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"The Hello Dolly" Was Not Where the Owner Promised it Would be When it \\nSunk in Breach of Warranty\\n\\nGreat Lakes Insurance, S.E. insured the Hello Dolly VI, a boat owned by \\nGray Group Investments, L.L.C. The Hello Dolly sank in Pensacola, \\nFlorida, during a hurricane. Gray Group filed a claim under the \\ninsurance policy, Great Lakes denied coverage, and Great Lakes then \\nsought a declaratory judgment that it properly did so.\\n\\nIn Great Lakes Insurance, S.E. v. Gray Group Investments, L.L.C., No. \\n22-30041, United States Court of Appeals, Fifth Circuit (August 1, 2023)\\n Hurricane Sally struck the Gulf Coast in September 2020. In its path \\nlay the Hello Dolly VI (hereafter, the Vessel), which was moored behind \\nGray Group\'s eponymous member Michael Gray\'s house in Pensacola, \\nFlorida. The Vessel sustained damage during the storm and sank at its \\nmooring. Great Lakes denied coverage, asserting that Gray Group had \\nbreached several warranties.\\n\\nThe Warranties\\n\\nGreat Lakes contended that Gray Group breached the "hurricane protection\\n plan" (the HPP) that Gray Group had submitted in response to Great \\nLakes\'s "hurricane questionnaire" (the HQ). The HQ requested the \\nVessel\'s location during hurricane season and asked a series of \\nquestions regarding Gray Group\'s contingency plans in the event of a \\nhurricane. In the HPP, Gray Group stated that the Vessel would be \\nlocated at the Orleans Marina in New Orleans, Louisiana, and detailed \\nthe protective measures Gray Group would take when a hurricane \\napproached. At the time the Vessel sank it was not even near Louisiana \\nnor did Gray Group comply with the HPP.\\n\\nThe district court agreed with Great Lakes and granted it summary \\njudgment. Specifically, the district court held that the phrase \\n"application for insurance" was ambiguous but that extrinsic evidence \\nshowed that the parties intended "application for insurance" to \\nencompass the HPP. Continuing the analysis, the court concluded that \\nGray Group\'s statement in the HPP that the Vessel was to be located at \\nthe Orleans Marina during hurricane season was also ambiguous. Gray \\nGroup had thus breached its warranty, justifying Great Lakes\'s denial of\\n coverage.

ANALYSIS\\n\\nThe Court of Appeals of New York has long recognized the concept of \\nincorporation by reference. For nearly as long as New York has \\nrecognized incorporation by reference, its Court of Appeals has allowed \\nparol evidence to prove the identity of the paper that the parties \\nattempted to incorporate.\\n\\nGray Group\'s HPP, with its representation that the Vessel\'s "marina or \\nresidence" location during hurricane season was the Orleans Marina, was \\nincluded in the policy\'s ambiguous incorporation of Gray Group\'s \\napplication for insurance.\\n\\nUnder a bolded header labeled "WARNING," the HQ, which prompted Gray Group\'s submission of the HPP, advised that "this declaration and \\nwarranty shall be incorporated in its entirety into any relevant policy \\nof insurance." \\n\\nThe district court concluded that the HPP\'s representation regarding the\\n Vessel\'s "marina or residence" location was a warranty such that Gray \\nGroup\'s breach of it voided the policy. The Hello Dolly VI never got to \\nwhere she belonged. Gray Group\'s representations to the contrary were \\nvalidly incorporated into the policy as warranties, and Gray Group\'s \\nbreach of its warranties justified Great Lakes\'s denial of coverage when\\n the Hello Dolly sank.\\n\\nZALMA OPINION\\n\\nA warranty is a promise made by an insured that must be kept in its \\nentirety for the policy to be effective. When, during hurricane season \\nthe Vessel was docked in Florida rather than the promised marina in \\nLouisiana with special protections from hurricanes, the promise was not \\nkept and the warranty was breached, Not only did the vessel sink, the \\nbreach of warranty sunk the claim. (c) 2023 Barry Zalma & ClaimSchool, Inc.