Ohio Bank Sues Florida Boat Owner to Foreclose on $1 Million Sardine Marine Yacht
Fifth Third Bank, N.A., a national bank based in Ohio, has filed a maritime foreclosure lawsuit in the Southern District of Florida to seize a 55-foot 2025 Sardine Marine yacht named Cuzican after the vessel’s owner allegedly defaulted on a nearly $1 million marine loan.
Florida Vessel Owner Accused of Defaulting on Yacht Loan Secured by Preferred Ship Mortgage
According to the complaint, filed under Case No. 1:25-cv-24503-JEM, the borrower and vessel owner—identified as Ivan Jesus Cotayo of Miami-Dade County—entered into a $999,778 loan agreement with Fifth Third Bank on January 10, 2025. The loan was secured by a First Preferred Ship Mortgage covering the Cuzican, a 2025 Sardine Marine Race 55-foot vessel powered by twin 2018 Mercury 400R outboard motors.
The bank alleges that Cotayo failed to make his scheduled monthly payment due August 9, 2025, and has since remained in default, triggering enforcement of the ship mortgage and underlying loan agreement.
The mortgage was duly recorded with the U.S. Coast Guard’s National Vessel Documentation Center and further perfected through a UCC-1 financing statement filed in Florida’s secured transaction registry. Fifth Third Bank is seeking a judicial order authorizing the arrest and sale of the vessel.
Complaint Seeks In Rem Seizure and Judicial Sale of 55-Foot High-Performance Yacht
Filed under admiralty jurisdiction pursuant to 46 U.S.C. § 31325, the lawsuit is both an in rem proceeding (against the vessel itself) and an in personam claim (against the borrower individually). The bank seeks:
- Arrest of the Cuzican and her equipment, parts, and accessories
- Foreclosure of the First Preferred Ship Mortgage
- A judicial sale of the vessel
- Damages for the outstanding loan balance, interest, late fees, and legal expenses
As of August 9, 2025, the amount allegedly owed includes $989,252.27 in unpaid principal, $15,631 in accrued interest, and $804.80 in late fees, with additional interest and attorney’s fees continuing to accrue.
Legal Basis for Ship Mortgage Enforcement Under U.S. Maritime Law
Fifth Third Bank brings its foreclosure claim under the Ship Mortgage Act of 1920, which allows lenders to enforce maritime liens on U.S.-flagged vessels. The Act grants banks holding a First Preferred Ship Mortgage priority over most other lienholders, including repairers and suppliers.
Under Rule C of the Supplemental Rules for Admiralty or Maritime Claims, banks may request the U.S. Marshals Service to arrest a vessel physically located within the court’s jurisdiction. In this case, the Cuzican is reportedly docked within the Southern District of Florida.
If the court approves the arrest, the vessel could be held in custody pending judicial sale, with proceeds used to satisfy the debt. Any shortfall could then result in a deficiency judgment against the borrower.
Deficiency Judgment Reserved Against Boat Owner If Vessel Sale Falls Short
While the complaint primarily targets the vessel itself, Fifth Third also reserves its right to pursue Cotayo personally for any remaining loan balance not recovered through the vessel’s judicial sale. This is known as a deficiency action, and it may be pursued separately depending on the outcome of the in rem foreclosure.
Notably, Fifth Third alleges it sent a formal default notice on September 12, 2025, demanding payment but received no resolution.
The lawsuit also names Remar Marine, LLC dba Miami Boat Place in the caption but does not clarify its role within the body of the complaint.
Yacht Mortgage Foreclosure Highlights Legal Risks of Vessel Financing Defaults
While residential foreclosures are widely understood, ship mortgage enforcement under maritime law involves unique procedures. Once a vessel is federally documented and mortgaged under the Ship Mortgage Act, the lien is enforceable in admiralty and can result in physical arrest and forced sale of the boat—regardless of its value, location, or active use.
Yacht owners facing payment difficulties should be aware that lenders can quickly move to arrest a vessel if a payment is missed, particularly in high-value marine loans like this one.
Contact a Maritime Vessel Foreclosure Attorney
If you are facing a ship mortgage foreclosure, vessel arrest, or marine lien dispute, our legal team can help you understand your rights under maritime law. Whether you’re a borrower, lienholder, or vessel purchaser, we can guide you through the complex legal procedures surrounding vessel seizure and judicial sale.
Contact us now to speak with a maritime foreclosure lawyer.
Disclaimer:
Our firm does not represent the plaintiff or defendant in this case and is not involved in the litigation. The information provided is based on publicly available court filings and is for informational purposes only. We make no representations about the truth of the allegations, nor are we predicting the outcome of the case.
