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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

TERRY v. ACE AMERICAN INSURANCE COMPANY

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
4:15-cv-00025 Search Pacer
ACE Group party(s): 
Opposing Party: 
Edward Terry
Court Type: 
Federal
US District Court: 
Eastern District of North Carolina
Date Filed: 
Feb 6 2015

The Plaintiff, Edward Terry, complaining against the Defendant, Ace American
Insurance Company, alleges and says:
1. The Plaintiff, Edward Terry, is a citizen mid resident of Pamlico County, North
Carolina.
2. The Defendant, Ace American Insurance Company, is a corporation domiciled in
the State of Pennsylvania and licensed to do an insurance business in the State o f North Carolina.
3. At all times relevant hereto, the Plaintiff, Edward Terry, was the owner o f a 1995
Hunter sailboat, model 430,43 feet in length, hull identification number HUN0182A595.
4. That on December 3, 2011, Ace American Insurance Company, issued a policy o f
insurance, policy number YWR Y08541723, insuring Plaintiff, Edward Terry’s 1995 model
Hunter sailboat model 430, said policy being designated as policy period o f December 3,2011 to
December 3, 2012. That said policy is, by reference, incorporated herein, a copy o f s p ie being
attached hereto as Exhibit “A”.
5. Said policy insured the vessel against “Property Damage to the Insured Vessel
Caused by an Occurrence as well as Protection Against Loss and Salvage charges, except as
excluded in this policy or by endorsement.”
6. Said policy defined “Occurrence means a loss or accident to which this insurance
applies and which takes place within the policy period appearing in the Declarations Page of this
policy.”
7. The Plaintiff kept the vessel moored at a private pier in Vandemere, North
Carolina. On March 25, 2012 the Plaintiff discovered the vessel to be partially submerged at the
dock where it was moored.
8. The Plaintiff promptly notified Ace American Insurance Company o f the loss.
9. The Defendant, Ace American Insurance Company, sent its marine surveyor to
survey the damage and make a determination as to the cause o f the loss.
10. Upon information and belief, the Defendant, Ace American Insurance Company’s
marine surveyor and employee, Kim I. MacCartney visited the vessel on March 29, April 4,
April 10 and April 12,2012 for the purpose of performing the inspection.
11. During the course o f the inspections, Mr. MacCartney, damaged several items
aboard the vessel.
12. By letter dated April 25, 2012, the Defendant by and through its Claim Director,
R. Michael Bums, advised the Plaintiff that its surveyor determined that the vessel sank as the
result o f a leaking packing gland.
13. The Defendant, Ace American Insurance Company, denied Plaintiffs claim
stating “that the damages to your vessel were the result of neglect and lack of reasonable care or
due diligence in the maintenance o f the insured vessel.”
14. Plaintiff requested from the Defendant, Ace American Insurance Company, a
copy o f its surveyor’s report, which was provided.
. . I
15. The Defendant, Ace American Insurance Company’s marine surveyor’s report
indicated:
CAUSE OF DAMAGE: The proximate cause o f damage was the
shaft log flax packing type stuffing box gland that was leaking at a
measured rate o f over eight (8) ounces per minute. Leakage of this
magnitude, over 3.65 gallons per hour or more than 90 gallons per
day is more than a bilge pump is designed to keep up with.
According to the American Boat & Yacht Council standard H-22,
“...electric bilge pump systems (are) intended for the control of
spray, rain water, and normal accumulation of water due to
seepage and spillage.” This does not include large volumes of
water resulting from a failure to properly maintain a shaft stuffing
box gland.
The proximate cause was exacerbated by two electric bilge pumps
that were found to be non-operational. This constant leakage of a
significant amount of water likely caused the failure of the forward
bilge pump and the after bilge pump float switch.
16. After receiving the denial of his claim and a copy of the Defendant’s surveyor’s
report, the Plaintiff retained a marine surveyor to review the Defendant’s surveyor’s report and
to conduct a survey.
17. The surveyor retained by the Plaintiff reviewed the survey report o f Ace Marine
Insurance Company’s surveyor and inspected the vessel. Based on Plaintiff’s surveyor’s initial
examination o f the vessel and after make calculations in regard to the reported water flow from
the propeller shaft stuffing box and considering the pumping capacity of the bilge pump, it was
his opinion that the water flow o f the stuffing box was insufficient to have resulted in the
flooding o f Plaintiff’s vessel as opined by Ace Marine Insurance Company’s surveyor.
18. After concluding that the vessel did not take on water and partially sink as opined
by Ace Marine Insurance Company’s surveyor, the Plaintiff’s surveyor conducted a second
inspection o f the vessel, the area where the vessel was moored at the time of the partial sinking
and consulted NOAA weather records for the area.
19. This second inspection and review of the weather records indicated that the
primary source of water entering the vessel was through the forward toilet as a result of the
vessel grounding at the dock due to lower than normal water levels in Vandemere Creek, due to
wind conditions. This grounding resulted in the vessel’s bow tilting downward with resulting
back flooding through the toilet in the forward head.
20. The partial sinking and damages resulting therefrom are damages covered by the
policy o f insurance aforesaid.
21. That as a direct and proximate result of said partial sinking and the resulting
damages, the Plaintiff’s vessel sustained damages in the amount o f $106,922.15.
22. The marine surveyor employed by the Defendant, during his inspection of the
vessel damaged the salon table, broke waterlines to the forward toilet, damaged bilge pump
wiring and discharge lines, damaged sleeping covers with battery acid and damaged the battery
compartment.
23. The cost of repairing the damage done by the Defendant’s employee is $3,100.80.
WHEREFORE, the Plaintiff prays:
1. That he have and recover o f the Defendant the sum of $106,922.15 for damages to
his vessel as a result of its partial sinking.
2. That he have and recover the sum of $3,100.00 for damages done to his vessel by
the Defendant’s employee.
3. That he have and recover prejudgment interest form March 25,2012.
4. That the costs of this action including reasonable attorney’s fees be taxed against
the Defendant.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.