It
has since been learned that the survivors of at least one of the
victims in the EL TORO incident has filed suit in excess of $10
million against Insurance Company Of North America, their staff
surveyor and the vessel owner, Chesapeake Bay Fishing Parties,
Inc.
Attorneys on behalf of INA and the surveyor had
filed a motion for summary judgment for dismissal which was recently
denied by the trial judge. The basis for that denial should be of
interest to surveyors.
The plaintiff claims that INA and the surveyor
(personally) were negligent for their failure to notify the vessel
owner of the results of the survey, and that they could have, and
should have, placed the vessel on port risk. Whether there was an
existing policy on EL TORO was not clear, but the information available
indicates that INA insured the four other vessels owned by Chesapeake
so presumably they insured the entire fleet.
According to court documents, the surveyor's report
stated "This may be the worst Coast Guard inspected boat I
have seen. In it's current condition, I do not consider it suitable
for operation or carriage of passengers."
That's pretty heavy language but it did not save
him from being sued. While defendant INA and the surveyor claimed
that they could not be negligent because there existed no duty to
the plaintiffs, plaintiffs argued that INA and it's surveyor had
a special relationship with the vessel owner which burdened them
with the duty to notify the results of the survey.
Since the accident occurred only 5 days after the
survey, its entirely possible that the surveyor had not even completed
his written report as of that time. But the court ruled that there
was enough of a factual dispute on these claims as grounds for denial
of the summary judgment.
Remember here that the plaintiffs are a third party,
the survivors of the deceased. The claim of a special duty comes
from not merely from the vessel owner, but the passengers. So what
its saying then, is that the surveyor's duty is not limited to the
vessel owner, but that that duty can extend to anyone in, on or
around that vessel.
This ruling should be particularly troubling to
surveyors. The effect of it is to suggest that the surveyor may
have a duty, and that the notification should be immediate. This
tragedy occurred 5 days after the survey, but could just as easily
have occurred 5 hours after the survey. Its not unusual for a commercial
vessel to leave the dock only minutes or a few hours after the surveyor
completes his work. There have been numerous times when this writer
performed surveys in only a couple hours between trips. With fishing
and ferry vessels, this is more often the case than not.
This demand places an untenable burden on the surveyor
for it leaves him no time for research or reflection on his findings.
It suggests that in very gray legal world, the surveyor is required
to see everything in black and white, that he should make snap decisions
with no time for consideration or reflection, yet alone the time
to compose a written report.
The surveyor now gets it from both sides.
The judge is saying that the surveyor may be liable for not
making an immediate notification. On the other hand, if the surveyor
has to condemn the vessel on a snap decision, and should he be in
any way wrong - remembering that he is given no time for consideration
- then surely the owner will sue him for being in error and costing
the vessel owner a loss of revenue, among many other damages real
or imagined.
As an example of how this might work, let's say
that the owner told the surveyor that the vessel was bronze fastened,
and was refastened 8 years ago. But knowing the builder of the vessel,
the surveyor believes that it is fastened with steel nails. With
the vessel being afloat, he has no way to check this, and otherwise
finds no indication of a hull problem. However, he knows that if
the owner is mistaken, or not telling him the truth, a 30 year old
wooden vessel that is fastened with nails is highly unlikely to
be seaworthy. In order to complete his survey, the surveyor needs
to contact the builder (if still in business) or do some other kind
of research to attempt to verify the owner's claims. It may take
him several days to complete this research.
In the meantime, the vessel goes to sea and is
lost and the surveyor is now in the hot seat. The INA surveyor probably
would have been wise to frame his defense in this manner, in essence
stating that the survey was not complete. Whether it was or not,
we don't know, nor would anyone have known had the surveyor given
notice that his work was not complete.
This sort of catch 22 is not limited to commercial
vessels and has been known to happen with yachts being used solely
for pleasure. A number of cases have arisen where there were ongoing
repairs while the survey was being done, repairs involving a condition
that would cause unseaworthiness. The surveyor either assumed that
because it was being worked on, or because the owner assured the
surveyor that a condition would be corrected, the surveyor omitted
that situation from his report. And once having made the fatal assumption,
of course the problem was not fully corrected and resulted
in a serious casualty for which the surveyor was later blamed.
As most surveyors know, whether you're right or
wrong is ultimately irrelevant in the face of a major lawsuit. A
defense of this magnitude would bankrupt the surveyor even in the
initial stages, yet alone a case involving multiple plaintiffs and
defendants that drags on for years. And in the EL TORO case, the
surveyor is a direct employee of the insurer, and yet he is not
immune to being sued personally.
So, is there a way out? Fortunately there is. Should
such a situation arise upon the completion of a survey, whether
of a pleasure craft or passenger vessel, the answer is for the surveyor
to advise the vessel owner both verbally and in writing. He does
not have to state that there are defacto defects that absolutely
cause unseaworthiness when he is unsure about that. Instead, he
can advise the owner that there MAY be defects that cause unseaworthiness,
and that these defects require research before the surveyor can
render his final judgment. Even if the vessel leaves the dock 5
minutes after he steps off the vessel, he should give that verbal
notice and follow up with it in writing the very same day, even
if he has to hire a courier to do so.
The point is to toss the ball back to the vessel
owner. It's his boat, and he's the one who should be responsible
for ensuring its seaworthiness, not the surveyor. But when the surveyor
steps into the picture, that burden begins to shift if he has special
knowledge of unseaworthiness. If the surveyor has that special knowledge,
but does not communicate it to the vessel owner, then he may be
complicit.
When the verbal advice is given, the surveyor should
try to do it in a situation where there are witnesses. Then he should
record the moment on his survey notes including the day an hour.
Better yet, try to get owner or captain to sign a short statement
saying that they have been notified of potential problems. It's
your life and livelihood at stake, so don't be shy about it.
Situations like these again point up the truth
that the surveyor can't ever take too many photographs. Here's another
neat little trick of the trade that only experience can teach. Physically
lead the vessel owner to the problem at hand and ask him to point
to it while you take his picture pointing to it. Unless he can prove
that you have a doctored photo (yes, be sure to staple those negatives
to the file!!!), there's no way that he can deny that you not only
told him, but actually showed him. If you suspect a serious problem,
find somebody involved with the vessel and find a way to work them
into the photograph, even if he's not willing to assist you in protecting
yourself. Do that and you've now got the best liability insurance
you could ever get at the cost of a photograph. This insurance doesn't
just defend you, rather it protects you from being sued in
the first place.
Then, if a suit should suddenly appear out of the
blue, all you have to do is send the lawyer a copy of your pictures
and threaten to counter sue. I've done this many times. It works!
On one occasion I received suit papers alleging that I failed to
inform a boat buyer that the fuel tanks were corroded, tanks which
sprung leaks shortly after the survey. The allegation was that I
had not explained the seriousness of the problem clearly. Not only
was it mentioned in the report, but I also had a photo of the client
pointing to the corroded spot near the tank bottom. The boat owner
didn't bother to tell his lawyer that. Instead, he gave the lawyer
the original report minus the photos. In this case, the boat
owner was even willing to deceive his attorney. When I sent the
lawyer the photos, the suit was dropped.
The real protection comes about when the
vessel owner remembers that you took his picture and that
you have proof that you physically showed him. My man with the corroded
fuel tanks apparently forgot, but it was no trouble to refresh his
memory.
Passenger carrying vessels pose enormous risk for
independent surveyors. The risk is just as bad whether its a 35
foot dive boat or a 100 foot ferry boat. One death is not much of
a bigger nightmare than a hundred deaths. The best protection that
any surveyor can get is to simply not to involve himself with old
vessels. But even if the vessel is new, passenger vessels call for
extraordinary caution. The large car ferry that sank in the Baltic
two years ago was nearly new and yet took several hundred people
to the bottom. It will also take down everyone involved with it,
innocent or not.
By the time a surveyor reaches the point in his
career where he has surveyed a thousand or more vessels, the odds
become heavily stacked against him that a vessel that he has surveyed
will meet with tragedy. By the time it reaches two thousand, it
is inevitable. By three thousand its likely to happen a dozen times.
And that calls for a strategy of self-preservation. If he doesn't
have one, the best advice is to get one.
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