So the U.S. Marshal arrested my boat
By Capt. J. Michael Shea, J.D.
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Bob Ragtop was in for quite a day. His boating fantasy never included this... Bill Jones and I were standing in front of this nice home on the Intracoastal Waterway, and we could see the M/V My Pride's 46-foot mast sticking up over the house. Bill was a United States Marshal, and we were there to arrest the new sailboat. |
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We rang the doorbell and Bob Ragtop opened the door. Bill introduced himself and showed his badge, explaining that he was there to arrest the M/V My Pride, and that I was the attorney responsible. Mr. Ragtop said that he and I had spoken by phone, but he could not understand how I could arrest his brand new Swain 46-foot sailboat, as he had paid cash for it. Deputy Marshal Jones produced a court order signed by a federal judge, authorizing the vessel to be arrested and taken into custody. The order went on to say that the Marshal's service was to turn the vessel over to Reliable Towing Service, who was to be the substitute custodian for the vessel. Reliable was standing off behind Mr. Ragtop's house in the ICW, waiting to tow it to their marina. This all started when Mr. Ragtop bought his new boat at the Dry Tortugas Boat Show, from Capt. Rip's Yacht Brokerage. Capt. Rip had the Swain 46 at the show as a consignment from the manufacturer. Bob Ragtop went to the show, saw the boat and liked it. Capt. Rip said that he could have the boat outfitted and ready to go in a few weeks. They then discussed and Ragtop agreed to buy an instrument package for the boat, which included all the latest navigation and communication equipment that a new boat owner could possibly want. The package came to $35,000 in addition to the original sale price. The problem surfaced when Capt. Rip, who ordered the navigation/communication package, went out of business and did not pay my clients, who had installed the package. This posed an interesting maritime legal question. You see, vessels are responsible for their own debts, and those debts follow the vessel even if it changes hands. This old custom goes back to the days when sailing ships traveled the world, and there was no instant communications with her owners so persons dealing with a ship would extend credit up to the value of the vessel as she sat in a foreign port. She was expected to trade her goods and then pay her bills before departing. Thus, we say one extends credit to the vessel and maybe the owner as well. But the important part is the credit to the vessel. This tradition is still the law today, for all kinds of floating things. Chances are if it is a vessel, it can be arrested for not paying its bills. Thus if you are owed money by a vessel, you can arrest the vessel. This is true for all kinds of things including repairs to the vessel, wages of crew, towage, supplies, dockage, and services. When buying a used vessel one should keep this in mind and only close using a vessel document service and maritime attorney, who investigates the vessel's history to make sure there are NO non-paid liens. In the case of Bob Ragtop, the issues were interesting. A new vessel that has not been put into intended service is not considered a vessel. Any contracts with construction of her are still land contracts of the boat builder and not the new vessel. Until she starts to work or is finished and is ready for her intended services, she can not and does not incur debts. This is an easy point when you have a large ship, as it is usually the christening date. But it is a more difficult question with wave runners and floating things in-between. In the case of Bob Ragtop, the issue turned on the fact that the vessel was finished and had been turned over to an independent boat broker to sell. There was also the fact that the vessel was sailed to the boat show. Thus the court concluded that the vessel had been put into service and therefore could incur her own debts. As the attorney, I talked to Bob and tried to explain all this to him. Bob believed that because he paid cash for the new boat, he could not be responsible for any unpaid supplies that went into the vessel. That would be so for any item placed on the vessel by the builder, but this was an aftermarket package, and the vessel was on the hook for the expense. |
Although it is expensive to arrest a vessel in federal court, if the amount at issue is large enough, it may happen. In most of our federal courts the marshal fees alone will be $5,000 and up, even when you have someone else appointed to safely keep the vessel (substitute custodian). If the case goes on for anytime, there is the ongoing expense of keeping the vessel safe and insured. The kind of things that can get your vessel liabled (maritime term for arrested) are unpaid repair bills of yours or a previous owner, unpaid dockage, injured crewmen or passengers, any damage your vessel does to another vessel or property, towage, wages (including delivery) and of course, mortgage foreclosure. A recent case involving a repair bill reached the point where the repair yard arrested the yacht for $95,000 in alleged unpaid repairs. Six months later the original repairs, with dockage, substitute custodian, insurance and interest had risen to $150,000. Much to the owner's chagrin, the case settled on the day of trial, and the owner was obligated by the court to pay the $150,000. For the vessel to be arrested, it must be in the jurisdiction of the federal court asked to issue the arrest warrant. That does not mean that the suit can't be started in one federal court and have still another federal court where the vessel is found issue the arrest warrant. To avoid having your vessel arrested by one of my maritime attorney colleagues:
With this in mind, sail on...but remember Mr. Ragtop and his dilemma. If in doubt, call your friendly boat lawyer. Capt. J. Michael Shea is a maritime attorney in Tampa and holds a master's and harbor pilot's license. He has coauthored law books in the maritime field, and writes articles on maritime law. |
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