Dear Attorney Smith:
Please accept the following as defendant Contractor’s confidential mediation
statement in anticipation of the mediation scheduled for February 6, 2019 at 1:30 p.m.
1. Defendant, Contractor, (“Shipper”), is a Massachusetts corporation
registered to do business in the State of Rhode Island. John O’Brien is the safety director
at Shipper and will be attending the mediation. Shipper is represented by Attorney
Melina Trudeau.
2. Plaintiff, Boat Co. (“Manufacturer”), is a Rhode Island Corporation and
manufactured the two keels at issue in this mediation. It is believed that a representative
of Manufacturer will attend the mediation and is represented by Attorney Stellar.
3. Defendant, PURE, is a reciprocal inter-insurance company/agency with a
principal place of business in Florida but authorized to do business in Rhode Island and is
represented by Attorney Star.
4. Non-party Racing, LLC, (“Racing”), is a Delaware limited liability
Joseph Smith, Esq.
September 30, 2021
Page 2
company with a sole member and Racing contracted with Manufacturer for the keels at
5. Upon information and belief, Non-party In a Hole, (“In a Hole”), is the sole
member of Racing and either or both Racing and In a Hole are insured by Defendant
This is a tale of two keels. The procedural posture of this matter is that a
complaint has been filed by Manufacturer in the United States District Court for the
District of Rhode Island. However the parties entered a stipulation agreeing to extend
time to answer so that this mediation could proceed before expenses begin to sink the
A. Keel 1
In or about the spring of 2018, Racing hired Manufacturer to build a custom keel.
(See Exhibit 2, Estimates). The total cost of that keel was $144,528.00. There was
credit of $19,815.75 for the scrap of a former keel. This brought the actual cost of the
keel to $124,712.25. Included in Shipper’s bill is the cost of delivery as billed by
Shipper. Three payments were made by Racing to Manufacturer totaling $122,712.50.
The parties agreed that the original quoted price was an estimate and that any remaining
balance would be paid once the keel was complete. The current outstanding balance on
keel 1 is $1,999.75. To date, this balance has not been paid by Racing, its sole member
In a Hole and/or its insurer Pure. To date, Shipper has not been paid for its services on
June 28, 2018.
Once keel 1 is completed and ready for transport is when our dispute begins.
Manufacturer hired Shipper pursuant to a crane lease agreement to transport keel 1 from
Manufacturer’s location in Providence to Boatworks located in Newport. (See Exhibit 3,
Crane Lease).1
Prior to the day of transport on June 28, 2018 the safety director for Shipper, John
O’Brien, (“O’Brien”), met with a representative of Manufacturer who introduced himself
as “Sam.” Sam held himself out as an employee of Manufacturer and able to make
1 Of note, under Terms and Conditions section number 7, the Lessee (i.e. Manufacturer) accepts all liability which
relates to the Lifting lugs. “Lifting Lugs: Lessee assumes all liability for the adequacy of the design or the strength
of any lifting lug or device embedded in or attached to any object.”
Joseph Smith, Esq.
September 30, 2021
Page 3
decisions regarding keel 1 and its transport. After discussing the unusual shape of keel 1
and how to best and safely transport it O’Brien and Sam agreed that keel 1 would be
placed upright in a metal stand and rolled onto the road for transport by Manufacturer as
that was the best method for properly securing it before being hoisted and transported by
Shipper. (See Exhibit 4, Images of Keel 1 and area described).
On the morning of June 28, 2018 the first to arrive on site at approximately 6:30
a.m. for Shipper was Mike Johnson the crane operator. He spoke with the
owner/employee of Manufacturer who showed him keel 1 which remained laying on its
side. This individual from Manufacturer signed Exhibit 3 and used a forklift to move
keel 1 onto a dolly on its side and then pushed it partially out of the bay door. The
Shipper crane operator was then directed by the same Manufacturer employee that he
would need to rig the piece using the two lifting lugs provided by Manufacturer. It is
believed that this Manufacturer employee, “Sam,” is the same employee that had
coordinated with O’Brien, the Shipper Safety director, that keel 1 would be placed in a
metal stand and wheeled onto the road way. At no time did the Manufacturer employee
“Sam” inform the crane operator from Shipper that the keel was to be placed in a metal
stand conversely he directed the Shipper employee to use a different method for moving
the keel.
Next to arrive on the job for Shipper was the Shipper foreman, Tom Jackson,
(“Jackson”), at approximately 6:45am. At that time, the crane operator had the crane set
up. Jackson noted upon arrival that keel 1, laying on its side, was being moved towards
the crane by Manufacturer employees. He too was directed by Manufacturers employee
“Sam” that they (Shipper) would need to rig the keel and pull it up vertically so that it
could be placed on the trailer for transport.
Following the instructions from Manufacturer’s employee, Jackson attached two
straps to the two shackles which were connected to the two lifting lugs on keel 1.
Jackson then directed the crane operator to lift the keel. It was during this lifting process
the keel first struck the bay door frame and then in swung back to hit the crane before
being placed on the bed for transport. (See Exhibit 5, Images of Keel 1 damage). There
is no dispute that keel 1 was damaged. Jackson did discuss the damage with another
Manufacturer employee that morning however the employee directed the Shipper
employees to deliver keel 1 “as is” and that the damage was likely repairable.
While Boatworks did agree to take Keel 1 they did not accept it due to its visible
damage and ultimately rejected keel 1.
Joseph Smith, Esq.
September 30, 2021
Page 4
B. Keel 2
After inspection, keel 1 was declared a total loss which led to the production of
keel 2. Manufacturer agreed to manufacture a new keel upon Racing demand for the
same. Upon information and belief, at or about the same time, Racing and/or Rutter
made a claim for keel 1 to its insurer PURE.
Manufacturer prepared an estimate for keel 2 and at PURE’s request provided a
copy of the invoice for Keel 2. (See Exhibit 6, Estimate #851 and Invoice #1617)
On August 29th, 2018 Keel 1 was returned to Manufacturer and on August 30th
2018 Manufacturer delivered the replacement keel, keel 2 to New England Boatwork’s,
which was accepted. To date, Manufacturer has not been paid for keel 2 by Racing/In a
Hole or by PURE.
Upon information and believe, PURE paid Racing/In a Hole directly for keel 2.
The total balance owed to Manufacturer for keel 2 by PURE, Racing and/or In a
Hole is $103,231.50. (See Exhibit 7, PURE Payment Invoices).
Manufacturer’s primary causes of action against Shipper sound in negligence
and contract law. (See Exhibit 1, Complaint). There are additional counts alleging
/seeking equitable subrogation and/or indemnification which are non-starters and
therefore do not need to be addressed for purposes of this mediation. There is also a
declaratory judgment action filed by Manufacturer against PURE.
There is no doubt that as between Manufacturer and Shipper there is shared
responsibility for the loss of Keel 1 and thus to a lesser extent some responsibility for
costs associated with the delivery of Keel 2.
Shipper’s employees followed the directives set by the Manufacturer employee on
June 28, 2018. As a result of following Manufacturer’s instructions the damages to Keel
1 were sustained.
Important to note, 1) Shipper’s employees were directed to lift keel 1 in direct
contradiction to the agreement that keel 1 would be in a metal stand ready for transport,
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September 30, 2021
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2) keel 1 was prepared with 2 lifting lugs when 3 were needed which is entirely the
responsibility of Manufacturer (see Exhibit 3, Section 7 “Lifting lugs”), and 3) that the
replacement keel and the damaged keel were BOTH transported in the metal stand as per
the original agreement between Shipper and Manufacturer. So for this reasons and the
reasons described below the use or lack thereof of tag lines is unavailing.
Further, Shipper secured a City permit to shut down the street for the time period
when keel 1 should have been rolled on a stand into the roadway by Manufacturer so that
Shipper could hoist and transport it. (See Exhibit 8, Permit).
Manufacturer has raised the issue that this incident could have been avoided had
Shipper used tag lines to secure the keel as is “industry standard” however this flies in the
face of what occurred on June 28th and is technically incorrect. Tag lines are used when
something is hoisted overhead and out of control of the person directing the item being
moved. On this job, the keel was not going overhead it was to be taken from ground
level and lifted onto a flatbed trailer 2 feet off the ground at no time would it be above
head level. So this argument amounts to no more than a red herring for the true issue –
the directives from Manufacturer and the lack of a third lifting lug.
A. Keel 1
*Manufacturer was paid in full except for the above referenced amount. Shipper
was owed $4,360.00 and was never paid for their services on June 28, 2018. Any
recovery by Manufacturer for the replacement of Keel 1 must be offset by what was not
paid to Shipper. (See Exhibit 9, Shipper Invoice).
B. Keel 2
1. Manufacturer
$103,231.50 Exhibit 6 – Manufacturer Invoice #1617
2. Racing/In a Hole/PURE
Joseph Smith, Esq.
September 30, 2021
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i. $2,300.00 Exhibit 10 –Measurements LLC Invoice
scan to determine damages completed on behalf of
Racing and paid for by PURE
ii. $2,185.15 Exhibit 11 – BW Invoice 3179 dated 7/7/18
iii. $4,477.50 Exhibit 12 – BW Invoice 3815 dated 9/9/18
iv. $122.78 Exhibit 13 – BW Invoice 3179
Arguably Manufacturer is entitled to seek reimbursement for its replacement keel
subject any offsets for unpaid bills and items that may have been doubled billed. For
example, Shipper was never paid for its work on keel 1 and since both Manufacturer and
BW included billing for lifting and hauling the keel only one of those charges is properly
attributable to incidental/consequential damages attributable to curing the defect caused
by the shared negligence of Manufacturer and Shipper.
1. Complaint
2. Estimate # 832 and Invoice # 1601
3. Shipper Crane Lease Agreement
4. Images of Keel 1 – Garage/Bay area
5. Images of Keel 1 Damage
6. Estimate #851 and Invoice #1617
7. PURE Payment Invoices
8. Shipper Permit
9. Shipper Invoice
10. Measurements LLC Invoice for Inspection
11. BW Invoice 3179 dated 7/7/18
12. BW Invoice 3815 dated 9/9/18
13. BW Invoice 3179
Prior to mediation and suit being filed, a good faith attempt to resolve this matter
for close to half of its value was offered and was rejected by Manufacturer. Due to the
position of the parties prior to today’s proceedings and as a result of the complication that
PURE’s premature payment presents Shipper’s position is that Manufacturer is primarily
Joseph Smith, Esq.
September 30, 2021

responsible for the damages sustained to Keel 1.
Should you have any questions or concerns or require any additional information,
please do not hesitate to contact me. I look forward to seeing you at the mediation.