Choosing state or federal procedures for a maritime lien

Q: I won a judgment against a boat owner in state court. The judgment related to repair work I did on the boat. Since the boat is documented with the Coast Guard I recorded a notice of claim of lien against the Coast Guard title. The owner has no assets other than the boat, so I would like to go after the boat to satisfy the judgment. I assume that since federal law trumps state law and the boat is Coast Guard documented, the only way to initiate legal action against the boat would be through a federal vessel arrest procedure. I understand, however, that the federal vessel arrest procedure is very expensive. Is there some other way that I can go after the boat?

A: The short answer is since our reader already has a judgment against the vessel owner he is not limited to the rules that govern the foreclosure of a maritime lien. The underlying claim that led to the judgment did in fact give rise to a maritime lien, but the judgment could be for anything. The fact that the underlying claim was for repairs to a boat is irrelevant at this point, and the fact that the boat is Coast Guard documented doesn’t make any difference. As such, he is free to use the collection procedures that are available under state law.

Federal law only “trumps” state law in areas where a specific federal law or federal legal concept applies. There is no specific federal law or legal concept protecting a vessel from being seized to satisfy a state court judgment. A vessel is therefore not protected from a sheriff’s levy (through a court ordered writ of execution) to satisfy a state court judgment.

Notwithstanding the state law option, technically — yes — a vessel arrest through a federal court is in fact the only way to “initiate legal action against the boat.” In this case, however, our reader does not need to initiate legal action against the boat. He pursued legal action against the boat owner instead of the boat, and he can satisfy the judgment through action against the owner and all of his assets.

This sounds like we’re splitting hairs, but a federal vessel arrest is literally an action against the boat itself, as if it were the entity responsible for the debt. It is a procedure that is available in a maritime collection case, but it is not required and it is often prohibitively expensive.

There are nonetheless a few problems that our reader may face when using state law procedures to satisfy a claim involving a boat. The biggest problem is that he may need to deal with competing creditors and other maritime lienholders. A county sheriff may sell a boat on behalf of a judgment creditor such as our reader, but neither the sheriff nor a state court judge has the power to sell a documented vessel free of all liens or claims. That power rests solely with a federal judge in a vessel arrest case.

The relative speed of federal versus state procedures may also be a problem for a claimant. The state law procedure described by our reader required him to sue the boat owner and take that litigation all the way to judgment before a writ of execution could be issued by the court to order the sheriff to take the boat into custody. A federal arrest case calls for the boat to be taken into custody on the first day of the federal lawsuit. This could be a significant issue if the boat is a “flight risk.”

Ultimately, the question of whether to use a state or federal procedure will depend on the facts of the case, and an experienced maritime attorney should be consulted before any decision is made.

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 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 (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 dweil@weilmaritime.com.

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