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Lozman v. Riviera Beach

The Supreme Court last week held that a Riviera Beach, FL resident’s floating home was a house, not a ‘vessel’, and therefore the marina where he had docked it could not seize his home under federal maritime law. The owner of the home, Fane Lozman, is a self-made millionaire who had been residing in the City of Riviera Beach Marina where he had indefinitely moored his 60-by-12 foot houseboat. The houseboat had been towed from another marina following Hurricane Wilma’s passing in the summer of 2005. Lozman had resided in Riviera Beach for a little more than a year before his relationship with city became rocky. The city had plans for a luxury development in the marina, but Lozman fought against it and ultimately succeeded in halting the plans. The city council wanted to clear the path for their development, and in 2007 passed new regulations for the marina, which required proof of insurance and registration, as well as new docking fees for the marina. In March, 2008, Lozman received a letter from the city advising him he would be evicted unless he brought his home in compliance with the new regulations and paid outstanding fees to the Marina also from the new regulations. In April 2009 the city arrested the houseboat and filed a claim in admiralty on his home, the boat was subsequently auctioned off and demolished. Lozman dismissed the admiralty claim, but the district court ruled in favor of the city, declaring that his home was indeed a ‘vessel’ and could be arrested under federal maritime law.

On appeal, the case finally reached the Supreme Court in 2012. The Supreme Court announced its ruling on January 15 ending the lengthy legal battle. The central question in the case was whether Lozman’s house could be considered a’vessel’ under federal maritime jurisdiction. Lozman argued that the house, which had no self-propulsion, energy production/storage, or rudder, was not a ‘vessel’ because it’s purpose and was not to transport goods or people. The City argued that the houseboat was indeed a vessel because it was capable of moving on water. The Supreme Court sided with Lozman
Lozman was seeking compensation for his house, which he valued at around $50,000, as well as reimbursement for legal and other related fees that totaled up to nearly $300,000. The ruling is expected to have significant legal ramifications for boat owners and others in the maritime. Across the country marinas, vessel owners, marine bankers, and other marine affiliated businesses have been reviewing their operations in light of the ruling. Among the issues the ruling is likely to affect are:

• What vessels are allowed to dock at marinas;
• What kind of non-traditional craft that may be approved for maritime loans;
• How creditors can recover unpaid bills;
• The balance of power between federal and state governments in regulating certain areas;
• The status of other indefinitely moored structures, like riverboat casinos and oil rigs;
• The relationship between admiralty law and other areas of law;

Because the decision does not provide a bright line rule for what a vessel is the issue will likely be revisited by federal district courts and appellate judges. This leaves it up to judges across the country to use their judgment to settle future disputes, but does set a precedent. From a historical point of view, the distinction is important mainly due to the unique characteristics of boats. In particular the fact that they can be easily moved. Unpaid creditors, such as the city, were given the power to “arrest” boats to recover debts. In circumstances such as Lozman’s, this has now changed.

It has yet to be seen or determined exactly how this ruling will play out in future cases, but it has definitely established a precedent on the issue. If you or anyone you know has a dispute that you feel may be affected by this new ruling, or need advice concerning what to do in light of it, please contact the Law Office of David H. Pollack at 305-372-5900 or visit our website at www.davidpollacklaw.com





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