Shipbuilder gets $46 million settlement in engine fire case

JUNE 10, 2014 — Mobile, AL, headquartered law firm Cunningham Bounds, LLC says that, a week before the start of a scheduled three week jury trial, the law firm of obtained a $46,000,000 settlement for its clients, Bender Shipbuilding and Repair Company, Inc. and an international ship operator, in a product liability lawsuit filed against Caterpillar, Inc. relating to an explosion and fire onboard a vessel that was under construction at the time.

Though a press release from the law firm refers to this vessel as the M/V Sherman, readers with a longish memory will recall that it was actually the Seacor Sherman, one of a series of six anchor handling towing supply vessels ordered from Bender by Seacor Marine LLC in October 2005.  The law firm says that the contract price for the vessel was almost $27 million.

Bender Shipbuilding is the former owner of what is now Signal International's Mobile shipyard.

On May 14, 2008, while the vessel was still under construction, says the law firm, one of its 3516B Caterpillar marine engines threw a rod during routine testing, causing a massive fire that burned the ship to its hull. Everyone who was on the ship at the time of the explosion was safely evacuated.

In their lawsuit, the plaintiffs alleged that the Caterpillar engine installed on the M/V Sherman was defective at the time of its original manufacture and delivery. The engine that failed weighed 17,000 pounds, had thousands of parts, was the size of a commercial truck, and was severely damaged in the fuel fed fire that burned for almost 24 hours. Discovery in the lawsuit revealed that the engine failure was caused by a missing oil plug. The missing plug was the size of a nickel, and had been left out of the crankshaft in the innermost part of the engine when it was manufactured. The missing oil plug starved part of the engine of oil, which led to the engine's catastrophic failure.

"This was a hard fought case with highly regarded and very capable defense firms from New Orleans, Mobile, and Birmingham. The litigation took place in four courts, involved 40 depositions, required the testimony of over a dozen retained experts, and lasted for almost four years. It is a credit to the hard work, persistence and professionalism of our entire team that we were able to find the missing proverbial needle in the haystack, and crack this case wide open," said Skip Finkbohner of Cunningham Bounds.

The law firm says that "a resolution of this magnitude would not have been possible without the early efforts of Cunningham Bounds attorneys Steve Olen and Steve Nicholas, who handled the initial proceedings in the federal district and bankruptcy courts. Specifically, they fought and won critical battles over the appropriate forum for the litigation and which laws should apply.

George W. "Skip" Finkbohner of Cunningham Bounds, LLC, along with his law partner, Lucy E. Tufts, served as co-lead counsel for the Plaintiffs. Also representing the Plaintiffs were Victor T. Hudson and William W. Watts of Pipes Hudson & Watts, LLP.