2020 -- S 2283 | |
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LC003735 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
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A N A C T | |
RELATING TO PROPERTY -- DRY DOCK FACILITIES | |
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Introduced By: Senators Felag, Sosnowski, McCaffrey, Goodwin, and Lombardo | |
Date Introduced: February 04, 2020 | |
Referred To: Senate Judiciary | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Sections 34-46-2, 34-46-3, 34-46-4, 34-46-5 and 34-46-6 of the General |
2 | Laws in Chapter 34-46 entitled "Dry Dock Facilities" are hereby amended to read as follows: |
3 | 34-46-2. Definitions. |
4 | As used in this chapter, the following words shall have the following meanings unless the |
5 | context clearly indicates otherwise: |
6 | (1) "Default" means the failure to pay obligations incurred by the storage and/or |
7 | ownership of a vessel. |
8 | (2) "Dry dock" means any space and/or real property designed and/or used for the |
9 | purpose of renting or leasing storage space for vessels. |
10 | (3) "Facility" means a marina, boatyard, or marine repair facility that provides, as part of |
11 | its commercial operation, the storage of vessels. |
12 | (4) "Last known address" means that address provided by the owner in the latest rental |
13 | storage agreement or the address provided by the owner in a subsequent notice of a change of |
14 | address. |
15 | (5) "Lien holder" means a person holding a security interest. |
16 | (6) "Operator" means the proprietor, operator, lessor, or sublessor of a dry dock facility, |
17 | his or her agent, or any other person authorized by him or her to manage the facility or to receive |
18 | rent from the owner under a rental agreement. |
19 | (7) "Owner" means a person, other than a lienholder, having a property interest in or title |
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1 | to a vessel. The term includes a person entitled to use or have possession of a vessel subject to an |
2 | interest in another person, reserved, or created by agreement and securing payment or |
3 | performance of an obligation, but it does not include a lessee under a lease not intended as |
4 | security. |
5 | (8) "Personal property" means movable property not affixed to land and includes, but is |
6 | not limited to equipment, goods, furniture, and household items whether affixed to the vessel or |
7 | not. |
8 | (9) "Rental agreement" means any written agreement or lease that establishes or modifies |
9 | the terms, conditions, rules, or any other provisions concerning the storage of a vessel in a dry |
10 | dock facility. |
11 | (10) "Vessel" means every description of watercraft used or capable of being used as a |
12 | means of transportation on water and any personal property located thereon and shall include its |
13 | appurtenances, engines, tackle, sails, generators, electronics, gear, bunkers and contents. |
14 | 34-46-3. Lien. |
15 | (a) Lien created. A facility operator has a lien on a vessel stored or located at that facility |
16 | for storage charges, labor, or other charges and for expenses reasonably incurred in the sale of |
17 | that vessel under the provisions of this chapter including, but not limited to, reasonable attorneys' |
18 | fees and costs. |
19 | (b) Exclusion. This chapter does not create a lien on a documented vessel subject to a |
20 | preferred ship mortgage or other preferred maritime lien pursuant to 46 U.S.C. § 31301 et seq. |
21 | 34-46-4. Notice of lien. |
22 | (a) A vessel owner must be notified of the lien created by this chapter before enforcement |
23 | of the lien by a facility operator. The facility operator must provide notice of the lien created by |
24 | this chapter before it may enforce the lien. Notification of the lien created by this chapter is |
25 | satisfied by either of the following: |
26 | (1) Written storage agreement. A written storage agreement signed by the vessel owner |
27 | that includes a notice of the lien created by this chapter the following language in bold, |
28 | capitalized font: "BEWARE -- THE VESSEL AND ITS CONTENTS MAY BE SOLD AT |
29 | PUBLIC AUCTION FOR FAILURE TO PAY STORAGE CHARGES."; or |
30 | (2) Written notice of lien. Written notification of the lien sent by the facility operator: |
31 | (i) To the last known address of the individual or entity identified as the registered |
32 | owner(s) of the vessel; and |
33 | (ii) To the last known address of the person or entity the facility operator has on record as |
34 | being responsible for the vessel if different from the vessel's registered owner. Notices shall be |
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1 | provided in the manner described in § 34-46-5(7) to the vessel owner. |
2 | (b) A facility operator who does not have a written storage agreement that includes a |
3 | notice of the lien created by this chapter may not initiate an enforcement action under § 34-46-5 |
4 | until thirty (30) days after the written notice of a lien required by subdivision (a)(2) is delivered to |
5 | the vessel owner delivery of written notice of the lien is effected pursuant to § 34-46-4(a)(2). |
6 | 34-46-5. Enforcement of lien. |
7 | A facility operator may enforce a lien created by this chapter only if the vessel owner has |
8 | been notified of the lien as required by § 34-46-4 notice requirement set forth in § 34-46-4 is |
9 | satisfied. |
10 | (1) Sale -- Use of proceeds. |
11 | (i) If a vessel owner is in default for a period of more than ninety (90) days, a facility |
12 | operator may enforce a lien by selling the stored vessel at a commercially reasonable public sale |
13 | for cash. As used in this section, "commercially reasonable" shall have the same meaning as in |
14 | the Uniform Commercial Code. The proceeds of the sale shall be applied in the following order: |
15 | (ii) The proceeds of the sale shall be applied in the following order: |
16 | (A) To the reasonable expenses of the sale incurred by the facility operator including, but |
17 | not limited to, reasonable attorneys' fees, legal expenses and expenses of advertisement; |
18 | (B) To the satisfaction of the lien created by this chapter; |
19 | (C) To the satisfaction of all other liens on the vessel held by all lienholders of record to |
20 | be paid in the order of priority; and |
21 | (D) To the extent that the proceeds of sale exceed the sum of the foregoing, the surplus |
22 | must be paid by the facility operator to the vessel owner. Where the surplus is not collected |
23 | within thirty (30) days of the sale, the facility operator shall provide the funds to the general |
24 | treasurer as unclaimed property. |
25 | (ii)(iii) If proceeds of the sale are not sufficient to satisfy the vessel owner's outstanding |
26 | obligations to the facility operator or any lienholder of record, the vessel owner remains liable to |
27 | the facility operator and/or lienholder for the deficiency. |
28 | (2) Advertisement -- Notice of default. Before conducting a sale under this section, the |
29 | facility operator shall: |
30 | (i) Personally serve a notice of default on the vessel owner if the vessel owner is a Rhode |
31 | Island resident. If the vessel owner is not a Rhode Island resident, notice shall be in accordance |
32 | with subdivision (7). The facility operator shall provide a copy of the notice to each lienholder of |
33 | record. The notice must include: Serve: |
34 | (A) A notice of default on the person or entity identified as the registered owner of the |
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1 | vessel; and |
2 | (B) Serve a notice of default on the person or entity the facility operator has on record as |
3 | being responsible for the vessel if different than the vessel's registered owner. Service shall be |
4 | made in accordance with § 34-46-5(7). The facility operator shall also provide a copy of the |
5 | notice of default to each lienholder of record. In addition, the facility operator shall affix a copy |
6 | of the notice of default on the outside of the vessel in a manner where it can be reasonably seen. |
7 | The notice of default must include: |
8 | (A)(I) A statement that the vessel is subject to a lien held by the facility operator; |
9 | (B)(II) A statement of the facility operator's claim indicating the charges due on the date |
10 | of the notice, the amount of any additional charges that will or may become due before the date of |
11 | sale, and the date those additional charges will become due; |
12 | (C)(III) A demand for payment of the charges due within a specified time not less than |
13 | forty (40) fourteen (14) days after the date the last notice of default required hereunder is |
14 | delivered to the vessel owner; |
15 | (D)(IV) A statement that unless the claim charges are is paid within the time stated the |
16 | vessel will be sold, specifying the time and place of the sale; and |
17 | (E)(V) The name, street address, and telephone number of the facility operator, or the |
18 | facility operator's designated agent, whom the vessel owner or the person or entity the facility |
19 | operator has on record as being responsible for the vessel may contact to respond to the notice; |
20 | (ii) After the expiration of the forty (40) fourteen (14) day period set forth in subdivision |
21 | (2)(i)(C) subsection (2)(i)(III) of this section, the facility operator shall publish an advertisement |
22 | of the sale once a week for two (2) consecutive weeks in a newspaper of general circulation in the |
23 | area where the sale is to be held and of general circulation in the state. The advertisement must |
24 | include a general description of the vessel, the name of the vessel owner (if known), and the |
25 | person or entity the facility operator has on record as being responsible for the vessel and the |
26 | date, time and place of the sale. The date of the sale must be more than fifteen (15) days after the |
27 | date the first advertisement of the sale is published. In addition, the facility operator shall affix a |
28 | copy of the advertisement on the outside of the vessel in a manner where it can be reasonably |
29 | seen. |
30 | (3) Location of sale. A sale under this chapter must shall be held at the facility or at the |
31 | nearest suitable location. |
32 | (4) Purchasers. A purchaser of a vessel sold at a sale pursuant to this chapter takes the |
33 | vessel free and clear of any rights of persons against whom the lien was valid and all other |
34 | lienholders of record. The purchaser shall remove the vessel from the facility within ten (10) days |
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1 | of the sale on condition that the facility operator provides the purchaser with a sworn statement of |
2 | having accomplished the requirements set forth in this chapter. The purchaser may not resell or |
3 | transfer the vessel until such time as a duplicate title or registration for the vessel has been |
4 | obtained. |
5 | (5) Facility operator liability. If the facility operator complies with the provisions of this |
6 | chapter, the facility operator's liability is as follows: |
7 | (i) To a lienholder of record, the facility operator's liability is limited to payment from the |
8 | net proceeds received from the sale of the vessel pursuant to § 34-46-5; and |
9 | (ii) To the vessel owner, the facility operator's liability is limited to the net proceeds |
10 | received from the sale of the vessel after payment in full of all lienholders of record pursuant to |
11 | this section. |
12 | (6) Denying access to storage facility. A facility operator may deny a vessel owner who |
13 | has been notified under § 34-46-4 access to the storage facility, except that the vessel owner or |
14 | responsible party is entitled to access to the facility during normal business hours for the purpose |
15 | of satisfying the lien or viewing and verifying the condition of the vessel. |
16 | (7) Notices. Except as otherwise provided in subdivision (2)(i), all All notices required by |
17 | this chapter must be sent by registered or certified mail, return receipt requested may be served |
18 | personally using a process server or served by registered or certified mail, return receipt requested |
19 | or served via a recognized commercial courier with proof of signed-for delivery. Notices sent to a |
20 | facility operator must be sent to the facility operator's business address or to the address of the |
21 | facility operator's designated representative. Notices to a vessel owner or the person or entity the |
22 | facility operator has on record as being responsible for the vessel must be sent to the vessel owner |
23 | at the vessel owner's person's or entity's last known address. Notices to a lienholder of record |
24 | must be sent to the address of the lienholder as provided in the public filings that serve to perfect |
25 | the lienholder's interest in the vessel. Notices Except as otherwise provided by this chapter, |
26 | notices are considered delivered on the date the return receipt is signed or, if the notice is |
27 | undeliverable, the date the post office last attempts to deliver the notice personal service is made, |
28 | or on the date notice is deposited with the postal service or received by the commercial courier. |
29 | 34-46-6. Cessation of enforcement actions. |
30 | A facility operator shall cease enforcement actions immediately upon any of the |
31 | following: |
32 | (1) Payment by owner. The vessel owner pays the facility operator the full amount |
33 | necessary to satisfy the amount of the lien on the date payment is tendered and removes the vessel |
34 | from the facility. At any time before the conclusion of a sale conducted under this chapter, the |
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1 | vessel owner may redeem the vessel by paying the full amount necessary to satisfy the lien of the |
2 | lien on the date payment is tendered and removing the vessel from the facility; |
3 | (2) Payment by other lienholders. A person other than the facility operator who has a lien |
4 | on the vessel pays the facility operator the full amount necessary to satisfy the lien held by the |
5 | facility operator. Upon payment by a lienholder of record, the facility operator shall hold the |
6 | vessel for the benefit of and at the direction of that lienholder and may not deliver possession of |
7 | the vessel to the vessel owner. Unless the facility operator and the lienholder enter into a new |
8 | storage agreement, the lienholder shall arrange removal of the vessel from the facility forthwith. |
9 | Absent a new storage agreement with the lienholder, where the lienholder fails to remove the |
10 | vessel from the facility within fourteen (14) days of its payment, the facility operator, without |
11 | prejudice to any other remedy, may assess and collect storage charges from the lienholder at three |
12 | (3) times its published rate; or |
13 | (3) Initiation of Civil Action. An owner of a vessel or one claiming ownership rights in |
14 | the vessel files in a court of competent jurisdiction and serves on the facility operator, not less |
15 | than ten (10) days before the scheduled date of sale, a complaint against the facility operator |
16 | relating to the obligations incurred by the storage of the vessel or any claims related to the vessel |
17 | and in such complaint objects to the enforcement of the lien and sets forth the legal reasons why |
18 | the lien should not be enforced. The enforcement action shall not resume until either the civil |
19 | action is resolved or the court enters an order permitting the enforcement action to proceed. |
20 | SECTION 2. Section 34-46-7 of the General Laws in Chapter 34-46 entitled "Dry Dock |
21 | Facilities" is hereby repealed. |
22 | 34-46-7. Rental agreements -- Notice of this chapter. |
23 | All rental agreements which are subject to this chapter shall contain clear and |
24 | conspicuous language as follows: "BEWARE -- THE VESSEL AND ITS CONTENTS MAY BE |
25 | SOLD AT PUBLIC AUCTION FOR FAILURE TO PAY STORAGE CHARGES." |
26 | SECTION 3. Chapter 34-46 of the General Laws entitled "Dry Dock Facilities" is hereby |
27 | amended by adding thereto the following section: |
28 | 34-46-8. Issuance of title cessation of enforcement actions. |
29 | (a) Where by a sworn statement, the facility operator establishes having accomplished the |
30 | requirements set forth in this chapter, the department of environmental management shall issue a |
31 | new title to the facility operator or to the entity or person who purchased the vessel at the sale as |
32 | identified by the facility operator. Title shall be promptly issued no later than ten (10) days from |
33 | receipt of a written request. The written request may be made by either the facility operator or the |
34 | purchaser. |
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1 | (b) No claim, cause of action or lawsuit shall lie against any officer or employee of the |
2 | department of environmental management, any person holding or acquiring a lien or security |
3 | interest in this vessel, and any successor in interest of said purchaser or person on account of any |
4 | defect in or undisclosed claim upon the right, title and interest of the person acquiring title in the |
5 | vessel pursuant to this chapter. |
6 | SECTION 4. This act shall take effect upon passage. |
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LC003735 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO PROPERTY -- DRY DOCK FACILITIES | |
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1 | This act would amend the lien and notice procedures for facility operators of dry dock |
2 | facilities. |
3 | This act would take effect upon passage. |
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LC003735 | |
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