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The Rough Notes Company Inc.

Railway, hoist, or dock?

Railway, hoist, or dock?

May 27
07:10 2020

Railway, hoist, or dock?

Global Ship Systems owned a shipyard in Savannah, Georgia. The shipyard used a marine railway to transport vessels into and out of the water. The railway consisted of: “(a) a set of parallel railway tracks mounted on a concreted bedplate, which are approximately 350 feet in length and on a 16-degree incline that runs into the Savannah River; (b) a cradle (flatbed) that rides on rollers (trucks) on the railway tracks and onto which a vessel is placed for movement[;] (c) a hauling chain, which is kept in tension by a separate chain (the tension chain), that is attached to the cradle and fed around two gear sprockets [; and] (d) a six-stage speed reducer (reduction gears) that [is] coupled to an electric motor.”

Global had policies with Continental Casualty Company (CNA), Landmark American Insurance Company, and Arch Specialty Insurance Company. The CNA policy provided boiler and machinery coverage. It specifically excluded any “[c]onveyor, crane, elevator, escalator, or hoist” but did not exclude any “electrical machine or electrical apparatus mounted on or used with this equipment.” The Landmark/Arch policies covered damage to or physical loss of “Covered Property” resulting from a “Covered Cause of Loss.” Covered property did not include “[b]ulkheads, pilings, piers, wharves[,] or docks.”

In December 2004 and May 2005, the marine railway experienced mechanical failure; Global sought coverage under the CNA and Landmark/Arch policies. When both companies denied the claims, Global sued them. The trial court granted summary judgment in favor of CNA and denied Global’s motion for partial summary judgment against Landmark/Arch. Global appealed.

The first issue on appeal was whether the marine railway was a “hoist” within the meaning of the CNA policy and therefore excluded from coverage. CNA argued that it was a hoist and that the coverage was limited to any electrical machine or electrical apparatus mounted on or used with the equipment. Global argued that the mere fact that the marine railway lifted or hoisted objects did not necessarily make it a hoist.

The appellate court agreed with the lower court. Using a dictionary definition, it found that the marine railway was a “hoist” within the meaning of the policy.

The second issue on appeal was whether the marine railway was a “dock” within the meaning of the Landmark/Arch policy. Again applying a dictionary definition, the appellate court agreed with the lower court and held that the marine railway was a “dock” and was not “Covered Property” within the meaning of the policy.

The judgment of the lower court was affirmed.

Global Ship Systems, LLC, v. Continental Casualty Company—No. A08A0354-Court of Appeals of Georgia—June 25, 2008—663 South Eastern Reporter 2d 826.

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