Judge tosses salvor’s $1 million claim

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Court ruling says the tow provider misled the skipper of a grounded 100-foot Azimut

Court ruling says the tow provider misled the skipper of a grounded 100-foot Azimut

A Miami federal court judge has rejected a salvor’s $1 million claim for pulling a 100-foot Azimut off a reef in Florida’s BiscayneNational Park, agreeing with the yacht captain that the salvor took unfair advantage while the yacht was disabled.

Blue Water Marine Services violated terms of its license to operate in the park when one of its captains misled the Azimut’s skipper to think he was paying an hourly rate for the job and a different captain threatened to cut the yacht loose unless the skipper signed a “no cure, no pay” salvage contract to pay the salvor a percentage of the yacht’s value, said Judge Paul Huck in his July 30 oral opinion.

Blue Water asked the federal court for $1 million — a third of the yacht’s value — for pulling Natalita III off the reef in an hour and six minutes and towing it 22 miles to the Merrill-Stevens Dry Dock Co. in Miami, according to court papers. The yacht captain, Joseph Pearce, says he thought he had agreed to pay the salvor something under $300 an hour — or about $3,600 — for the ungrounding and tow. “All these circumstances lead the court to find it would be inequitable to enforce the signed salvage contract,” Huck said in a transcript of his oral opinion.

He awarded the salvor nothing.

Natalita III, a $3 million yacht owned by a Cayman Islands corporation, Natalita III Ltd., was en route from Fort Lauderdale to Key West and on to the Caymans when it ran aground March 19 in BiscayneNational Park. The 1996 Azimut hit an uncharted reef, damaged its props, lost power, then was blown onto a second reef, according to Natalita’s court filings.

One of Natalita’s crewmembers, Dave Ehnes, a captain with the Cayman firm Professional Yacht Management, radioed Sea Tow Key Biscayne, which quoted him a basic rate of $300 an hour to render assistance, plus $20 per foot for pulling the yacht off the reef, according to the transcript of the judge’s oral opinion.

A captain from Blue Water Marine Services, a TowBoatU.S. operator based in Homestead, Fla., overheard Ehnes’ radio conversations with Sea Tow and contacted Natalita by VHF to ask if Natalita had vessel assistance coverage with any towing group, according to the transcript. The yacht carried no coverage, so Capt. Carlos Galindo of Blue Water hustled out to the grounding, arriving there well before Sea Tow. He told Ehnes and Pearce that Blue Water could do the job cheaper than Sea Tow, and that Sea Tow didn’t have the capability to pull the 100-footer off the reef. According to Huck, Pearce called Sea Tow back, told the dispatcher to recall its towboat, and gave Blue Water the job of pulling Natalita off the reef and towing it to Merrill-Stevens. Pearce said in Natalita’s court filings that he thought, in his discussions with Galindo, that Blue Water was offering to do the job for less than Sea Tow’s hourly rate of $300.

Three Blue Water boats pulled the Azimut off the reef, towed it to more protected waters, and sent a diver down to check for hull damage. Then, according to Huck, Galindo’s boss, Blue Water Capt. Bill Hicks, pulled out a blank salvage contract and told Pearce to sign it, binding him to letting a court decide what percentage of Natalita’s value the salvor should get for saving the yacht.

Blue Water later asked the court for $1.5 million, but then reduced its request to $1 million, according to Michael Moore, Natalita’s Fort Lauderdale attorney.

“Pearce then realized that [Blue Water] was seeking to be compensated in an amount and in a method that was different than represented by Galindo,” the judge said. “When Pearce questioned whether he had to sign the form, Hicks said it was a matter between his company, the plaintiff, and the defendant’s insurer, and it was OK to sign the form. When Pearce balked at signing the form, Hicks announced that if he did not sign the form, Hicks would immediately cut the defendant vessel loose where it was then located.”

Hicks later maintained that he would not have carried out the threat, Huck said, but Pearce had no way of knowing that when he signed the salvage contract. Had the salvor offered to stand by at that point while Pearce called another tow operator, the judge said, he might have decided the case differently.

Huck said Blue Water’s license to work in the park stipulates that its captains won’t mislead boaters in distress or intervene in communications between a disabled vessel and another tow operator, and will tell skippers their rates and surcharges and get their signature on an agreement before starting work. Huck said there was an oral agreement between Pearce and Galindo to do the work for less than $300 an hour and no discussion at all of a salvage contract until after the boat was off the reef. Then, the judge said, Pearce signed the salvage contract under duress.

“Under the circumstances of either signing or being cut loose promptly, it seemed that this was a situation where Pearce didn’t have much of a reasonable choice other than to sign the contract,” Huck said.

Blue Water’s attorneys argued there were no discussions of price before the salvage began, and wind and seas were bad enough that Natalita’s hull was “cracking and breaking” on the reef, so this clearly was a salvage situation and not a simple matter of freeing a grounded boat and towing it, but there was no time to get a salvage contract signed beforehand. They also noted that a park ranger, who had just ticketed Natalita’s captains for damaging the reef, was close by when Hicks asked Pearce to sign the salvage contract. If Pearce had thought he was being strong-armed, he could have called the park ranger, they said.

The judge, however, found conditions were not so bad that there wasn’t time to discuss whether this was a salvage or not, and the basis for paying Blue Water.

Blue Water is appealing. Its attorney, James Stroup, of Fort Lauderdale, declined to comment.

Moore says the case should serve as a wake-up call to towers and salvors. “It was a put-up job from the beginning,” Moore says. “It was exaggerated … Fortunately for us, the judge saw through it.”

“The Court particularly notes that the yachting and boating community are to be protected from unfair business practices of salvors and particularly the practices of salvors who are granted permits by the National Park Service and the United States Department of the Interior,” Moore says in a written comment.

“This was a case about a bait-and-switch, where the salvor led the boat owner to believe he was going to be charged a fixed price of a couple thousand dollars and then charged over a million dollars, arresting the owner’s vessel as a sort of ransom,” adds Scott Wagner, another of Natalita’s attorneys.

The appellate court still gets to weigh in on that judgment. Meanwhile, U.S. attorneys have filed a second case against Natalita, seeking $1.8 million for damage to the coral reef. Natalita has filed a counterclaim against Blue Water, alleging the salvor caused part of that damage.