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Petroterminal De Panama, S.A. v. QBE Marine & Specialty Syndicate 1036

United States District Court, S.D. New York

January 18, 2017


          Attorneys for Plaintiff BLANK ROME LLP, Jared Zola, Esq., James Carter, Esq.

          Attorneys for Defendants BRUCKMANN & VICTORY, LLP Richard J. Sprock, Esq., Robert Louttit, Esq., Mark Bruckmann, Esq.


          ROBERT W. SWEET, U.S. D. J.

         Defendants QBE Marine & Specialty Syndicate 1036, Markel Syndicate 3000, Starr Insurance & Reinsurance Company, Munich Reinsurance Company, Liberty Mutual Insurance Europe Limited, and Catlin Insurance Company (UK) Limited (the "Defendants") moved pursuant to Rule 56, F. R. Civ. P. for summary judgment dismissing the complaint of plaintiff Petroterminal de Panama, S.A. ("Petroterminal" or the "Plaintiff"). Plaintiff simultaneously moved for partial summary judgment for a determination that Plaintiff has made a prima facie showing for all risk coverage under the insurance policy. Based upon the findings and conclusions set forth below, Plaintiff's motion for partial summary judgment is granted, and Defendant's motion for summary judgment is denied.

         Prior Proceedings

         The Plaintiff initiated this action on October 28, 2014 alleging claims for breach of contract, specific performance, and declaratory judgment for issues relating to whether certain insurers are required to pay for damage caused by a fallen pile. The instant motions for summary judgment were filed on June 13, 2016 and were heard and marked fully submitted on September 22, 2016.

         The Facts

         The facts have been set forth in the parties' stipulation of undisputed facts as well as Plaintiff and Defendants' Statements of Material Facts per Local Civil Rule 56.1, which are not in dispute except as noted below.

         Plaintiff stores and transports crude oil and petroleum products with terminals on the Atlantic and Pacific coasts of Panama. Zola Decl., Ex. 3, P. Ripp Dep. Tr. at 11:2-8, 27:24-28:13. This case concerns Plaintiff's Pacific Terminal, which includes Piers 1 and 2, both of which were used for loading and unloading petroleum. Amended Stipulation of Undisputed Facts, ¶ 3. Pier 2 contained four "breasting dolphins" used for mooring and berthing operations. Id. at ¶ 4. Each breasting dolphin consisted of a steel pipe pile and a pivoting timber-faced fender panel. Id. at ¶ 5.

         These piles were all installed in 1984 in order to increase the pier's capacity to accommodate larger vessels and were built with a larger diameter than the original piles. Id. at ¶ 8. Each of the steel piles was comprised of several sections that were attached to one another using a circumferential weld. Id. at ¶ 10. The outer breasting dolphins have an outside diameter of 1101/4 inches and the two inner breasting dolphins have a diameter of 783/4 inches. Id. at ¶ 8.

         On February 10, 2012, a hull oil tanker, the Maya, carrying 380, 742.87 GSV (US barrels) was being moored to Pier 2, using the 781/4 inch diameter steel pile of the southern inner breasting dolphin pile ("Pile PDB-2AA"), when Pile PDB-2AA fell over. Id. at ¶ 13, 15. Prior to February 10, 2012, Pile PDB-2AA was standing and was being used regularly to moor vessels to Pier 2. Id. at ¶ 14. At first, the pile came to rest against another pile and was chained there. Id. at ¶ 15. After the Maya was moved to Pier 1, the fallen pile segment was unchained and allowed to fall and rest on the seabed. Id. at ¶ 16.

         It is undisputed that standard mooring procedures were followed on February 10, 2012. Id. at ¶ 17. The parties dispute the cause of why the pile fell on February 10, 2012. A portion of the failed pile was retrieved, and the parties agree that it failed at a point above the mudline. Id. at ¶ 18-20.

         The parties stipulated that all four of the breasting dolphins at Pier 2, including Pile PDB-2AA, are covered under the insurance policy. Id. at ¶ 6. This policy was in effect from January 15, 2012 through January 15, 2013. Id. at ¶ 2. The insurance policy "insures against all risks of physical loss or damage occurring during the period of this policy from any cause . . . except as hereinafter excluded." Zola Decl., Ex. 2, Ex. A at 00053 CANDL. However the policy excluded a number of potential perils, including "gradual deterioration, corrosion (but this policy does not exclude corrosion occurring from a sudden and accidental event), inherent vice, . . ., ordinary wear and tear, unless loss or damage by a peril not otherwise excluded ensues and then the policy shall be liable for only such ensuing or resulting loss or damage." Id. at 00062 CANDL.

         The ...

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