Florida brokerage found liable for misrepresentation

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A Fort Lauderdale yacht brokerage was found liable for $1.7 million in damages after a Rhode Island man filed suit claiming the 66-foot yacht he bought in 2007 was “unseaworthy.”

HMY Yacht Sales, which brokered the $2.3 million sale, was found liable for negligent misrepresentation by a federal jury in Fort Lauderdale last week, The Miami Herald reports. Jim Barboni, the HMY broker who led the deal, also was found liable of negligent misrepresentation and ordered to pay $100,000, court documents show.

The jury, however, did not find the defendants guilty of fraudulently inducing the plaintiff, nor were they found guilty of violating the Florida Deceptive and Unfair Trade Practices Act.

HMY Yacht Sales was found liable for 85 percent of the damages, Barboni for 5 percent, according to court documents. Additional defendants, not listed in the final judgment, were also found guilty of negligence.

Brian O’Neill went to South Florida to purchase the 2005 66-foot sportfishing boat in March 2007 after seeing an HMY ad on the Internet listing it for $2.6 million, according to court documents.

The boat is referred to as “a 2005 Twin Screw 66-1/2 foot fiberglass motor yacht ‘Bryemere’ f/k/a ‘M/V Double Billed.” It was described as such: “This awesome like ‘NEW’ … solid fiberglass Custom Carolina Sport Fish has all the attributes you would expect out of a high performance custom yacht. The speed, sea handling and those looks, with the sleek profile and Carolina flare.”

O’Neill met with HMY’s Barboni and the yacht’s previous owner, Richard Talbert, March 18, 2007,  in North Palm Beach and viewed the boat. Later that month, Talbert, Barboni and O’Neill took the vessel out on Lake Worth – not the Atlantic – while a surveyor conducted a sea trial, the newspaper reports.

O’Neill purchased the boat for $2.3 million in April 2007 and began to notice problems during a trip from South Florida to New England, according to the suit.

A transducer began leaking, sludge poured from the fuel tanks, and the hull was “flexing,” according to the newspaper report. O’Neill said he had the boat surveyed again after arriving in Rhode Island, and a naval architect deemed the boat “structurally unsound” and “unseaworthy.”

After an unsuccessful attempt to nullify the sale, O’Neill sued HMY in 2007, claiming the brokerage misrepresented the yacht’s condition.

Court documents show that HMY attorneys based much of their defense on the “as is” clause contained in the sale contract, describing the situation as a case of buyer’s remorse.

A representative of HMY could not be reached for comment by Soundings Trade Only.

O’Neill’s attorneys countered that the “as is” clause was not valid because of several misrepresentations about the boat by HMY, as well as vague language in the contract.

Click here for the full article.

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Comments

32 comments on “Florida brokerage found liable for misrepresentation

  1. Concerned broker

    How could the surveyor not be liable for this? Is it now going to be required for all brokers to fully survey and sea trail the boats before we take them as listings, how can we as brokers guarantee the condition of the boat? We tell buyers that the burden is on them to acertain the condition of the vessel by any means necessary and agreed to by the seller. that includes survey and sea trial. How could the broker be liable here? This sets a very scary president.

  2. Concerned Surveyor

    Was the surveyor selected by the Broker or did the potential buyer select his own surveyor?  It can make a huge difference even though it should not if the surveyor is ethical.  Possibly the surveyor was over his head from an experience level.

  3. Rick Dieterich

    Either we aren’t getting the whole story or this is absolutely a ludicrous finding by the courts.  The boat was deemed “unseaworthy” but the surveyor is was not found negligent and the broker was?!
    HMY should have never written any reference to condition in their listing…that is “no-no” 101, but it does not make them 90% responsible for this issue.  VERY SCARY INDEED.

  4. Yacht broker 101

    If this buyer hired HIS Surveyor to inspect the vessel, then how is Barboni and HMY at fault? Yes, the boat should have been taken offshore, but it is the buyer and surveyor that must have agreed not to. This is a case of buyers remorse. The naval architect called the boat a death trap? Was the boat damaged at one time and not properly repaired? Oh, and the owner settled out of court for a small sum!Give me a break!
    This is a bad message that has been sent to all brokers. Survey, sea trial, all boats before listing, and stay away from any vessel that is not mainstream.

  5. Brian Gibson

    As a Broker & Captain of over 30 years we must be carefull as to the “verbage” used in our listings. Just state the obvious and do not “sensationlyze the craft” in any way. Let the Buyer and buyers agents including surveyors make ther own conclusions. As profesionals, let’s all learn from this judgement.
    BPG

  6. troubled

    I agree that the surveyor, whoever hired the surveyor, should have born much of the responsibility. I’m beginning to think there are a lot of unqualified nams & sams surveyors out there.

  7. craig

    One clue should tell you something about the broker:
    “O’Neill’s lawyers also claimed that Barboni showed the yacht buyer core samples of the boat’s hull that were not from the actual boat, and were not representative of the actual thickness. According to court documents, HMY did not deny showing hull samples that were not from the actual boat being purchased.”
     
    what does that tell you about the broker? That would be enough for me right there to show their intentions.

  8. dick obritz

    Sounds like bad karma all around. Not many facts stated here. Surveyors determine the condition of used vessels. Naval architects design vessels and generally lack experience to evaluate condition.  The use of the terminology “unseaworthy” is used by lawyers in personal injury cases….not to describe condition. Further, survey does not always reveal all conditions unless you want to pay to take the boat apart. Not very practical. Leaky transducer…thats a minor cop out and may have only occurred on the trip north. Sludge from tanks? Dont know if this means accumulated biowaste or leaky tanks. Accumulated debris in tankage is a common “as is” condition in most used boats and typically shows up with low fuel levels and heavy motion of the vessel. “Structural deficiencies” …dont know if this means inadequate design or structural failures. Surveyors may comment on structural failures but not often on inadequate design unless it is obvious in a sea trial.
    To sum  up, it sounds like the courts allowed themselves to be “fooled again” by non scientific jawboning and snake oil experts.

  9. Blake E. Davis "pilothouseking"

    This isn’t the first time a big house has been successfully sued by purchasers unhappy with their purchase.  I’m curious what happened to the boat?  Did he keep it?  Sell it to somebody else? Did he destroy it (which I doubt) since it was  so “horrible”?  Moral of the story is to not make “glowing statements” about boats that can’t be backed up and IF the buyer has issues with their boat after purchase, not to ‘blow them off’ but work with them to solve the problems which used to be called “customer service” BEFORE lawyers get involved and there’s no going back.  Also one should do a bit of due dilligence research on their buyers to see if they have a history of suing people and then choose not to do business with them.  I’ve saved myself much trouble over the years by discovering some “buyers” actually do this for a living- just suing people. Usually you can find their tell with just a couple of roundabout humerous
    innocuous questions.  Seller beware too.  Hopefully there’s still an appeal to come.

  10. Vic

    Only a naval architect would deem a boat unseaworthy just after it made a 1000 + mile trip! I wish all of my boats were that unseaworthy that they could make a trip that far. What a croc. This is our legal system at work.

  11. Broker in Shock

    I had to read this story several times because the verdict is so completely unbelievable. I have many questions and wonder if there is much more to the story than is being reported.  The broker did not build the boat and it was previously owned and used.  I’m assuming the previous owner did not list his boat knowing it was defective.  A marine survey and sea trial was obtained by the buyer and he had a chance to back out of the deal or obtain many surveys at his expense.  The boat was sold with no warranties and in “as is” condition. Where is the culpability in “as is?” Obviously, the boat appeared to be a good buy and after due diligence, the buyer went forward with the purchase.  Did the buyer initially try to get out of the purchase?
    The brokerage listing described the boat as “awesome.” Is it unusual to describe a 2.3 million dollar vessel as “awesome?”  What about 1st amendment rights?  It would appear that ” awesome” was an opinion offered by the brokerage firm.  What one deems  “awesome,” another may describe as “awful.”  Descriptive language is subjective and written as perceived.
    Should there be an industry standard dictionary where terms of vessel condition are limited to only half a dozen descriptive words?  Speaking of the industry, where were professional marine associations during this case?  Is an association attorney helping with an appeal?
    This verdict is a game changer.  I hope an appeal is made and the decision is made just by being reversed.

  12. Jerry Tarkanian

    While I hear what everyone is saying, this is another case of “just do whatever it takes to get the sale”. Isn’t that right Moynehan!

  13. Daspasman

    As a yacht broker, I am very concerned and dismayed over this court ruling.  Nowhere does it say the surveyor in Florida has any culpability.  However there may be another side to the story we have not been told.  What was the transit like from Florida to Rhoded Island?  Was a log of the jouney kept showing weather conditions and sea state, as any good captain would?  Having bee involved with boating for over 40 years, and a mechanical engineer I find it hard to believe a transducer comes loose with normal use.  Was the boat grounded along the way.  I also find it very hard to believe a custom Carolina boat only 2 years old would be sturcturally unsound making the vessel un seaworthy unless it was overstressed along the way.  Were the fuel filters changed before the long voyage and if so what was found in the drained fuel.  If not shame on the buyer. If  the drained fuel was clean, it is very possible contaminated fuel was picked up along the way.  I’m sure the vessel had to be refueled several times.  I would love to review the owner’s testamony in this case.

  14. Dan

    Or, we could simply tell every buyer the truth…….anybody can BUY a boat. OWNING a boat, well, that’s quite a bit more expensive.

  15. Mark Mowl

    I am a former surveyor, but I truly cannot see how the courts can find the broker liable, and the surveyor walk away unscathed. To my way of looking at it the broker is an intermediary arranging a sale. While their choice of advertising rhetoric might have been a poor choice, the buyer had the boat surveyed, chose not to perform a proper seatrail, and had access to the previous owner. Provided the broker did nothing to conceal any defects known to him, it would seem that the broker is being punished for a failure in the buyers own due dillegence. Which to me points back to the surveyor. 
    I would be curious to read the contract language the courts seem to have based their findings upon. The hold harmless in my survey contract was pretty tight, but I always assumed that in a case of serious negligence (i.e. my own failure) that it would be ripped apart by the courts considering me a compensated expert. Therefore being held to a higher standard.
    Having said all that, it just seems like something is missing here.  I was once pursued by a client who purchased a boat in Florida and upon closing shipped the boat to New England. He claimed the boat arrived with damages not found in my survey.  In fact the damage was caused in shipment by the buyers chosen, but uninsured shipper. Further, against my advice he had chosen not to insure the vessel prior to its shipment. His last chance to avoid a costly repair was to come after me, and my insurance carrier. Fortunately although there were ten representative photos in his survey report, their were sixty detail photos in my files. He was not successful.
    This judgement is a very scary precident for the brokerage industry.

  16. ms. muffett

    its precedent not president…..big difference.  these types of cases go way back.
    I can remember kenny rogers and gamblers lady being one of the most
    well known.  this unfortunately is not a first. .

  17. Mike a Broker

    I have reviewed the orginal article in the Ft. Lauderdale paper AND the listing used by HMY.  The listing was full of opinions such as “like new”, “exquisite”, “very comfortable”, “example of the best”.
    Lesson to be learned, AVOID YOUR OPINIONS ABOUT YOUR LISTINGS

  18. VISSIONQUEST

    As a repairer, there was nothing in this article that said “unseaworthy” to me. Leaking transducers and lousy fuel don’t add up to that. Either something else was going on like broken stringers or a full untabbing and it is not in the story, or the buyer had a very good lawyer. I do wonder why both sides would choose to go to trial, if the boat was ok. Taking the boat back would have saved a lot of trouble.

  19. Captain Forest

    It sure would be nice if the whole story could be reported.  What exactly was the negligent misrepresentation that HMY and the broker were found guilty of??
    I’m sure everyone would benefit and learn if all the facts were disclosed.

  20. Surveyor North

    The full article (must be clicked on to view) said that the surveyor, AMS since 1992, was held to be not negligent.  There must be some parts left out here, because the surveyor is the independent expert hired to give his experienced opinion on the condition.  What is the rest of the story?
    It does show the vessel descriptions should be held to just the facts, and not flowery promotions.

  21. Billy Hampton

    A sea trial on Lake Worth? Give me a break. That thing should have been out in the ocean taking a pounding before it was purchased. Your reporting on the story was sketchy, at best, and led me to believe that the buyer did not do his due diligence.

  22. Rod Johnson

    If you read the full article fro mthe Miami Herald it does mention that the surveyor was originally included as a defendant in the suit but was found “not negligent”.
    Still, I would have liked to know how much of the “structural defects” that the naval architect found were actually caused by the trip North from Florida! The internet ad that was cited that described the boat as capable of “excellant sea keeping in all conditions” may not have been a real stretch…… my experience is that the worlds worst designed/built boat could still be “safe” in the hands of an expert seaman, and the worlds absolute finest designed/built boat could be truly “dangerous” in the hands of a “skipper” who doesn’t know what he/she is doing. Surveying a boat after a 1000+ mile trip (in what kind of weather??) does not give a true picture of what condition that boat was in before that trip. How “roadworthy” would a Cadillac Escalade be after competing in the Baja 1000?
    Customer Service was mentioned by another writer, well… in today’s real world I suspect that a customer like Mr. O’Neill probably contacted his lawyer before even thinking about contacting the Broker about the “defects”. Like the boatowner here in Massachusetts who after running his 62′ Sea Ray right over a 35′ sailboat…… called his lawyer long before calling the USCG to report the “accident”.

  23. thataway

    The settlement was not a small amount–it was about $2,000,000.  85% to the brokerage, 5% each to the salesman, seller and seller’s company.  Estimates to “repair” the boat was $600,000 to one million.  Transducers leaking and fuel sludge are not issues which would end up with this type of judgement.  There is mention of the vessel flexing–and the N A stating that the vessel was unsound.  I would like to see the NA’s testimoney–and I suspect that the case was made on this.  I agree that it is unusual that the surveyor did not have some liability (empty pockets?–still would be a judgement).  If core samples, and construction were the issue, it is certainly possible that the surveyor did not render an opinon about these–and it would be beyond his expertise.  Agree that there are a number of unqualified surveyors, despite certifying bodies.
    So, if the vessel was taken out into rough seas–would have the surveyor seen flexing of the hull?  I suspect so.  Who was skippering the vessel during sea trial and who made the decision not to go out the inlet?  I have seen a reluctance of brokerages or owners to subject the vessel to a sea trial in rough conditions.

  24. JOHN A AMES

    I HAVE NEVER COMMENTED HERE BEFORE, BUT I MUST NOW. THIS IS TOTAL BS, BUT IT DOES NOT SURPRISE ME! I SAW THIS COMING OVER 10 YEARS AGO WHEN I DECIDED TO TURN IN MY LICENSE AND RETIRE IN COSTA RICA. SAME OLD USA, LAWYERS & DEEP POCKETS!
    PURA VIDA,
    JOHN

  25. naval architect

    This is a very good example of a possible “close relationship” between surveyor and brokerage. Just because a surveyor completes a six week course and is certified by paying a fee to NAMS or SAMS does not make them qualified to be a surveyor. Perhaps other parties such as the organization that certified the surveyor, the “school” the surveyor attended and any sponsor of the surveyor should have been enjoined in the litigation. Then maybe the field of “certified surveyors” could be narrowed to actual qualified and experienced professionals.

  26. Dick Mulvey

    As a Broker and Sales Manager for one of the Great Lakes
    largest Volume Sailboat dealers, I always worked with the
    Toughest and Most Experienced Surveyors. I would always
    explain to the Buyers and sellers that the Boat could be new
    and these guys would be able to find problems. We lost a few
    sales along the way, but my buyers always respected the
    process, and no Lawsuits!!!! Most of the other brokers in the
    area would guide there customers away from these guys for
    fear of loosing a sale! I was more concerned with loosing a
    customer to a Lake Michigan Storm…
    Thankyou Scott Grabner and Steve Dake for being
    as good as you could be.
    Dick Mulvey  Sailboatsails@Gmail.com

  27. Sandy Daugherty

    We are very quick to judge from so little information!  This is a wake-up call for glib promotion, and a warning against lazy sales practices.  I can see someone schmoozing a high roller, and not being very careful about what he uses to convince the buyer.  It bit him bad. 
    But the diatribe above merely demonstrates our lack of objectivity and due dilligence.  Get the facts, stick to the facts, and loose the sale if it requires stretching the truth.  May we get smarter after this, and may we develope better habits that extend right down to the small pockets who can’t afford high-power lawyers and three year lawsuits.

  28. Xrayer

    From my expierence both Surveyers and Naval Architects all have opinions like the editorial pages especially when they sway from the guidelines of good and practable boat building as when it states you shall and exceptions. I have seen it from the example of the 62′ Sea Ray owner, electrical opinions and water intrusion. This guy had a good lawyer maybe there will be or should be an appeal.

  29. Island Boy

    Just wondering did the buyer sue the seller? After all, HMY didn’t own or build the boat (I assume)….
    I assume no action towards the surveyor? Most likely had no pot of gold to get!
    Can’t understand why a buyer didn’t have certain responsibllities in this situation (buyer beware)……..
    HMY-stop using used-car-mentality-type-slick-willy broker-salesmen!!!!!
    Control all released data!
    Get a better attorney, seems the buyer had a good one!!!!
     

  30. Gordy McKelvey

    Lawyers, Boats and Money and dumb buyers! People wake up. If you are smart enough to be able to afford a 2.3 million dollar “USED” boat than you need to be smarter than the people you are buying from including the owner. This sounds like a case of too much money and no walking around sense.

  31. Shell

    The core samples shown were not of the actual boat– but they were not represented to be so.  Another example of shoddy reporting and a case of buyers remorse going for the deeper pockets instead of the person who actually committed a wrong.

  32. Comment from Europe

    We all know advertising grabs clients but is not a binding contract. What sells is the product. In a case of a multi-million purchase it’s purely the product, especially if it’s a second hand. The buyer’s representative and surveyor charge specifically to spot any “existing” problem prior to the sale-purchase. Any mechanical problem arising thereafter, be it conditional, circumstantial, accidental or a result of misuse should not be considered the selling broker’s responsibility. Did a second surveyor make a report after the problems/damages? If so, it should clearly determine whether the first surveyor left those part of the yacht unchecked before acceptance & delivery. If the yacht, according to the buyer’s surveyor, was in optimum condition, something MAY have happened AFTER it fell in the buyer’s hand…. Who’d be responsible for that???

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