Salvage of the M/V Skyz The Limit

On July 8th 2005, at approximately 12:30 in the afternoon, Captain Doug Gould, aboard the M/V Safe/Sea Block Island, overheard a report of a vessel on the rocks over VHF channel 12. The M/V Skyz The Limit, a 2003 32 foot Sea Ray express cruiser, was aground on rocks approximately one-quarter mile west of Champlin’s Marina in Great Salt Pond, Block Island.

The vessel's captain reported that one propeller had become fouled in a lobster pot, forcing him to shut down one of the engines. Shortly thereafter, running on just the one remaining engine with limited maneuverability, the M/V Skyz The Limit was forced onto the rocky beach by the wind.

When Captain Gould arrived on scene, he offered salvage assistance to the captain of the Skyz The Limit. After a lengthy explanation and discussion, the owner entered into a fixed-price salvage contract with Safe/Sea under advice from his insurance agent. It was the suggestion of Captain Gould that the salvage contract be an “open-form” type, without a specified amount to be paid to Safe/Sea. However the insurance agent suggested that the owner enter into a fixed-price contract, which he insisted upon.

After the owner agreed to salvage services from Safe/Sea, Captain Gould successfully removed the vessel from its peril and towed it to safe water. A subsequent dive on the vessel later revealed damage to the hull and running gear.

However, when presented with the agreed upon bill for the salvage services provided by Safe/Sea, One Beacon Insurance, who insured the M/V Skyz The Limit, refused to pay and had their lawyers file suit against Safe/Sea to have the agreement overturned.

On May 12, 2006, the insurance company’s motion was heard by the Honorable Mary M. Lisi to void the salvage contract that was entered into by the vessel’s owner and Safe/Sea. The insurance company’s motion was denied and the case was ordered to binding arbitration as provided for in the salvage contract.

On August 7, 2006, the panel of arbitrators handed down a decision and an award in the case. Both the District Court Decision and the Arbitration decision are available in PDF format below.