The Federal District Court for the District of Hawaii found bodily injury suffered in a boating accident was barred under the policy’s Watercraft and Events Exclusions. Great Divide Ins. Co. v. Hawaiian Kamali`i, 2019 U.S. Dist. LEXIS 43106 (D. Haw. March 15, 2019).
The Hawaiian Canoe Club (HCC) hosted and sponsored the 2016 Pailolo Challenge Outrigger Canoe Race on September 17, 2016, from Kapalua, Maui to Kaunakakai, Moloka`i. Mark Stevens agreed to provide and operate an escort boat, the Ohana, for one of the teams. Before the Ohana began escorting the underlying plaintiff’s team’s canoe to the staging area, Steven’s hat flew into the water. The underlying plaintiff went into the water to retrieve the hat. As she re-entered the boat from the rear, the Ohana reversed and a propeller struck the plaintiff, causing significant injuries. Her left leg was eventually amputated.
The plaintiff sued Stevens, alleging he was negligent or grossly negligent in operating the Ohana. HCC was sued for negligence and for failure to obtain sufficient liability insurance prior to the event.
HCRA had a CGL policy with Great Divide. The policy’s Watercraft Exclusion barred coverage for “‘bodily injury’ . . . arising out of the ownership, maintenance, use or entrustment to others of any watercraft owned or operated by or rented or loaned to any insured.” An endorsement excluding events barred coverage for “bodily injury” arising out of any “event” managed, operated or sponsored by the insured.
Based upon the two exclusions, coverage was denied. Suit was filed and the court entertained cross motions for summary judgment.
Judge Kobayashi found that Stevens had no coverage based upon the Watercraft Exclusion. Moreover, if Stevens was an insured under the policy and the Watercraft Exclusion applied to him, it would also preclude coverage for HCC. Even if the Watercraft Exclusion did not apply to claims against HCC, coverage was still barred for HCC under the Events Exclusion.
The 2016 Pailolo Challenge was an activity that HCC managed or operated. Further, the accident occurred during the event. HCC argued that the underlying plaintiff entered the water before the race started. There was no Hawaii law interpreting an Events Exclusion, but the court predicted that the Hawaii Supreme Court would adopt the analysis of other courts that had addressed the exclusion for sporting or athletic events. When the underlying plaintiff entered the water, the race had already started, although her crew was still in the staging area. To participate in the Challenge, the underlying plaintiff had to re-board the boat and rejoin her crew. Therefore, the claims arising from her injuries were not covered based upon the clear, unambiguous language of the Events Exclusion.
There were no genuine issues of material fact, and it was impossible for the underlying plaintiff to prevail on a claim against HCC that was covered by the policy because either the Watercraft Exclusion or the Events Exclusion applied. Therefore, as a matter of law, Great Divide did not have a duty to defend or indemnify. Summary judgment was granted to Great Divide.