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Friday, April 18, 2014
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Ask a Maritime Attorney

Do I need workers compensation insurance?

David Weil, Esq.  |  posted: 4/12/2014

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?

The Difference between a Loan and a Mortgage

By David Weil, Esq.  |  posted: 3/13/2014

 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?"

Hire Reputable Boat Surveyors

David Weil, Esq.  |  posted: 3/2/2014

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?

Can You Recommend an Escrow Agency?

David Weil, Esq.  |  posted: 2/13/2014

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?

Do I need A New CG Certificate of Inspection?

David Weil, Esq.  |  posted: 1/30/2014

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?

Where Do I Begin to Prepare for the Purchase of My First Boat?

David Weil  |  posted: 1/16/2014

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?

How Can I Resolve a Dispute Over Commission Paid to a Broker?

David Weil, Esq.  |  posted: 12/18/2013

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.

What Laws Protect Owners of Floating Homes from a Marina Eviction?

David Weil, Esq.  |  posted: 12/6/2013

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?

My Boat’s Buyer Is Not Making Payments. What Do I Do Now?

David Weil, Esq.  |  posted: 11/20/2013

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. 

Recreational Sailboat vs. Tugboat with Barge: Who Has the Right of Way?

David Weil, Esq.  |  posted: 11/6/2013

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? 

Trying to Sell a Boat When No One Is Alive to Sign the Bill of Sale

David Weil, Esq.  |  posted: 10/23/2013

My father passed away last month and I am working to get his affairs in order. He owned a sailboat, which he purchased three years ago. But after his death, I learned that title for the boat is still in the name of the previous owner. Unfortunately, when I tried to contact the previous owner, I was informed by his family that he had also passed away last year. To complicate things further, the seller’s estate was never probated. His family has been very helpful, but it seems that I am now faced with trying to sell a boat where nobody is alive to sign a bill of sale. Do you have any suggestions?

Must Marine Insurance Value Be Based on a Boat’s Purchase Price?

David Weil, Esq.  |  posted: 10/8/2013

I am applying for insurance on a boat that I just purchased. The insurance applications require a lot of information, but I was wondering about the significance of the purchase price and the value. This boat is currently in terrible shape cosmetically, and I intend to invest a lot of time and money into fixing it up after the purchase. Should I give them the actual purchase price on the application, or the expected value after I complete the project?

Should I Sign a Release to Protect My Broker in Case of a Deficient Survey?

David Weil, Esq.  |  posted: 9/26/2013

I made an offer on a 40-foot sailing yacht, and I now have two weeks to complete a sea trial and survey. I asked my yacht broker to recommend a marine surveyor, but he won’t do so unless I sign a release to hold him harmless if he refers me to an incompetent surveyor. That seems a little heavy-handed to me. Should I sign the release?

Are Boating Anglers Liable for Injuries Caused by a Trolled Fishing Line?

David Weil, Esq.  |  posted: 9/11/2013

On a recent trip to Catalina, we were motoring our inflatable dinghy outside of the moorings, but fairly close to the harbor. Another boat passed in front of us, and we noticed at the last second that they were trolling a fishing line behind them. The monofilament line was almost invisible. I grabbed the line to lift it over our heads as we passed barely underneath it, but the line was so tight that it sliced deeply into my hand. The injury required stitches, and I am left with tendon damage. Do I have any recourse against the fishing boat? I was under the impression that the Rules of the Road require fishing boats to display certain shapes during the day as well as lights at night, but there was absolutely no hint that these guys were fishing until the line was literally on top of us.

What Rules Determine a Race Committee Boat’s Liability in a Collision?

David Weil, Esq.  |  posted: 8/28/2013

I am on the race management committee for my yacht club and I have a question concerning possible exposure of the club and its volunteers to liability during races and other events. Specifically, if a member volunteer who is operating a club-owned boat damages another privately owned boat during a race, is it the responsibility of the club to pay for the repairs to the other boat? I have reviewed the Racing Rules of Sailing, and I don’t see anything relating to collisions with a committee boat -- so, would liability be determined entirely under the International Rules of the Road?

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