Dueling Lawsuits Over Shipwrecked Gold

     SEATTLE (CN) – Two companies sued each other over rights and technology used in an effort to recover “hundreds of pounds of gold” lost in a 1901 shipwreck.
     The SS Islander sank near Juneau, Alaska in 1901, killing 40 passengers, according to the two federal complaints. The ship was believed to be transporting “hundreds of pounds of gold” from the Klondike to Seattle and San Francisco. Salvagers say that if there were gold on board, it would likely be “single gold bars and boxes of gold bars” buried under as much as 8 feet of silt.
     MK Salvage Venture LLC, of Seattle, sued Tetra Tech EC, a New Jersey corporation with offices in Seattle, in one complaint. Tetra Tech returned the favor in its complaint against MK Salvage.
     MK Salvage Venture, preparing to recover artifacts and treasure from the Islander, hired Tetra Tech to do technical work for the operation.
     Tetra Tech claims MK Salvage refused to pay it $630,200 for data analysis and survey work. Tetra Tech sued for breach of contract, claiming it “fully completed the scope of work and otherwise fully performed all services.”
     Tetra Tech claims it also is entitled to $175,000 if it documents and recovers at least 137 pounds of gold.
     MK Salvage sued for fraudulent inducement, claiming Tetra Tech made false statements about its technology, including its “inability to detect gold bars and its inability to detect boxes of gold bars that were wrapped in iron strap.” (
     MK Salvage claims that it “repeatedly and specifically sought confirmation from Tetra Tech that it guaranteed its technology would detect non-ferrous materials up to 8 feet under the silt.”
     Tetra Tech technicians later disclosed the maximum detection capability of their equipment was only 3½ feet and “they were dubious about their technology having the ability to detect a bar of gold in any depth of sediments,” MK Salvage says in its complaint.
     MK Salvage claims it lost two months of excavation time due to Tetra Tech’s failed technology and spent several hundred thousands of dollars, “which MK Salvage would not have spent but for having relied on the guarantees and misrepresentations of Tetra Tech and compensating for Tetra Tech’s misrepresentations.”
     MK Salvage claims it doesn’t owe Tetra Tech anything and wants punitive damages for fraudulent inducement, breach of faith, breach of agreement and negligent misrepresentation.
     MK Salvage is represented by Stephen Vanderhoef, with Cairncross & Hempelmann.
     Tetra Tech is represented by Mark Beard, with Lane Powell.

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