Insurers cut deal on collapsed White Pass dock

Settlement ends company's claim for $22 million to reconstruct dock

Posted: Friday, March 10, 2000

A jury trial in Juneau Superior Court on the final legal aspect of the White Pass dock collapse was canceled this week when a settlement was reached.

The case involved a claim for $22.37 million, which Pacific & Arctic Railway and Navigation Co. (doing business as White Pass and Yukon Route) sought for rebuilding the 120,000-square-foot dock on the Skagway waterfront. The dock collapsed Nov. 3, 1994.

Insurers wanted to pay only $11.1 million.

``Juneau missed out on a case that would probably have put jurors to sleep,'' said Andrew Guidi, Anchorage defense attorney in the case. ``Some of the issues got very technical.''

Because the settlement was sealed, Guidi could not reveal its amount.

``The last remaining aspect of the case was a claim by the owners of the dock and its parent corporation against its property insurers,'' Guidi said.

The 1,300-foot dock collapsed because of a huge underwater landslide. The timber dock, oriented north and south, lost 900 feet on its southern end, the end jutting into Taiya Inlet, 90 miles northwest of Juneau. Four hundred feet of dock at the northern end remained, but 100 feet of that was undermined by the slide, PARN said.

The slide occurred at 7:12 p.m., hard on the heels of a minus 4.3-foot low tide, one of the lowest of the year. The slide triggered a localized tsunami-like wave that damaged adjacent facilities owned by PARN, various boat owners and the state.

An exclusion in the insurance policy said it would cover only damage. PARN chose to take down the entire dock, and reconstruct its full length in concrete.

PARN claimed it should be reimbursed for the whole cost. Arguments ensued with its Toronto-based insurers about exactly how much of the reconstruction cost they should finance.

The insurers contended that PARN caused the collapse with reconstruction the company undertook earlier in 1994, removing piles in the area in September, October and November.

They said new piles had been driven in unstable underwater slopes that included waterlogged silty sands and sandy silt. These unstable slopes had been documented by the U.S. Geological Survey in 1972.

The insurers further alleged the weight of rip rap moved into place along the shore and the use of vibrating hammers in removing old pilings had contributed to the slide.

A document filed by the insurers, dated Feb. 19, 1997, said the causes of the collapse were human error, ``beginning with problems with work at the dock.'' They said insurance claims should not be honored because PARN had failed to perform adequate mass stability analysis. And they noted that, a week before the collapse, a crack had appeared along the shoreline, signaling incipient slope failure. Still, construction continued.

PARN contended the dock collapsed ``due to an act of God.''

Because of all the issues involved, documentation of the PARN case runs to more than 10,000 pages.

One person, construction worker Paul Wallin of Homer, died in the dock collapse. The issue of a death benefit was resolved in 1998. Terms of the settlement were not disclosed. And the state sued for $2.5 million for damage to state facilities - the Skagway ferry terminal and the small boat harbor - after the dock collapse.

That aspect of the case went to trial before Juneau Superior Court Judge Larry Weeks in 1999. On Feb. 26, 1999, a settlement of $1.875 million was reached. Repairs were made with federal emergency funds, so the settlement was destined for federal coffers.

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