A Ninth Circuit panel expressed skepticism Friday regarding a treasure hunter's quest to secure a $7.5 million settlement from an insurer over a failed shipwreck salvage operation. The judges questioned whether the withholding of vital maps by his ex-partners was intentional, casting doubt on the claim's coverage under insurance.

Doubts on Accidental Occurrence

During a hearing, the Ninth Circuit panel raised concerns about the nature of the loss suffered by Rodger May, the treasure hunter. May argued that his ex-partners' refusal to provide crucial charts and data wasn't intentional, thus qualifying as an accidental occurrence under Washington state law. However, Judge Eric D. Miller expressed doubt, questioning the foreseeability of the outcome.

Predictable Consequences

Judge Miller's skepticism was echoed by Judge William A. Fletcher, who pointed out that withholding the information had directly led to the claimed loss, making it entirely predictable. May's attempt to compel the insurer to cover the settlement faces challenges as the judges grapple with the intentional nature of the partners' actions.

9th Circuit Critical Of Treasure Hunter's Insurance Appeal : Partnership Fallout

The dispute stems from a souring partnership between May and his former associates, Peter Kuttel and Bear Enterprises, in their quest to salvage the SS Islander shipwreck off Alaska's coast. Following the dissolution of their partnership in 2016, May alleged that Kuttel withheld crucial information necessary for the salvage, leading to the loss of salvage rights.

9th Circuit Critical Of Treasure Hunter's Insurance Appeal : Legal Battle

May's legal battle saw a covenant judgment settlement of $7.5 million awarded to him in 2022 by a King County Superior Court Judge. However, the insurer, Great American Insurance Co., contested the ruling, leading to the current appeal in the Ninth Circuit.

Argument Clash

Representatives from both sides clashed during the hearing. Joseph D. Hampton, representing Great American, emphasized the intentional nature of Kuttel's actions, emphasizing the cruciality of the withheld information for the salvage operation. In contrast, Philip A. Talmadge and Gary W. Manca, representing May, argued that while Kuttel withheld the information, there was no intent to harm May, but rather to assert a claim of right regarding an initial investment.

Tangible vs. Electronic

The debate extended to the nature of the withheld information, with the district court ruling it as electronically stored and therefore excluded from coverage. However, Talmadge argued that the material, including charts and maps, was tangible and had been digitized solely for the purpose of a lien.

9th Circuit Critical Of Treasure Hunter's Insurance Appeal : Judicial Panel

U.S. Circuit Judges William A. Fletcher, Eric D. Miller, and Barrington D. Parker Jr., sitting by designation from the Second Circuit, presided over the panel for the Ninth Circuit.

Great American Insurance Co. is represented by Joseph D. Hampton and Danielle N. McKenzie of Bullivant Houser Bailey PC. May is represented by Philip A. Talmadge and Gary W. Manca of Talmadge/Fitzpatrick PLLC.