Posted: October 24, 2012 | By: David Weil, Esq.
We have received quite a few inquiries about this case. The sailing community -- particularly in San Francisco -- is pretty upset that a foreign competitor would be subjected to this feature of the American legal system.
On Sept. 30, the 45-foot catamaran sailed by the French entry in the America’s Cup World Series came loose from its mooring in the middle of the night. As we understand from reports on the incident, the anchor chain on the mooring apparently fouled on a piece of steel rebar on the bottom of San Francisco Bay, which in turn caused the mooring line on the boat to part when the tide came in. It was a calm evening, but a strong current carried the boat into the bay, and it eventually ran aground on Treasure Island.
A “Good Samaritan” named Todd Tholke saw the boat aground, and at 3:30 a.m., he pulled the boat to safety with his 14-foot open powerboat. The rescue reportedly took around three hours to complete. Tholke was offered a ride on the racing catamaran in appreciation for his efforts, but he decided instead to pursue a salvage claim against the boat.
Salvage law is fairly universal around the world, but most case law in the United States refers back to an 1869 U.S. Supreme Court case called “the Blackwall.” In that case, the court described salvage as “the compensation allowed to persons by whose assistance a ship or her cargo has been saved, in whole or in part, from impending peril on the sea.”
So long as the ship is in peril, any voluntary act that contributes to its ultimate safety may rank as an act of salvage. The “peril” that may be threatening the vessel may be very slight, and it is therefore not limited to some form of impending disaster.
Our reader asked how Tholke could be entitled to a $200,000 for three hours of work in a Boston Whaler. That does seem pretty high, but lawsuits often include inflated numbers in the initial papers that are filed. If the case is not settled voluntarily, the actual number will be determined at trial.
The Supreme Court in the Blackwall case was called upon to calculate an award for the salvage of the ship, and they set out six factors that are still used today by courts in salvage cases. Those factors are: (1) The labor expended in rendering the salvage service; (2) the promptitude, skill and energy displayed in rendering the service and saving the vessel; (3) the value of the towing vessels and other property employed in rendering the service, and the danger to which such property was exposed; (4) the risk incurred in securing the vessel from the impending peril; (5) the value of the vessel saved; and (6) the degree of danger from which the vessel was rescued.
The calculation of a salvage award will consider the six factors and determine an amount that is a percentage of the post-incident value of the boat. If the case involves a quick tow off a sandy beach with no surf, the award may be in the neighborhood of 5 to 10 percent of the value of the boat. A strong onshore wind on an exposed rocky point, where people are risking their lives, will lead to a very high award. Regardless, awards that exceed 60 or 70 percent of the vessel value are extremely rare.
Applying these rules to the incident in San Francisco, it’s pretty clear that Tholke is entitled to some sort of salvage award. Tholke has been criticized for not simply calling the Coast Guard and reporting the incident, but he nonetheless acted voluntarily to contribute to the safety of the vessel.
So, this case will focus on the calculation of the size of the award -- and when we apply the factors from the Blackwall case, it would seem that the percentage would be fairly low. It was a calm evening, he rescued the catamaran with a small open powerboat, and the vessel was already aground. But the percentage that comes from that analysis is applied against the post-incident value of the boat, and that’s where this case gets complicated.
An AC45 racing catamaran will be very difficult to appraise. This is not a Catalina 42, and you won’t be able to get a few comps from Yachtworld and take an average.
In my opinion, expert witnesses would probably use appraisal methods similar to those used to value a business rather than a boat, since these boats are basically business ventures and floating advertising platforms. Taking that approach, since the AC45 World Series is almost over and the likelihood of these exact boats being used for that purpose again is pretty remote, I would expect the value of the boat to be fairly low.
Finally, our reader thought the arrest procedure used by Tholke’s attorney was “heavy-handed,” but it was actually fairly routine. The boat has been “arrested” in connection with the lawsuit filed to enforce the maritime lien that arose from Tholke’s salvage efforts. This is a necessary step for the court to obtain jurisdiction over the vessel in the enforcement of a maritime lien. In this case, the boat was about to be shipped off to Italy, and the arrest procedure is available to keep a boat within the jurisdiction of the local court.
This case is a little unusual because of the type of boat involved, but the vessel arrest process is a standard component of maritime legal practice -- and it is a routine and necessary step in any dispute involving a large maritime lien. I will leave it for others to say whether Tholke should have simply taken a boat ride in appreciation for his rescue activities.