Torts

• Author: International Law Group

Estefania is a 72-foot motor yacht built in 1992. J. Michael Jensen Boat Sales, Ltd. (JBS), a Canadian company, entered into a non- exclusive, 10% commission, Open Listing Agreement for the sale of the yacht with Point Loma Yacht and Ship Brokers of San Diego in February 1995. The principal of JBS is Michael Jensen who owns a marina in Vancouver, B.C. Point Loma hired Linda Krantz of Driscoll Yacht and Ship Brokers Inc. (Driscoll) to sell the ship. Ms. Krantz called in Mr. Roger McAfee, a lawyer knowledgeable about luxury vessels. After looking the Estefania over, McAfee gave it a favorable rating.

Ms. Krantz then found a California physician named Claud Cahen who made a firm offer of $575,000 for the yacht. In mid September of 1995, Jensen and Dr. Cahen signed a "Bill of Sale" for Estefania with a price of $575,000 U.S. The deal was subject to giving Mr. Jensen ten days to confirm that he would take Dr. Cahen's vessel, Sweet Life III, in trade at $307,000 U.S. Dr. Cahen gave Jensen a $20,000 U.S. down payment and the latter signed title transfer documents on September 14th.

Meanwhile, Ms. Krantz had found a couple, the Monteleones, who were interested in buying Sweet Life III. They were expected to buy that vessel from Jensen before the ten days ran out. Jensen next went to California to meet the Monteleones. As part of a proposed financing package, however, Jensen asked the couple to pledge their home as security. This caused the Monteleones to back out of the deal.

At a September 27 meeting, McAfee met with Jensen at the shipyard.

According to McAfee, Jensen made the improbable demand of an additional $100,000 for Estefania but Jensen denied that he made such a demand. When McAfee told Dr. Cahen that the Estefania's "new" price was $675,000, the latter called the whole deal off and asked for the return of his down payment. Jensen gave the $20,000 back to Dr. Cahen without being told of his alleged increase in the sale price.

McAfee then told Edward Belzberg, one of his regular clients, that he might be able to buy the Estefania for much less than $575,000.

A few days later, Belzberg met with Jensen. There he offered to buy Estefania for $400,000 (a figure suggested by McAfee) and presented his personal check for that amount. Discouraged by the delays, Jensen decided to sell the Estefania to Belzberg, especially after Ms. Krantz told Jensen (1) that Jensen would not owe her a commission and (2) that there was no way to revive the sale to...