Supreme Court Ruling on Floating Homes vs. Boats Proves Perplexing

Posted: March 13, 2013  |  By: David Weil, Esq.

I recall a discussion in your column last year about a marina eviction case that made it all the way to the U.S. Supreme Court. Last month, I read an article about recent Supreme Court activity and I noticed a case on the list about a houseboat. Is this the case that you wrote about? I live aboard a houseboat in Northern California, and I am interested in whether this will affect my rights as a marina tenant.
It is indeed the same case (see our previous article, “Will Supreme Court Decision Affect the Rights of Marina Tenants?” The Log, March 1, 2012). The court heard oral argument last October in Lozman v. City of Riviera Beach, Florida, and it published a decision on the case in January. The court did not rule as I had expected, but let’s provide a little background before getting into the legal nuts and bolts.
             
Fane Lozman owned and lived aboard a houseboat in a marina operated by the city of Riviera Beach. The “houseboat” was an unpowered barge with a two-story plywood structure mounted on the deck of the barge. Lozman and the city had a running feud over a number of city projects, and the city unwisely tried to evict him by filing an unlawful detainer action in state court.
            
Marina rental agreements are maritime contracts, but since an eviction has no immediate effect on the ownership of the property, the marina may proceed under state law through an unlawful detainer proceeding, similar to the procedure used for apartment evictions. This may be an attractive option for a marina, since it is typically a fraction of the cost of a maritime lien foreclosure and sale proceeding in federal court.
            
In this case, the city ran into trouble because the local Florida court found that the marina had evicted Lozman in retaliation for his taking legal action against the city to stop a redevelopment project. Most states, including Florida and California, prohibit the eviction of a tenant in retaliation for his or her exercise of a legal right.            

After failing to evict Lozman through the inexpensive state law option, the city decided to play hardball by filing a maritime lien foreclosure proceeding in federal court and having the houseboat seized by U.S. Marshals. This is the proper procedure for the enforcement of a maritime lien, but it is rarely used in a marina eviction because of the significant cost.            

A lien enforcement proceeding in federal court is nonetheless a very powerful tool, under which the vessel owner has very few defenses. This assumes that the structure in question is actually a “vessel,” and this brings us to what the Supreme Court case was all about.            

A maritime lien may only arise against a “vessel,” and Lozman claimed that his unpowered floating home was not a vessel. He lost this argument at both the district court where the case was originally heard and at the 11th U.S. Circuit Court of Appeals.            

In the end, however, the Supreme Court agreed with him and reversed the lower courts. They had held that his home was not a vessel.            

The term “vessel” is defined by a federal statute to include “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water” (1 U. S. C. §3). The language of the statute is very clear, and it has been held by courts throughout the country (including the Supreme Court, in earlier cases) to include everything from an unpowered cargo barge to a PWC and everything in between.            

In this case, since Lozman’s houseboat was towed for 200 miles to deliver it to the Riviera Beach marina, it was obviously capable of being used for transportation on the water -- and, as such, the outcome of the Supreme Court case should not have been in question. But the law moves in mysterious ways.            

The Supreme Court held that Lozman’s home was not a “vessel” because “a reasonable observer, looking to the home’s physical characteristics and activities, would not consider it to be designed to any practical degree for carrying people or things on water. And we consequently conclude that the floating home is not a ‘vessel.’” Among other characteristics, they noted that the “home” was a plywood structure with French doors, ignoring the fact that these features are found on conventional vessels.            

The problem with the court’s ruling is that this analysis completely ignores the fact that the home was towed on navigable waters for 200 miles. During that tow, it could have been involved in a collision or other calamity, and no one would argue that this barge was not a vessel under way during a tow.            

At what point did it stop being a vessel?            

This case, therefore, adds ambiguity and subjectivity to a lien analysis. The court basically said that it was not a vessel because it didn’t look like a vessel, referencing certain permanent physical characteristics (such as French doors).            

But those French doors were in place during the 200-mile tow. Since the physical characteristics of the structure did not change during the tow, how can the court say that the question of whether the structure is a vessel will be based upon whether it looks like a vessel?            

So, how does this affect the yachting community?            

Not much, frankly. As noted above, the cost of a lien foreclosure proceeding in federal court is prohibitively expensive unless the claimant is pursuing a very large lien. And if the claimant is not using the federal procedure, he does not care about the federal definition of “vessel.”            

The most significant consequence of the case will be for the permanently moored floating casinos found on the Mississippi River and elsewhere. If the casino is a “vessel,” it must be manned by a licensed captain and crew -- and everyone, even the bartenders and entertainers, will be considered “seamen” under a federal law known as the Jones Act, which concerns personal injury claims aboard vessels.            

If you own or live aboard (or work aboard) a boat or structure that you think may be affected by this court decision, contact an attorney who is familiar with the case.

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