$30K for a 10-minute water leak job? Legislation targets maritime assistance charges

TALLAHASSEE — A $30,000 bill from SeaTow started Florida fishing boat owner Eric Hull’s campaign for a state law aimed at stopping maritime assistance services from charging what he and others believe are exorbitant and hidden fees for help on the water.

“I’m the reason for this legislation,” Hull said. “I just couldn’t believe this was legal.”

But SeaTow and other maritime assistance services are pushing back, claiming their terms of service are clearly spelled out in membership agreements like the one Hull had signed with SeaTow. Routinely, those memberships cost from a little more than $100 to nearly $200 annually, for services including towing, on-water jump-starts, bringing fuel for an empty gas tank, or freeing a grounded boat.

At the root of the conflict over the legislation is admiralty law, the federal law that governs maritime salvage operations. In some instances, such as damage that could lead to disastrous consequences for a boat, or rough weather that puts maritime assistance personnel in danger, that law comes into play. In those instances, assistance companies can charge fees to boat owners that can be as much as the value of the boat.

The rationale for those admiralty laws is to serve as an incentive for maritime assistance, according to Tina Cardone, executive director of C-PORT — the Florida-based Conference of Professional Operators for Response Towing, a trade association.

“It’s to encourage people to go out there and do the crazy things we do,” she said.

The measure now under consideration in the Florida legislature does not address how much salvors — defined to include businesses like SeaTow and BoatUS, another nationwide maritime assistance business — can charge for services. It does, however, require salvors to provide on-site written notice to the customer when work will go beyond basic services covered in a membership contract.

The legislation — House Bill 469 and Senate Bill 664 — includes specific language for the notice, requiring assistance companies to tell customers that “salvage work allows the salvor to present you, or your insurance company, with a bill for the charges at a later date. The salvor shall calculate the charges according to federal salvage law … . The charges could amount to as much as the entire value of your vessel and its contents.”

Originally, the bill required salvors to provide on-site cost estimates to boat operators, but that provision was removed from the proposal. One reason for the removal, pointed out by the maritime assistance companies, is that rough weather and other complications can quickly change the nature of an assistance call.

The issue has the potential to affect thousands of Florida boaters. BoatUS, for example, has 125,000 members in Florida. And even boaters who aren’t members of maritime assistance services can call them on an around-the-clock basis. Taking that into consideration, there are thousands of boats registered in Northwest Florida, including 18,502 registrations in Okaloosa County alone.

Hull’s fishing boat was en route to Key West when the captain noticed water from bait storage areas had leaked into the craft’s interior. He arranged to meet SeaTow in a nearby port, and within 10 minutes of pulling the fishing boat alongside the SeaTow boat, the water was pumped out. Subsequently, the SeaTow worker presented a salvage form to the captain. The captain called Hull, who in turn called his insurance agent, who told him to have the captain sign the form.

The next day, Hull called SeaTow, and was told it was too early to determine the charge for the on-water assistance.

That’s not uncommon, according to Cardone. Maritime assistance personnel have to prove what they did during an assistance call, and have to assign a value to their work in terms of the potential danger from which they saved a boat, all of which can take time.

Some days after his initial call to SeaTow, Hull got the $30,000 bill. After some wrangling between SeaTow and his insurance company, which would also eventually involve the boat manufacturer, the charge to Hull was reduced to $13,000.

Hull conceded the fine print in his membership agreement indicates that significant service charges can be assessed. But he contended that his boat was in no immediate danger — his captain had, in fact, piloted the boat to the SeaTow boat — so there was no need for handling it as a salvage operation.

“If he (the SeaTow representative) had told my captain it was going to cost $30,000,” the captain could have made other arrangements for addressing the problem, Hull contended.

Capt. Joseph Frohnhoefer III, CEO of SeaTow, is closely following the Florida legislation, and is familiar with Hull’s case. He called the cost of the captain’s call for assistance “a fairly low-order claim,” given the $750,000 value of Hull’s boat.

He suggested the SeaTow response prevented significant damage which could have resulted if additional water had gotten into the boat’s interior.

If there is a shortcoming to admiralty law with regard to salvage, it is that there is no clear dividing line between routine assistance and salvage, according to David Kennedy, government affairs manager with BoatUS.

“I can’t tell you that there’s a bright-line standard,” he said. It’s one thing to answer a simple assistance call, he explained, but if winds and weather change, placing both the boat and the assistance personnel in additional peril, salvage laws may come into play.

But, Kennedy added, situations like Hull’s are far from the norm. His company answers 70,000 calls annually, and only a “tiny, tiny fraction” come within the purview of admiralty law, he said. And, Kennedy added, when assistance does move into the realm of salvage, boat owners should have insurance policies to protect them from significant financial consequences.

A major issue, from the perspective of maritime assistance companies, is that consumers often don’t educate themselves about what a membership contract will cover. Cardone contends that it is unreasonable to think an annual membership fee of less than $200 would cover anything other than routine assistance like towing.

“Boaters need to be educated,” she said.

By Jim Thompson

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