Columbus-America Discovery Group v. Atlantic Mutual Insurance Co.,

974 F.2d 450 (4th Cir. 1992)

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Nature of the Case

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Facts

Columbus-America Discovery Group (P) located the wreck for the S.S. Central America on September 11, 1988. The ship had sunk off the South Carolina coast in 1858 in 8,000 feet of water. P recovered all the lost gold on board the ship with very special and unique equipment. The cost of the recovery was close to $30 million. P secured exclusive rights to salvage from the federal district court which acted in exercise of its admiralty jurisdiction. When the public discovered the find, 39 insurance companies claimed ownership of the treasure. The gold on board was valued at $1.3 million in 1857 but that did not include any personal treasure troves of the passengers. The commercial shipments of gold had been insured and most if not all claims for the losses were promptly paid off by the underwriters. Once the claims were paid by the underwriters, the gold became theirs. Interest in salvaging the gold came up when technology made that process feasible. The insurance companies did attempt negotiations about salvage but they did not enter any such contracts nor did they relinquish their rights to the gold. When the gold was recovered, D's immediately asserted their rights. The trial court found for P on all issues under the ruling that the insurance companies had abandoned the gold; the insurance companies had intentionally destroyed any documentation they had once had concerning the case. Ds appealed.