United States District Court, E.D. Wisconsin
DANIEL MATTHEW VOORHEES a/b/o M/Y BROADWATER, and BROADWATER MARINE, LTD., Plaintiffs,
ACE AMERICAN INSURANCE COMPANY, Defendant.
DECISION AND ORDER GRANTING DEFENDANT'S MOTION TO
STAY AND COMPEL ARBITRATION (DKT. NO. 5)
PAMELA PEPPER, UNITED STATES DISTRICT JUDGE
plaintiffs, owners of the yacht M/Y Broadwater, filed a
complaint in Milwaukee County Circuit Court alleging breach
of contract and related causes of action regarding their
coverage under a recreational marine insurance policy issued
by the defendant. Dkt. No. 1-1. The defendant removed this
case to this court, and filed a motion to stay the litigation
and compel arbitration pursuant to the Federal Arbitration
Act (FAA), 9 U.S.C. § 3. Dkt. Nos. 1, 5. The court will
grant the motion.
plaintiffs purchased M/Y Inevitable (renamed M/Y Broadwater),
a 1990 163-foot Feadship custom motor yacht. Plaintiff Daniel
Matthew Voorhees is a citizen of the District of Columbia.
Dkt. No. 1 at ¶1. Plaintiff Broadwater Marine Ltd. is a
holding company incorporated in the Cayman Islands, and has
its principal place of business there. Id. at
¶2. Defendant ACE American Insurance Company is a
Pennsylvania corporation with its principal place of business
in Philadelphia. Id. at ¶3.
March 2014, a sea trial and extensive pre-purchase survey of
the yacht were conducted in Fort Lauderdale, Florida; neither
disclosed any engine or power issues. Id. at
¶9. In April 2014, the plaintiffs purchased the yacht
moored in Nassau, Bahamas for $9.5 million, id. at
8, and had a $450, 000 contract to charter the yacht to
Millennium Charters in West Palm Beach, Florida, id.
reviewing the yacht's pre-purchase survey, the defendant
issued a recreational marine insurance policy (YMY
YO9164510), with a $47, 500 deductible for property damage,
to Broadwater Marine at a District of Columbia address. Dkt.
No. 6-1, Ex. 1 at 9-34. The insured period began on April 17,
2014, and ended on April 17, 2015. Id.
sailing from Nassau to Fort Lauderdale in April 2014, the
yacht experienced a sudden engine and power system failure,
and became inoperable due to extensive generator, exhaust and
power systems damage. Dkt. 6-1 at ¶ 5. This led to
cancellation of the charter contract and extensive repair of
the yacht during the following year. Id. at
¶¶ 6, 7.
policy amendment effective July 10, 2014, Broadwater
Marine's address of record changed to a Milwaukee,
Wisconsin address. Id. at ¶ 2, Ex. 1 at 21. The
plaintiffs gave defendant timely notice of the April
incident. On August 29, 2014, the defendant informed the
plaintiffs that it was denying coverage, because the
generator failure pre-dated the policy period. Id.
at ¶ 9, Ex. 2.
September 2014, the defendant withdrew the coverage denial
and provided the plaintiffs with a proof-of-loss form, which
plaintiffs timely completed. Id. at ¶ 10.
During October, ACE requested additional damage
documentation, access to the yacht for inspection, and an
examination under oath. Id. at ¶ 11.
November 2014, while at Bahia Bar Marina in Fort Lauderdale,
the yacht's hull and propulsion system were damaged,
necessitating additional repairs. Id. at ¶ 12.
Responding to the defendant's requests for information,
the plaintiffs provided extensive documentary evidence
regarding the April incident. Id. In January 2015,
the defendant requested information regarding the November
2014 Bahia Bar Marina incident and a “complete,
detailed sworn proof of loss.” Id. at ¶
14, Ex. 7 at 55-56.
March of 2015, the defendant again requested specific
information the plaintiffs had not provided, as well as a
complete detailed proof of loss with respect to the April
2014 incident. Id. at ¶ 15. The defendant
stated that its “preliminary analysis” failed to
establish a relationship between the charges for removing and
installing shore power units and related components and the
generator/exhaust failures; however, “[o]ur
investigation remains ongoing and we will be happy to
consider any further documentation substantiating these
charges.” Id. at ¶ 15, Ex. 8 at 58.
22, 2015, the plaintiffs sent the defendant a revised, and
more detailed, proof of loss for the April incident and
additional documents regarding the November incident, and
they asked the defendant to enter into a tolling agreement.
Id. at ¶ 16. The plaintiffs also stated:
[t]o the extent of any disputed portion of this claim,
the insured is also making a request for arbitration so that
we can get resolution of any disputed amounts without further
Please give me a call so that we can discuss wrapping up this
claim, payment on the undisputed portion, the tolling
agreement, and the process and location for the