Several months ago, I inherited a classic boat from my father when he passed away. I am interested in selling the boat — but when my yacht broker reviewed the abstract of title from the Coast Guard, we learned that a notice of claim of lien had been recorded against the boat almost 20 years ago. The claim is apparently related to the restoration of the yacht after my father bought it. When I contacted the repairman to get more information, he claimed to have had a verbal agreement with my father that required the claim to be satisfied when the boat was sold. He has no receipts to support the amount of the claim, and my father never said anything about this agreement. I want to be fair — and if the repairman is actually owed something for his work, he should be paid — but due to the age of the claim and the lack of any paperwork, I have no way of determining whether it is valid. Are maritime liens subject to a statute of limitations? What can I do about this?
Statutes of limitation establish a deadline for pursuing legal action to enforce a claim. For example, in California, a lawsuit for breach of a written contract must be filed within four years, and a suit for breach of a verbal contract must be filed within two years.
These statutes exist to prevent a scenario such as our reader has described. Memories fade and supporting documentation disappears over time — and when people face a deadline for initiating legal action, they are more likely to resolve conflicts while the facts are still fresh in everyone’s mind.
Unfortunately, most maritime liens are not subject to any statute of limitations. This may seem odd, but we need to remember that recreational boating operates under a legal framework that was designed for commercial shipping and international trade.
Maritime liens are not treated uniformly around the world, but generally speaking, a maritime lien against a container ship may be enforced anywhere in the world. A statute that requires a lawsuit to be filed within a certain period of time may be enacted by a particular country, but unless it is a part of an international treaty, it will have little or no effect in other countries.
So, there is no statute of limitations that will help our reader in the scenario described here. But there is another tool that is part of the general maritime law of most countries.
“General maritime law” is a collection of maritime legal precedents that are handed down by courts over many years, and these precedents are often observed internationally –even where no statute or treaty would be relevant to a particular case.
In this case, we can look to general maritime law for the legal principle known as “laches.” The laches principle basically says that if you sit on your rights for a long period of time, and as a consequence of that passage of time other people are somehow harmed by your failure to act, you may lose those rights.
In this country, courts typically start a laches analysis by looking at the statute of limitations that would have applied in a non-maritime case, and then they look at the question of whether a party was prejudiced by the passage of time.
Laches may seem to be a rather vague principle, but it does provide incentive for a lien claimant to move things along — and it is very relevant to our reader’s case. Here, the repairman claims to have entered into a verbal agreement with a boat owner who has passed away, and he has no documentation or paperwork to support his claim. The passage of time has prejudiced the boat owner’s heirs, because they are unable to obtain any testimony or track down any paperwork that might contradict the repairman’s claim.
Notably, in this case, a comparison to the relevant statute of limitations in California would not offer much guidance.
The agreement alleged by the repairman called for payment upon sale of the boat, and the boat had not yet sold. He could therefore argue that there was no breach of the agreement, and therefore the clock on the statute of limitations had not yet started to run. But the uncertainty of that provision of the agreement, coupled with the effect that the passage of 20 years had on the ability of both parties to present a case, would point to an effective laches defense, in this case.
In the end, a case like this is probably best handled through a compromise. The costs associated with litigating a case like this will be substantial — and, in the end, those costs would likely exceed the amount of the claim. Regardless, both sides should consult with a qualified maritime attorney before taking this any further.