M.D. Fla. on Split Re Owner Liability for Unseaworthiness Claim by Third Party

Per Lovette v. HAPPY HOOKER II, Slip Copy, 2006 WL 66722 (M.D. Fla. Jan. 11, 2006):

Defendants Plath and Salt Water Adventures contend that the Vessel Lease Agreement between Salt Water Adventures and Wicburg constitutes a bareboat charter, that the vessel was delivered to Wicburg in seaworthy condition, and that therefore as a matter of law the vessel owner Salt Water Adventures cannot be held liable for the unseaworthiness claim. Lovette responds that neither the express terms of the Vessel Lease Agreement nor the actions of the chartering parties show that the parties entered into a bareboat charter. Lovette further argues that the vessel owner remains liable for the vessel's unseaworthiness even if there is a bareboat charter.

The issue of whether an owner who delivers a vessel in seaworthy condition to a charterer pursuant to a bareboat charter is liable for an unseaworthiness claim by a third party has split the circuits. The Fifth Circuit stated: “A bareboat or demise charter (hereinafter called a bareboat charter), whereby the charter assumes ‘full possession and control of the vessel,”··· constitutes the only form of charter that purports to invest temporary powers of ownership in the charterer and, therefore, constitutes the only conceivable basis on which the vessel owner could seek to escape liability for the unseaworthiness of his vessel.” Baker v. Raymond Int'l, Inc., 656 F.2d 173, 181-82 (5th Cir.1981)(internal citations omitted). However, the Fifth Circuit in Baker found that, even in the case of a bareboat charter, the owner remains liable for the unseaworthiness condition at the time of the charter. See id. Contrary to the Fifth Circuit, other circuits have found that a demise charterer is the liable party for the unseaworthiness condition of the vessel, and the vessel owner is absolved from such liability. See Matute v. Lloyd Berm. Lines, Ltd., 931 F.2d 231, 235 n. 2 (3d Cir.1991), overruled on other grounds, Neely v. Club Med Mgmt. Servs., 63 F.3d 166, 178 (3d Cir.1995); see also McAleer v. Smith, 57 F.3d 109, 112 (1st Cir.1995). This issue remains unresolved in the Eleventh Circuit. The Court finds it unnecessary to resolve this legal issue because there are material issues of disputed facts as to whether a bareboat charter existed in this case.