Our readers in the marine insurance industry are sure to be paying attention to Lozman v. City of Riviera Beach, Florida, an opinion issued by the U.S. Supreme Court on Tuesday. Charles Davant, an associate in our Fort Lauderdale office who advises marine insurers and litigates cases involving various maritime and admiralty issues, has provided an analysis of the case below.
The U.S. Supreme Court settled an important conflict between the Fifth and Eleventh Circuits this week, holding a floating home, incapable of propelling itself, was not a “vessel” within the meaning of the Rules of Construction Act, 1 U.S.C. § 3. Lozman v. City of Riviera Beach, Florida, Case No. 11-626, 23 Fla. L. Weekly Fed. S556a. We expect this decision will have an impact, not only on individuals and their floating homes, but also on businesses that use special purpose structures in construction and other industries. We will keep you updated as lower courts begin to digest and interpret this important decision.
In 2002, Fane Lozman bought a floating home, which “contained a sitting room, bedroom, closet bathroom and kitchen, along with a stairway leading to a second level with office space.” Id. “An empty bilge space underneath the main floor kept it afloat.” Id. Mr. Lozman moved his vessel four times in seven years, ending up at a marina owned by the City of Riviera Beach, Fla. Id. After failing to pay dockage fees and damages for trespass, the city invoked admiralty jurisdiction and sought a maritime lien on the vessel pursuant to the Federal Maritime Lien Act, 46 U.S.C. § 31342. The lower courts allowed the city to maintain the maritime lien finding the home was “capable” of movement over water and the owner’s intent was to remain moored at the city’s marina indefinitely. Id. The U.S. Supreme Court reversed.
In reaching its decision the Court considered the definition of a vessel within the Rules of Construction Act, to wit, that a vessel is “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.” Id. The Court focused on the phrase “capable of being used…as a means of transportation on water.” Id. It found it must apply the definition in a practical, as opposed to theoretical, way. Id. Disagreeing with the Eleventh Circuit’s broad interpretation of the definition, the Court found that not every floating structure is a vessel. Id.
In the Court’s view, a structure such as Mr. Lozman’s does not fall within the statutory definition of a vessel (thereby invoking admiralty jurisdiction) “unless a reasonable observer, looking into the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.” Id. The Court’s observations of the particulars of Mr. Lozman’s floating home illustrate its general criterion: it has no rudder or other steering mechanism, it’s hull was unraked, it had a rectangular bottom just 10 inches below the water, had no capacity to generate or store electricity, its rooms looked like nonmaritime living quarters, it was equipped with French doors and ordinary windows, and was not self-propelled. Id. Thus, in the Court’s opinion, the characteristics of the home could not “lead a reasonable observer to consider it designed to a practical degree for transportation on water.”
Mr. Lozman may now seek a return of the $25,000 bond the city posted when it arrested the vessel.
The opinion, authored by Justice Breyer, can be found here.