“Law of the Flag” Held Not to Apply to Action on Unenforceable Gambling Debt in Florida Bankruptcy Court

more+
less-

In this bankruptcy contract case, the debtor, a cruise vessel operating as a gambling casino, fronted $200,000 to a blackjack gambler who submitted checks for the cash but then stopped payment on the checks. The debtor sued to recover the debt for the benefit of the bankruptcy estate. The issue in the case was which law governed the dispute. The debtor claimed that under Lauritzen v. Larson, 345 U.S. 571 (1953), a “universal rule of maritime law” required that actions aboard a ship are governed by the law of the sovereign whose flag the ship flies. Here, the vessel sailed under the flag of Saint Vincent and the Grenadines, and therefore, the debtor urged that the law of these sovereign states should apply.

The bankruptcy court disagreed, finding that the vessel flew the flag only as a “flag of convenience.” Further, the court found that the debtor did not base its claim on a maritime contract, and therefore, admiralty conflict of law rules did not apply. Rather, the law of the forum – Florida – determined choice of law, and under local law, a court may not apply the law of another forum if to do so would be repugnant to Florida’s public policy. The court found such repugnance based on numerous Florida precedents on the issue, in addition to Florida Statute Section 849.26, which generally prohibits enforcement of gambling debts. For this reason, the court granted defendant’s motion for summary judgment and held that the gambling debt is unenforceable under Florida law.

 In re Titan Cruise Lines, 353 BR 919 (M.D. Fla. 2006).

 

 

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Trenam Kemker | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×