Court voids insurance for Harwich boat shop

Sep. 13--HARWICH -- The owner of a boat repair and storage business won't get any help from his insurance company to fend off lawsuits from customers whose boats were damaged or destroyed in a fire in 2018.

In a summary judgment issued Aug. 20, a judge in U.S. District Court in Boston concluded Karl Anderson, owner of Karl's Boat Shop in Harwich and a storage barn in South Dennis, failed to meet the requirements contained in the contract with his insurer, Atlantic Specialty Insurance Co.

Judge William G. Young said that failure allowed Atlantic Specialty to void its insurance agreement with the boat shop and thus deny coverage of third-party claims from boat owners.

As part of his contract with Atlantic Specialty, Anderson was required to have boat owners sign waivers saying they would not hold him -- and in turn Atlantic Specialty -- responsible for any damage to their crafts while in Anderson's care, except in cases of gross negligence.

In June 2018, a large fire in Anderson's storage barn in South Dennis destroyed several boats and severely damaged others. The barn remains a burned-out shell with a few boats stored outside.

In a report filed by Dennis fire Lt. Phelim Meehan, the fire was believed to have started inside the barn on the second floor, based on burn patterns. The instability of the structure prevented investigators from getting close enough to dig into the spot where they believe the blaze began.

Meehan did not say in the report whether the fire was considered of suspicious origin.

Atlantic Specialty ultimately paid Anderson $221,347 for damage to his property and related expenses.

According to court documents, "multiple third parties threatened Karl's Boat Shop with claims, and KBS in turn requested Atlantic to defend and indemnify it."

In May 2019, Atlantic asked the federal court for a judgment that would allow it to void the company's contract with the boat shop.

The company argued that Anderson's failure to get signed waivers from his customers was a "material breach of contract."

The court documents state Karl's Boat Shop was unable to produce evidence that signed waivers from his customers existed. During his testimony, Anderson said he had delegated the task of securing such waivers to one of his employees. She was no longer with the company, he said, having been fired sometime around 2017, based on "fishy" accounting irregularities and inconsistencies in payroll.

Anderson did not respond to a request for comment. His attorney, Paul Revere III, declined to comment except to say he planned to file a request with the court to alter or amend the judgment.

Follow Christine Legere on Twitter: @ChrisLegereCCT.

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