Anyone considering lending his vessel to another should be mindful of his potential liability for injury caused by the borrower and his family and friends. Many states, Alaska among them, have statutes imposing liability on "water craft" owners for injury or damage caused by negligent operation by anyone using the water craft with the owner’s consent, whether express or implied. The statutes do not condition owner liability on the owner having been at fault in any way. By contrast, the owner of an automobile may be held liable for injury negligently caused by a borrower- but only if the owner was at fault in lending the car in the first place.

In a recent case, a Waverunner owner lent his Waverunners to a man who said that his kids were going to use them. A thirteen-year-old friend of the man’s stepson subsequently injured a person seriously with one of the Waverunners. The state supreme court held that the owner's implicit agreement to use by the borrower’s "kids" potentially included the thirteen-year-old friend.

Lenders of any type of water craft should expect an attempt to hold them liable for injury caused by the negligence of any user of the borrowed craft. If a craft is to be lent, the better practice would be to limit the permitted users in writing.

Disaster struck the purchaser of a documented vessel who delayed recording his bill of sale with the Vessel Documentation Center for two months. Looking to liquidate property of the seller to pay judgments they had against the seller, creditors had the vessel seized

for liquidation well after the sale, but five days before the buyer’s bill of sale was recorded. The creditors believed the seller still owned the vessel.

The buyer sought to recover the vessel on the ground that it was no longer the seller’s property at the time it was seized because the seller had sold it two months before. But the court held that the sale was not valid against the creditors at time of seizure because the buyer had not yet recorded his bill of sale. The buyer lost his vessel.

A vessel need not leave its berth to be rescued from a marine peril, entitling the rescuer to a salvage award. In a recent case, a pleasure vessel valued at $60,000.00 was discovered settling by the stern at its moorings. The salvor retrieved a pump from his own house boat in the harbor and deployed it on the settling vessel. After telephoning the owner to report the incident, the salvor discovered the vessel was leaking through its stuffing boxes. The owner’s mechanic arrived, and tightened the stuffing boxes, stopping the leaks. The salvor finished pumping the vessel and departed. Although the effort, risk and resources involved in the salvage effort were minimal, the court still awarded $11,000.00 for a couple hours of work heading off a swamping or sinking.

The employment relationship between vessel owner and crew member is generally governed by federal admiralty law. The courts have commonly supplemented that law, to the owner’s detriment, by applying the law of the state where the employment occurred to resolve an employment dispute. State employment law contains a number of provisions favoring employees that are absent from federal maritime law. For example, years ago an Alaska federal judge applied a state statute providing for substantial penalties for delay in making wage payments against a seaman's employer. Federal maritime law did not provide for any such penalty.

A recent federal appellate court decision suggests a vessel owner may avoid the application of painful state employment law by providing in employment contracts that the contract shall be governed exclusively by federal maritime law. In this case, a group of fishing vessel crew members successfully sued for unpaid wages. They also tried to recover the attorneys’ fees they incurred in their suit from the owner. Attorney’s fees are generally not recoverable under federal maritime law, and could not be recovered under that law in this case. But the federal trial judge borrowed and applied a state statute allowing an award of attorneys’ fees whenever an employee successfully sues for unpaid wages.

The appellate court held, however, that the employment contract’s provision that federal maritime law would control exclusively barred the application of state law. So the attorney fee award was reversed.

WHERE TO BUILD

Some years ago, an Alaskan commissioned an Idaho builder to construct a small aluminum vessel for passenger and charter service. Only after delivery did the new owner discover, as the vessel began to shake itself apart, that the welding schedule had only been partly completed. It seemed that the owner's error had been to not hire an owner's rep to oversee construction. Yet, in a more recent out-of-state project, an experienced owner's rep, marine architect and boat builder managed among them to produce a vessel with very poor provision for passenger and engine compartment access. Such experiences show there is no substitute for the owner's personal monitoring of the construction process. The cost and feasibility of doing so should be taken into account in deciding whether to build out-of-state.

Copies of court decisions available upon request