## Facts

- The Ex-U.S.S. Cabot/Dedalo (Cabot) was a decommissioned U.S. Navy aircraft carrier.
- A museum in Louisiana owned the Cabot for a time and kept it moored at a wharf near New Orleans.
- After another vessel collided with the Cabot, the Cabot faced a marine peril: it was at risk of breaking free from its moorings and being destroyed.
- When the museum declined to take adequate protective measures, the United States Coast Guard voluntarily intervened.
- The Coast Guard spent more than $500,000 to address the situation, including repair-related efforts and transporting the Cabot to safer docking.
- Later, Pankaj Patel acquired the Cabot and arranged for it to be temporarily held at a wharf in Texas through Marine Salvage & Services, Inc. (Marine Salvage).
- While at the Texas wharf, the Cabot began listing to one side, signaling a risk of capsizing; capsizing would have eliminated the Cabot’s economic value.
- Marine Salvage’s president, William Kennon, could not obtain clear instructions from Patel about what should be done to protect the Cabot.
- Kennon voluntarily chose to spend about $20,000 to stabilize the Cabot, and those efforts went beyond Marine Salvage’s contractual wharfage-related role.
- The United States District Court for the Southern District of Texas seized the Cabot and ordered a forced sale, which produced $185,000 deposited into the court registry.
- The court then conducted proceedings to determine which claimholders would be paid from the limited sale proceeds and how registry interest would be allocated.

## Issues

1. Whether the United States and Marine Salvage provided salvage services giving rise to enforceable maritime salvage liens against the Cabot’s sale proceeds.
2. If so, what salvage-lien amounts should be recognized, and how the sale proceeds and accrued registry interest should be distributed given insufficient funds to satisfy all asserted claims.

## Decision

- The court recognized salvage liens in favor of only two claimants: the United States and Marine Salvage.
- The court fixed Marine Salvage’s salvage lien at $20,908.00.
- The court fixed the United States’ salvage lien at $70,342.68.
- The court awarded both salvors a pro rata share of interest accrued while the sale proceeds were held in the court registry.
- The court ordered that, because the registry contained insufficient funds after payment of the recognized salvage liens, no other asserted maritime lien claimants would receive distributions.

## Legal Principles

- A maritime salvage lien generally requires: (1) marine peril; (2) voluntary services not owed under a preexisting duty or contract; and (3) success in saving property in whole or in part.
- Services performed beyond the scope of an existing contract may qualify as voluntary salvage if they are not required by the contract and materially contribute to saving the vessel.
- Admiralty courts distribute the proceeds of a judicial sale according to maritime lien priority, and high-priority salvage claims may exhaust a limited sale fund before lower-priority claims receive anything.
- Interest earned on proceeds held in the court registry is treated as part of the fund and may be allocated among paid claimants in proportion to their allowed amounts.

## Conclusion

In this final judgment distributing the forced-sale fund, the court held that the United States (based on Coast Guard actions) and Marine Salvage (based on extra-contractual stabilization work) held valid salvage liens, set their lien amounts at $70,342.68 and $20,908.00 respectively, awarded them pro rata registry interest, and directed that no other claimants be paid because the $185,000 sale proceeds were insufficient.


United States v. Ex-U.S.S. Cabot/Dedalo, 179 F. Supp. 2d 697 (2000)