## Facts

- Coast to Coast Seafood, Inc., a U.S. seafood importer, purchased frozen black tiger prawns from Thai suppliers through intermediaries.
- After an initial five-container shipment arrived without incident, Coast to Coast agreed to buy 24 additional containers on “C & F” terms, paying 80% on receipt of bills of lading and 20% after arrival and FDA clearance.
- Coast to Coast held an open marine cargo policy issued by multiple underwriters.
- The policy included a warehouse-to-warehouse clause defining the covered transit period, an all-risks clause excluding preshipment conditions, and an unexplained-shortages clause addressing shortages from sealed containers.
- The 24 containers shipped from Thailand to California (often via transshipment ports) under bills of lading describing the cargo as “frozen seafood products shrimp,” with weights subject to shipper disclaimers.
- Upon arrival, containers were still sealed, but some contained blocks of ice with little shrimp or mixed seafood rather than the contracted quantity and quality.
- Coast to Coast claimed the missing/adulterated cargo was a covered transit loss; the underwriters denied coverage, arguing the loss may have occurred before the cargo entered covered transit.

## Issues

1. Whether the insured met its burden under a warehouse-to-warehouse all-risks marine cargo policy to show the loss occurred during the covered transit period rather than before shipment.
2. Whether the unexplained-shortages clause provided coverage for shortages or substitution that may have existed before transit began, including nonexistence or misdescription of cargo at shipment.

## Decision

- The Court of Appeals reversed summary judgment for Coast to Coast.
- Coast to Coast proved a loss but did not present non-speculative evidence that the loss occurred during the policy’s covered transit period.
- Bills of lading descriptions and weights, especially with shipper disclaimers, did not establish the quantity and condition of goods when coverage attached.
- The unexplained-shortages clause did not expand coverage to preshipment losses or to cargo that may never have been loaded as represented.
- Because the evidence was consistent with fraudulent or improper packing before loading as well as with in-transit loss, Coast to Coast failed to carry its initial burden to establish coverage.

## Legal Principles

- Under an all-risks marine cargo policy, the insured bears the initial burden to prove both the existence of a loss and that the loss occurred within the policy’s temporal grant of coverage (as defined by the warehouse-to-warehouse clause).
- “All risks” coverage applies to fortuitous losses within the policy period; it does not insure against losses outside the defined transit period.
- An unexplained-shortages clause addressing sealed-container shortages operates within the policy’s temporal limits and does not convert cargo insurance into a guaranty against preshipment nonexistence, mispacking, or seller fraud.
- When the insured’s proof leaves it speculative whether the loss occurred inside or outside the coverage period, coverage is not established as a matter of law.

## Conclusion

The court held that Coast to Coast could not recover under its marine cargo policy because it failed to show the shortages and substitution occurred during the covered warehouse-to-warehouse transit, and the unexplained-shortages clause did not extend coverage to losses that may have existed before shipment.


Coast to Coast Seafood, Inc. v. Assurances Generales de France, 112 Wn. App. 619, 50 P.3d 662 (Wash. Ct. App. 2002)