A ship was taken to a marine service facility in Florida for extensive refitting, renovation and repair upon arrival from Greece. The vessel owner, which was insured by Lloyds of London, requested a "laid up and out of commission" endorsement to be effective for the four months during which the work would be performed.

The ship capsized and sank on the return trip from another repair yard, to which it had been moved during the four month period and which was located a half mile down river from the facility described in the endorsement. Lloyds denied coverage, asserting that the trip out and the trip back were in violation of the "laid up and out of commission" endorsement, specifically applicable during the undisputed time frame ". . . .at Anchorage Marine, Fort Lauderdale, Florida." During the course of litigation, the trial court entered summary judgment in favor of the insurers. Appeal followed.

Largely because of varying circumstance, the appeal court said that uniform conclusions were not reached in various cases construing "laid up and out of commission." It did note, however, that no case was found "which supports the proposition that a ship operating on a navigable stream under its own power is laid up." It agreed with the conclusion reached in Tsalapatas v. Phoenix Insurance Company 115 S.E.2d 49 (S.C. 1960), as follows:

"We are of the opinion that the risk of striking an underwater object while the boat was being operated under its own power was one of the risks sought to be obviated by the terms of the warranty."

The court found, from the evidence in the case under review, that the ship was using its own power to help navigate when it ran aground. It then listed and foundered when water poured through open portholes. It was not contested that the ballast had been removed and that the porthole covers near the waterline had been taken off. It was clear that the ship was not fit for any voyage and that the ship's engines were being used to navigate when the accident occurred.

In its argument for coverage, the insured stressed that the mishap occurred when the ship was back in the geographical limits of the designated marine service company. The court was not persuaded by the argument, stating that the ship was engaged in a voyage specifically excluded by the pertinent endorsement. The navigation in progress at the time of the accident was completely at odds with the lay up requirement.

The judgment of the trial court was affirmed in favor of the insurers and against the insured.

(MARINE CHARTER & STORAGE LTD., INC., Appellent, Cross-Appellee v. ALL UNDERWRITERS AT LLOYDS OF LONDON ETC. ET AL., Appellees, Cross-Appellants. Florida District Court of Appeal, Fourth District. Case Nos. 88-2272 and 88-2856. September 12, 1990. CCH 1990 Fire and Casualty Cases, Paragraph 2759.)