My Boat Was Seized by U.S. Marshals: How Do I Fight This?
Posted: August 24, 2011 | By: David Weil
We have discussed the formation and enforcement of maritime liens often in this column, but this is a complicated subject and our readers are continually presenting us with questions that have not been addressed in any of our previous installments.
A maritime lien may arise from a wide range of obligations, but it is generally safe to say that services provided to a vessel, such as the engine repairs referenced by our reader, will give rise to a lien if the boat owner fails to pay the invoice. Federal law provides that a maritime lien may be enforced through a unique procedure that calls for a United States Marshal to seize or “arrest” the vessel.
Here, the reader is frustrated by two problems. First, he feels that the vessel arrest was unwarranted, because the invoice was the subject of a good faith dispute between the parties. Second, he was blindsided by the arrest, because the vendor failed to file a lien with the Coast Guard.
We should note preliminarily that the arrest of a vessel is initiated through the filing of a lawsuit in federal court, and it is a very expensive procedure. As such, we rarely see a vessel arrested in cases where the dispute involves a relatively small amount, such as the claim described by our reader. Nonetheless, the arrest will be valid if the underlying claim gives rise to a valid maritime lien.
Our reader indicated that he disagrees with half of the charges that were listed on the repair invoice. It appears, therefore, that the other half of the charges are undisputed. The disputed amount may or may not be enforceable, and the federal court may ultimately be called upon to resolve that dispute. But it is clear that the undisputed amount was not paid, and as such the repair shop had a valid maritime lien and the arrest of the vessel was a legitimate — though expensive — way of enforcing the lien.
Our reader was also concerned that the vessel arrest took place notwithstanding the failure of the repair shop to record its lien with the Coast Guard, and with no notice of the contemplated action. In fact, no notice or recording is required.
Maritime liens are instantly perfected upon completion of the work on the vessel, regardless of whether the obligation is recorded with the Coast Guard or with anyone else. This is a concept that should be well known to our regular readers, but we see it nonetheless in many of our readers’ questions, since it seems so counterintuitive. The “Notice of Claim of Lien” that may be filed with the Coast Guard has no legal effect on the validity or the enforcement of a maritime lien, and a vessel may by arrested by a United States Marshal without the need to file anything at all with the Coast Guard.
The procedures for the enforcement of maritime liens have developed over hundreds of years, mostly in the context of global merchant shipping. A ship, or even a yacht, may be located in any ocean on the planet at any given time, and it may be registered in any seafaring nation in the world. The tools for the enforcement of a maritime lien allow for the swift and efficient foreclosure of a lien by seizing the vessel without notice or warning, before it has an opportunity to disappear over the horizon to some unknown or unfriendly foreign port. Unfortunately, a disputed $14,000 claim by a local vendor against a small local yacht is stuck with the same enforcement mechanism.
A vessel arrest is an expensive proceeding, but it is nonetheless a legitimate enforcement tool for a small claim against a small yacht. To the extent that some of a claim may be undisputed, it is always advisable to pay that portion at least, which may in turn cause a vendor to think twice before taking such a drastic step against the boat. And, regardless of whether you are enforcing or defending a vessel arrest, this is a complex and unique area of legal practice, and an experienced maritime attorney should be contacted immediately.
David Weil is the managing attorney at Weil & Associates (weilmaritime.com) in Long Beach. He is an adjunct professor of Admiralty Law at Loyola University Law School, a member of the Maritime Law Association of the United States and is former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at (562) 438-8149 or at firstname.lastname@example.org.