Maritime Myths, Misconceptions, & Urban Legends
by: Barbara Kreitz Cook, Esq.
Board Certified Admiralty & Marine Law

Admiralty law or maritime law is a distinct body of law (both substantive and procedural) fashioned by the federal courts and Congress specifically to create uniformity both nationally and internationally.  It is so specifically fashioned in order to facilitate commerce and to protect seamen, who were considered “generally poor and friendless and acquire habits of gross indulgence.” 

Common maritime myths, misconceptions, and urban legends harbored by the lay person (including attorneys without maritime legal training) can wreak legal havoc on many fronts.  This article serves to give notice of the most significant of those myths.

Myth #1: A boat is a “thing” just like a car.  A boat is a vessel which is used for transportation on water.  The “vessel” includes all of her cargo, equipment, tenders, and even fishing licenses, whether on-board or ashore.  The vessel has legal status as a female entity which can sue and be sued in rem, but only in a federal court sitting in admiralty. 

Myth #2: A lien on a boat is like a lien on a car.   A vessel can be burdened with maritime liens due to unpaid “necessaries” (any item reasonably necessary for the venture in which the ship is engaged, such as expenses for dockage, fuel, provisions or repairs), seaman’s wages, salvage or towing, or for liability for injury to persons or property.  Maritime liens need not be recorded for perfection, and follow a boat through innocent changes in ownership.  The maritime lien can be extinguished only through waiver, laches, payment, or federal court-ordered marshal’s or bankruptcy sale.  The type of debts which create maritime liens is determined by federal statute or historically acknowledged in general maritime law, and cannot be created by contract between parties or state law.  Maritime liens have priority over state statutory liens, and have priority generally in reverse-time order (last in time = first in right) and by category unless otherwise prescribed by federal law.

Myth #3: A boat loan is like a car loan.  A boat loan is not a maritime lien, and does not have priority over maritime liens incurred later in time.  Only loans which are Preferred Ship Mortgages filed and perfected in accordance with that Act have priority over later in time maritime statutory and historical liens.  Only federally documented boats can obtain Preferred Ship Mortgages.  Only U.S. citizens and boats over 5 tons are eligible for federal documentation.  Upon default, the Preferred Ship Mortgages must be foreclosed in federal court.

Myth #4: The boat owner is liable for all property damage and personal injury caused by the boat. The Limitation of Liability Act of 1851 limits owner (whether US or foreign) liability to the value of the boat (whether it is a wave runner, run-about, cruise ship, or anything in between) for acts of a master and crew done without the privity or knowledge of the owner.

Myth #5: The navigational “Rules of the Road” are just like those on land.  Vessels over 40 feet must have a copy of the navigational rules aboard.  All vessels must comply with the rules, and nothing exonerates the operator from neglect to comply with the rules or with any precaution dictated by the ordinary practice of good seamanship or the special circumstances of the case.  The navigational rules do not give absolute right of way to any vessel.  When the vessel which is supposed to “give way” does not, the “stand on” vessel is required to take the necessary action to avoid collision.  Every vessel must use all available means to avoid collision.  If there is any doubt such risk shall be deemed to exist. If there is radar aboard, the operator must be trained in its operation and it must be used.  When vessels equipped with radar fail to use it and that failure contributes to collision, they will be held at fault. Action to avoid collision must be taken in good time and in such a manner that the “stand on” vessel is left in no doubt that the “give way” vessel is taking avoiding action.  Small vessels moving in a traffic separation scheme may not impede vessels moving in the lane.     

Myth #6: State laws apply to all state waters.  Once admiralty jurisdiction is established, all of the substantive rules and precepts peculiar to the law of the sea become applicable, and state law applies only to the extent not inconsistent with established maritime law.  Admiralty jurisdiction is established when injury to persons or property is caused by 1) a vessel 2) in navigation 3) on navigable water 4) during the course of traditional maritime activity 5) with the potential for affecting maritime commerce.  Contracts are within admiralty jurisdiction if they relate to navigation, business, or commerce of the sea.  Examples are contracts for repair, insurance, or dockage, but not construction or purchase/sale contracts.

Myth #7: A vessel is “in navigation” only when it is moving from place to place.   “In navigation”  does not mean that the vessel must be underway, but that it must be capable of carrying out a transportation function.  A vessel is “in navigation” from the day it is “born” (first launched) until it is a “dead ship” (withdrawn from navigation.)  A vessel undergoing repairs or stored on land for several years is still “in navigation.”  There is controlling maritime law on the meaning of “in navigation” since it is a cornerstone of admiralty jurisdiction.  So federal law would preempt contrary state or local law on that subject, and there can be no “common” meaning of “in navigation.”  Though Florida state law comports with the federal law, some local jurisdictions have implemented ordinances with their own meaning of the term, in violation of federal and state law.  (See Myth #s 6 and 11)   

Myth #8: Recreational boating is not a commercial activity.  Tell that to recreational marinas, repair facilities, electronics outfitters, and West Marine!

Myth #9: “Navigable waters” does not include the dry Everglades during dry season.  Once a water is found navigable, it remains so.  If, during rainy season, air boats can navigate across the Everglades to a navigable body of water, the dry area is still “navigable waters.”

 Myth #10: A boat owner owes guests the highest degree of care pursuant to Florida’s “dangerous instrumentality” statute.  The admiralty rule that a boat owner owes a guest only the duty to use reasonable care under the circumstances is not merely a minimum standard of care which a state in its discretion might supplement by imposing a stricter burden on an owner.  Any state supplementation of that rule would entail alteration of an admiralty norm in direct contravention of uniformity.

Myth #11: Federal maritime law always preempts state law.  Federal maritime law preempts state law only where admiralty jurisdiction exists and where there exists controlling federal maritime law.  Preemption can be express, implied, or field preemption.  That is, there is preemption when federal law expressly so states, or where it so implies, whether individually or covering an entire field of law.  Courts may look to state law where there is no controlling federal maritime (or federal statutory) law, where federal statutes so authorize, where there is no need for uniformity, or to supplement or fill gaps.  For example:  it has been held valid to “borrow” the Uniform Commercial Code, the Restatements of Law for Product Liability, and state agency law to fill gaps in maritime law;  state wrongful death remedies are available to supplement federal remedies for non-seafarers killed in admiralty jurisdiction; federal Oil Pollution Act specifically preserves state law liability.

Myth #12: The sky is clear and I’m aground but need help to get off, so its only a tow job not  salvage, right?  Maybe...maybe not.  It is very circumstance and fact based.  Three facts must be established for a salvage situation:  marine peril, voluntary assistance, success (“no cure-no pay”).  The peril need not be imminent or absolute danger:  where danger exists or is reasonably apprehended, it is salvage.  The degree of peril (slight, moderate, or severe), its imminence and extent, affects only the amount, not the entitlement, to an award.  In “low order” salvage situations, it is customary for the salvor to agree on an hourly or contract price.  A powerboat out of fuel or whose engine won’t start is a marine peril.  So to is a grounding, whether it is on soft sand or rocks or a reef.  In both situations, the vessel is exposed to wind, waves, wake, or vagaries of weather (if its Florida and its summer and its after noon, how soon before calm seas become raging waters in a thunderstorm?)  But for a sound vessel aground on a soft bottom and capable of freeing itself without assistance at the next tide, and the only urgency is to get home in time for dinner, the service of towing it off before the next tide may be a convenience rather than a necessity.  Sometimes, a master’s requests for assistance are strong evidence that a marine peril is genuine and that the salvor’s efforts, if voluntary and successful, are worthy of reward.  Those who have a duty to provide rescue services (on-duty fire rescue, coast guard, the on-duty crew of the vessel) are not entitled to claim salvage.  If its salvage, but you agree on a price, even though no cure no pay, there is no right to a discretionary salvage award, just the agreed amount.  A verbal agreement is enforceable, even without a price.  A signed agreement is enforceable, even if later the owner claims not to have read or understood it.

Courts scrutinize salvage agreements closely for any signs of overreaching, improper coercion, or overcharging by salvors.  Extortionate demands will not only void a contract but often result in an award that is less than it would otherwise be.  However, fear not: it is well settled admiralty law that salvage claims are a covered loss if you have the proper vessel insurance.  Hull insurers are not only required to pay salvage claims and defend the insured but may be sued directly for the amount of the salvage award.  Such actions are not barred by statutory prohibitions of direct actions against insurers under insurance policies..... so make sure to keep your policy current and don’t sign anything unless your insurer agrees!

Myth #13: OK OK so its salvage....and I know the seas were high and the hurricane was coming and you saved my life.  But $50,000 is a lot for 1 hour’s work!  “The award on an action for salvage-unknown for land activities-is not one of quantum meruit as compensation for work performed, but is a bounty historically given in the interests of public policy, to encourage the humanitarian rescue of life and property at sea, and to promote maritime commerce.  The Blackwall, 77 US 1 (1869).  “The very object of the law of salvage is to promote commerce and trade, and the general interest of the country, by preventing the destruction of property, and to accomplish this by appealing to the personal interest of the individual as a motive of action, with the assurance that he will not depend upon the owner of the property he saves for the measure of his compensation, but to a court of admiralty, governed by principles in equity.”  Seaman v. Tank Barge OC601, 325 F.Supp. 1206, 1209 (S.D.Ala.1971).”

Eight factors are considered in determining the amount of a salvage award:

1-the degree of danger from which the ship was rescued

2-the post-casualty value of the property salved in her damaged state, at the time of her salvage or after brought into safe harbor

3-the risk incurred in saving the property from impending peril

4-the skill, promptitude, and energy displayed in rendering the service and salving the property

5-the value of the property employed by the salvors and the degree of danger to which it was exposed

6-the cost in terms of labor and materials expended by the salvors in rendering the salvage service

7-consideration of life salvage

8-prevention of environmental damage

The weight of all factors is without regard to the order presented.  Only recently, the salved value generally served as a ceiling for the maximum allowable total award and 50% of the value was considered exceptional.  However, prevention of environmental damage entitles special compensation, for which an owner can be personally liable.  In the Columbus, the salvors were awarded 90%.

Myth #14: I found it!  Its mine! Finders - keepers.  It is definitely urban legend that a derelict vessel found adrift becomes the property of the finder.  However, the law is that an abandoned vessel remains the property of its owner absent an owner’s affirmative act that clearly and convincingly establishes the owner’s intent to part with ownership.  (The Columbus-America Discovery Group salvage effort on a Spanish wreck de-mythed that legend.  Even a 131 year lapse of time was not sufficient to overcome the presumption that the vessel insurers still owned $1,000,000,000 (billion) dollars in gold found 8000 feet below the sea in the vessel sunk in a hurricane September 8, 1857 on the journey from the Alaska goldrush to NY.)   A salvor who finds an abandoned vessel obtains a possessory lien on the vessel but not ownership.  The salvor must attempt to find the owner; the salvor can file an in rem salvage action to foreclose the salvage lien, and if the owner does not appear, the salvor can bid on the vessel at the marshal’s sale and obtain clear title.

Myth #15: Yea! I’m in international waters and the closest land is Nirvana where everything is legal!  Under admiralty law, in international waters the ship's flag determines the source of law. For example, a ship flying the American flag in the Persian Gulf would be subject to American admiralty law; and a ship flying a Norwegian flag in the north Atlantic will be subject to Norwegian admiralty law. This also applies to criminal law governing the ship's crew.

Myth #16: F@%$*%%!!  The government of Nirvanaland arrested my vessel and chained it to the dock.  They can’t do that!    A foreign or U.S. entity or government can arrest your vessel and prevents its leaving its location for a variety of reasons: to foreclose a maritime lien, to attach your assets to assure satisfaction of a judgment elsewhere, or as pre-suit garnishment (a method for substituted service of process of an in personam lawsuit by attaching property belonging to a defendant who cannot be served by conventional methods within the district in which the action is pending).