Insurance Claim Denied After Speed Boat Sinks

Gregory Contos v Economy Fire & Casualty CO. 96L-376

  • Verdict: Not Guilty
  • Special Interrogatory: Did Plaintiff make a material misrepresentation in the submission of his claim to Defendant? "Yes.")
  • Judge: Stephen J. Culliton (IL, Du Page 18th Jud Cir)
  • Pltf Atty: Theodore G. Gailan and Timothy E. Cronin (Bloomingdale)
  • Demand: $50,000
  • Asked: $50,000
  • Deft Atty: Mark B. Ruda of Condon & Cook
  • Offer: $5,000
  • Pltf Expert: Tom Karras, K.C. Kostaskos, P.O. Box 642, Key Largo, EL (Marine Surveyor) and Melvin Surdel, A-1 Marine Surveyors, 12406 Mackinac, Lockport, TL (708-301-9622) (Marine Surveyor)
  • Deft Expert: Alan Spear, Davis & Co. Ltd., Lisle, IL (800-223-8816) (Marine Surveyor)

In 1993, Plaintiff M-34 mortgage broker, a resident of Glenview, agreed to purchase a Scarab speed boat which was in 'Key West, FL. The boat was found by the Plaintiff's friend and expert Torn Karras, who is a marine surveyor. Plaintiff claimed to have agreed to pay $55,000 for the boat. He made a $10,000 cash deposit and completed the transaction in May of 1994, with a $45,000 cash payment. The boat was driven to Illinois in May, insured by Economy in June, and operated on the Chain of Lakes until it was discovered sunk on August 17, 1994. Plaintiff then submitted a claim Co Economy asserting the boat was in excellent condition and worth $75,000.

Economy retained a marine surveyor to examine the boat to determine its condition, value and the cause of the sinking. The surveyor concluded that the battery wires which operated the bilge pumps were cut while the boat was ducked and estimated the boat's value at less than $10,000. The Defendant denied the phi's claim and contended that he sunk or had the boat sunk and made material misrepresentations regarding the acquisition, purchase price and condition of the boat. The defense also asserted the Plaintiff’s bank records and commission checks did not reflect an income high enough to substantiate the claimed purchase price. The only record of the transaction was a copy of the receipt of sale from the seller. The Plaintiff contended he was entitled to the value of the boat plus fees and costs and a punitive amount for the vexatious denial of his claim. Defense counsel reports that Plaintiff's expert Tom Karras made repeated references to the boat in question as a '"Miami Vice' type boat." Post-trial motions were denied.

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