Lozman Case Ruling: Is a Floating Houseboat Considered a Water Vessel under Maritime Law? What Does This Mean for Marinas?
Fane Lozman's floating home was a house built of a plywood structure with an empty bilge space underneath the main floor to keep it afloat. He had it towed to several marinas before deciding on a marina owned by the City of Riviera Beach. After several disputes with the marina, the City attempted to evict Lozman and was unsuccessful in that endeavor.
Thereafter, the City sought Federal Admiralty jurisdiction to have the vessel arrested. Over Lozman’s objections, the city was successful in arresting Lozman’s house, having it hauled off and destroyed. Mr. Lozman appealed to the 11th Circuit Court of Appeals where the lower court's decision was upheld. Not intimidated, Lozman appealed to the United States Supreme Court that just ruled that Lozman’s structure was not a vessel and therefore not subjected to Federal Admiralty laws.
The City of Riviera Beach now must compensate Fane Lozman for the loss of his home. However, the case means much more than that. The laws of Admiralty have always supposed that if an object floats it is a boat. And for centuries the law has operated under that premise. Now, a more in-depth analysis must be employed in deciding whether a structure on the water is a boat subjected to maritime and admiralty law or simply a floating structure not subjected to these laws. The distinction will have long reaching ramifications for many parts of the maritime industry.
What could this ruling mean for storage facilities and marinas?
Across the state of Florida there are thousands of houseboats currently moored at marinas and docks. Some of these houseboats have motors, electricity and can engage in transportation. Others are like Lozman’s, a structure that simply floats at the dock with no means of generating electricity, transportation or any other navigation associated with a vessel. There are other vessels that may fall in between these two characterizations, and it is this category that will result in the most problems for marinas. The reason for the quick process under Admiralty Law was that vessels could get away under the dark of night leaving the marina owner without redress. Now, with the new definition of what a vessel is or isn't as set forth by the Supreme Court, depending on the nature of the structure, marinas may be left to the common law to evict late payers and thereby lose an edge to secure payment by taking possession of the vessel.
An eviction process can take months and maybe years. It is not too dissimilar from attempting to evict a non-paying tenant from an apartment, condominium or house. Now, marinas are going to have to take special care in drafting their lease agreements to protect themselves. The maritime industry will be looking for remedies to this problem created by the Lozman case. This will spawn litigation in the area of contract enforcement between boat/or structure owners and marinas.
The Supreme Court, in its 7-2 decision, discussed the common interpretation of a boat as viewed by a reasonable observer, looking into its physical characteristics and activities in deciding if it was designed to a practical degree for carrying people or things over water. Of the things to be considered are whether it has a motor or some type of propulsion, whether it can generate and store electricity, whether it can be navigated and to what degree it can transport people and things.
Lozman’s boat, according to the majority in the Supreme Court decision, had none of these characteristics. The City argued that the analysis used by the Supreme Court is too complex and abstract which will lead to confusion and litigation down the road.
For now, that is the law. Mr. Lozman took on the Government and won, changing the landscape of this aspect of Admiralty law for the foreseeable future. No small feat for sure. However, we have not seen the end of this issue.
Stay tuned for the next in this series of blogs....
Read the full Supreme Court Ruling:http://www.supremecourt.gov/opinions/12pdf/11-626_p8k0.pdf