Federal jury in Duluth: Hallett Dock owes $4.7 million for damage to McCarthy

Hallett Dock Co. is responsible for the partial sinking of the 1,000-foot-long Walter J. McCarthy Jr. at a Superior dock five years ago, a federal jury decided in Duluth today.

Walter J. McCarthy Jr.
The 1,000-foot laker Walter J. McCarthy Jr. at Hallett Dock No. 8. The ship hit an underwater object in January 2008, which smashed a hole in the stern and flooded the engine room. The ship's stern was at the bottom of the slip in 20 feet of water. (2008 file / News Tribune)

Hallett Dock Co. is responsible for the partial sinking of the 1,000-foot-long Walter J. McCarthy Jr. at a Superior dock five years ago, a federal jury decided in Duluth today.

The company owes American Steamship Company nearly $4.7 million for repairs and lost profits, the 11-member jury decided.

Hallett attorney David Hornig called the decision unfortunate.

"We were surprised by the verdict," he said.

Hallett will file for a new trial, he said.


"Based on the facts, we certainly don't think Hallett's motion for a new trial has any merit," American Steamship attorney Brent Reichert said.

"American Steamship Company and Armstrong Steamship Company are very pleased with the result."

American Steamship filed its lawsuit against Hallett in 2009. The trial began Feb. 5 before U.S. District Chief Judge Michael J. Davis.

The McCarthy's engine room flooded Jan. 14, 2008, after a submerged object

ripped a 7-by-4-foot hole in the ship's bottom as it backed into a slip.

The ship's stern settled to the bottom in about 20 feet of water, with water covering the ship's four 3,500-horsepower General Motors Electro Motive Division diesel engines.

American Steamship claims it cost nearly $4.2 million to repair the damage.

In addition, the repairs cost 45 sailing days and at least five cargo hauls before the McCarthy was certified as ready to sail, costing the company $516,794 in lost profits.


American Steamship claimed the ship's hull was punctured by a large, submerged piece of concrete and rebar, and that Hallett Dock was negligent in not informing the ship's crew of its presence or in marking the area as hazardous.

Part of the dock collapsed in 2006. Hallett informed the Coast Guard of the collapse and hired a firm to clean the slip -- work that wasn't completed until after the McCarthy was damaged.

In his closing arguments, Hornig said ice could have caused the hole in the ship's hull. But the bulk of his argument centered on where the McCarthy was supposed to dock and the spotters responsible for guiding it. American Steamship had been told not to go past a yellow bollard because debris from a dock collapse were in the slip beyond it, he said. Had the McCarthy stopped before the bollard, "there would have been no casuality in this case," Hornig said.

"They sailed right past it into harm's way," he said.

Hornig implied that the ship's captain, Lawrence Smyth, was incompetent and lazy for not taking soundings in the slip and for not knowing the point he was not to pass. If you are given a stopping point, you "better damn well know where it is," he said.

Reichert disputed Hornig's arguments. Hallett was responsible for guiding the ship, he said. The ship's crew did its job, checking charts, pilots, notices to mariners -- none of which indicated there was less than 23 feet of water in the area where the McCarthy was -- and called Hallett. The company should have warned the McCarthy that the debris from the dock collapse included a 10-by-10-by12-foot concrete and rebar obstruction.

"A small amount of debris is not the massive obstruction that was in the slip," Reichert said. "Hallett agreed to provide safe mooring and spotting."

During his closing arguments, Reichert stood near a large orange, white and black warning sign. He said Hallett broke the law by not marking the hazardous area with such a sign. The McCarthy never would have passed such a marker, he said.


"The evidence shows that Hallett Dock is 100 percent at fault," Reichert said.

After three hours of deliberations, the jury agreed, absolving American Steamship, Fraser Shipyard and Chris Jensen and Son of any percentage of the damages.

Steve Kuchera is a retired Duluth News Tribune photographer.
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