Ask a Maritime Attorney
Q. My boat sank a couple of months ago due to the negligence of boat mechanic and I’m looking for advice on how to recover at least a part of my loss from him. He was working in my engine room and he apparently broke a through-hull fitting for an old knotmeter. The fitting did not have a valve, and when it broke the old sending unit was dislodged, allowing water to enter the engine room. The boat sank very slowly and nobody noticed that it was low in the water until it was too late. The marine surveyor who investigated the loss found the broken fitting but he did not really say anything as to how or why it happened, and he did not place any blame. I spent a little over $30,000 to repair the boat, and I am now considering a lawsuit against the mechanic to recover my loss. Since this is a maritime case, would the lawsuit need to be filed in federal court? What is the federal statute of limitations for a claim such as this? What are the other significant issues that I should look out for?
I have read a couple of your articles in recent issues of The Log about the private repossession and sale of boats, where the procedure is completed without judicial oversight. I have a preferred ship mortgage recorded against a documented boat and I am preparing to repossess the boat, but I want to be sure that I don’t overlook anything. Can you provide a general overview of the procedure?
I bought a 41 foot power boat two years ago with the help of a friend who loaned me the money for 80 percent of the purchase price. He funded the transaction by taking out a home equity loan, and our arrangement called for me to make the payments on his loan. Unfortunately he never showed me his loan paperwork and I recently discovered that the amount of his home equity loan was substantially more than the amount that he gave to me for the boat purchase. This entire deal was done on a handshake and at this point I have no idea how much I owe him. He refused to give me a detailed accounting of my payments or of his home equity loan, so I stopped making my payments to him. He responded by putting a lien on my boat through the Coast Guard. What are my legal rights at this point?
I own a deep draft racing sailboat and several weeks ago the boat ran aground at high speed in shallow water near a harbor entrance. The force of the impact caused the rig to fail and the mast fell overboard in two ugly pieces. We had to cut it loose to be towed to safety and the rig and part of the destroyed mainsail remain at the site of the grounding. Yesterday I was contacted by the harbor patrol and advised that I had to retrieve the rig and dispose of it immediately. What are my legal obligations under a circumstance like this? I should note that my insurance company concluded that the rig failed because several key components showed signs of extensive corrosion so they denied my insurance claim.
I own a construction company that is performing seismic upgrades and electrical work on a fuel dock at a marina in the Bay area. I have workers compensation insurance for my employees but my insurance broker now tells me that I need insurance to cover employees under the federal Longshore and Harbor Workers Compensation Act. Do I really need that coverage or is he just trying to sell me more insurance?
I purchased a Vessel and originated a loan with an institutional lender in 2003. At the time of the purchase the lender recorded a “Preferred Ship Mortgage” with the Coast Guard. Unfortunately the boat sank several years ago and the insurance company refused to pay the claim. We filed suit against the insurance company but we lost, and the claim denial was upheld. Several months after the completion of the lawsuit, my lender filed a notarized "Satisfaction of Preferred Ship Mortgage" with the Coast Guard. The Coast Guard subsequently provided me with a certified copy of that document, but apparently that was not the end of my journey. Last month I was served with a lawsuit by a company that had purchased my loan from my lender, demanding payment of the balance of the boat loan. Can a lender demand payment of a loan after a "Satisfaction of Preferred Ship Mortgage" has been notarized, recorded and signed off by the Coast Guard? If so, what does the filing of the satisfaction trigger? What additional documents must be filed to release a mortgage other than a recorded "Satisfaction of Preferred Ship Mortgage?"
I was horrified to learn last month that my boat had sunk while it was tied up in its slip. Now I am having a dispute with my insurance company because they are refusing to pay the claim. Apparently the boat sank after a thru-hull valve failed. They hired a surveyor to investigate the incident, and he believes that the failure was caused by corrosion in the valve assembly , which developed because it was constructed of inferior metals and it was not properly connected to the boat’s corrosion bonding system. However, the boat is relatively new and both the valve and the corrosion bonding system were installed by the builder. To complicate matters further, I had the boat surveyed last year at the insurance company’s request and with a surveyor approved by them. They accepted the surveyor’s report and took my insurance premium without saying anything about a possible problem. I am not an expert when it comes to corrosion aboard a boat, so how can I be expected to identify or repair a problem that their approved surveyor did not identify? Now they are accepting the report of a different surveyor as the basis for denying my claim. In light of the fact that they agreed to insure the boat after reviewing a report prepared by the first surveyor it seems that they should be required to pay the claim. What am I missing here?
I am seeking an escrow service for a yacht purchase but the services that I have contacted are not interested in working with the parties in a yachting transaction. I know yacht brokers are authorized to hold funds in trust but the boat we are interested in is being sold without a broker. Can you refer us to an escrow agency that would be able to perform the service?
I recently purchased a 38-foot charter boat that is located in South Carolina. The prior owner operated the boat in an active charter business with a Coast Guard Certificate of Inspection that expires in 2017. I plan to move the boat Lake Michigan to start a charter business on the Great Lakes, but I’m not sure if I can do that with the existing Certificate of Inspection. Do I need to start from scratch with a new COI? Who should I contact to make this happen?
I am considering the purchase of an extremely well maintained late-model motoryacht that is Coast Guard documented. This is my first boat purchase, so I have a couple of questions about the process. First, is there a website or other published source where I can find information or advice on the purchase of a used vessel? Second, is there a “boilerplate” or standard form contract that may be used for the purchase of a used vessel?
I am trying to help my parents with a problem that developed in connection with the recent sale of their boat. The boat was listed with a broker in Southern California, and after the deal closed, he had apparently deducted a 30 percent commission from the sale proceeds instead of the usual 10 percent. I know I could take the broker to small claims court, but I am trying to avoid that, since I live in another state. I am instead looking for a trade organization or association that I may be able to file a complaint with. I have heard that all brokers are part of an association that allows them to post their listings on the Yachtworld website, but I have not been able to find that organization on the Internet. If you could point me in the right direction, I would really appreciate it.
I own a floating home. The structure consists of a two-story triple-wide modular home integrated onto a 40- by 80-foot barge. I keep the home at a marina here in Southern California, but I just received an eviction notice from the marina operator. I am current on my rent, so the reason for the eviction is unclear. I understand California has a law that protects owners of floating homes from this kind of discrimination, but I am having some trouble figuring out how that law works. Can you help?
I sold my boat a couple of years ago and allowed the buyer to make payments for half of the purchase price. He signed a promissory note, and I recorded a preferred ship’s mortgage with the Coast Guard. He is now three months late on his payments, and I would like to know my options. Can I just repossess the boat, or do I need to get the U.S. Marshals involved? What kind of notice do I need to give? I probably should have looked into this before I sold the boat to him, but I really did not expect him to have any problems making the payments.
I own a sailboat that I keep at a marina in San Diego. We had an encounter in the bay last month with a tugboat that was pushing a barge, and there was some disagreement among our crew as to who had the right of way. We were making way under sail only -- and, as such, I believe that we had the right of way over the tug, which is basically just a power boat. Several of my crew are under the impression that the tug had the right of way since, as a commercial vessel underway with a barge, it would be considered a “restricted” vessel under the Rules of the Road. Which of us has the correct answer?