- Supreme Court Rejects Anything That Floats Approach
- February 7, 2013 | Author: W. Brett Mason
- Law Firm: Breazeale, Sachse & Wilson, L.L.P. - Baton Rouge Office
On January 15, 2013, the Supreme Court of the United States issued an opinion in the case of Lozman v. City of Riviera Beach, Florida which changed the analysis used in determining what constitutes a "vessel" in the context of transportation on water. The Court concluded that a floating home, which is not self-propelled, is not a "vessel". The opinion clarifies the factors to be considered and underscores that not everything that floats is a vessel.
The case involved a dispute over a 60-foot by 12-foot two story floating home which consisted of a house-like plywood structure with French doors on three sides. Empty bilge underneath the floor kept the home afloat. After purchasing the floating home, Mr. Lozman, the home owner, had it towed to several Florida marinas where he kept it docked. Over the course of seven years, Lozman moved the structure four times.
In 2006 the structure was located in a marina owned by the city of Riviera Beach, Florida. The City attempted to evict Mr. Lozman and brought a federal admiralty lawsuit in rem against the floating home to enforce a maritime lien for dockage fees and damages for trespass.
The district court found that the floating home was, in fact, a "vessel" and awarded the City $3,039.88 for dockage and $1 in nominal damages for trespass. The district court ordered the City to post a bond in the amount of $25,000 to secure Lozman's value in the vessel and ordered that the home be sold to satisfy the City's judgment. The City bought the home at a public auction and had it destroyed. Mr. Lozman appealed.
The Eleventh Circuit Court of Appeal affirmed the district court ruling - agreeing that the floating home was a "vessel." Mr. Lozman sought review by the Supreme Court of the United States. The Supreme Court reversed the Court of Appeal concluding that the floating home was not a "vessel".
The Rule of Construction Act defines a "vessel" as including "every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water."
The Supreme Court instructed that this definition must be applied in a "practical" way, not a "theoretical" way. The Court could not find anything about the home/structure that could lead a reasonable observer to consider it was designed to a practical degree for "transportation over water." Mr. Lozman's home/structure was not self-propelled like an ordinary houseboat, it did not have a rudder or other steering mechanism, its hull was unraked, and it had no capacity to store or generate electricity. These objective factors support the Court's determination that Mr. Lozman's floating home was not a vessel.
C. New Test
In the wake of the Supreme Court's opinion, the new test that courts will use to evaluate vessel status is whether a reasonable observer, looking at the physical characteristics and activities of the object, would consider it designed to a practical degree for carrying people or things over water. This is an objective test which does not consider the structure owner's subjective intent. This test is not absolutely precise but it will provide guidance in borderline cases.
D. Why is this important?
The status of a structure as a vessel or non-vessel could:
- Enhance or impair a lender's security in collateral;
- Impact the scope of insurance coverage afforded under certain insurance policies;
- Impact the scope and nature of the rules and regulations applicable to the structure; and
- Expand or limit the remedies available to those seeking recovery for maritime personal injury.