Maritime Update: Marina Lease Provides Basis for Admiralty Jurisdiction
On March 5, 2014, the United States District Court for the Eastern District of Virginia, in the case Marina One, Inc. d/b/a Joys Marina v. Jean Jones, denied a motion to dismiss filed by a vessel owner in response to a marina’s suit for indemnification. The pleasure boat owner maintained the Court lacked jurisdiction and shouldn't consider the marina's suit because her husband had already sued the marina in state court for personal injuries resulting from a fall. The Court rejected the defendant's arguments. This ruling illustrates why vessel owners should carefully read marina leases and marina owners should secure and maintain up-to-date leases which clearly recite the relative responsibilities of the parties.
Rick and Jean Jones were co-owners of a 44 foot Sea Ray pleasure boat called the "Double Eagle." The Jones leased a slip at Joys Marina ("Marina") in Hampton, Virginia, which is located on the Hampton River a short distance from the Chesapeake Bay.
The lease was for a certain slip in exchange for monthly payments for a term of one year, July 1, 2011 to June 30, 2012. Lessee [Jones] was required to obtain indemnity insurance in the amount of $300,000 and list the Marina as an additional insured.
In May 2012, Rick Jones fell and was injured while getting off his boat at Joys Marina. He sued the Marina in state court and claimed he was not bound by the terms of the Marina lease because his wife was not authorized to sign it on his behalf.
The Marina sued Jean Jones in federal court based on admiralty jurisdiction claiming that she was obligated to indemnify the Marina in her husband's state court suit and breached the lease by failing to maintain the pier in a safe condition.
Mrs. Jones moved to dismiss the Marina's suit claiming that maritime jurisdiction did not apply and the suit failed to state a cause of action against her. The Court rejected both arguments.
The Court determined that it had admiralty jurisdiction over the dispute because the lease was subject to general maritime law since the temporary dockage of the Double Eagle was at a marina with access to navigable waters. The Court found that Mrs. Jones owned the Double Eagle and because she signed the lease there was a plausible inference that she signed the lease in her own capacity and not merely as an agent of her husband. The Court concluded that the Marina's complaint stated a claim against Mrs. Jones.
C. Why is this important?
1. A firm understanding of obligations imposed by a marina lease is valuable to vessel and marina owners should a dispute arise, a vessel sink or sustain damage, or someone become injured or die;
2. Vessel owners like Mrs. Jones should carefully review marina leases and recognize the importance of the insurance and indemnity provisions. Consulting with a reputable marine insurance broker is a great idea if there is uncertainty about whether a vessel's insurance provides coverage required by a marina lease. Without proper marine insurance, one could unexpectedly face significant uninsured liability; and
3. Admiralty jurisdiction in federal court could open the door to a more favorable venue to resolve a marina lease dispute.