Certain Underwriter at Lloyds, London v. Inlet Fisheries Incorporated
Filed February 11, 2008
United Sates Court of Appeals, for the ninth circuit
Cited as D.C. 04-00058-JWS, No. 06-35383

Judgment by the Trial Court Affirmed

Inlet Fisheries, Inc. and Inlet Fish products, Inc. (for brevity-referred to as “Inlet”) are Alaska-based fish buying and processing businesses, both owned by Vincent Goddard. Inlet owns a number of vessels, including the Yukon II, Fort Yukon, Maren I, Harvester Barge (HB) and the Quanirtuuq Princess (QP).

The underwriters that are parties to this case are those syndicates at Lloyd’s of London that agreed to underwrite a stand-alone pollution insurance policy issued to Inlet on August 2000.

Within the same month, one of Inlet’s vessels, the QP, spilled oil and pollutants when it sank in Steam boat Slough, near Bethel Alaska.

Eventually, Inlet made a claim to Lloyd’s under its vessel pollution policy, at which point Lloyd’s commenced an investigation into both the accident and Inlet generally.

After an investigation was conducted, Lloyd’s have learned that Inlet had made a material misrepresentation in its application for insurance coverage under the policy. It was found that Inlet failed to disclose the following:

• sinking incident of Maren I and HB;


• the poor condition of the vessels, and


• the pending bankruptcy charge.

Lloyd filed a suit seeking a declaratory judgment that it had the right to void the policy ab initio under the doctrine of uberrimae fidei.

Inlet files a Counter-claim and argued that Alaska state law, rather that the federal maritime law applied, and that Lloyd’s never asked for the allegedly material information.

On cross-motions for summary judgment, the district court grants Lloyd’s motion, and ruled:

• That uberrimae fidei applied (the court recognized that marine insurance contracts as within the federal court’s maritime jurisdiction), and


• That Lloyd was entitled to void the policy.

Appeal follows: The appellate court ventilates on the following issues:

1. Whether vessel pollution insurance be considered as under marine insurance.


2. Whether the uberrimae fidei principle applies to vessel pollution policy - thus disclosure of pertinent information is required.

The appellate court ruled on the following issues, thus:

1. Vessel pollution insurance fits well within the general conception of marine insurance, as it is a contract of indemnity triggered by an event that is maritime in character.


2. The doctrine of uberrimae fidei imposes a duty of utmost good faith and requires that an insured should fully and voluntarily disclose to the insurer all facts material to a calculation of the insurance risk.

Judgment by the trial court was affirmed.