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Ruling could limit liability in Kandi Won lawsuit

The first lawsuit in the fatal July 4, 2012, Long Island, N.Y., sinking of the 34-foot Silverton Kandi Won, in which three children drowned, was filed by the father and brother of victim Victoria Gaines.

The first case in the fatal 2012 sinking will begin in federal court under admiralty law.

The action came a week after the lawyer for the owner of the boat submitted papers in federal court in Brooklyn seeking a ruling from the U.S. District Court for the Eastern District of New York that any claims against Kevin Treanor be heard in that court under admiralty law in an effort to limit liability. Federal Judge Sandra J. Feuerstein signed the order Oct. 10.

Lawyer Michael Della of Ronkonkoma filed suit in the state Supreme Court in Riverhead on Oct. 11 on behalf of Paul Gaines, who is also the executor of 7-year-old Victoria’s estate, and Victoria’s brother, Ryan, seeking in excess of $50,000 of actual and punitive damages from 10 defendants. Victoria’s mother, Lisa, is not a party to the lawsuit.

In addition to Treanor, those named as defendants include Treanor’s brother-in-law, Salvatore Aureliano, who was steering Kandi Won with 27 people aboard when it capsized in Oyster Bay on its way back to Huntington after fireworks; Silverton Marine Corp., although the company is out of business; Luhrs Marine Group and Morgan Industries Corp.; Guy Denigris, who steered the boat from Huntington to Oyster Bay; Greg and Deborah Aureliano, who escaped from the cabin while their son David, 12, drowned; and Cablevision CEO James Dolan and his wife, Kristin.

Prior to this year, the Dolan family had sponsored annual July Fourth fireworks at its waterfront Cove Neck property for many years, attracting hundreds of boats.

The Nassau County District Attorney’s Office issued a report in July stating that overloading was the primary cause of the accident, based on stability tests conducted on the recovered boat. “I think there are still unanswered questions in spite of the fact that the DA’s office did their investigation, and I think the family deserves answers to those unanswered questions,” Della says. “This lawsuit is all about holding people accountable to prevent this from ever happening again. I think there was a cascade of failures from the moment they got on the boat until six hours later when the accident happened, which is why we named so many parties.”

Before the case is heard in the state Supreme Court, Della expects it to be stayed because of the federal court order obtained by Treanor’s Manhattan maritime lawyer, James E. Mercante, to have any litigation heard under admiralty law. That could limit the owner’s liability to the value of the boat after the accident — $1,500 according to a marine surveyor hired by Mercante.

Della says he hopes to prove negligence — “of which there is overwhelming evidence,” he says — in federal court and thus eliminate the liability limit and eventually have the case remanded to state court.

The lawsuit alleges that Treanor, Aureliano and Denigris were “grossly negligent and reckless” for allowing the boat to leave its Huntington Marina overloaded, failing to “develop and provide adequate safety procedures for emergency situations,” failing to require everyone on board to wear life jackets and “operating the vessel in a careless and negligent manner.”

“I truly hope the family finds answers and that it brings them some solace,” Mercante says.

When Kandi Won capsized, it spilled most of the 27 people on board — a dozen adults and 15 children and teenagers — into the water. The three who died — cousins David Aureliano, 12, of Kings Park, who was Sal Aureliano’s nephew, and Harlie Treanor, 11, of Huntington Station, and family friend Victoria Gaines, of Huntington — were trapped in the cabin with David’s parents, Greg and Deborah, who managed to escape and are also defendants in the lawsuit.

Mercante says this is “clearly an admiralty case” and lawyers cannot legally challenge the jurisdiction of that court once a judge signs an order to have it heard there. Under admiralty law, lawyers can only contest the claim for limited liability by trying to prove negligence on the part of the owner or the value of the vessel after the accident, according to Mercante and other maritime lawyers.

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 say. If the families of those who died want to sue parties other than Treanor in additional courts they could still do that, they add.

Admiralty law and the limit-of-liability language dates from 1851 and has been used in many celebrated nautical disasters, including the sinking of the Titanic, in which liability was limited to the value of its lifeboats. Often in these cases the owner was not on the vessel at the time, which makes it more likely that the limit of liability will be imposed, maritime experts say. In the Kandi Won case, Treanor was on board, but he was not steering the boat.

Howard M. McCormack, a maritime lawyer and former president of the Maritime Law Association of the United States, says that under admiralty law 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 says. “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 adds, “there are cases going both ways.”

December 2013 issue