By Alyssa Cutler Massachusetts Lawyers Weekly June 27, 2005

Related Articles:
October 21, 2004

Plaintiff successfully sought vessel as security; was auctioned off for $1.7 million

$2 million settlement

On Nov. 25, 2003, the plaintiff was working on deck of the defendant scallop vessel. The crew was in the process of hauling back and unloading scallops on the boat. While the plaintiff was waiting for the scallops to be dumped on the deck, a 20-ton block broke free, struck the plaintiff, scalped him and crushed his C3/C4 vertebraes, resulting in incomplete quadriplegia.

Investigation revealed that the swivel that held the block failed, causing the block to fall. The plaintiff’s liability focused on the “unseaworthiness” of the swivel. The defendant disputed the unseaworthiness.

The plaintiff’s employer had coverage of $1 million; however, based on the magnitude of the medical bills and it being a drawn down policy, it was inadequate. The plaintiff filed a lawsuit against the employer and owner of the vessel, seeking the remainder of the insurance policy.

The defendant refused to tender the remainder of the insurance policy despite the plaintiff’s request and a Chapter 93A letter from the plaintiff. In response to the 93A letter, the defendant’s insurance company filed a separate lawsuit against the plaintiff and the defendant seeking a declaratory judgment as to whether, under the terms of the insurance policy, the funds had to be tendered to the plaintiff.

Due to the insufficient funds, the plaintiff also filed a separate lawsuit against the vessel, in rem, seeking to secure the boat as security for any judgment the plaintiff obtained in excess of the insurance policy. To protect the plaintiff’s interest in the vessel, the plaintiff moved for seizure of the vessel, which was allowed, and five months later the court allowed the auction of the boat by U.S. Marshals.

The defendant fought the auction on several grounds. The defendant moved to enforce an alleged contract to purchase the vessel that was signed prior to its seizure. The plaintiff disputed the authenticity of the agreement. The defendant also argued that the maximum value of the vessel at auction was $900,000, and that more likely than not it would sell for less at auction, thus the court should enforce the alleged contract to purchase the vessel.

The court rejected the defendant’s arguments and ordered the plaintiff’s request of a minimum bid of $1 million. At auction, the vessel was sold for $1.7 million.

The case settled for the remainder of the insurance policy, the funds from the auction of the vessel minus payment of some corporate expenses and payment of all outstanding medical bills.