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NORTHERN ASSURANCE COMPANY OF AMERICA et al v. C&G BOAT WORKS, INC. Complaint

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.

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Case 1:11-cv-00283-KD-N Document 1
Filed 06/02/11 Page 1 of 8
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA, SOUTHERN DIVISION NORTHERN ASSURANCE COMPANY OF AMERICA, NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, INDEMNITY INSURANCE COMPANY OF NA, GREAT AMERICAN INSURANCE COMPANY, AGCS MARINE INSURANCE COMPANY, ESSEX INSURANCE COMPANY, CATLIN INSURANCE COMPANY, ZURICH AMERICAN INSURANCE COMPANY, And TRAVELERS INSURANCE COMPANY, Plaintiffs, vs. C & G BOAT WORKS, INC. Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
CASE NO.: ______________________
COMPLAINT FOR DECLARATORY JUDGMENT COME NOW Northern Assurance Company of America (“NAC”), lead underwriter and on behalf of National Union Fire Insurance Company of Pittsburgh, PA, Indemnity Insurance Company of NA, Great American Insurance Company, AGCS Marine Insurance Company, Essex Insurance Company, Catlin Insurance Company, Zurich American Insurance Company and Travelers Insurance Company (the “Underwriters”), subscribing each for itself and not for the other, severally and not jointly, and for their Complaint for Declaratory Judgment, hereby states as follows:
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I.
Parties, Jurisdiction and Venue 1. This case arises out of a claim for insurance benefits made by defendant C & G
Boat Works under a policy issued by the Underwriters. 2. NAC is a company organized and existing under the laws of the State of
Massachusetts, with its principal place of business located in the State of Massachusetts. At all times pertinent to this action, it was qualified to conduct business in the State of Alabama. 3. National Union Fire Insurance Company of Pittsburgh, PA is a company organized
and existing under the laws of the State of Pennsylvania. At all times pertinent to this action, it was authorized to conduct business in State of Alabama. 4. Indemnity Insurance Company of NA is a company organized and existing under
the laws of the State of Pennsylvania. At all times pertinent to this action, it was authorized to conduct business in State of Alabama. 5. Great American Insurance Company is a company organized and existing under
the laws of the State of Ohio. At all times pertinent to this action, it was authorized to conduct business in State of Alabama. 6. AGCS Marine Insurance Company is a company organized and existing under the
laws of the State of Illinois. At all times pertinent to this action, it was authorized to conduct business in State of Alabama. 7. Essex Insurance Company is a company organized and existing under the laws of
the State of Delaware. At all times pertinent to this action, it was authorized to conduct business in State of Alabama.
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8.
Catlin Insurance Company, Inc. is a company organized and existing under the
laws of the State of Texas. At all times pertinent to this action, it was authorized to conduct business in State of Alabama. 9. Zurich American Insurance Company is a company organized and existing under
the laws of the State of New York. At all times pertinent to this action, it was authorized to conduct business in State of Alabama. 10. Travelers Insurance Company is a company organized and existing under the laws
of the State of Connecticut. At all times pertinent to this action, it was authorized to conduct business in the State of Alabama. 11. C & G Boat Works is a corporation organized and existing under the laws of the
State of Alabama, with its principal place of business located in the State of Alabama. 12. This is an action brought for declaratory judgment pursuant to 28 U.S.C. §§2201
and 2202 and Rule 57 of the Federal Rules of Civil Procedure. 13. Federal subject matter jurisdiction exists in this matter pursuant to 28 U.S.C.
§1332 because the Underwriters are diverse from the Defendant and the amount in controversy, as shown below, exceeds this Court’s minimum jurisdictional limits of $75,000, exclusive of interest and costs, when an action is based upon diversity of citizenship. (See Exhibit 1 – 11/22/2010 Corr.). 14. There is a present justiciable controversy which requires this Honorable Court to
declare the rights, remedies, obligations and liabilities of these parties with respect to a policy of insurance issued by the Underwriters. 15. The District and Division in which this action has been filed is proper since the
contract of insurance, upon which the defendant’s claims are based, was issued by the
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Case 1:11-cv-00283-KD-N Document 1
Filed 06/02/11 Page 4 of 8
Underwriters for delivery in Mobile County, Alabama and C & G Boat Work’s principal place of business is located in Mobile County, Alabama.
II.
Facts of Claim 16. C & G Boat Works, Inc. contracted with Crescent Towing to construct Hull 117, a
tug boat. As part of the contract, C & G Boat Works installed two GE 6L250 diesel engines (“the main engines”) in Hull 117. 17. On or about September 30, 2010, C & G Boat Works conducted sea trials of Hull
117. On sea trials, the port main engine experienced high bearing temperatures. The main engines were inspected following the high temperatures. 18. During inspection, the main bearings were pulled and showed signs of damage
due to metal and particulate contamination on both the port and starboard main engines. 19. Further inspection in the presence of C & G customer Crescent Towing, GE and
C & G Boat Works of the lower end bearings and crankshaft journals of the starboard engine revealed damage similar to the damage found in the lower end of the port engine. The lube oil system piping was bore scoped, “reveal[ing] significant amounts of various metal particles . . . present in random areas within the piping which appeared to . . . be attributable to torch cutting, arc welding and mechanical grinding that had previously been carried out on the piping sections as they were being assembled.” (See Exhibit 2 - W.T. Ames & Associates Corr., December 3, 2010, p. 2 of 5). 20. Busch and Associates, a metallurgical engineering consultant, was contacted by
Crescent Towing to determine the cause, nature and extent of engine damage to Hull 117’s engines. The findings were summarized as follows: “The main bearings were badly scored on
4
Case 1:11-cv-00283-KD-N Document 1
Filed 06/02/11 Page 5 of 8
both the port and starboard engines. The scoring of the bearings was caused by aluminum oxide particles, steel shavings, weld spatter, and, to a lesser extent silicon oxide. These contaminants, in all probability, came from the oil lines provided by C & G Boat Works, Inc. as a result of improper cleaning of the oil lines after fabrication. . . . One main and one rod journal on the starboard engine were grooved and scored from the abrasive particles. In all probability, all were damaged, requiring removal of the crankshaft from the engine.” (See Exhibit 3 - Busch and Associates, Inc. Corr., Nov. 9, 2010). 21. On December 7, 2010, NAC advised C & G Boat Works that the loss was
excluded by the policy, citing the provisions referenced herein, infra. (See Exhibit 4 – 12/7/2010 NAC Corr.). 22. Following the disclaimer, C & G submitted a memorandum to NAC, requesting
reconsideration of the claim, primarily based on the fact that its employee responsible for construction and installation of the lubrication oil piping system deviated from construction protocol and improperly welded certain joints in the piping system. (See Exhibit 5 – 1/7/2011 C & G Memorandum to Underwriters). 23. C&G subsequently submitted written statements from four persons which support
the Underwriters’ position that the procedures used were faulty and which statements are consistent with Exhibit 5. (See Exhibit 6 – Statements of Kenneth Sprouse, Travis Hunt, Earl LaFave and Daryl Boutwell). 24. Because of the improper welds 1, the lubrication system was not completely
cleaned. As a result, metal particles were introduced into the engines through the lubrication system constructed by C & G Boat Works, resulting in severe damage.
1
Welding involves fusing two materials together by applying an electrical current of electricity to the materials. Stick welding and tungsten inert gas (TIG) welding are two basic methods of welding. In stick welding, materials are
5
Case 1:11-cv-00283-KD-N Document 1
Filed 06/02/11 Page 6 of 8
25.
The Underwriters have mutually agreed to submit this coverage dispute to the
Court. The parties stipulate that there is a present, justiciable controversy.
III.
The Insurance Policy 2 The Underwriters issued policy number 3 MNB 1944-2010 to C & G Boat Works, which
provided, in pertinent part:
PART I – HULL SECTION This policy insures against all risks of physical loss of or damage to the Vessel occurring during the currency of this Policy, except as hereinafter provided. ... Addendum No. 2 1. It is hereby understood and agreed that lines 61 and 62 of the “PART I – HULL SECTION, HULL RISKS” are deleted and the following substituted therefore: Subject to the provisions of exclusion (b) of the following paragraph, in the event that faulty design of any part of parts should cause physical loss of or damage to the Vessel this insurance shall not cover the cost or expense of repairing, replacing or renewing such part of parts, nor any expenditure incurred by reason of a betterment or alteration in the design. Faulty design shall include, but not be limited to, error, omissions or deficiencies in plans, drawings, specifications or calculations. Further, Underwriters shall not pay for any loss, damage or expense caused or arising in consequence of:
welded when a filler metal is melted between them. TIG welding effectively welds materials with or without the use of filler metals. The employee made a “root pass weld” (first weld) using a stick welder rather than a tungsten inert gas (TIG) weld. The TIG weld would have resulted in far less “slag” or “spatter”. The “spatter”, caused by the stick weld, could not be sufficiently cleaned in the process of cleaning the piping system through which lubrication oil travels. The metal particles resulting in the damage to the engines were from this stick weld due to the particles passing through the lubrication system into the engine as the oil flowed through the system. The Underwriters reserve their right to assert any other applicable conditions, terms, coverages or exclusions contained in the policy, regardless of whether cited herein. By specifically reciting the provisions above, the Underwriters do not waive any other coverage defenses, whether in fact, law or contract. The policy is adopted and incorporated by reference as if set forth fully herein.
3 2
Exhibit 7.
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Case 1:11-cv-00283-KD-N Document 1
Filed 06/02/11 Page 7 of 8
a) b) ...
Faulty workmanship, or the installation or use of improper or defective materials . . . Faulty production or assembly procedures even if constituting faulty design.
(Exhibit 7, pp. 5,10).
IV.
COUNT ONE – DECLARATORY JUDGMENT 26. The Underwriters adopt and incorporate by reference the foregoing as if set forth
fully herein. 27. By stating the grounds for relief requested herein, the Underwriters reserve the
right to assert any other term, condition or exclusion contained in the policy, which is adopted and incorporated by reference as if set forth fully herein. 28. C & G Boat Works has made a claim for insurance benefits as a result of the
above-described damage/incidents. 29. An actual controversy exists as to whether the policy provides coverage such that
a declaration by this Honorable Court of the parties’ respective rights and obligations under the contract of insurance is necessary. Specifically, a controversy exists with respect to the damage to Hull 117’s engines are excluded by Addendum 2, as set forth herein. 30. A real, bona fide controversy exists between the parties with regard to the duties
and obligations under the policy as to the existence of coverage for the claims submitted by C & G Boat Works. WHEREFORE, the Underwriters pray: a. This Honorable Court take jurisdiction of this cause;
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b.
This Honorable Court order, adjudge and decree that there is a bona fide
controversy between the parties as to their legal rights, duties, status and liability; c. That upon final hearing of this cause, this Honorable Court will declare that no
coverage is provided under the applicable policy of insurance; and d. The Underwriters requests such other, further or additional relief to which they
may be entitled, whether or not specifically requested herein. Respectfully submitted on this the 2nd day of June, 2011.
/s/ LaBella S. Alvis John W Johnson, II LaBella S. Alvis Attorneys for the Underwriters
_
OF COUNSEL: CHRISTIAN & SMALL, LLP 505 North 20th Street, Suite 1800 Birmingham, Alabama 35203 (205) 795-6588
DEFENDANT’S ADDRESS TO BE SERVED BY CERTIFIED MAIL C & G Boat Works, Inc. P. O. Box 1725 Mobile, AL 36633
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aJS44
(Rev. I2107)
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CIVI
COVER SHEET
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bylocalruleso|court'Thisform,approvedbytheJudiciaI the civil docket sheet, (sEE INSTRUCTIONS oNTHEREVERSEoFTHEFoRM,)
Northein Assurance Company of Notlh America, et al
l. (a) PLAINTIFFS
(b)
DEFENDANTS
C & G Boat Works, Inc.
County ofResidence ofFirst Listed Plaintiff
(EXCEPT IN U,S. PLAINTIFF CASES)
County of Residence of First Listed Defendant
ON U.S. PLAINTIFF CASES ONLY)
NOTE: lN LAND CONDEMNATION
LAND INVOLVED.
CASES, USE THE LOCATION OF THE
LaBdii6 S:'Aivid, ibhn WJohns-oir, l[; Ch'iistian & Small LLP, 505 N 20th St, Birmingham, Alabama 35203; (205) 795-6588
(c)
Attornev's (Firm Nme,
Address, and Tclephone NurlbeJ)
Attomeys (If Krown)
II.
DI
BASIS OF JURISDICTION
U.S. Goveurment
(Place m
"X"
in one Box
only)
III.
CITIZENSHIP OF PRINCIPAL PARTIESelace
(For Diversity Cases Only)
O3
Federal Question
Plaintiff
(U.S. Govement Not a Party)
Citizen ofThis State
PTF DEF O I El ! J O
2
an "X" in one Box for Plaintiff and One Box for Defendant)
PlacL:
llcorporate! o/ Principal
of Business ln This State
PTF DEF J 4 04 O 5 O n 6 O
O 2 U.S. Covetrunent
Deferdmt
E4
Diversity (lndicate Citizership ofPuties in lten
CitizenofAnotherstate d2 lll)
Citizen or Subject
IncorporatedandPrincipalPlace
ofBusiness ln Another State
5
ofa
0 3
3
ForeignNarion
6
IV. NAT
FI I l0 lnsurance
U 120 Mdne D 130 Miller Act
o
140 Negotiable lnstrument O 150 Recovery of Overyalment & Enforcernent of
D I5l MedicseAct
I
52 Recovery of Defaulted Student Loans
0
tr
0 o o
O
(Excl. Veterms) I53 Recovety ofoveryayment ofVeteran's Be[efits 160 Stockholders' Suits 190 Other Conhacl 195 Contract Product Liability
610 Agriculture PERSONALINJURY PERSONALINJURY 620 Other Food & Drug D 362 Personal lnjury 310 Airplane 625 Drug Related Seizure Med, Malpractioe 315 Airylane Product ofPropeny 2l USC 881 D 365 Personal lnjury Liability D 630 Liquor Laws Produot Liability 0 320 Assault, Libel & Slander n 368 Asbestos Personal D 640 R.R. & Truck n 650 Airline Regs. Itrjuty Product 3 330 Federal Employors' O 660 Occupational Liability Liability Safety/Health PERSONAL PROPERTY O 340 Marine D 690 Other O 345 Mdne Product D 370 Other Fraud 3 371 Truth in Lending Liability ll 7l 0 Fair Labor Stmdards 350MotorVehicle f, 3S0OtherPersonal Act Property Dmage 355 Motor Vehiole 720 Labor/Mgrnt. Rclations 0 385 Propetty Damage Product Liability 730 Labor/Mgmt.Reporting Product Liability 360 Other Pe6onal
422 Appaal 28 USC 158 423 Withdrawal 28 USC 157
4O0 State Reapportionment
0 430 450 460
4 I
Antitrust Bmks md Bmking
0 0
830 Patent 840 Trademark
D D
o
861 862 863 864
Commeroe Deportation 470 Racketeer Influenced ald Compt Organizations 480 Consurner Credit 490 Cabls/Sat TV 8 l0 Selective Serryice 850 SecuritiEVCornmodities/
HtA (t395f0
Black Lung (923) DIWC/DIWW (40s(g)) SSID TitIE XVI
Exchmge
D 875 Customer Challenge l2 usc 34r0
o o n
D
890 Other Statutory Actions 892 Eoonomic Stabilization Act 893 Ervironmental Matters 894 Energy Allocation Act 895 Freedom of lnformation Act 9O0Appeal of Fee Detennination
Under Equal Access to iustice
& Disolosure Act
210 220 230 240 245 290
D 891 Agricultural Acts
870 Taxes (U.S. Plaitrtiff or Defendmt) 871 IRS-Thnd Ptrty 26 USC 7609
Lmd Condetmation
Foreclosure Rent Lease & Ejectment
D
O O
441 Voting 442 Employment 443 Housing/
510 Motions to Vacate Sentetrca
740 Railway Labor Act 790 Othcr Labor Litigation 791 Empl. Ret. lnc,
Habeas Corpus:
530 535 540 550 555 Genefal Death Penalty Mandarnus & Othel Civil Rights Prison Condition
Secuity Act
Torts to Lmd
Accolmodations
444 Welfae 445 Aner. w/Disabilities -
D
Torl Product Liabiliry
0
All Other
Real Property
Employment 446 Amer. w/Disabilities -
0
Other 440 Other Civil Rights
0
463 Habcas Corpus Alien Detainee 465 Other lmmigmtion
950 Consdrutionality of
State Statutes
Actions
V. ORIGIN
El Original D 2 Removedfrom tr 3 Proceeding State Court
VI. CAUSE OF ACTION
(Plaoe m
"X"
in one Box
only)
Remandedfrom Appellate Court
D 4 Reinstated or
Reopened
O
, -
Transfened anolner
from olstncl n -
6 -
Multidistrict J
Litigation
7
CitetheU,s.CivilStatuteunderwhichyouarefiling (Donotcitejurisdictionalstatutesunlessdiversity):
Brief description of cause:
0 cuecr IF THIS IS A clAss ACTION REQUESTED IN UNDER F.R.C.P.23 Exceeds $75 COMPLAINT: vrrr. RELATED CASE(S) (.ee ._
VII.
lF ANY
lnsnctrons):
'000 exclusive of
DEMAND $
CHECK YES only ifdernanded in complaint
JURY
DEMAND: 0
Yes
dNo
ruDGE
interest & Costs NUMBER DOCKET
SICNATURE
ATTORNEY OF RECORD
06t01t2011
FOR OFFICE USE ONLY
/s/ LaBella S. Alvis, Esq.
RECEIPT#
AMOUNT
APPLYINC IFP
MAG. ruDGE
Case 1:11-cv-00283-KD-N Document 1-8
Filed 06/02/11 Page 2 of 2
"Melanie R. Byrd" <M RByrd@csattorneys.com>
061021201'l 09:30 AM
To
"efi le_newcases@a lsd. uscou rts. gov"
<efile_newcases@alsd.uscourts. gov> Jeff Odom <RJOdom@csattorneys.com>, Karen Jones <KJones@csattorneys.com>
bcc Subject 1 attachment
liq
,..i;.:
39981 - Civil Cover Sheet C&G.PDF
Our File No.
,l7375-4
Decr
Sir
or Modom:
Pleose find ottoched o Civil Cover Sheet regording o suit my firm intends io file todoy. The porties involved ore os follows:
Plqinfitfs:
NORTHERN ASSURANCE COMPANY OF AMERICA, NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, INDEMNITY INSURANCE COMPANY OF NA, GREAT AMERICAN INSURANCE COMPANY, AGCS MARINE INSURANCE COMPANY, ESSEX INSURANCE COMPANY, CATLIN INSURANCE COMPANY, ZURICH AMERICAN INSURANCE COMPANY, ond TRAVELERS INSURANCE COMPANY
Represented by LoBello Alvis ond John W Johnson, llwith Christion & Smoll Defendonf: C & G BOAT WORKS, INC. Pleose chorge our firm's credit cord for the $350 filing follows: 479804200097 8924r Exp.8/12; SIC # 458
LLP
fee.
The number is os
Should you hove ony questions, pleose do not hesitoie fo contoct me of the number below or by response to this emoil.
Sincerely,
Melonie Byrd

Published under a Creative Commons License By attribution, non-commercial
AttachmentSize
Northern Assurance Company of America et al v. C&G Boat Works, Inc Complaint.pdf4.41 MB

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