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Judge: federal court must take up capsize lawsuit

A judge ruled that any lawsuits against the owner of the boat involved in the Oyster Bay, N.Y., boat accident on July 4, 2012, in which three children drowned must be heard in federal court under admiralty law.

The ruling signed last Thursday by U.S. District Judge Sandra J. Feuerstein and released Wednesday means that a lawsuit brought against the owner and other parties last week in New York State Supreme Court will not proceed until questions of negligence and liability are resolved in federal court.

James E. Mercante, the New York maritime lawyer for Kandi Won owner Kevin Treanor of Dix Hills, N.Y., had sought the ruling from U.S. District Court for the Eastern District of New York in an effort to limit Treanor’s liability. Under admiralty law, other lawyers cannot contest the jurisdiction; they can only contest the owner’s attempt to limit liability to the value of the vessel after an accident, the value of the vessel after the accident or try to prove negligence on the part of the owner, Mercante and other maritime lawyers said.

If the liability limit is not successfully challenged by lawyers for anyone suing Treanor, his monetary liability would be limited to the cash value of the 34-foot Silverton cabin cruiser after it sank. Mercante’s motion included an appraisal from a marine surveyor that says the recovered hull is worth only $1,500.

The liability limit can be exceeded if it is shown in court that the owner was aware of a problem with the boat or was otherwise negligent, maritime lawyers said. If the families of those who died want to sue other parties in other courts, they can still do that.

Lawyer Michael Della, who represents Paul Gaines, whose daughter Victoria died in the accident, filed suit in the state Supreme Court last week, naming Treanor and nine other defendants.

Maritime lawyers said the liability limit is most often approved if the owner was not on the vessel at the time of the accident. In the Kandi Won case, Treanor was on board, although he was not steering the boat.

Howard M. McCormack of Garden City, N.Y., a maritime lawyer and former president of the Maritime Law Association of the United States, said that under admiralty law dating from 1851 the key issue for the court is whether the owner had knowledge of a problem and was negligent.

“If the owner is on board, it’s a tough sell” to limit the liability, he said. “The courts tend to take the view that if he’s on board and it’s not a big boat, he’s likely to have some knowledge of what’s going on.” But he also said “there are cases going both ways.”

The Nassau County District Attorney's Office issued a report in July that said overloading with 27 people aboard was the primary cause of the accident.

— Bill Bleyer