Is there a boating recession on the horizon, or did someone just have too many boats that they just forgot about the one on your property?

 American songwriter Jerry Vandiver in his catchy tune “Too Many Boats” sings “there is no such thing as too many boats.” But with the recent surge in the cost of living, together with fuel prices, storage/marina fees and maintenance costs associated with boat ownership, I hear rumblings about boats being abandoned.

In Florida, when I think of abandoned boats, I think of a dilapidated boat anchored near the shore with a slight list. But with the boating boom that went on during the pandemic, people talk about boats in fairly shipshape condition being abandoned.  Many people may have an interest in abandoned boats. There are waterfront property owners who look out their windows to see a boat stuck in the mangroves or washed onto there property after a storm. There are municipalities where a boat owner has not paid their slip or dockage fees. There are private marinas where an overnighter has disappeared leaving the boat behind, a long-term owner can not be contacted, or a credit card was recently declined. Then there are the banks and other lienholders with a security interest in the abandoned vessel.    

So what does one do with an abandoned boat on their property? Well depending on the circumstances, there are legal options to remove the abandoned boat from its current location and potentially other options to deal with it. While there are judicial options, such as arresting the vessel and asserting a claim against it in Federal Court, Florida provides a non-judicial option that does not involve the filing of a lawsuit, well at least at first.

Let us get the question of whether a boat is a vessel out of the way. Under applicable Florida Statutes a “Vessel” … “includes every description of watercraft, barge, and airboat, other than a seaplane on the water, used or capable of being used as a means of transportation on water.” Whether or not something is or is not a vessel has been litigated, and most certainly will be litigated again in the future. But if you are on Google researching what to do about an abandoned boat on your property or place of work, you probably are fairly certain you are dealing with a boat. And in most cases a boat is probably a vessel under Florida law. So there are a few questions that need to be answered to determine your options. The initial simple questions you need to answer are:

1.  Is the boat “abandoned property” under Florida law?

2.  Where is the boat located?

3.  What is your relationship to the boat?

For purposes of Florida Statutes a boat is abandoned if it falls into one of the three categories contained in the definition of a “derelict vessel.” These categories are:

1.  Boats that are in a wrecked, junked, or substantially dismantled condition upon any waters of this state.

2.  Boats at a port in this state without the consent of the agency having jurisdiction thereof.

3.  Boats that are docked, grounded, or beached up on the property of another without the consent of the owner of the property.

This is why where the boat is located and your relationship to the the boat matters. Not only will it impact whether or not the boat is abandoned, it most certainly impacts your options to deal with the boat moving forward. Unfortunately, it is not always a one size fits all solution to deal with an abandoned boat. Florida considers itself a title state, and the improper removal, disposal, or sale of a vessel may result in criminal and civil liability, which is why the assistance of an attorney to help determine a safe course of action is a must.

Most boats abandoned on waters of Florida are dealt with by the state or local municipality. For example, after a hurricane, the State of Florida may apportion emergency funds to remove abandoned or derelict vessels as part of disaster cleanup operations. Hillsborough, Manatee or Pinellas Counties might apportion extra funds to remove derelict vessels from local waterways as a part of a beautification project or to encourage more water-based recreation. The Florida Fish and Wildlife Conservation Commission in general is tasked with identifying abandoned boats, initiating the removal process, and hiring the company tasked with removing the boat. However, the costs associated with removal, cleanup, or disposal of the abandoned boat, while initially paid for by the state or municipality, may be recovered from the owner of the vessel or the party determined to be legally responsible for the vessel being left on the water in a derelict condition. This is something to keep in mind. There are possible scenarios where an unsuspecting individual might be on the hook for these removal costs. If neither you nor that guy you sold the boat to off Craigslist properly filed the transfer of title paperwork with the state, you might still appear to be the owner responsible for removal costs. Another possible scenario is if you let a friend dock a boat at your place, and a thunderstorm blows it away because you were not checking to make sure it was secure. A third possible scenario is if you see an abandoned boat that you just must be the future owner of. There is a process for this, which I will discuss in the future.

The non-judicial process for a private property owner dealing with an abandoned vessel is similar to how a marina deals with a possessory lien. The general process for a private property owner is as follows:

1.  Written notice must be given to the vessel’s owner.

2.  Written notice must be given to each person or entity with a recorded security interest against the vessel.

3.  The required written notice must be made at least 60 days before the vessel is removed from the property.

One caveat is that the private property owner can not hinder the vessel’s owner’s efforts to remove the vessel. Another is the cost associated with removing the vessel. While the vessel owner is ultimately responsible for paying these costs, a more important question is who will front the costs of removal. Does the vessel owner have insurance? Do you know how to find out if the vessel does? As I mentioned above, the non-judicial process might allow you to deal with an abandoned boat without filing suit, but if you want to recover the money you spent removing the vessel you might have to.  

Florida marina’s also have notice requirements before dealing with an abandoned vessel. In addition to the option of removing the vessel from the property, a Florida marina also has the option to sell the vessel. But before doing so, the Florida marina must publish the upcoming sale of the vessel once a week for two consecutive weeks in a newspaper of general circulation. In my area, the major newspaper of general circulation for Hillsborough and Pinellas County is the Tampa Bay Times. For Manatee County, the newspaper of general circulation is probably the Bradenton Herald. The sale of the abandoned boat cannot occur until at least 15 days after the first publication. The marina’s lien can be satisfied by the owner or lienholder at any point prior to the sale. Upon receipt of the payment satisfying the marina’s lien, the marina shall return the boat to the owner or lienholder that made the payment.

If the sale goes forward, the proceeds of the sale are first used to satisfy liens, if any, in the order of the lien priority. While the marina is required to provide notice of the sale to the lienholders and owner, after the sale the marina is obligated to notify the lienholders and owner of the the amount of the proceeds of the sale. If a lienholder or owner does not claim their portion of the sale proceeds within 1 year of the sale, the are deemed to have abandoned the proceeds.

The procedures that legally must be followed for a non-judicial sale of an abandoned vessel can take over fourteen months, but should take much shorter. Further, the legal steps and documentation required by Florida Statutes as part of a marina’s abandon boat sale process must be strictly followed. All statutorily required documentation must be provided by the marina to any new purchaser at the close of the sale. And if the purchaser is unable to transfer title of the vessel to that person or entity’s name, the marina may be exposing itself to civil liability. This is just another reason why the assistance of an attorney to help determine a safe course of action to deal with an abandoned vessel in Florida is a must.

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Limitation of liability and the recent fires aboard car carrier/ro-ro vessels ?

 

When I originally started writing this post on the admiralty and maritime law principal of Limitation of Liability, I had recently talked to a friend about Hurricane Sally and the eight-month Pensacola Bay Bridge closure. The Court handing the complaint for exoneration and limitation of liability had recently issued its ruling in that case and the factual background and legal analysis is fascinating.

Hurricane Sally struck the Pensacola Bay area on September 16, 2020. During the storm, 27 barges owned by Skanska broke loose causing damage to the Pensacola Bay Bridge and other properties around Pensacola Bay. The Pensacola Bay Bridge was closed for 8 months, so one can imagine the damage caused by the loose barges was significant and the cost to repair likewise. Skanska did what most companies engaged in maritime activities would do in this situation and filed a complaint in admiralty under the Limitation of Vessel Owner’s Liability Act, 46 U.S.C. § 30501 et seq. (the “Limitation Act”) in the local United States District Court seeking exoneration from or limitation of liability. The United States District Court of the Northern District of Florida, Pensacola Division, issued its Order and Final Judgment in IN RE SKANSKA USA CIVIL SOUTHEAST INC. AND SKANSKA USA, INC., AS OWNERS OF THE BARGE KS 5531 PRAYING FOR EXONERATION FROM OR LIMITATION OF LIABILITY Case No.: 3:20cv5980/LAC/HTC at the end of December 2021. Senior US District Judge Lacey A. Collier wrote a 40-page opinion which provides a detailed summary of the facts of the case and his legal analysis as to why Skanska was not entitled to exoneration or limitation under the “Limitation Act.” It is well worth the read.

But as I was about to publish this post, news broke that the Felicity Ace sunk to the bottom of the Atlantic. It seemed like a week ago, I was reading in the news that the fire aboard the vessel was out and salvors were towing the vessel to safety. A number of blog posts were commenting on salvage costs upwards of $150 million, and the possibility of another major general average case in just under a year.  The Ever Green grounding was March of 2021. So, my draft post drifted off course a little bit. And after some edits, back and forth as to what my post should focus on, I decided to drop anchor before I ran completely aground.   

Limitation of Liability is a historical legal principle developed by the European maritime powers of the time to protect shipowners from catastrophic liabilities in the case of maritime disasters. The medieval sea codes suggested the shipowner and voyage sponsor would not be held liable beyond the value of the vessel. The principle developed before corporations became a common method to limit shareholder liability or indemnity insurance became widely available. The principle was also a way to encourage investment and participation in the inherently dangerous nature of maritime ventures. Despite the long historical significance of this legal principle, it was not a feature of English admiralty law until about 1734. Despite numerous early English merchants and settlors, who had become accustomed to this rule of law during the settlement of North America, Maine and Massachusetts were the two states to adopt the principal into their respective state laws. The US Congress first enacted the Limitation of Liability Act in 1851 formally adopting this historical legal principle into federal law. Congress’s goal was to provide US documented ships with the same competitive edge as foreign counterparts, whose owners could limit their liability.

The Act is now codified under 46 U.S.C. § 30501 et seq. and formally known as the Limitation of Vessel Owner’s Liability Act. It applies to most vessels, including canal boats, barges, and lighters, operating on navigable bodies of water, including lakes and rivers. It applies to both commercial vessels and pleasure craft. The owner who may limit liability is usually the person with legal title to the vessel. The term owner could be a demise or bareboat charterer but is not a time or voyage charterer. Further, the term owner does not include the employer of the ship's crew or management company operating the vessel.

While protection and indemnity (P&I) insurer’s are not statutorily entitled to invoke limitation of liability, they may receive an indirect benefit from a successful limitation action. This is because most P&I policy terms provide that the insurer will only indemnify the insured up to the insured’s legal liability.

The Limitation Act does exactly what the title says. It limits a vessel owner’s liability for personal injuries, death, embezzlement, loss, or destruction of any property, goods, or merchandise shipped on board the vessel to the value of the vessel at the conclusion of the voyage and the pending freight (I.e. the total earning of the vessel for the voyage), as long as the loss occurred without the owner’s privity or knowledge of the negligent acts or unseaworthiness that caused the casualty. Whether the owner lacked privity or knowledge is on the owner to prove. Privity or knowledge will exist where the owner has actual knowledge or had notice and could have obtained the knowledge by reasonable inquiry or inspection.  The fact of privity or knowledge is often heavily fact dependent, and establishing privity or knowledge is often a legal strategy to overcome a limitation claim.

The value of the vessel at the conclusion of the voyage and the total earning of the vessel for the voyage is called the initial limitation fund. In the case of a marine casualty of a “seagoing vessel” that involves personal injuries or death, and the initial limitation fund is inadequate to cover the personal injury and death damages, the vessel owner must also establish a supplemental fund of up to $420 per gross ton of the vessel to cover the personal injury and death damages. Certain types of vessels are not subject to the supplemental fund requirement. These vessels are statutorily defined and include pleasure yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels, fish tender vessels, canal boats, scows, car floats, barges, lighters, or nondescript vessels.

In the case of fire damage, vessel owners are entitled to even greater protection. The owner of the vessel is also not liable for loss or damage caused by fire unless the fire resulted from the actions or negligence of the owner. It is usually the cargo interest’s burden to prove the fire was caused by the design or neglect of the vessel owner. Proofing that negligence on the part of the master, crew, or independent contractors was the cause of the fire is insufficient. To overcome the fire damage protection, the cargo interest must show the vessel owner was negligent, such as in the hiring incompetent individuals in performance of their duties. And maybe, in the not implementing fire safety measures it was actually aware needed to be in place.

The Act also limits the potential liability for small items such as precious metals, gold or silver, precious stones, jewelry, trinkets, watches, clocks, coins, bills, securities, printings, engravings, pictures, stamps, maps, papers, silks, furs, lace, and other item of high value and small size to the value entered by the shipper on the bill of lading.  

The timing of the filing of a complaint for limitation is important. A vessel owner has six months from receipt of written notice of a claim exceeding the vessel’s value to file its complaint for exoneration or limitation. The written notice of claim triggering the six-month period, does not necessarily have to be in an amount in excess of the vessel’s value, if the owner knows or should know that the claim could potentially exceed the value of the vessel.  Likewise, if the owner knows or should know that the value of multiple potential claims will exceed the value of the vessel, the six-month period to file the complaint may be triggered by receipt of the first claim.

While I was originally planning to provide a summary of Judge Collier’s decision, my mind started racing when I read that the vessel Felicity Ace sunk yesterday morning. This car carrier was reportedly carrying thousands of brand-new Volkswagen, Porsche, Bentley, and Lamborghini vehicles. This marine casualty began on February 16^th, when the vessel caught fire en route from Germany to Rhode Island. The last I checked the cause of the fire is unknown, but it is believed firefighting operations were complicated by the number of electric cars onboard which also caught fire. Thankfully, the entire crew was rescued. But if you have bought a car recently, you will know that some new car models are hard to find and car prices on all models are at all-time highs. Based on some news reports, the loss of the vehicles alone is $300 million plus, with at least one news outlet putting the number higher than $400 million. The Felicity Ace was not cheap either.

Under the Limitation Act the vessel is, in my opinion, now worth nothing sitting on the bottom of the sea. I am not sure what the total earnings of the vessel for this voyage was either. With the cause of the fire unknown, and unlikely to be determined unless one of the salvors or crewmembers determined the cause before sinking, under US law the owner will most likely be exonerated.

 Even if the vessel owner is not exonerated, a limitation fund under US law could be a pittance compared to the potential total amount of the claims of the shippers.  The total amount of the claims may be impacted by the applicability of the whether the carrier’s bill of lading adequately adopted Carriage of Goods by Sea Act (COGSA)’s $500 per package limitation, and whether the shipper had a fair opportunity to opt for a higher liability by paying a corresponding greater charge.

So, who is going to pay for all this? The simple answer is that most likely there is some sort of commercial insurance in place that will cover some of the financial losses. It is common for shippers to carry their own cargo insurance to cover lost or damaged cargo during transport.  But with the number of car carrier/ro-ro vessels involved in major marine fire casualties in recent years, (Grande America, MV Golden Ray, MV Hoegh Xiamen, Felicity Ace), is there a basis to reevaluate the apparent legal presumption the owner will be entitled to exoneration in fire damages cases?

 

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Why the site is called Mariner Legal? Why am I starting Mariner Legal?

 What is a Mariner? 

    The last few weeks, as I have been opening my law office, I have pondered who my ideal cliental will be. Starting off, I know I will need to be somewhat of a "thresh hold" lawyer practicing "door law."  But my goal for my law office is to primarily serve mariners and the maritime industry. This lead me to the question, What is a mariner? And the past few days, I have probably spent way too much time thinking about this question as I sat down on multiple occasions to write this post. Having graduated from the United States Merchant Marine Academy, where the sports teams are referred to as the Mariners, I was initially inclined to define the term mariner as "an individual who makes their living upon the sea".  But as I pondered what a mariner is and viewed it in the context of who I want to provide legal services to, my definition would need to encompass more individuals than my initial definition seemed to allow. As I tried to refine my definition of mariner to cover more individuals, the definition became long and cumbersome. Being a lawyer, I decided to research legal authority to see how the law answered my question. So, the first place I looked to was the Revised Fourth Edition of Black's Law Dictionary, which I received as a gift from my good friend Michele Guglietti. 

The Revised Fourth Edition of Black's Law Dictionary defines a Mariner as:

A seaman or sailor; one engaged in navigating vessels upon the sea; every person employed aboard ships or vessels.

   But as I read more legal authority from across our country and others, I concluded that for the purpose of the maritime law topics I plan to address on this website, a formal definition of the word mariner does not matter that much. I guess I envisioned mariners as those many individuals who rely on the sea, not only for work but also for pleasure, leisure, and adventure. Is it a stretch for me to identify more individuals as mariners than a strict definition might afford. Maybe? When it comes to this website, there will be times I address legal issues that apply to the maritime industry in a broader context and therefore applicable to more individuals. There will also be occasions where the topic I address is applicable to a more defined set of individuals. But as long as my posts are clear as to who is impacted by the maritime law topic I am writing about; a formal definition of mariner is probably not necessary for readers of this website. Whether it be a salvor, charter captain, deck hand, fisherman, recreational boater, dock master, sailor or marine engineer, for my purposes it does not matter whether they meet the legal definition of the term mariner.  As I write and discuss various topics in the future, I will attempt to identify impacted categories of individuals when appropriate. 

So, who do I hope to reach with my posts on Mariner Legal?     

Individuals who make their living from the sea and improve their lives through recreation upon it. 

    Since 71% of the earth is water-covered, this might be a large target audience. But this is my target audience. And having known many mariners, commercial and recreational, I know this target audience is small. But this is the group of individuals I wish to help in resolving their legal issues.

Why am I starting Mariner Legal?

    Upon reflection, it is a long story. But the short answer is that I am starting this website to promote my law office: The Law Office of Samuel C Higginbottom.  My law office's web address is: www.lawsamuelchigginbottom.com, and there should also be a link to my website under my profile. This website will involve me, a mariner, writing mostly legal musings, which is partially how I came up with the name Mariner Legal. If you don't want to hear the long story stop reading now.  

    So here is the long story: 

    The summer of 1992 my parents shipped me down to Miami, Florida to stay with my paternal grandparents. I was never sure why I was the one to be shipped off, but that summer I have a feeling it was because my mother was pregnant with my youngest brother, who would be the sixth child in the family. My grandfather was still active in the Miami business community, but when family was in town, he would prioritize time with us. While visiting, we would frequently go fishing on the boat named after my grandmother, the Fair One IV. In retrospect, some of my favorite childhood memories were times spent fishing with my grandparents. Even though many years have passed, when my siblings, cousins, and I get together we often share exaggerated stories of my grandfather's sternness when it came to discipline on his boat. That summer, I was to eventually be joined by my Aunt Fair, and Aunt Row, Uncle Al, and cousins Maxine and Fair who were going to meet us in Key Largo. 

    The Fair One IV was docked in Miami, and my grandfather planned for us to motor to Key Largo prior to my aunts, uncle, and cousins arriving in town. Unfortunately, my grandfather had a last-minute meeting spring up.  So, he hired a local captain to motor the boat from Miami to Key Largo with me.  Keep in mind that I was 8 at the time. The burley captain, who I recall speaking broken English, smoking constantly, and enjoying a few beers on that voyage; showed up early at my grandfather's Miami home ready to go.  My grandfather prepared a lunch cooler for the trip and sent us on our way. I didn't know this burley captain at all, and I really don't know how my grandfather knew him. To say the least, I was set off on an adventure. An adventure as an individual improving his live through recreation upon the sea. An adventure with an individual who made their living from the sea. 

    In my mind, we were two mariners setting off on a grand voyage. The trip was mostly unremarkable, and I hardly remember it except for it being long.  But the key phrase is mostly. During the middle of the voyage while we were eating the lunch packed by my grandfather, the burley captain sprang up and shouted some foreign words, that were most likely curse words. He then exclaimed that "if we hurry, we can still make the short cut!"  Guess what?  We did not make the short cut because the tide was out and sea too low. We ran aground near a long bridge.  The burley captain was not too happy. At the time, I thought it was because he was sure we should have made it. But having now dealt with cases involving the maritime law of salvage, he probably had some financial reasons not to be happy as well. 

    Instead of calling the Coast Guard, Sea Tow, or anyone to help get us back afloat. He pulled out a wooden shaft gaff.  He used it to measure the depth of the water. He then used it to compare the depth of the water to my height. He then turned to me and asked my weight.  After a few minutes, he came up with a plan he was convinced would float the Fair One IV and get us back underway.  His plan was for me to put on a life-vest, tie a few other life-vest to the cooler, tie a line from the boat to me, then the line from me to the cooler, and for me to jump overboard with the cooler.  He was convinced The Fair One IV would float free and I could push it the few hundred feet to deeper water. I was 8 and didn't know any better. So, we strapped life-vests to the cooler.  I put on a life-vest and tied a line from the cooler to me. We then tied a line from me to the boat.  The cooler was lowered overboard.  I was then lowered overboard. The Fair One IV did seem to float a little higher and I pushed her into deeper water. In hindsight the thought of this sounds crazy and extremely dangerous, but it worked.  And thankfully, once the water got a little deeper, the burley captain pulled the cooler and eventually me in. He then jumped into the water to push the boat a little deeper to make sure it was safe to get underway under the vessel's own power. We eventually made it to Key Largo. But it was this trip, where I first remember knowing I wanted to make my living from the sea.

    During the summer between my sophomore and junior year of high school, I was tasked with identifying colleges to attend. I was quickly remined that I would have to pay for college myself, which coincided with telling my parents I wanted to study marine biology.  But then again, maybe it was because I was one of seven. This limited my search to ROTC programs and the Federal academies.  My older brother was at the Naval Academy at the time.  He and a few friends came home for a long weekend while on their summer cruises.  One of those friends just happened to be a midshipman at the United States Merchant Marine Academy. During this chance meeting, I learned there was five Federal academies and about the existence of the United States Merchant Marine Academy.  After some quick research, I knew I was going to be a graduate of the United States Merchant Marine Academy.  I was going to be a mariner.  I was so confident I was going to be accepted, get a congressional nomination to attend, and pass all the medical, that I argued with my parents when urged to apply to other universities. I eventually applied to two other colleges, because I qualified for an ROTC scholarship. But mostly to make my parents happy.

    I attended and graduated from the United States Merchant Marine Academy.  Like many graduates, I have several sea stories. Some of which I might share in the future. And like many graduates, the sea calls and the winds of opportunity blow us toward various careers and vocations.  For me it was eventually law school and the practice of law. My first job as an attorney was with the Admiralty and Maritime practice group of a Tampa, Florida law firm. It was great to have the opportunity to primarily serve various mariners and stakeholders in the maritime industries.  After a few years, the winds of opportunity blew again. I joined the Tampa office of a large Philadelphia law firm as an insurance and injury defense attorney. I learned so much with this firm. And I eventually became a shareholder representing some of the world’s largest insurance companies. Some questioned my walking away from this firm to start my own law office, but I felt the winds of opportunity blowing and the sea calling. While my sailing days are long behind me, when the sea calls; you answer. As many mariners will attest.  For me the answer was to once again focus my law practice on serving mariners and the maritime industry by founding my own law office. So, I opened the Law Office of Samuel C Higginbottom to provide legal services to those individuals who make their living from the sea, and those individuals who improve their lives through recreation upon it. 

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