New Hampshire Ins Co v. C'est Moi, Inc.

Facts

Lawrence O’Rourke purchased C’Est Moi, Inc. (C’Est Moi) in 1986, and became its president and sole shareholder. As part of this purchase, O’Rourke acquired a yacht owned by C’Est Moi, and subsequently insured it through Washington International Insurance Co. (Washington International). A fire destroyed the yacht in 1992, and Washington International paid O’Rourke $450,000 for the loss. O’Rourke reacquired the yacht from Washington International at salvage, paid off a loan and began restoring it. Washington International stopped insuring the yacht after the fire, and it remained unin- sured until 2001, when C’Est Moi obtained insurance from New Hampshire Insurance Company (NHIC).

In 2004, the yacht sank in calm waters while docked at Newport Beach, California. O’Rourke, on behalf of C’Est Moi, filed an insurance claim. NHIC investigated and deter- mined that the likely cause was a malfunctioning bilge pump. NHIC then sued C’Est Moi to rescind the insurance policy, and the district court granted summary judgment in favor of NEW HAMPSHIRE INS. v. C’EST MOI, INC. 2727 NHIC, holding that uberrimae fidei applied and that C’Est Moi misrepresented material facts on its…