The Sunseeker 74 that was “arrested” following the Fort Lauderdale International Boat Show was released to the company in February after a few months in custody. Read the story at right below. (Photo courtesy Kevin Turner via Soundings Trade Only)
 Maritime attorney Todd Lochner of Annapolis, Maryland, has agreed to let us share a series of his articles about various facets of boating law as posted at his website boatinglaw.com. This is the third installment in that series.
Defend Your 'Arrested' Boat With Qualified Representation
From BOATINGLAW.COM A lien is a claim for an amount of money which is secured by a piece of personal or real property. A maritime lien entitles the lien-holder to have a vessel seized and sold to satisfy a debt. Since vessels can move, a maritime lien is enforceable by arresting the vessel and holding it in place until the debt is satisfied or secured with a bond. In the United States, this is usually done by U.S. Marshals in an action in the federal courts, although many states have state lien laws. The law in this area is greatly complicated by the fact that maritime liens can arise without the lienholder filing the lien with any central authority. Only recently has the USCG accepted most liens for filing. Enforcement of maritime liens is also complicated by the fact that it courts engage in the fiction of personifying the boat. Liens are enforceable against the boat itself, even though boats cannot themselves be negligent, boats cannot themselves breach contracts, and boats cannot themselves fail to pay wages. In the maritime sphere, liens arise in several areas. The one that the casual boat owner knows is that of a bank or mortgagee. This type of lien, if filed appropriately, is called a preferred ship’s mortgage. This type of lien usually appears in an abstract of title available through the USCG and follows the vessel until paid off. Yet there are other, hidden liens, that can burden a vessel. The highest priority lien is that of a seaman. This class includes virtually any person that is working on a vessel in navigation. A seaman will have a lien against the boat for his or her unpaid wages and this lien will have first rights over any other lien. Another type of a lien is when a maritime business provides "necessaries" to a vessel. "Necessaries" are those items or services that are necessary to the operation of the boat. For marinas, necessaries include dockage, fuel, electricity, water, hauling, etc. For service companies, liens will arise through repairs to the hull, engine and the like. Other liens may arise out of services requested by the vessel itself, such as equipment ordered specifically for the vessel (e.g. radar, tackle, ropes, etc.) and even insurance premiums. The law is very generous to those who “furnish” these necessary services to the vessel. In order to qualify, the parts or service must be necessary to operation, and they must be provided to the individual vessel. Generally speaking, items sold in a retail store then taken to the vessel will not give rise to a maritime lien against the vessel. Conversely, those same items supplied on the credit of the vessel, may give rise to a lien. Additional maritime liens can arise in the context of injuries that occur aboard the vessel or from property damage caused by the vessel. A passenger that is injured by the negligence of a crewmember has a lien against the boat. A dock owner whose property is damaged when the vessel comes into contact with it has a lien against the boat. Finally, liens from salvage and other areas can encumber the ship. Enforcement of lien (for a marina or seaman) or defense of a lien (for the boat owner) can be complicated and costly. Suit must be filed where the boat is physically located, which can be difficult to ascertain. It may be advisable (or inadvisable) to assert a claim against the owner or operator of the vessel as well. Asserting a proper and enforceable claim to arrest a vessel requires significant expertise, and there are fees for having the marshals arrest the boat; fees for storing the boat until it can be sold; and attorneys' fees and costs associated with preparing and trying the case. Moreover, should the vessel be sold at a judicial sale, all liens, known and unknown will be extinguished. By law, a sale by the U.S. Marshals clears all liens on the vessel. This means that if a person has a valid lien on a boat, but fails to exercise it or fails to intervene in the arrest proceedings, should that vessel be sold at a judicial sale, the lien on the vessel will be cleared. Finally, providing services to a vessel that is arrested, such as fuel or dockage, and not making a claim before the sale is ratified, such person(s) will forfeit any claim against the vessel. If you have a lien to enforce, or your vessel is seized to satisfy one, find an admiralty attorney, preferably one in the jurisdiction in which the boat lies. Timing is of the essence. If you wait, you may lose your rights to enforce the claim, or lose your rights to contest an arrest that was done improperly. |
When Worse Comes to Worst: 'Arrest' the Boat
Soundings Trade Only earlier this year reported on an extreme case that resulted in the "arrest" of a yacht at last year's Fort Lauderdale International Boat Show. Here's what Trade Only published on Feb. 20: "The 74-foot Sunseeker that was placed “under arrest” at the end of last year’s Fort Lauderdale International Boat Show was released by a federal judge to Sunseeker U.S.A. "Turner, who put down a $4 million deposit for the yacht, told the newspaper he had been caught in a “financial musical chairs” that Sunseeker and Obey had played for years. "Obey took deposits from buyers and sent the money to Sunseeker, the story noted. The builder then applied those funds to boats it was finishing for earlier buyers. At times, the money was applied toward boats that Sunseeker sold Obey on spec. "In May 2018, one of the engines blew on a boat Obey had sold to another client, Obey said in the lawsuit, but Sunseeker declined to reimburse Obey for repair costs. This caused Obey to fall behind with payments to Sunseeker, Turner said. "Sunseeker said in its own legal filings that Obey never paid the full balance for Turner’s boat. Obey then said he told Sunseeker to apply $4 million he had paid the company to Turner’s boat and release the vessel to him. Tired of the back and forth, Turner sued Obey and Sunseeker last spring in state court." READ MORE |
