INSURANCE-MARINE INSURANCE-COVERAGE

Great Lakes Ins. SE v. Raiders Retreat Realty Co., LLC, 2022 U.S. App. LEXIS 24409 (3^rd Cir. August 30, 2022) (Ambro, C.J.)  A yacht owned by Raiders Retreat Realty Co., LLC ran aground. Raiders had insured the vessel with marine insurer Great Lakes Insurance SE (“GLI”). But after Raiders submitted a claim under its policy, GLI left it high and dry. The insurer’s reason for denying coverage: the yacht’s fire-extinguishing equipment had not been timely recertified or inspected notwithstanding that the vessel’s damage was not caused by fire. GLI sued first, seeking in federal court a declaratory judgment that Raiders’ alleged failure to recertify or inspect its fire-suppression equipment rendered the policy void from its inception.  A lawsuit was brought under Pennsylvania law for breach of fiduciary duty, insurance bad faith, and Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.  The question is whether New York or Pennsylvania law applies.  After a lengthy discussion, the court determined that the district court needs to consider whether Pennsylvania has a strong public policy that would be thwarted by applying New York law.  The court thus vacated and remanded for further proceedings as to application of law in this interlocutory appeal.  The basic dispute concerns what state law should apply, or even federal law in admiralty.  The Supreme Court spoke to the framework as to which of two competing states was the proper forum for a tort action is admiralty.  That key case is Bremen v. Zapata Off-Shore Company, 407 U.S. 1, 15 (1972).s