Industry News & Tips

May 31, 2010

Gene Horton

   Early on Thursday while marketing an account I was told by one of my markets that the marine and the re-insurance markets where in a “state of alarm” over the Deepwater Horizon disaster. Already underwriters are staking their positions in order to limit their exposure. The following article from Insurance Journal give a good glimpse of what is to follow.

   “ Lloyds, Other Insurers Sue to Block BP Claim Against Transocean

               Lloyd's of London has asked a U.S. court to block a claim filed by oil major BP seeking damages against driller Transocean, which drilled the well which is currently gushing crude into the Gulf of Mexico.

  Lloyds underwriting syndicates and other insurers who provided $700 million of cover to Transocean lodged a case with a federal court in Houston, arguing that the policies provided to Transocean preclude claims related to environmental damage caused by leaks from the well.

  According to court documents, the insurers argue that Transocean's contract with BP only makes it liable for environmental damage caused by any spills from its rig, which exploded and sank, causing the pipe running from the rig to the well to snap. The well is leaking oil. BP said it had lodged a claim against the insurers but declined to comment further. No one was available for comment at Transocean.

  Even if BP were awarded the full $700 million of cover the insurers provided to Swiss-based Transocean, it would be only a small fraction of the total bill for the cleanup operation and compensating people who suffered losses due to the spill. Analysts at UBS put the likely cost of this at $12 billion, in a report issued on Tuesday.''

  (Reporting by Tom Bergin; Editing by Cynthia Osterman)

  All of us in the maritime industry know where and how this is going to affect us. For the insured's, rates and premiums will be higher. For brokers, placements will be harder and more stressful, especially on renewals. Some older tonnage may be placed out of the market all together. The average person watching this on television may not be aware of the effects on them, but they will soon start feeling the results as their premiums go up as re-insurers try to make up their losses because of Deepwater Horizon. To add to everyone's concern, we are not even in hurricane season yet!

  Will add more to this if we get any more industry information,

  Gene at HortonMarine.com

March 31, 2010

Gene Horton

Whenever possible I like to give our friends and customers updates on what is happening in the insurance industry as far as changes, available and cost are concerned. This article is from one of our very knowledgeable underwriters that specialize in marine insurance. LIG Marine regularly send us updates and I am happy to pass on anything that will help our customers and friends better understand the driving forces in insurance costs and therefore be better prepared deal with these critical coverage's. I hope you find this article interesting and useful.

Thanks for your support,

Gene Horton

                                                     Marine Rates Down, Down and Up?

The year end 2009 results from LlG Marine Managers WaveLine Survey are showing a further drop of 1.8% for 2009, with some moderate hardening predicted for 2010:

GEOGRAPHIC
Most notable, but least surprising is the geographical split of results which range from an average rate decrease in the Mid-Atlantic of 3% to a small rise in the West Coast of 0.3%.

RATE CHANGES BY ACCOUNT SIZE
No surprises here, the biggest accounts achieved an average of 12.5% rate decrease

2009 shows the continued free fall of cargo rates, down another 5.6%, when will it end? Charter/Sightseeing has seen a modest increase but all other lines dropped for the year.

2010 EXPECTED RATE CHANGES BY CLASS
With the exception of cargo and marinas, most marine professionals are expecting modest raises in most lines during 2010. Bluewater P&l leading with 2.5%.

POLICY DELIVERY IN 2009
We again surveyed policy delivery and the result nationally shows that the average marine policy was delivered to the agent/broker 63 days AFTER binding. A marked decline of 8 days over the last 2 years.

WAVELINE
is the on-line marine and Longshore insurance market survey sponsored by LlG Marine Managers and compiles responses from the top marine and Longshore agents, brokers and insurance companies in both the USA and London.

March 07, 2009

Gene Horton

July 26, 2008

Gene Horton

March 08, 2008

Gene Horton

TONNAGE COST COMPARISONS 

I’m sure many of you have seen the commercial on television extolling the advantages of rail shipping. In the advertisement the advertiser makes the point that railroads can carry a ton of freight four hundred and twenty miles on a gallon of fuel. That is very impressive compared to motor-truck.However I thought it would be fun to put out some factoids from some of the trade magazines I subscribe to. So here we go. 

A tanker trade group states that a VLCC, (very large crude carrier) moves one metric ton of cargo 2,800 kilometers on one liter of fuel. The carbon footprint (in CO2 per ton-kilometer) is less than one tenth of a heavy truck and less than one hundredth of an aircraft. 

A large freight aircraft can carry up to one hundred fifty tons of cargo.The lifting capacity of the cranes on some heavy lift ships is now four hundred tons.  

Another inland waterways group points out that one tug and barge or barges can carry as much cargo as sixty four to four hundred tractor trailers. 

The ship “Estelle Mearsk” is thirteen hundred feet long and carries eleven thousand containers. That is the equivalent of a freight train forty three miles long. The average long haul freight train is now eight thousand feet long or about a mile and one half.

The amount of money spent on highways and roads infrastructure is thirty nine billion dollars. The amount spent on maritime infrastructure, four hundred forty six million dollars. Europe and other countries are way ahead of the United States in “short sea transport”. There is finally some movement in our government to expand short sea transport up and down our Atlantic and Pacific coasts and inland waterways. Not only will this save energy, it will save wear and tear on our highway infrastructure, ease traffic congestion and improve traffic safety. The next time you’re on the highway count the number of tractor trailers that can be put on one ship or barge. If you have any interesting facts on the maritime industry please pass them on.

Thanks for your support,

Gene Horton

August 25, 2007

Gene Horton

When Should I Insure My Export Shipments?  

This question is too often confused with "When do I have to insure my export shipments"? There is a world of difference between the two.

First, you should review the contract and terms of sale - they will determine which party is responsible to insure the export shipment. An example would be when the price quoted to a prospective customer is on a C.I.F. (Cost, Insurance, Freight to Destination) basis. C.I.F. sales should be equal to the cost of your shipment landed at the port of destination. This includes the cost of insurance.

Other forms of contracts of sale - F.O.B. (Free on Board Vessel), F.A.S. (Free Along Side Loading Port), and C & F (Cost and Freight to Destination) - leave the responsibility of providing the marine insurance to your customer. You may or may not choose to provide the insurance; an agreement between the two parties is all that is necessary. There are times when you should obtain the insurance for your own economic self-protection. This is decided by determining whose money is at risk - which is determined by the Terms of Payment.

If the Terms of Payment are either "Cash in Advance" or "Letters of Credit," your exposure to financial loss is very limited. Insuring these shipments is an option you may want to consider.

If, however, the Terms of Payment are one of the following, you should arrange for the insurance, because your money is at risk: "Draft Terms," "Open Accounts," "Consignments" and "On Approval" just to name a few.

In some cases, a shipment may be exposed to potential loss for two or more months before you have received payment for it. Should a loss occur, are you positive that you will receive full payment for damaged goods? When will you receive it? Maybe the shipment was totally destroyed and your customer failed to insure it. Only by arranging for the insurance yourself can you be sure that your assets are protected. And there are advantages for your customer as well.

·  If the shipment is lost before it arrives in your customer's country and the customer allows you to process the claim in the United States, the claim will be paid in U.S. dollars. This money could be applied immediately to the cost of a replacement shipment.

·  You may be able to obtain broader coverage for a lower price than you or your customer can.

·   The possibility of uninsured shipments due to misunderstandings is eliminated. Your coverage           automatic.

·    The insurance is "Warehouse-to-Warehouse." Coverage begins from the time the shipment leaves your warehouse until it reaches the warehouse of your customer. There are no gaps in coverage.So when you are making the decision whether to insure a shipment or allow your customer to seek coverage, make sure that you ask the right questions. It can make a world of difference. If you have any questions contact Gene Horton at gene@hortonmarine.com or 800-553-3624 ext131

July 18, 2007

Gene Horton

May 05, 2007

Gene Horton

MARITIME LOSSES AND THE ECONOMIC LOSS RULE:
THE "PLEASURE CRAFT" EXCEPTION

By John W Reis

COZEN O'CONNOR

A vessel catches fire on navigable waters, invoking maritime law. The cause was a defective engine, but all warranties on the vessel have expired. The only viable theories are negligence and strict liability. The manufacturer defends asserting the economic loss rule, which bars such tort theories when a product malfunctions and the only thing damaged is the product itself. But is this a winning defense in a maritime case? The answer depends on the nature of the vessel and where the court falls within the ongoing debate over an exception to the economic loss rule called the consumer/commercial product distinction or the "pleasure craft" exception.

UNDERSTANDING THE ECONOMIC LOSS RULE

The mother ship of the economic loss rule is East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (1986). There, the United States Supreme Court, applying maritime law, held that the owner of a commercial vessel could not sue the manufacturer of the vessel's defective engine turbine in tort for the physical damage the turbine caused to the engine and ship. The rationale was that such products come with warranties, the terms of which should control the remedies available to the purchaser when the only thing damaged was the product itself. Otherwise, reasoned the Court, contract law would "drown in a sea of tort."THE COMMERCIAL/CONSUMER DISTINCTION OR THE ^"PLEASURE CRAFT^" EXCEPTION

One of the driving principles behind vesting the federal courts with admiralty and maritime jurisdiction is to establish uniformity of substantive maritime law. However, because East River involved sophisticated commercial parties and a commercial vessel, a debate ensued over whether in maritime cases the economic loss rule applies only to commercial vessels but not to personal vessels or pleasure crafts. 

CASES  RECOGNIZING AND APPLYING THE PLEASURE CRAFT EXCEPTION

In Sherman v. Johnson & Towers Baltimore, Inc., 760 F. Supp. 499 (D. Md. 1990), the owners of a yacht that caught fire sued the seller under warranty and tort claims. The court denied the defendant's motion to dismiss the tort claims, holding that the East River doctrine was limited to cases involving commercial relationships and did not apply to pleasure craft.

In Farley v. Magnum Marine Corp., N. V. Case No. 89-0725-CV, 1995 WL 795711 (S.D. Fla. 1995), the court recognized and applied the consumer/commercial distinction, denying the defendant's motion for summary judgment on the tort claims for fire damages to a secondhand,sixty-foot pleasure yacht.

The Farley analysis was applied in Ins. Co. of North America v. American Marine Holdings, Inc. 2005 WL3158049 (M.D. Fla. 2005), upholding a subrogated insurer's tort claims against the manufacturer of a used vessel after finding no warranty theories were available.

Similarly, in United States Aviation Underwriters v. Pilatus Business Aircraft, Ltd. ("USAU"), 358 F.Supp.2d 1021 (D. Col. 2005), the court applied the consumer/commercial distinction under maritime law in a subrogation suit against an airplane engine manufacturer. The court applied the distinction even though USAU's insured, the airplane's lessee, was using the aircraft for commercial purposes because the end user had no bargaining power against the engine manufacturer.

CASES REJECTING THE DISTINCTIONOn the other hand, in Karshan v. Mattituck Inlet Marina and Shipyard, Inc., 785 F. Supp. 363 (E.D.N.Y, 1993), the court applied the economic loss rule to bar tort claims for damages to a new, fifty-foot pleasure craft that caught fire from a defect in the starboard shore power connector while berthed at Daytona Beach, Florida. The fire caused S89,620.82 in damages.In Somerset Marine, Inc. v. Forespar Prods. Corp., 876 F. Supp. 1114 (D. Cal. 1994), the court refused to make the commercial/consumer distinction in a yacht-damage case in which the vessel capsized when the defective mast snapped in two.

In the same year and same jurisdiction as Farley, another Southern District judge in Sbarbao v. Yacht Sales International, Inc., 1996 A.M.. 133, 138 (S.D. Fla. 1995) barred tort theories by a new yacht owner against the yacht manufacturer. However, the vessel in Sbarbaro was purchased new directly from the manufacturer and its authorized dealer and would have come with a warranty.

In Marshall v. Wellcraft Marine, Inc., 103 F. Supp.2d 1099 (S.D. Ind. 1999), the vessel had not been the subject of a fire lass but was a "lemon," subject to numerous problems which could not be repaired to the owners' satisfaction. The court rejected the commercial/consumer distinction and applied the economic loss rule because there were viable warranty claims. 

CAN THE CASES BE RECONCILED?

Close review of these cases reveals that the outcomes are driven less by differing philosophies than by differing facts. Courts consistently make and apply the pleasure craft exception when a vessel is purchased used for personal pleasure and there are no available warranties from the manufacturer or dealer. Courts tend to reject the distinction when the vessel is new and has a warranty, especially when the damages are not catastrophic. Indeed, the nature of the damage often tips the balance. Cases involving a vessel that is catastrophically destroyed and/or involving other property damage (Sherman, Farley, USUA, and ICNA) tend to recognize the distinction. Those cases involving reparable damages (Karshan and Marshall) tend not to recognize the distinction.

CONCLUSION

Despite the debate over the pleasure craft exception, outcomes can be predicted based on the facts. The "pleasure craft" exception is more likely to be applied in a set of facts involving: (1)   purchase by an individual,(2)   of a used product,(3)   for purely personal or pleasure purposes,(4)   that is totally destroyed, and(5)   causes damage to other property.

The exception is less likely to be applied in a case involving: (1)   purchase by a sophisticated commercial entity,(2)   of a new product,(3)   for commercial purposes,(4)   that is not totally destroyed but involves reparable damages, and(5)   causes no damage to other property.

Given the tide of cases recognizing the distinction, tort claims under maritime law are not yet completely drowned in a sea of contract.

John W Reis is a member of the Charlotte, NC office of Cozen O'Connor.
John can be reached at Phone: 704.348.3416 • Fax: 866.248.2901 • jreis@cozen.com  

April 28, 2007

Gene Horton

There’s a new emerging liability from what is normally a very low exposure. That is the liability caused by your cargo to other cargo in the same shipment. Since cargo insurance is "property" insurance, liability coverage is not part of the contract. Let me give you an example of two situations where your cargo damages other shipper’s cargo.  First, your cargo breaks loose in heavy seas and damages other shipper’s cargo.  While I can’t say you wouldn’t be named, I’m comfortable in saying that in this situation the liability would belong to the ship owner and “those acting on their behalf”. In this case it would probably be the stevedores since it was their job to load and secure the cargo. Both you and the shipper with the damaged cargo would look to their respective cargo insurers for coverage. Bear in mind, there are limitations to the liability of ship-owners. These limitations will be shown on the back of your bill of lading.  

Now let’s look at a totally different situation. You are a battery manufacturer and regularly get shipments of battery solutions used for the chemical reaction to make electricity in your batteries. These shipments are shipped in drums that are then loaded in containers. Your shipping documents and bill of ladings all clearly state your cargo is corrosive, hazardous and even toxic. During one of your shipments, one of the drums in the shipping container leaks the acids during the whole voyage and damages other shipper’s cargo.  In this situation the steamship company would deny any liability. This would now split into two more scenarios. One, the steamship company would pay for the damages and then “subrogate” against you. Or more likely they would deny any liability and refer the owners of the damaged cargo to you. 

Now you as a boat owner shipping his yacht as cargo are confronted with a very similar situation. Let’s say your boat was run on its own bottom to the ship where it was loaded on board with no incidents. Unknown to anyone someone left both the electrical power on and an appliance or motor also on. The motor malfunctions and overloads and causes and electrical fire. Then this fire not only damages your yacht but other yachts and cargo on the same ship. 

Where would each of you look for coverage? Again, there are two possibilities. For the battery manufacturer he will have to look to his business insurance. His coverage will have to be tailored to his business since this type of loss is normally excluded in a standard “commercial general liability” policy.  He would probably find coverage under his environmental third party liability policy. This is a long and deep subject that needs to be addressed on an individual basis.  

For the yacht owner he could depending on the underwriter find some coverage in his personal liability policy. That’s a long shot. A more likely solution would be in his umbrella policy if it has a “drop down” provision. This provides coverage for exposures that you don’t usually have. The best solution would be to have a yacht policy in force during the shipping voyage. The underwriters usually suspend the hull portion of the policy leaving the liability in effect. This is the correct way to set up coverage. Unfortunately most yacht underwriters won’t or are reluctant to do this.  

As one of the oldest yacht cargo specialists we have some unique underwriters to work with and we offer a one year wrap around policy that covers the yacht from the factory, on board the ship and the first year of coverage. After the first year we have many options for renewal. I hope this article is interesting and helpful to those of you who will be shipping yachts. Please feel free to contact me by telephone or e-mail if you would like to discuss this further. Thanks for your support,

Gene Horton 

March 10, 2007

Gene Horton

IMPORTANT CHANGES IN (OPA 1990)

We have been notified by several trade sources about new limits of liability compliance in (OPA 1990). 

We now are able to give more detailed information. The important consideration is that these are minimums. For smaller vessels and even yachts, these limits are a large exposure. Many pleasure boat policies now have some oil spill cleanup coverage. That coverage will not cover "Fines and Penalties". This is getting to be a concern for us with our customers who own fishing boats, work boats and yachts that are now carrying large amounts of diesel oil. We are going to start offering this coverage as a separate policy.

RE: COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2006

On July 11, 2006 the President signed into law the Coast Guard and Marine Transportation Act of 2006 (P. L. 109-241). This bill among other things amends the limits of liability for vessels under the Oil Pollution Act of 1990 (OPA '90). The limits take effect from July 11, 2006 (immediately) for non-tank vessels and October 9, 2006 for tank vessels. The new limitation amounts will be:.       

For double hulled tank vessels over 3,000 gross tons, the greater of $1,900 per gross ton or $16,040,000;.       

For double hulled tank vessels 3,000 or less gross tons, the greater of $1,900 per gross ton or $4,000,000q  

For single skin hulled tank vessels over 3,000 gross tons, the greater of $3,000 per gross ton or $22,000,000;

For single hulled tank vessels 3,000 or less gross tons, the greater of $3,000 per gross ton or $6,000,000; and.       

For non-tank vessels limits would be increased to the greater of $950 per gross ton or $800,000.Tank vessels with double sides or double bottoms only will be considered single hulled.

January 31, 2007

Gene Horton

January 18, 2007

Gene Horton

Loss/Risk Management Notes

Property/Casualty

Counterterrorism Should Focus on Cruise Ships

Maritime counterterrorism efforts are too focused on port security and car-go containers, leaving cruise ships and ferries wide open to the possibility of deadly and costly terrorist attacks, according to a book-length study of the issue by Rand Corp.The report, Maritime and Terror­ism:Risk and Liability, says cruise ships and ferry lines need more protection against terrorism attacks because they meet terrorists' prerequisites for an attack: The damage would be highly vis­ible, would kill many people, would destroy costly property and would inter­rupt trade.Currently, the United States govern­ment is focusing its maritime efforts on port security and securing cargo con­tainers, the ships that carry them and the freight carriers that take containers in and out of ports. But focusing on car-go containers and ports without also securing cruise ships and ferries "is like bolting down the front door of a house and leaving the back door wide open," the report said.The study also said a maritime terrorist attack will create complicat­ed liability issues that would make it difficult to compensate victims. The United States currently has "ambigu­ous liability standards in the maritime terrorism context," owing to conflicts in the law."Civil liability standards in maritime terrorist attacks against the United States will likely draw on specialized rules in admiralty, particularly with regard to attacks on ferries and cruise ships," the report said. "Related rules include liability standards for personal injury and death, regulatory require­ments pertaining to vessel security, and statutory limits on liability for vessel owners. Admiralty jurisdiction over these sorts of claims may preempt com­peting legal rules that would otherwise apply on land and may limit the com­pensation that can be sought by victims in some circumstances."The report contained some good news, in that there is little evidence ter­rorists and pirate syndicates are in cahoots. Pirates, the report said, rely on maritime trade to be operating smooth­ly, while terrorists are motivated to disrupt it. Also, the report said, some com­monly anticipated attacks probably aren't attractive for terrorist groups because they wouldn't work. Sinking a cargo ship with an improvised explo­sive device to block a commercial ship-ping route—one common scenario—would be difficult owing to modern ship design, and sunken ships even then could be cleared quickly from shipping lanes. "Maritime terrorism policy should not be motivated by these perceived threats," the report said.The greatest risk to shipping, the report said, would be a nuclear device smuggled into the United States in a shipping container. But that, the report concluded, was far less likely than what it judged to be the greatest risk to human life: an attack on _a cruise ship or ferry. Possible attacks there would be far easier to carry out, the report said, and might take the form of an onboard bomb or a biological agent tainting the food or water.The report also made a handful of policy suggestions, including a recom­mendation that the U.S. government "increase attention to the control of nuclear weapons and materials" to keep a possible nuclear device from sneaking in through a cargo container. "Policies must balance the need for reducing the risk with the need to keep shipping open," the report said.   

January 15, 2007

Gene Horton

SEA TRIALS -

The Case of Big Foot and the Undulating Wave

If you berth your boat at a marina, odds are you signeda marina storage contract. This document contains much "fine" print and legalese that is worth falling asleep to on a rainy day. In a recent admiralty case, the marina storage contract was the focal point involving a personal injury to a boater. 

The Accident

A boat owner was injured at a dock owned by the marina. The boater's big foot got caught and crushed between the main dock and a floating dock to which his boat was moored. The accident occurred when the floating dock undulated as a result of the wake from a passing boat. His next step (limping, of course) was to sue the marina. The suit was brought in federal court pursuant to admiralty jurisdiction. The boater, now plaintiff, contended that admiralty jurisdiction existed because of a federal statute known as the Admiralty Extension Act 46 U.S.C. Section 740, which extends the federal court's admiralty jurisdiction to accidents resulting on land but having been caused by a vessel on navigable waters.By way of example, consider the ship berthing in New York Harbor, not too long ago whose bow wound up breaking through the wall of a harborside restaurant during docking and injuring some unwary diners. 

The Fine Print

The marina contract at issue in the big foot case contained an "exculpatory" clause stating that the boat owner would not bring any claims of any kind or nature against the marina and that he would even defend, indemnify, and hold the marina harmless from any such claims.Generally, courts disfavor contract terms that seek to relieve a marina from liability for its own negligence. However, such terms can and have been enforced if the exculpatory language is specific and clear, and when there is some consideration given by the marina in exchange for it, to wit, a better storage rate per foot. It's rare, but your author has heard of situations where a marina operator will agree to strike the clause to get the business.Written by James Mercante

Jurisdiction Challenge

The court has not yet decided the validity of the exculpatory clause, having been sidetracked with the marina's challenge over whether the federal court has jurisdiction. For the marina to have employed this jurisdictional battle, state law must have been more favorable to the marina then federal admiralty law on the enforcement of the marina's terms. The marina's position was that the contract (which governs whether or not the boater can go forward with his claim because of the exculpatory clause) is not a maritime contract. On the other hand, the injured plaintiff argued that the case belongs in federal court because the injury which occurred on an (undulating) dock caused by the wake of a vessel in navigable waters — is a maritime accident.The court found that the marina's storage agreement is a maritime contract and thus admiralty jurisdiction exists. However, the court determined that the plaintiff boater can not proceed on the injury claim until after the court first resolves the contractual issue. In other words, if the exculpatory term of the storage agreement is valid and enforceable, the boater's negligence claim would be doomed. The Judge summed it up this way: The negligence claim cannot be divorced from the contract claim because without success on the latter, the plaintiff cannot proceed on the former. That clears it up!

Marinas are entitled to store boats pursuant to maritime contracts. Boaters should read the fine (depending on one's perspective) print. As with the law, ignorance of the contract terms is no excuse.

January 15, 2007

Gene Horton

In Joseph v. J.P. Yachts, LLC, 436 F. Supp. 2d 254 (D. MA. 2006), the district court found that New Bedford Marine, a marine towing and salvage company, was entitled to recover a pure salvage award notwithstanding evidence of an oral fixed-fee agreement entered with the boat owner prior to the services being rendered. At around 0300 on September 2, 2003, the M/Y LADY MAZTF, a three million dollar motor yacht owned by Jerry Prescott, grounded in the outer harbor at Cuttyhunk Island, Massachusetts. Prescott was a member of Boat U.S. and was familiar with the organization's on-water towing services agreement. After the grounding Prescott called Boat U.S. and was provided with contract details for New Bedford Marine, an approved Boat U.S. towing services provider. According to the trial court, Prescott intentionally waited until after 0500 to contact New Bedford Marine in order to obtain the lower $125 per-hour daytime towing rate. Prescott spoke with Ralph Joseph, the owner of New Bedford Marine.

Prescott informed Joseph that he had dragged anchor, but did not disclose that he was aground, precipitously close to a rocky beach, with strengthening winds and waves pushing the vessel ashore. The trial court found that during the conversation with Joseph, Prescott (an experienced boater who once held a 100 ton master's license) intentionally minimized the nature of the problem and was emphatic that he only needed one assist boat to keep the yacht's stem from going on the beach. Asked for a price, Joseph quoted the discounted rate of $125 per-hour for one boat captained by Clinton Allen to tow the yacht and reset the anchor. Prescott agreed and Joseph dispatched Allen with a 23 foot tow boat equipped with a hawser. When Allen arrived, the vessel was aground with 18 inches of bottom paint visible, listing, and lurching towards shore. Allen immediately informed a member of the vessel's crew that they were in a salvage situation. With the crew's assistance Allen attached the towing hawser to the yacht's starboard quarter and kept a strain on it to minimize the yacht's contact with the rocks. He then called Joseph and requested a second boat. A shallow-water Kencraft was dispatched, captained by Joseph Moniz. The two rescue boats were able to keep tension on the yacht's stem until the rising tide lifted her off the ground at approximately 1020. The yacht sustained no damage. Allen released his hawser, leaving the Kencraft's towing line in place. To confirm that the yacht's engines were operating properly, Allen then carefully instructed Prescott to momentarily "bump it in gear" while the Kencraft's line was still attached. Instead, Prescott put the yacht in first gear for a full minute, causing the Kencraft assist boat to capsize. Allen rescued Moniz, retrieved the Kencraft, and gave Prescott a salvage invoice. Prescott refused to sign.