The simplest approach to any title problem is to contact the people who are the source of the problem and determine whether they still have a legitimate interest in the boat. In the case described above, you will need to track down the mortgage holder and, since the seller is apparently deceased, you will need to locate the seller’s heirs.
If you can locate the seller’s heirs, and if the estate was probated, you are in good shape since the executor of the estate is authorized to sign a bill of sale. The heirs will presumably agree to cooperate, since there seems to be no question that the boat was sold to you. Even if the estate was not probated, the heirs may be authorized to execute the transfer paperwork if the value of the boat is less than $100,000. This is another topic that we discussed in greater detail in a previous installment of this column [’Ask a Maritime Attorney – Probate Law for Boat Transfers,’ The Log, June 14, 2007].
Things get a little more complicated if you are unable to locate these people or if they are unwilling to cooperate. In either case, you will probably need to retain an attorney to file a ’quiet’ title action. This is a type of lawsuit where a judge is asked by the plaintiff, who in this case would be the current boat owner, to sort out the title problems and then clear things up with a court order. That order may then be submitted to the Coast Guard, and the Coast Guard will update its records according to the judge’s instructions.
After filing a quiet title action in a case where some or all of the parties cannot be located, it will of course be impossible to serve the court papers on those people. Under those circumstances, the court may allow service by publication in a newspaper after the plaintiffs demonstrate that they diligently searched for the missing parties. After publication of the court papers, the judge may be able to issue the court order through a default judgment, since no one is likely to oppose the lawsuit.
Finally, if the prior owner or the mortgage holder are located but they are unwilling to cooperate, or if they still claim an interest in the boat or the mortgage, the parties will need to fight it out in court. One argument available to the boatowner is that the previous owner and the mortgage holder should have taken action to protect their interest years ago. This concept is known as ’laches,’ and it may be successfully argued if the mortgage holder or the prior owner failed to diligently assert their claim for so long that the new owners have been prejudiced by that delay.
The best possible outcome in a case like this would be for the mortgage holder and the prior owner to have simply forgotten to file some Coast Guard paperwork, and for that paperwork to be signed now by the proper parties. If this is not possible, a quiet title action may be quick and easy, if no one shows up to dispute anything. However, if clear title to the vessel is in dispute, this type of lawsuit can be very unpleasant and very expensive. Keep your fingers crossed.