Steelmet, Inc. v. Caribe Towing Corp.

GODBOLD, Chief Judge:

In this case insurance coverage on cargo was extended to a carrier while the carrier knew its barge was unseaworthy, and the facts of that condition were not communicated to insurers. Barge and cargo were lost, and the shipper attempts to recover on the carrier’s protective and indemnity policy. Because the district court erred in giving collateral estoppel effect to findings of an earlier arbitration, we reverse and remand for a new trial.

I. Background1

Steelmet is one of a group of shippers of steel bars who are plaintiffs in this action. Caribe Towing Corporation was a…