Cigna Property & Casualty Insurance v. Polaris Pictures Corp.

Defendants/appellants Polaris Pictures Corp. (Polaris) and U.S. Inbanco Ltd. (In-banco) appeal from the district court’s judgment granting Cigna Property and Casualty Insurance Company (Cigna) rescission of a marine insurance contract on the ground of fraud.

The insurance contract was for insurance on a yacht. The district court found the insurance was obtained with the fraudulent intent to sink the yacht and collect the proceeds. We affirm the district court’s rescission judgment, but not on the ground of fraud. The pleadings and uncontroverted evidence at trial support a judgment of rescission on the ground of failure to disclose material facts in the insurance application. We affirm the judgment on this ground.

We also affirm the district court’s judgment awarding attorney fees in favor of Cig-na, and the court’s addition of appellant Rex K. DeGeorge as a judgment debtor.

FACTS

A. Prologue

DeGeorge, a Beverly Hills attorney, has the remarkable experience of having owned several yachts which have been lost at sea. Each vessel was adequately insured against such loss, and except for the yacht that sank in this case, DeGeorge collected the insurance proceeds on every one of…