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March 24, 1970

ROCK TRANSPORT PROPERTIES CORPORATION, New York Trap Rock Corporation and Mellon National Bank and Trust Company, Plaintiffs,

MacMahon, District Judge.

The opinion of the court was delivered by: MACMAHON

MacMAHON, District Judge.

This is an action to recover on two insurance policies for the "constructive total loss" of eleven scows and the partial loss of one scow, owned by plaintiff Rock Transport Properties Corporation and chartered by another plaintiff, New York Trap Rock Corporation. The remaining plaintiff, Mellon National Bank And Trust Company, was the mortgagee of all twelve scows.

 Defendant, The Hartford Fire Insurance Company, issued two insurance policies covering these scows. The first insured for damages caused by accident or by negligence, provided such damage had not resulted from the owner's or manager's want of due diligence. The second was an increased value policy insuring each of the scows for an additional $3,600 in excess of the $45,000 limit per scow of the first policy in the event of actual or constructive total loss from a peril covered by the first policy.

 Plaintiffs claim that eleven of the scows were constructive total losses and seek to recover the entire value of both policies which amounts to $534,600, or $48,600 per scow. Plaintiffs claim that one scow, the EDGAR J. COY, sustained two "partial losses" and seek to recover $9,278 under the first policy.

 The case was tried to a jury on November 13, 14, 17, 18, 19, 20 and 21, 1969. There was sufficient evidence from which the jury could find the following facts:

 The two policies involved here covered a period from April 1, 1965 to April 1, 1966. The scows were in sound condition at the beginning of this period, *fn1" and the damage occurred between April and December 1965 during the ice-free season on the Hudson River. *fn2" During this time, the scows were used to transport rip-rap, which includes crusher run, shovel run and capstone varying from dust to stones ten to twelve tons in weight. The large stones were loaded on the decks on top of a bed of crushed stone and carried from New York Trap Rock Corporation's Clinton Point quarry on the Hudson River, near Wappingers Falls, N.Y., to Port Jefferson on the north shore of Long Island. From there the stones were taken off the decks of the scows by the use of cranes, placed in trucks and transported to the south shore of Long Island where they were used in the construction of piers and breakwaters.

 The most severe damage took place during the unloading operations at Port Jefferson. One witness often observed large irregular stones, weighing eight to fourteen tons, falling to the decks. Sometimes the stones were dropped or bumped around on the decks because the crane operator would lose control of them while turning the crane to get a better grip. *fn3" At other times, the crane's heavy bucket was not lowered slowly but allowed to crash down on the load of stones. On still other occasions, the crane operator maneuvered the scow by pushing and pulling with the crane's bucket, rather than by using tying lines. *fn4" This and other battering caused severe damage to the decks, bulkheads and underdeck structures of the steel scows.

 There was no dispute that the insured value of each scow under both policies was $48,600, *fn5" and the joint survey indicated that the cost of repairing the eleven scows claimed to be constructive total losses exceeded their insured value. *fn6" The repair bills for the "partially lost" scow COY indicated that the amount of repairs was $9,278. *fn7"

 At the conclusion of trial, counsel for both sides stipulated to submit only part of the case to the jury on special verdicts, leaving the determination of the remaining issues of law and questions of fact to the court. *fn8"

 Pursuant to this stipulation, therefore, the case was submitted to the jury on special verdicts under Rule 49(a), Fed. R. Civ. P., prepared by the court with the consent of both sides, requiring answers to four questions:


 1. Did the damage result from a peril covered by the insurance policies?

 Answer (write 'Yes' or 'No'):

If your answer to Question No. 1 above is 'No,' drop your deliberations; if your answer is 'Yes,' then answer the following questions:

 2. Does the cost of necessary repairs to restore the scows to sound condition exceed their insured value?

 Answer (write 'Yes' or 'No'):

 3. If your answer to Question No. 2 above is 'Yes,' what is the total amount of the ...

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