Another Claim of Record Jones Act Award

A native of Puerto Rico was recently awarded a record $7.5 million settlement in a back and neck injury lawsuit following the sudden explosion of an air tank aboard a marine vessel that was docked for repairs. Plaintiff Edward Perez-Mossetty was seriously injured in the explosion.  The then-37-year-old was affecting repairs aboard the vessel on behalf of defendants American Tugs Inc. The plaintiff was in the engine room that also housed an aging air tank that was exhibiting signs of thinning and pitting.

According to court records in the back injury compensation claim, the tank had been installed without a working pressure relief valve and was normally operated in an automated fashion, with the air compressor automatically shutting down when the desired pressure within the tank was reached.  However, on the day of the accident, employees had been operating the compressor in manual mode as the compressor had been shutting off too soon. The pressure within the tank had built up to a level that the pitted walls of the tank could not withstand. The ensuing explosion  caused Perez-Mossetty to be thrown into the air. He landed on his neck and sustained serious back and neck injuries from which, in spite of surgical intervention and months of rehabilitative treatment, he has failed to fully recover.

Perez-Mossetty suffered a serious neck injury when he landed after being thrown into the air from the explosion. The plaintiff suffered partial paralysis and serious motor and sensory impairments. He requires assistance to walk and to maintain daily activities. Perez-Mossetty also remains in constant pain and will require assistive devices and ongoing medical care and treatment going forward for as long as he remains alive. He can no longer work.

Despite the claim of a record award, this blog reported back in October 2013 of an award of $9.6 mil   http://blog.ligmarine.com/2013/10/is-96-mil-record-award.html so whilst this may not be “THE” record, it certainly worth notice and serves to reinforce that $1mil of P&I/crew coverage is just not enough today (see http://ligblog.ligmarine.com/2014/06/are-current-pi-limits-enough/ )

New Seaman Status Test in 5th Circuit.

On March 10, 2014, the United States Fifth Circuit Court of Appeals upheld that a land-based vessel repair supervisor was entitled to status as a Jones Act seaman.

Elevating Boats, LLC operates 26-30 lift boats out of Houma, Louisiana.   Larry Naquin, Sr., a vessel repair supervisor was seriously injured while testing one of the shipyard cranes at the shipyard.

In the decision Naquin was able to recover under the  Jones Act even though:

•   Naquin rarely spent the night aboard a vessel;

•   He was a shore-based repair supervisor who worked at a shipyard

•   The vessels where Naquin worked were ordinarily docked; and

•   Naquin never ventured out into the immediate canal area or onto open sea.

Seaman status used the two-prong test enumerated in Chandris v. Latsis.  A worker must prove that (a) his job contributes to the function of the vessel or accomplishment of its mission and (b) that his connection to a vessel in navigation is substantial in duration and nature.  

In this case the court quickly determined that Naquin spent 70% of his time repairing and operating cranes and other equipment aboard the lift boats (even though it was at the dock), Naquin could satisfy the requirement.

2014 Waveline Report

We are pleased to announce the release of "Waveline 2014: State of the Marine & Longshore Market", commissioned from LIG’s national survey in January 2014 to gauge the state of the Longshore and Marine Insurance Market. This survey measures the changes in pricing of Longshore and Marine Insurance over calendar years 2013 versus 2012, with projections for 2014. 

The “2014 Waveline Report” encompasses a fascinating overview of the State of the Market for Longshore, Blue Water, Brown Water, MEL, Cargo, MGL/SRL, Docks & Piers, Marinas & Boat Dealers, Yachts / Personal Boats & Charter and Sightseeing Boats, Account Size Rate History, and Policy Delivery Time.  This report includes comparison of the data compiled since it started in 2006.

The FREE report is available online at WaveLineUS.com download your copy now.

$850,000 BOAT INSURANCE FRAUD

Acting United States Attorney A. Lee Bentley, III announced a grand jury returned five indictments charging seven men with conspiracy to commit mail and wire fraud.

The men charged are John J. Kurant, Jr., of St. Augustine, Adam Horvit, of Parkland, and Christopher E. Labaire, Greg Wilson, Jerold Wolfe, John Grant, and Scott Coleman all from Jupiter.  They each face a maximum penalty of 20 years in federal prison if convicted.   The Department of Justice says the indictments of Kurant and Labaire cite that Boat U.S. paid out $853,758 in insurance proceeds based upon the sham and fraudulent marine insurance claims. 

The DOJ says the scam, worked by Kurant, a claims adjuster for Boat U.S., partnering with Labaire, defrauded their marine insurance program by creating and submitting fake insurance policies and claims.  The claims included the other men as pleasure boat owners who experienced 'total losses' including theft, damage, or sinking.  When the boat insurance claims were paid, the DOJ alleges the seven men shared the money.

UPMOST GOOD FAITH

There has long been a principal of upmost good faith in Marine Insurance, i.e. you have to disclose information that is relevant, even if you are not asked for it and this recent case form Puerto Rico really emphasizes that

A Catlin is a Lloyd’s syndicate and the Federal Court ruled they were justified in rescinding policy coverage for a sunken dry dock because its policyholder had not provided it with a complete and accurate information about its value and condition, a federal court ruled.

San Juan Towing & Marine Services Inc. (Puerto Rico) purchased a dry dock, the Perseverance, for $1.05 million in 2006.  In February 2010, it advertised the dry dock for sale for $1.35 million. In September 2011, it sold it for $700,000 to Leevac Shipyards (Louisiana) The dry dock sank the end of that month, according to the court records.

Catlin insured the dry dock for $1.75 million in April 2011. The Underwriters was never informed of its much lower $700,000 sale price, according to the ruling.

MEL IN ALASKA -- URGENT

If you work in Alaska, you have probably received a notice from the Alaska DOI regarding a hearing regarding the AK export list.  Details can be found at http://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=169486

The hearing is Thursday October 3^rd and the deadline for written comments is Tuesday, October at 4:30 ADT

As you may be aware there have been significant issues recently on exporting Maritime Employers liability (MEL)  coverage, particularly to London, and yet there are almost no licensed markets writing this coverage in Alaska for most operations.

As such I would urge you to send your request to have Maritime Employers Liability added to the export list for Alaska urgently to Sarah.mcnair@alaska.gov before the deadline!

New Excess/Umbrella Program

We have just completed our exclusive London Excess program and are open for submissions.

It provides up to a $10 million limit on a first excess/umbrella, or on excess layers and will participate when needed. No Fishing Boats nor Oil and Gas but otherwise all forms of commercial marine business can be covered. $10,000 minimum premium. Send your submissions to SUBMIT@LIGMarine.com