitted  the  Fishing  Vessel            Safety Requirements Clause  days earlier.3  The  DRAKE had no            inspection sticker at that time, nor later that month when it            left  harbor.     Considering  the  facts  and  circumstances            surrounding  the  issuance  of  the policy,  as  we  may, see                                                                      ___            Massachusetts  Mun. Wholesale Elec.  Co. v. Town  of Danvers,            ________________________________________    ________________            411 Mass. 39, 45-46, 577 N.E.2d 283 (1991), we think it clear            that plaintiffs' argument  fails.  Cf. Shurdut, 320  Mass. at                                               ___ _______            731  (resumption of  obligation  after lapse  made  expressly            conditional   upon  the  truth  of  statements  made  in  the            application for reinstatement).                      Affirmed.                      _________                                            ____________________            3.  A simultaneous basis for  cancellation was non-payment of            the premium,  also remedied before  reinstatement.   Although            its owners  had never before  had the Drake inspected  by the            Coast Guard for  purposes of obtaining a  compliance sticker,            they requested  such an  inspection in February  1995 at  the            behest of their  insurance brokers.  The Drake  did not pass,            and no sticker was issued.  The reasons are immaterial to the            loss. Cf. Edmonds.                  ___ _______                                         -6-
