William Campbell and the Western Bank, an Oregon Corporation, Plaintffs-Appellants v. Hartford Fire Insurance Company, a Connecticut Corporation

This case involves the interpretation of a marine insurance policy. The principal issue is whether the “held-covered” clause entitles an owner to recover for the loss of a vessel, despite the breach of an express warranty in the policy. This diversity action was brought under 28 U.S.C. § 1332 by James Campbell, owner of the vessel, against his insurer, the Hartford Fire Insurance Company. The district court held that plaintiff could not recover. We affirm.

Campbell purchased the marine policy to insure his fishing vessel, the Tinkerbell. Among several clauses limiting coverage, the policy included a warranty that the Tinkerbell would be “laid up and out of commission” from October 1, 1971, to April 13, 1972.

In the first week of September 1971, Campbell entrusted the Tinkerbell to one Gentry, with instructions to sail the vessel from Brookings, Oregon, north to Charleston, Oregon, and there to lay it up for the winter. Gentry proceeded toward Charleston and docked at Port Orford after one day’s sail. Various mechanical problems had arisen. Gentry kept the vessel at Port Orford for about a month and one-half, making repairs from time to time and taking the vessel on…