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Lawyers, boats and money

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Boatbuilders learn the best way to avoid potentially costly lawsuits.

Boatbuilders learn the best way to avoid potentially costly lawsuits.

It’s hard to imagine that courtroom arguments about load distribution, torque and engine mounts are as riveting as legal dramas on television. But dig into some of the arguments that lawyers and experts have made to win clients’ cases, and you’ll hear about re-created scenarios, rebuilt components and re-enacted crashes.

The American Boat and Yacht Council is helping marine companies learn to avoid lawsuits, and to understand their options if they find themselves being sued. Its third Marine Law Symposium is scheduled for Jan. 8 in Seattle, and attendees will get in-depth perspectives of two fatal boating accidents and the lawsuits that followed.

The last symposium was held in Charleston, S.C., in April, when experts presented five cases and discussed the process of getting jurors — many of whom have no experience with boats — to grasp naval architecture and the Coast Guard Navigation Rules. In a 2011 case involving a collision on Georgia’s Lake Lanier, a 14-year-old boy was killed. Joe Angersola, a partner with the law firm Swift Currie in Atlanta, represented a Sea Ray owner, Jensen Hughes. Angersola tapped senior mechanical engineer Wendy Sanders to help defend his client, who had $2.3 million in liability insurance coverage for his Sea Ray.

Attorneys had to explain to the jury, which included five non-boaters, how the concept of right-of-way when driving an automobile doesn’t apply the same way to boats. “They put up a big aerial photo at a four-way stop sign and tried to treat it like an intersection,” Angersola says. “I had to get through to the jury it was not the same, that it’s like apples to elephants.”

The plaintiff’s attorneys argued that the defendant had “cut a corner,” resulting in the collision. Interviews, aerial images and photographs helped make their case, but evidence showed that the other boat operator had turned around to check on the tubers he was towing. After more than four years of litigation and a jury verdict on the eighth day of trial, the defense prevailed, Angersola says.

The situation exemplifies why it’s crucial that your insurance company hire a lawyer who’s experienced in maritime investigations, “not one that asks what that smell is when they walk in and smell fiberglass,” says Pat Duggan, president of Merrimac Marine Insurance. “If you’ve got an expert that claims to be in this industry but isn’t, it’s your reputation.”

Jeff Smith, a partner at Honigman, Miller, Schwartz and Cohn, adds, “Even if you’re in the right, it’s still going to cost you a lot just to go to the party” when companies don’t have the proper coverage.

Check all the boxes

Bob Taylor, principal engineer with Michigan-based Design Research Engineering, and Raul Chacon, partner at the Miami office of Manning, Gross and Massenburg, invalidated a plaintiff’s claim that the outboard fell off his Sea Fox while underway.

The plaintiff’s attorneys said a manufacturer error led to the accident, and the case was constructed around one checklist box that remained unchecked during the manufacturing process — not because the task wasn’t completed but because someone had simply forgotten to check a box. It is a common oversight, but such an error can lead to legal headaches for builders.

Boat owners Feliciano and Mildred Cortes and their daughter, son-in-law and grandson sought more than $2 million in damages from Sea Fox Boat Co. and retailer Davey Marine Center in Fort Lauderdale, Fla., after the engine dismounted and they were ejected from the boat. The family’s insurance provider, Continental Insurance Co., joined the suit.

Taylor examined photographs taken immediately after the accident and discovered that the engine had at some point been removed and remounted. “If this engine had fallen off the first day it was used, you’d see the connection, but this engine had been used for a season or two; the boat had over 100 hours on it,” Taylor says.

To mount the Mercury Verado on the boat, Yamaha bolts with metric threads had been used with Mercury nuts that had standard threads. Taylor looked at whether the mismatch could have caused the accident using the same nuts and bolts on a replica transom that Sea Fox built. “That connection, even with the mismatched nut and bolt, can still withstand 10,000 pounds of force,” Taylor says, adding that he found other manufacturers that had made the same error. “That’s why there are boats out there that have this mismatched connection and the engines haven’t fallen off.

“The plaintiff expert just went on a notion of, hey it’s a mismatch — that’s got to be the cause. He thought it was a simple thing,” Taylor adds. “That engineer never did any testing or analysis to find out whether the mismatch was the cause.”

Chacon’s partner, Russell Pfeifer, questioned the plaintiff about his propensity for speed, and he admitted that he’d adjusted the engine mount to make the boat faster, and forgot to put the top nuts back on, which caused the failure.

As for checking off paperwork boxes, American Boat and Yacht Council technical vice president Craig Scholten described the various checklists and online tools he has been putting together to help manufacturers comply with ABYC and ISO standards, as well as National Marine Manufacturers Association certification. As Taylor’s case showed, meeting and documenting such parameters can make the difference in front of a jury.

Ignoring it won’t make it leave

 When there is a manufacturer error, getting ahead of a situation is crucial, says Christina Paul, a Miami-based attorney with K&L Gates. One builder of offshore sportfishing yachts heard from a customer whose boat was excessively wet underway, obscuring the view at the helm and soaking anyone at the stern. This customer had hull No. 10. Later, the owner of hull No. 7 told the builder about the same problem.

“At the time the builder was dealing with these claims, the general thought process was that it really wasn’t the boat,” Paul says. “That delayed the process as to how the boat was dealt with.”

The manufacturer eventually tried to make repairs on the boats. “At that point, you have a problem you’re identifying,” Paul says. “So you’re acknowledging to some extent, OK, we’ve got wet boats, but we’re on hull 10. Do we see a pattern in what’s happening? Now we’ve got two hulls. Are we going to have other hulls popping up, too?

“As lawyers, we hate to hear that,” she adds. “It’s very hard to deal with a lawsuit when you have a manufacturing issue. You know right away it’s a case you can’t try.”

The issue arose because builders often test fishing boats with low fuel and water, and without a tower, Paul says, which makes the boat lighter. The two clients who brought suits were using their boats to cruise to the Bahamas and other places for days, and they were running them with full fuel and water, she says.

Lessons learned

“Identify issues in manufacturing early, and listen carefully to the customer,” Paul says. “It took us a lot longer than it should have to really identify what the issues were.

“I’ve handled a lot of client warranty and liabilities issues. This customer was a good guy,” she adds. “He was extremely patient, and he told us in litigation, ‘Look, I’m telling you this now, but I’ve already told this to the manufacturer.’ Now I have to figure out if we have someone who’s proud of that boat design and doesn’t want to say, ‘We’ve got a problem.’ ”

Manufacturers should also be aware that anybody who engages with the customer can be a potential witness. In this case, the plaintiff’s attorneys deposed service technicians who had worked on the boat, as well as other owners.

Paul urges manufacturers to take customers who have complaints out on the boat and run it together. “Test the vessel to confirm or deny the customer’s concerns,” Paul says. “You want to test products according to how they will be used.”

ABYC and NMMA are working on a potential set of testing protocols for various boats and segments. But it is taking time because of the vast differences among boats, ABYC president John Adey told the Charleston symposium.

“The impact this line takes is that you have a value issue,” Paul says, even after the problem was fixed on the design end. “That boat is now worth a lot less. There’s a lot of dock talk with vessels of this size. It can devastate the manufacturer.”

Next year’s symposium

ABYC hadn’t planned a symposium for 2019, Adey says, but the positive feedback from the second event prompted the group to schedule a third. “As an attorney whose primary emphasis is the recreational marine business, attending the Marine Law Symposium for the past two years has been extremely rewarding,” Paul says. “The combination of speakers from fields such as law enforcement, general industry personnel, insurance and legal creates a diversified learning experience such that anyone in the industry can benefit from the symposium.”

The first case study experts will present at the 2019 Marine Law Symposium is Warren v. Shelter Mutual, which stemmed from a 2005 accident that killed 20-year-old Derek Hebert. It took 10 years to resolve, with two appeals. Speakers include the defense lawyer, the government investigator and the defense expert. Kiko Villalon of Ancon Marine Consultants, Walter Laird of Forcon International and David Frohn with the Manning, Gross and Massenburg law firm will present their roles in the case.

The second case study, Wolkowicki v. Creative Yacht Management, examines the problems that can occur when dealer-trained technicians weren’t used in an improper repair that resulted in three deaths in 2014. The resulting $27.9 million lawsuit included 3D animation, questionable experts and manufacturer involvement. The case study will be presented by Dawn Beery of the Benesch law firm, Greg Davis of Davis Marine Consulting Associates and Pete Chisholm of Mercury Marine.

The symposium will include a mock deposition where two attorneys will try to elicit certain responses from an expert witness. It will be held at the Renaissance Hotel Seattle. For information, visit abycinc.org or email Meghan Sykes at msykes@abycinc.org.

This article originally appeared in the September 2018 issue.

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