Ask A Maritime Attorney: Can I enforce a maritime lien and have a liveaboard boat arrested to collect payment, or are there legal complications because the owner uses it as their home?

Question:

            I am a boat mechanic, and I am chasing after a boat owner who bounced a check to me for a re-power project.  I understand that I now have a maritime lien against his boat, so I have done some research on maritime liens.  I know that I can have the boat arrested to collect what is owed, but there are some details about the process that I need help with.  The biggest problem is that the boat owner lives aboard the boat, and I don’t know if I can have the boat arrested under these circumstances.  Unfortunately, I don’t know anything about evicting someone from their home. Is there some way that I can collect my money without spending a fortune?

Answer

Our reader seems to have done a fair amount of research on maritime liens and the procedure for foreclosing on a maritime lien, but we can definitely fill in a few gaps.

First, he does appear to have a maritime lien against his client’s boat.  A maritime lien may arise from a wide variety of maritime services, but generally speaking, work that is performed on a boat with the authorization or approval of the boat’s owner or person in charge will give rise to a maritime lien.  And as our reader further notes, the foreclosure of a maritime lien on a vessel involves a “civil arrest” of the vessel by a Federal Marshal.  But as our reader suggests, the arrest does have some obstacles to consider, starting with the cost of the procedure.

Federal Marshals may take a boat into custody to foreclose on a maritime lien, but a “judicial foreclosure” such as this is extremely expensive.  The procedure requires the creditor to bring an “in rem” lawsuit in Federal Court.  The vessel is sued as if it were an individual defendant, and the lawsuit is served against the vessel by a U.S. Marshal who takes the vessel into custody and then transfers custody to a commercial custodian.

An unopposed arrest and marshal’s auction, where the boat owner simply walks away without fighting the creditor’s claims, will involve court costs, marshal’s fees, custodial costs, and attorney fees, all of which will cost thousands of dollars.  Those costs will go up dramatically if the boat owner chooses to fight the claim, and the attorney’s fees may not be recoverable even if the action is ultimately successful.  Further, if the Court determines that the creditor’s claim is invalid or that the claim does not qualify as a maritime lien, the creditor may be liable to the boat owner for a “wrongful arrest.”

There are other, less expensive options.  A maritime lien is a security device, which means that it is a tool for securing a debt with valuable collateral (the boat).  If the boat owner is solvent and an established member of his or her community, there is probably no need to arrest the boat even if the claim is a valid maritime lien.  The creditor may file a collection lawsuit in state court, and if a judgment is awarded, the boat owner’s bank account and other assets (including, if necessary, the boat) may be used to satisfy the claim.

For a relatively small claim, the creditor should consider small claims court.  A small claims action is limited to $10,000.00, but a creditor with a larger claim may waive the excess amount of his or her claim and proceed in small claims court.  The expedited time frame and reduced costs of that procedure may benefit creditors even if they waive a portion of their claim.  Check out the web site of the California Courts Self Help Center: https://selfhelp.courts.ca.gov/

Our reader was primarily concerned about the fact that the boat owner in his case lives aboard the boat.  This is a legitimate concern, but there is no law that prevents a foreclosure of a live-aboard boat in California.  Keep in mind that liveaboard boaters are not renting their home.  They own it.  They are only renting a parking place for their boat (or home).  Federal courts have held that “the right to dock one’s boat at a particular berth or marina cannot be equated with the right to decent low-cost housing even if one chooses to live aboard the boat.” (see Derfus v. Far West Villa Del Mar, 471 F. Supp. 1082 (C.D.Ca 1979)).  Notably, this same rule applies to marina eviction procedures.

When a lienholder files a lawsuit in Federal Court to foreclose on a maritime lien, the Court will issue a Warrant for Civil Arrest.  The order authorizing the warrant will typically authorize the Marshals to enter onto private property (such as a marina or private waterfront home) to access the boat, and it will instruct them to remove any persons found aboard the boat at the time of the arrest along with their personal belongings.

The law therefore authorizes the arrest of a liveaboard vessel, but there are nonetheless a few unique issues that arise with the personal property and miscellaneous gear that will be found on a liveaboard boat.  Those items must be inventoried, stored and returned to the boat owner.  That procedure is further complicated if the owner has pets or medication aboard the boat.  We had a client a few years ago who repossessed a boat with exotic birds aboard, and the birds had to be professionally cared for until the boat owner finally retrieved them.

A vessel arrest is a powerful tool for the enforcement of a maritime lien, but it may not be the best tool for a creditor with a small claim.  He or she must consider a long list of issues before committing to the considerable cost of the procedure, including the nature and amount of the claim, the value of the boat, the existence of competing liens, the solvency of the boat owner, and the question of whether costs and fees may be recovered as a part of the claim.  Speak to your attorney about these issues and consider them carefully.

David Weil is licensed to practice law in the state of California and as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Seal Beach. He is certified as a Specialist in Admiralty and Maritime Law by the State Bar of California Board of Legal Specialization and a “Proctor in Admiralty” Member of the Maritime Law Association of the United States, an adjunct professor of Admiralty Law, and former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-799-5508, through his website at www.weilmaritime.com,  or via email at [email protected].