While an unfortunate situation, the trailer has likely performed as intended unless the tongue tube was the wrong thickness and overlooked in manufacturing.
The trailer is likely engineered to have an inexpensive, easily identifiable, and ductile failure for the owner to identify before something catastrophic happens. In this case the tongue weight is far too high and/or the trailer is terribly overloaded.
Like Dennis mentioned, the $3700 to fix a tongue tube is the worst offense in this whole story.
