Marine Cargo Policy Covers only Portion of Hurricane Loss

    The Eleventh Circuit affirmed the district courts granting of summary judgment to the insurer after a portion of the claim for loss of vegetable crops were lost due to a hurricane. Certain Underwriters at Lloyds of London vs. Pero Family Farm Food Co., Ltd., 2023 U.S. App. LEXIS 8451 (11th Cir. April 10, 2023).

    Pero grew vegetables that it prepared and packaged for either retail sale at grocery stores or wholesale by food service companies The seeds were either prepared by Pero purchased from third-party seed providers. Pero planted some seeds in fields it owned or leased in Florida. Some seeds were sent to Trans Gro, a third-party plant grower. Trans Gro planted the seeds and grew the seedlings in its greenhouses until the seedlings were mature enough to be transported to Pero’s fields and planted in the ground. Once Pero harvested its vegetables, they were transported to its cooled storage facility where it cleaned, sorted, stored and packaged the vegetables. Pero packaged some of its vegetables in plastic packaging. It then transported the vegetables to its final customers. 

    The Lloyds policy covered transport of vegetables and other transit risks such as nondelivery, shortages, accumulation of stored goods due to interruption of transit, insufficient packing or preparation, etc. 

    Pero submitted a claim to Lloyds after Hurricane Irma struck. Pero sought coverage for the loss of vegetables stored in the coolers at its packing houses as well as seedlings growing in Trans Gro’s greenhouses, plants that had been growing in Pedro’s fields and plastic covering that had been placed over the plants growing in Pero’s fields. Lloyds issued payment for Pedro’s loss of the vegetables in its coolers but denied coverage for the damage to the seedlings growing in Trans Gro’s greenhouses, the plantings in Pedro’s fields, and the plastic coverings on Pero’s fields. 

    Lloyd’s sued Pero seeking a declaration that the policy dd not cover the damage to the seedings, plantings or plastic coverings. Lloyd’s moved for summary judgment and Pero moved for partial summary judgment for its counterclaim on breach of contract. Lloyds argued that there was no coverage because the policy was a marine cargo policy and the plants in greenhouses and plant coverings were not cargo or goods covered by the policy. Pero argued that the policy covered its goods in all settings and circumstances and at all times, from seed to store. 

    The district court granted summary judgment to Lloyd’s and denied Pedro’s motion because the unambiguous language of the policy did not provide coverage for Pedro’s damaged seedlings, plantings, and plastic coverings. 

    The Eleventh Circuit affirmed. The policy unambiguously covered goods or merchandise only while they were in transit or in store as stock. The policy’s title confirmed that the policy covered only goods or merchandise in transit or in storage during the transit process.  The policy’s provisions showed that it covered goods or merchandise only while in transit or in storage during the transit process. For example, the policy covered “any means of conveyance by land, sea, or air” to and from “ports and/or places in North America.” Further, Pero’s insurance application explained that the policy covered only good or merchandise in transit or int storage during the transit process.