In nearly every case where we represent a recreational yacht / boat owner wherein the owner lost use of the yacht for a period of time, one of the first questions asked is whether they could recover loss of use damages. The answer is perhaps.
Under admiralty law, a recreational yacht / boat owner cannot recover loss of use damages while his vessel is laid up. The origin for this maritime rule is from an 1897 case called The Conquer. In that case the Supreme Court denied loss of use damages to Frederick Vanderbilt when his yacht was detained by U.S. Customs after a transatlantic voyage. Though The Conquer decision is highly criticized by the lower courts, it is the law until either the Supreme Court reverses itself or Congress passes a law allowing for such damages. As one court recently put it, “I would be less than candid if I did not also register my sense that the categorical rule of The Conqueror finds its source in the resistance of the Supreme Court to enabling one of the richest men in late nineteenth century America to recover, on questionable evidence, the ‘inconvenien[t]’ loss of one of his many recreational diversions. That categorical rule has, however, a broad wake, depriving the working couple in this case recovery for a monetizable loss of the central recreational activity to which they have devoted considerable personal efforts over a number of years.” Courts, however, have started to chip away at The Conquer’s oppressive holding. Below are just a couple of examples where courts have found loss of use damages for a recreational yacht / boat owner.
One such situation where loss of use damages have been allowed for recreational yachts / boats is where there has been a breach of a sales contract. For example, when a seller breaches the contract by not giving clean title to the yacht / boat, and the owner without title cannot register the vessel and in turn use the craft, courts have found the breach of contract is not governed under maritime law, but instead, state commercial law. If the state where you purchased the yacht (or the choice-of-law provision in the sales contract calls for the application of state law which) allows loss of use damages for recreational vehicles, courts will grant loss of use damages for the yacht / boat.
The second instance where courts allow loss of use damages for recreational yachts / boats is when there is a breach of maritime contract that contains a state choice of law provision. For example, the refurbishment of a yacht is considered a maritime contract to be governed by maritime law. However, some of these contracts call for the application of state law to govern any dispute. If the refurbisher fails to complete the contractual obligations in time call for or preformed the job poorly so that additional time is needed to properly effect the refurbishments, courts have applied the state law called for in the contract to award loss of use damages.
In conclusion, though maritime law precludes loss of use damages for recreational yachts / boats, such damages still can be awarded in certain circumstances. If you may think you are entitled to loss of use damages for your recreational yacht / boat, it is in your interests to contact a qualified maritime lawyer to discuss your claim.