A Rye lawyer is suing a yacht insurer for allegedly refusing to pay for damages to his 40-foot sailboat caused by a defect.
David A. Cutner is demanding $140,000 from AIG Property Casualty Company for unfair dealing, in a complaint filed Oct. 25 in Westchester Supreme Court.
“After delaying for months,” the complaint states, “AIG simply concocted factually and contractually incorrect reasons to deny insurance coverage.”
AIG did not respond to a message asking for its responses to the allegations.
Cutner is a founder of Lamson & Cutner, a Manhattan firm that specializes in elder law. He spends much of his leisure time on the sailboat, according to his firm’s online profile, and he named the vessel in memory of his mother whose physical, mental, and emotion decline inspired him to focus his work on the protection of the elderly and disabled.
AIG Property Casualty is part of the $45 billion American International Group Inc. insurance conglomerate based in Manhattan.
Cutner says an AIG yacht policy has covered the sailboat since he bought it from a previous owner in 2010.
He claims the boat has been maintained properly by marine professionals, including on-land winter storage at boatyards in Connecticut and Rhode Island.
As the boat was being commissioned for the summer season this past May, the captain noticed old and worn hoses, including a hose that led to a sump pump in the bilge, that he thought prudent to replace.
On close inspection, the complaint states, the captain discovered that the fiberglass hull had been cut to make room for the hose.
A moisture meter indicated that a significant area of the balsa core — the strong material sandwiched between two fiberglass skins that provides the hull’s structural integrity — was wet.
That part of the hull had to be cut away and replaced, according to the complaint.
Cutner claims he is responsible for the costs of repairing the sump pump and hose, under his yacht policy, and AIG is responsible for the costs of repairing the wet core damages.
AIG denied coverage on May 12, finding that gradual infiltration of water had rotted the core and that the damage was found through ordinary observation and testing.
Cutner argues that AIG’s position is absurd. Neither he nor marina professionals had observed the defect over a period of years, and could not have done so without removing the cabin floor and the hose. And given the long life expectancy of marine hoses and the unlikelihood of anyone cutting the fiberglass skin and leaving it unprotected from moisture, there was no reason to inspect the path of the hose through the hull.
Safe Harbor Pilots Point in Westbrook, Connecticut estimated the cost of repairs at $27,231 to $30,609.
For months, according to the complaint, Cutner and AIG discussed a possible settlement. Then on Oct. 3, AIG reaffirmed its original decision, denying coverage.
Cutner is accusing AIG of breaches of the yacht policy and of an implied covenant of good faith and fair dealing.
He is demanding that AIG pay for the repairs and $140,000 for the full value of the hull.
