Can My Coast Guard-Documented Boat Be Seized by a County Sheriff?

I was sued in small claims court last year by a marine engine mechanic who did some work on my boat. We had a dispute over whether the job was properly completed, so I decided to withhold my final payment until the problem was resolved. I was out of town on the day of the hearing, so I’m not sure what happened, but I later received notice that a judgment had been entered against me for around $7,000. Last week, the county sheriff seized the boat and I was notified that it will be sold to satisfy the judgment. I am confused by all of this, because my boat is Coast Guard documented, and I had always understood that a lawsuit involving a documented vessel must be filed in federal court, and that the boat would  be seized by federal marshals. How was he able to do this through a small claims court lawsuit? 

Our reader is misinformed on a number of levels, and his only option at this point is probably to pay the full amount of the claim to the mechanic.

Our reader’s first oversight was his failure to defend the claim in small claims court.  The best defense in the world is worthless unless it is actually presented to the judge. The court will work with the parties to set a mutually convenient hearing date.

He is also misinformed about the rights of a party with a claim for services rendered to a vessel. Under most circumstances, a claim by a marine engine mechanic for repairs to a boat will give rise to a maritime lien. And a maritime lien may be enforced through a federal court procedure that calls for the boat to be taken into custody by U.S. Marshals. This procedure, however, is very expensive and it is rarely used to enforce a relatively small claim such as the case described by our reader.

The significance of the federal court procedure is that it allows for the boat to be seized at the beginning of the lawsuit, so that it is available to satisfy a judgment — and the boat is seized by federal marshals without any advance notice to the boat owner.

The boat is actually named as a defendant in these cases, and it is treated as if it were a party to the repair contract. This is a powerful tool, particularly where the boat owner may not have other assets or where there is a risk that the owner will try to hide the boat or take it to Mexico. This is the procedure that our reader was thinking of, but there are other ways to enforce a claim against a boat.

A claim that arises from services provided to a boat is essentially a claim for the breach of a contract — and it may be enforced in state court, like any other breach of contract case. A state court may not take the boat into custody without advance notice to the boat owner, but that procedure may not be necessary if the owner is an established member of the community and has other assets. Even where the owner’s resources are questionable, a breach of contract lawsuit in state court may be the only option available to a mechanic with a small claim, such as the case described by our reader, since the federal court procedure is so expensive.

When a judgment is rendered in a lawsuit for breach of contract, the plaintiff may look to any of the defendant’s assets for satisfaction of the judgment. A bank account, a car, a boat or even real property may be seized by a county sheriff pursuant to a writ of execution issued by the court that rendered the judgment.

The fact that a boat may be federally documented does not protect it from being seized to satisfy a judgment. There are, however, a few differences between the state and federal procedures.

First, as noted above, the state court procedure requires advance notice to be given to the boat owner. Second, and perhaps more important, the sale of a boat through the federal court procedure will include an order by the federal judge for the boat to be sold free of all liens and encumbrances. A state court judge does not have this authority, and this may interfere with the claimant’s ability to sell the boat, particularly if the boat is subject to a mortgage.

The considerable expense of an “arrest” of a vessel pursuant to a federal court order will complicate the enforcement of a small maritime lien — but, as discussed above, the claimant may have other options for collection. In most of these small cases, however, the best solution is for the parties to work out a compromise. Legal fees, even for a relatively simple state court procedure, may exceed the amount of a small claim fairly quickly.