Theater group hooks insurer into growing legal actions over sinking of 'haunted barge' at Navy Pier

By Dana Herra | Jun 29, 2016

Another lawsuit has been added to the pile of legal actions already filed in the 2014 sinking of a “haunted barge” attraction at Navy Pier.

Foundation Theatre Group Inc. has filed suit in Chicago federal court against its insurer, Kenneth Donat, and his company, Donat Insurance Services, LLC, alleging Donat failed to obtain adequate insurance on the leased barge. The theatrical company had already filed suit against Kindra Lake Towing, L.P., which owned the vessel, and Black Diamond Marine Equipment, Inc., a lessee that subleased the barge to Foundation. Kindra and Black Diamond have also filed legal actions in connection with the incident.

The barge, a haunted house-style Halloween attraction, was moored at Navy Pier and sank during a storm on Halloween 2014. Court documents filed in the flurry of suits between Foundation, Kindra and Black Diamond stated the barge was not properly equipped or secured to the pier and sustained damage from bumping the pier wall for about a week before sinking.

Under its charter agreement with Black Diamond, Foundation was required to purchase specific insurance to protect the barge. According to the new lawsuit, Foundation hired Donat to “determine, arrange for and procure” the necessary insurance.

The suit quotes Donat advertisements that promote the firm as “one of the best in the special events insurance industry” able to provide “the most comprehensive coverage available.” It claims the company had all the information it needed to secure the appropriate insurance, including an understanding that the attraction would be on an inoperable barge located on the waters of Lake Michigan and that the necessary coverage would have to cover storms and sinking.

“Foundation … trusted and relied upon Donat and Donat Insurance to properly place the requested insurance for the protection of Foundation in compliance with the [charter],” the suit states.

According to court documents, Donat secured a commercial general liability policy through Capitol Specialty Insurance Corporation to cover the attraction. The policy named Foundation, Kindra and Black Diamond as insured organizations. According to a declaratory judgment action in 15-CV-09735, Capitol Specialty said the policy does not cover or provide a defense for the damages caused by the barge sinking.

Foundation has sued Donat for negligence, failure to comply with its agreement and breach of fiduciary duty for allegedly failing to procure the level of insurance coverage promised in the charter. Foundation estimates the total amount of damages, including damage to the barge, salvage costs, loss of use and court costs, could exceed $1.5 million, and it asks to be awarded damages of not less than $1.5 million on each count.

Foundation Theatre Group is represented in the action against Donat by attorney Kurt D. Hyzy. 

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