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A New York federal judge has refused to grant an early victory to Stoneline Group LLC in its $6.1 million insurance dispute with Liberty Mutual, ruling that too many questions remain unresolved regarding a shipment of marble allegedly ruined by a snail infestation.

The Coverage Controversy

U.S. District Judge Mary Kay Vyskocil dismissed Stoneline's declaratory judgment claim but left its breach of contract claim and other allegations intact. The stone company, which specializes in high-end marble, insists its insurer wrongfully denied coverage after the U.S. Department of Agriculture rejected the pest-infested shipment at Port Everglades, Florida, forcing costly fumigation in the Dominican Republic.

Liberty Mutual had argued that its warehouse extension clause precluded coverage, but Judge Vyskocil called this claim "specious," asserting that an extension is not an exclusion. The insurer also contended that improper packing caused the infestation, but the judge found no policy-defined parameters for what constituted improper packing.

What Counts as a Loss?

Another point of contention was whether the marble suffered "physical loss." Liberty Mutual suggested the infestation alone did not qualify, yet the insurer itself had submitted evidence stating the stone had been reduced to debris. Judge Vyskocil cited a 2024 New York Supreme Court ruling denying COVID-19 business loss claims, reinforcing the state's strict definition of tangible damage.

A Shipment Gone Wrong

Stoneline originally purchased $1.8 million worth of tumbled beige marble in summer 2022. Before departing from Aliaga, Turkey, aboard the M/V Canny Caroline, the cargo underwent fumigation and was certified pest-free. However, when it arrived in Florida in October 2022, authorities detected live pests and ordered the entire shipment destroyed or reexported.

Hoping to salvage its investment, Stoneline shipped the marble to the Dominican Republic for fumigation. But in transit, additional damage occurred due to alleged mishandling by Port Everglades stevedores. The company attempted to recondition the marble and return some cargo to the U.S., but ultimately realized the material was a total loss, compounding its financial burden.

The Insurance Standoff

Stoneline contends that its policy, which took effect on August 15, 2022, covered the shipment despite Liberty Mutual’s claim that the marble’s journey began too early. After rejecting multiple coverage appeals, the insurer eventually canceled Stoneline’s policy for "claims activity," without refunding the premium or paying out any claims.