Floating home or vessel? Florida man's case going to U.S. Supreme Court

When Riviera Beach seized and later destroyed Fane Lozman’s floating home, no one expected it would create a legal battle that will have profound implications for the nation’s maritime industry.

The U.S. Supreme Court is taking up the case on Monday, spurred by Lozman, a self-described “corruption fighter” who made his fortune in the commodities trade and his reputation for activism in North Bay Village and Riviera Beach.

At issue is whether a floating structure that is indefinitely moored, receives power and other utilities from shore and is not intended to be used in maritime transportation or commerce constitutes a “vessel” under the U.S. Code of Laws, thus triggering federal maritime jurisdiction.

Depending on which way the Supreme Court rules, such floating structures could be subject to either state or federal laws, which vary broadly. The determination will affect such issues as property taxes, building code requirements, certain protections under foreclosure, as well as workmen’s compensation and other employment laws for those who live and work on the water, including on floating restaurants and casinos.

Among the implications: owners of floating homes usually must pay property taxes, as Lozman did, while those owning vessels under federal maritime law do not.

In addition, the standards differ on what kinds and amounts of damages can be awarded in personal injury lawsuits. And there are different federal rules for employment disputes and compensation for workers injured on the job.

Attorneys for Lozman, a former Chicago commodities and options trader, who says he now lives in both North Bay Village and Miami Beach, will argue that his home was not a vessel under Florida law, and therefore not subject to federal laws, in the case that seeks to overturn an 11th Circuit Court of Appeals ruling.

On the other side, Riviera Beach’s attorney, David C. Frederick, a partner at Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington, D.C., and an adjunct professor at the University of Texas School of Law, will argue that Lozman’s home was in fact a vessel.

“Our position is that houseboats like Mr. Lozman’s have uniformly been held to be vessels, and the Supreme Court should also rule that way,” said Frederick, reached in his office on Sunday as he prepared for the oral arguments.

Lozman seemingly lost his six-year battle with Riviera Beach when his home was hauled away in 2009 by court order and later destroyed by the city in 2010. But Lozman refused to give up, claiming officials vindictively and illegally targeted him for eviction from the city’s marina because of his vocal opposition to a major redevelopment plan.

Lozman has spent more than $100,000 in attorney’s fees to pursue the case, spurred, in part, by anger.

“This was my home, and not only did they destroy my home, but they destroyed my furniture, too,” he said Sunday from Washington, D.C. “And I felt like I had an obligation to my fellow homeowners around the country to fight this out to see that they will never have to go through the horror show I did in the federal district court system.”

Riviera Beach may have underestimated Lozman, 51, a former Marine Corps officer, who has been a city activist and “corruption fighter” for at least a decade.

“My hobby is fighting political corruption, trying to remove politicians that my investigations show are corrupt, and I take credit for removing three North Bay Village commissioners and two North Bay Village mayors from office,” he said.

Now, the definition of a vessel, and whether state or federal law will apply, is the keystone of the case, with implications for those nationwide who live on the water, as well as for commercial businesses such as floating casinos, hotels and restaurants, said Kerri Barsh, a shareholder with Greenberg Traurig in Miami, who will serve as “second chair” for Lozman during the oral arguments, along with Stanford University law professor Jeffrey Fisher.

“It’s a pivotal case for federal maritime jurisdiction, and in the way we view it, if the 11th Circuit Court’s decision were to be upheld, there would be a broad and dramatic expansion of federal jurisdiction over maritime matters,” Barsh said Sunday from Washington.

The U.S. government backs Lozman in the case, and Assistant Solicitor General Curtis Dannon will also speak on his behalf during oral arguments, Barsh said.

The Supreme Court’s ruling, which could take 60 to 90 days or more, will determine whether federal maritime or state laws apply to structures that are moored, more or less permanently, in one place.

As a result, owners of vessels and floating structures across the U.S., including in Seattle and Sausalito, Calif., are closely watching the case, Barsh said.

The entire oral arguments will take one hour, beginning at 11 a.m., split between Lozman’s side and Riviera Beach’s.

Two federal appeals courts have ruled the owner’s intent is key to determining whether a structure is a vessel. In Lozman’s case, however, the 11th U.S. Circuit Court of Appeals held that what mattered most was if a structure was “practically capable of transportation over water,” which closely tracks the language in federal law that dates to the 1870s.

Riviera Beach officials, in documents urging the Supreme Court not to take the case, insisted the structure was not similar to a land-based home that would be afforded important state law protections against seizure.

Yet Lozman’s home had no engines, no bilge pumps, no steering mechanism, no lights or navigation aids. It had to be towed wherever it went. It could not get a Florida vessel registration number. All it did was float.

“It was a very unseaworthy craft,” Lozman said. “In the structure’s 33-year lifespan it was stationary for 32 years, 360 days and had five days worth of movement.”

Yet a Florida federal judge and the 11th Circuit judges determined the structure was, in fact, a vessel, in part because it had been towed several times to different marinas across hundreds of miles.

Lozman’s story began when he picked the marina in Riviera Beach for his floating home, because Hurricane Wilma had destroyed his former marina in North Bay Village.

It gave him easy access to his speedboats and pleasure craft, and like his previous floating home, it was governed by the same state laws as homes on land.

Then Lozman learned Riviera Beach was planning a $2.4 billion private redevelopment project for the marina. The plan included the use of its eminent domain powers to take 2,200 local homes and businesses for a project geared toward wealthy yacht owners. On May 10, 2006, the city council held a hastily called private meeting to designate the project’s master developer — one day before then-Gov. Jeb Bush signed a law prohibiting use of eminent domain authority for such non-public projects.

Lozman decided to challenge that decision in state court, arguing the meeting violated state open-government laws. That’s when the trouble began.

Lozman claims he was followed and harassed, his truck tampered with and damaged. He started showing up at city council meetings, where he got thrown out regularly and was even arrested a few times. The local politicians considered him a nuisance; other people saw him as a crusader.

Then the city served an eviction notice, contending that Lozman’s 10-pound dachshund, Lady, was a dangerous dog and that he used unlicensed repair workers at his home. The city argued at the time that he was on a month-to-month lease that could be terminated under state landlord-tenant law.

But there is no mention of the structure as a vessel — yet.

Lozman fought the eviction in court and won, with a jury finding in March 2007 that the eviction amounted to retaliation. Meanwhile, the marina redevelopment plan was shelved, only to be replaced by a scaled-down version that didn’t include use of eminent domain powers. Lozman fought that plan, too.

The city decided to change the rules at the marina, telling Lozman in 2009 his right to stay there would be revoked unless he got the structure registered as a vessel and that it had to be self-propelled, which Lozman said was impossible.

In 2009, after turning off Lozman’s electricity and ignoring a state judge’s order to turn it back on, the city went to federal court and for the first time sought to use U.S. maritime law to impose a lien on the structure as a vessel, not a house. The floating home would have been protected from seizure under state law. But a judge sided with the city, so the structure was seized, then bought by Riviera Beach at a U.S. Marshal’s auction for $4,100 and later destroyed.

Lozman said if he wins the case, he will return to living in a floating home in Riviera Beach.

“There is no reason to federalize state tenant-landlord law,” he said. “It’s working fine as it is.”

Information from The Associated Press is included in this report.