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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

ACE AMERICAN INSURANCE COMPANY v. WILLARD et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
2:14-cv-00045 Search Pacer
ACE Group party(s): 
Court Type: 
Federal
US District Court: 
District of Maine
Date Filed: 
Feb 4 2014

GENERAL ALLEGATIONS ABOUT THE COLLISION

10. Capt. Eugene Willard works as a caption for the Casco Bay Island Transit
District. He also runs a side business called "Portland Water Taxi", which involves picking up
and dropping off individuals and their baggage in and around the various small islands in Casco
Bay. Willard owns and operates three (3) motor boats, called "Portland Express," "The Water
Taxi" and "Bay Express." The "Bay Express" is the 24' 2004 Osprey Expedition, H.I.N.
OFO24X51G305 and will hereinafter be referred to as "the Vessel".
11. On September 7, 2013, Willard received a booking to pick up a group of
individuals from Chebeague Island to Portland, Maine, a roughly four and a half mile trip. This
group included Congresswoman Chellie Pingree, a member of the United States Congress House
of Representatives for the State of Maine, and certain members of her staff.
12. Willard's two regular boats, "Portland Express" and "The Water Taxi", were
either unavailable due to repairs or deemed unsuitable for this type of trip so Willard elected to
use the Vessel to perform this particular job.
13. Willard was unable to perform the trip himself so he asked his friend and
colleague, Kyle Jacobs to perform the job.
14. While navigating back to Portland harbor, the Vessel collided head-on with
another vessel, named the "Miss M". The U.S. Coast Guard has yet to issue its report on the
incident, but ACE has been advised that Willard and the Vessel have meritorious defenses,
including but not limited to: (a) the "Miss M" did not have its running lights turned on; (b) a
Portland Fire Department report which identified the operator, Mr. Christopher S. Pizey as being
"intoxicated" and (c) the "Miss M" was in violation of the Nautical Rules of the Road, i.e. Mr.
Pizey was driving his vessel in the wrong direction for the area in which the collision occurred.
15. Defendants Christopher S. Pizey and Sally Handy have filed claims for personal
injuries and damages against Willard and Willard's company, Portland Water Taxi. No one
associated with the Pingree party has filed any claim for injuries or damages arising from the
September 7, 2013 collision, as of the date of the within complaint.

GENERAL ALLEGATIONS ABOUT WILLARD'S INSURANCE POLICIES

16. From July 28, 2013 until the date of the within rescission, ACE provided marine
insurance coverage to Willard under a Yachtsman Policy of Insurance, Policy Number YKR Y
07853427 (hereinafter "the Policy"). A true and correct copy of the Policy is attached hereto as
Exhibit "A". The Policy attached as Exhibit "A" provided marine insurance coverage to Willard
and a 2004 24' Osprey Expedition Motor Yacht with Hull Identification Number
OFO24X51G305 (hereinafter referred to as "the Vessel") for the periods July 28, 2013 to July
28, 2014. This type of policy is referred to as a YAR within the ACE nomenclature and refers to
a recreational marine type coverage for an individual's personal usage of a vessel.
17. ACE had issued a total of four (4) marine insurance policies to Willard.
18. The first policy, number Y07453978 was cancelled on September 15, 2004 due to
the vessel being a total loss.
19. The second policy, Number Y07262334 was cancelled on May 13, 2007. This
policy was a YAR and ACE cancelled once the insured advised he intended to use the vessel as a
commercial water taxi. ACE's basis of cancellation was a material change in risk.
20. The third policy, Number Y07269742 was issued as a SPC, or special chartering
policy, but was later cancelled and reissued under Policy Number Y07853427 as a YAR. This
last policy number is the one on which defendants issued a claim.
21. The Policy contained the following terms and conditions:

GENERAL CONDITIONS AND EXCLUSIONS
CHOICE OF LAW/CONFORMITY OF STATE LAW: This Policy shall be
construed in accordance with the General Maritime Law or Admiralty Rule.
If no General Maritime Law or Admiralty Rule applies, the law of the State
appearing in your address as contained upon the Declarations Page will apply
without regard to the conflict of laws provisions thereof....
PRIVATE PLEASURE USE ONLY: This policy only provides coverage while
the Insured Vessel is used for private pleasure purposes. However, this
limitation on use does not apply while you are operating or using the Insured
Vessel to entertain business associates or clients or other types of use wherein no
monetary or other directly related renumeration is received by you in relation to
operation or use of the Insured Vessel.
CONCEALMENT, MISREPRESENTATION OR FRAUD: All coverage
provided by us will be voided from the beginning of the Policy Period in any case
of fraud by you. It is also void if you conceal or misrepresent any material
fact or circumstance relating to this contract of insurance, or the application
for such insurance, whether before or after a loss.
DISHONEST, ILLEGAL OR INTENTIONAL ACTS: We do not pay for loss or
damage caused by the dishonest, illegal or intentional acts of any Covered Person,
or any person to whom the Insured Vessel is entrusted, regardless of whether or
not such person is convicted of such an act by a criminal court.
PAYMENT OF LOSS: We will pay for any claim of covered Property Damage
or damage to Person Property you incur under this policy to the Named Insured,
and any loss payee . . . .
However:
c. the loss payee's rights are no greater than those of the Named Insured
under this Contract.

GENERAL PROVISIONS IN THE EVENT OF LOSS
ASSISTANCE AND COOPERATION: Any Covered Person making a claim
must:
a. cooperate with us in the investigation, settlement or defense of any claim
or suit under this policy.
b. assist us in the enforcement of any right of contribution or indemnity
against any person or organization which may be liable to any Covered
Person.
c. allow us to inspect and appraise all damaged property, not stolen or otherwise
unrecoverable, before it is repaired or disposed of.
e. submit to examinations under oath as often as requested by us;
(emphasis added).
22. Willard applied for insurance coverage through an insurance agent known as the
Marsh Agency, located at 560 Brighton Avenue, Portland, Maine 04102.
23. Marsh Agency is not an agent of ACE. Marsh applied for insurance coverage
with ACE through ACE's authorized agent, Global Marine Insurance Agency, Inc., located in
Traverse City, Michigan. ACE duly notified Willard of all changes in coverage under the ACE
policies. Upon information and belief, Marsh Agency also notified Willard of any changes in
coverage under the ACE policies.
24. Willard also has a commercial marine policy with another insurance company
called "Seacoast Specialty Administrators". The authorized agent for the Seacoast policy is
Wells & Co. Marine Insurance. Upon information and belief, the policy number for the Seacoast
policy is #6314440900 and provided commercial marine coverages for "Portland Express and
"The Water Taxi". "Bay Express" (i.e. the Vessel) was not listed as an insured vessel on the
Seacoast policy.

WILLARD'S BREACHES AND MISREPRESENTATIONS

25. On September 9, 2013, ACE received a notice of loss advising that the Vessel was
crossing Portland Harbor when another vessel collided with it.
26. On September 10, 2013, ACE commenced an investigation of this incident.
27. As part of this investigation, ACE learned a number of facts and circumstances
leading up to this collision.
28. Willard painted "TAXI" in bold letters on both sides of the hull of the Vessel.
29. Willard also affixed a black and yellow checkered design on both sides of the hull
of the Vessel.
30. Willard occasionally used the Vessel to pick up and drop off passengers.
31. Willard occasionally used the Vessel for commercial purposes.
32. Willard occasionally used the Vessel for non-recreational purposes.
33. Willard occasionally used the Vessel for non-personal pleasure purposes.
34. Willard never advised ACE of using the Vessel occasionally for commercial or
non-recreational or non-personal pleasure purposes.
35. On September 7, 2013, Willard accepted a booking of the Vessel from someone
associated with Congresswoman Pingree.
36. Willard felt obligated to honor his commitment by complete the booking for
Congresswoman Pingree even though he personally had another engagement.
37. Willard asked his friend and colleague, Kyle Jacobs to complete the booking with
Congresswoman Pingree.
38. Congresswoman Pingree and her staff were never business associates or clients or
friends or acquaintances of Willard.
39. Congresswoman Pingree and her staff were not aboard the Vessel for
entertainment purposes or some other similar type of use.
40. Congresswoman Pingree's staff contacted Willard because he operates a business
known as "Portland Water Taxi."
41. Willard did not invite Congresswoman Pingree and her staff aboard the Vessel for
a harbor cruise or other similar type of entertainment or use.
42. On September 7, 2013, Willard used the Vessel for a commercial purpose.
43. On September 7, 2013, Willard operated the Vessel in breach of the Policy's
Private Pleasure Use Only Limitation.
44. Willard was aware of the difference between commercial and recreational or
private pleasure use because ACE had previously cancelled its policy in 2007 when he advised
ACE that he wanted to use a vessel as a commercial water taxi.
45. Willard was aware of the difference between commercial and recreational or
private pleasure use because ACE mailed a copy of the Policy to Willard.
46. Willard was aware of the difference between commercial and recreational or
private pleasure use because Willard had commercial marine insurance coverage for his two
other vessels, "Portland Water Taxi" and "The Water Taxi".
47. Willard never advised ACE of the existence of the Seacoast policy and, but for its
investigator's conversation with the Marsh Agency, ACE would never have discovered that
Willard also had commercial marine insurance coverage for his two (2) other vessels with
Seacoast.
48. Willard sought to conceal from ACE his occasional use the Vessel for commercial
or non-recreational or non-personal pleasure purposes.
49. Willard never disclosed to ACE that he intended to use the Vessel for a
commercial, rather than, recreational or personal purpose.
50. Willard breached his duty of utmost good faith, or ubberimae fidea, by failing to
fully and voluntarily disclosing to ACE all facts material to the risk, whether or not inquired into
by ACE.
51. Willard misrepresented the Vessel's commercial usage to ACE.
52. Willard misrepresented the Vessel's occasional commercial usage to ACE.
53. During ACE's investigation, Willard falsely represented that he did know the
nature and extent of coverage under the Policy.
54. Willard misrepresented the nature and extent of insurance coverages for his fleet
of vessels because he wanted to conceal his prior knowledge of the difference between
commercial and recreational/private pleasure usage.
55. Based upon various misrepresentations made by Willard, the Policy is void ab
initio.
56. Based upon the various material misrepresentations made by Willard, the Policy
is void ab initio.
57. The claims by Willard are expressly excluded under the Policy.
58. Willard failed to comply with the conditions of the Policy.
59. ACE has no obligation to cover claims by Willard under the Policy.
60. ACE has no obligation to cover claims by Pizey or Handy under the Policy.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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