## Facts

- Spot Pack, Inc. owned the fishing vessel M/V Spot Pack and insured it under a marine policy issued by Saskatchewan Government Insurance Office.
- The policy insured against specified perils including “Fire.”
- The vessel was destroyed by fire at sea, and the parties did not materially dispute that fire caused the loss.
- The insurer refused to pay, asserting the owner breached policy conditions requiring due diligence and seaworthiness by sending the vessel to sea in an unseaworthy condition.
- The insurer claimed unseaworthiness based on operating without a circuit breaker between the starboard generator and the main switchboard.
- The trial court found the vessel could properly operate without that circuit breaker because three fuses on each main line between the generators and the panel provided protection.
- After judgment for the insured, the insurer sought a new trial under Rules 59 and 60, alleging material trial testimony about the electrical system was false or misleading and that post-trial material showed unseaworthiness.
- The district court denied the new-trial motion, and the insurer appealed both the merits judgment and the denial of post-trial relief.

## Issues

1. Whether the insurer proved a breach of the policy’s due diligence/seaworthiness obligations sufficient to forfeit coverage for an otherwise covered fire loss.
2. Whether the district court abused its discretion by denying a new trial under Rules 59 and 60 based on alleged false or materially inaccurate technical testimony.

## Decision

- The Fifth Circuit affirmed the judgment for Spot Pack on coverage.
- The court held the insurer did not carry its burden to establish unseaworthiness or lack of due diligence that would defeat recovery for the fire loss.
- The Fifth Circuit affirmed the denial of a new trial, finding no abuse of discretion in rejecting post-trial claims of false or misleading testimony.

## Legal Principles

- Once an insured establishes a loss from an insured peril (such as fire), the insurer bears the burden to prove a policy-based forfeiture defense (including lack of due diligence or unseaworthiness).
- Seaworthiness determinations that turn on conflicting technical evidence are factual findings reviewed deferentially on appeal.
- Denial of a new trial under Rules 59 and 60 is reviewed for abuse of discretion; post-trial allegations that testimony was false or mistaken do not require a new trial absent a showing that the new material would probably change the result and that the trial court’s refusal was unreasonable.

## Conclusion

The court enforced coverage for a fire loss under a marine policy because the insurer failed to prove that the vessel’s electrical configuration made it unseaworthy or showed a lack of due diligence, and it deferred to the trial court’s credibility and fact determinations in upholding the denial of post-trial relief based on alleged false technical testimony.


Saskatchewan Government Insurance Office v. Spot Pack, Inc., 242 F.2d 385 (5th Cir. 1957)