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January 22 – 25, 2015

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Los Angeles
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February 19-22, 2015

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ARBITRATION FINDINGS
By Dennis Moran
Arbitration Administrator

Arbitration 92-002
BUYER v. BROKER & SELLER
“Intentional Misrepresentation, Negligent Misrepresentation and Breach of Contract”

Buyer purchased an old wooden boat that Broker and Salesman reportedly said was in “excellent condition and a great deal.” Buyer had both engine and hull surveys performed by surveyors of his choice. Buyer elected after purchase to return vessel to “like new” condition investing about $25,000 in upgrades. Soon after reconditioning, Buyer then sold vessel for less money than invested. Seller, Broker and Salesman were asked to make up the difference between invested price and sales price. Arbitration Panel found in favor of Broker & Seller. No award of damages, each party to bear its own costs and attorneys’ fees. Cost of arbitration was paid by Buyer for one pre-hearing conference and four sessions.

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Arbitration 96-015
BROKER v. BUYER
“Breach of Contract”

Buyer twice negotiated to purchase a vessel. On the first occasion, Buyer backed out just before signing Final Acceptance of the Offer to Purchase and Sales Agreement. On the second occasion, Buyer signed the contract including Final Acceptance but failed to make a deposit. Since the contract called for damages to be in the amount of the deposit and that deposit was zero, the Arbitration Panel found in favor of the Buyer. Broker to pay fees of arbitration, each party to pay own attorneys’ fees. Cost of arbitration was $1925 for two sessions.

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Arbitration 96-018
BUYER v. SELLER
“Breach of Contract”

Seller of vessel failed to provide clear title to Buyer. Seller repossessed from his previous client, a vessel and resold to Buyer through a Broker. While vessel was in the possession of Seller the Security Exchange Commission placed a lien on the vessel for over one million dollars in the name of the individual from whom the vessel was repossessed. Vessel value is $130,000, which Seller accepts from Buyer, then, does little to get lien released in a timely manner. Arbitration Panel finds in favor of Buyer. Seller to pay cost of arbitration $9,444 plus $26,471.97 in attorneys’ fees and damages for two sessions.

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Arbitration 97-02
BUYER v. BROKER & SELLER
“Breach of Contract”

Buyer desires rescission of contract and money damages for breach of fiduciary duties. Buyer purchases vessel, has it surveyed by surveyor of his choice. Two years later, Buyer finds vessel was involved in accident where entire dock storing vessel and vessel was damaged during a winter storm. Buyer seeks recession of contract during pre-hearing conference and return of $257,500 paid for vessel. Buyer then asks court to litigate two times but is referred back to CYBA Arbitration. Buyer then reduces claim to $25,000 but fails to pays fees to move forward. Arbitration Panel heard two prehearing sessions but did not hear complaint. No award tendered.

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Arbitration 97-023
BUYER v. NEW BOAT DEALER
“Breach Of Contract”

Oregon Buyer purchases sailboat from California Dealer. Vessel is to be commissioned by Dealer within thirty days. Buyer sends several trucks to pick up vessel only to learn vessel is not finished. Sixty days later Buyer picks up vessel, moves vessel to Oregon and finishes commissioning and upgrades at yard of his choice. Buyer requests $13,600 in commissioning fees and UPGRADES. Arbitration Panel awards Buyer $7,250 in damages and $2,552 in arbitration fees for two sessions.

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Arbitration 98-027
BUYER v. NEW BOAT DEALER
“Breach of Contract”

Buyer requested Dealer to warrant vessel he just purchased. Dealer was paid a finders fee only because Buyer wanted to purchase vessel offshore, in Australia, where vessel was manufactured. Buyer was Australian, took delivery of vessel in Australia, operated vessel in Australia, then returned vessel to manufacture for extensive list of warranty repairs. Several months later Buyer shipped vessel to United States and later wanted Dealer to perform additional warranty at Dealers cost. Arbitration Panel awards Buyer $1,313.87. Each party instructed to pay their own attorneys’ fees and split cost of arbitration of $5,772.48 for four sessions.

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Arbitration 98-030
BROKER v. SELLER
“Breach of Contract”

Broker had a buyer wanting a specific type and model of vessel. Broker walks dock finding exact vessel with Seller on board. Obtains one-day, one-client, short-term listing. The same day, Broker makes full amount offer. Seller agrees to terms and conditions of Offer to Purchase and Sales Agreement, but to a reduced commission of $10,000. Seller later refuses to sell vessel to Buyer. Arbitration Panel finds in favor of Broker in the amount of $10,000 plus arbitration fees in the amount of $1742.50 for one session. 

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Arbitration 99-033
BUYER v. NEW BOAT DEALER
“Breach of Contract”

Buyer purchases Dealers’ demonstration vessel and is told by Dealers’ salesman that all warranties would start on the day of delivery to Buyer even though vessel had been in Dealers’ inventory for over two years and used on many “sea trials” and trips to Catalina Island. Buyer took delivery of vessel in Mexico and found Dealer reluctant to repair vessel out of the country. Arbitration Panel found in favor of Buyer for warranty amount of $7,000 plus attorney fee of $25,000 as well as arbitration fees of $4,400 for two sessions.

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Arbitration 99-035
BUYER v. SELLER
“Breach of Contract”

Buyer purchased vessel from Seller through Broker. When vessel was delivered to Buyer after all surveys were completed, much of the equipment on the Listing Specification Sheet had been removed from vessel. After all proper notifications to both parties, the case settled one week before the Arbitration Hearing.

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Arbitration 00-044
BROKER v. SELLER
“Breach of Exclusive Listing Agreement”

Seller listed his vessel with Broker. A short time later Seller called Broker saying, “vessel sank and was being taken off the market.” Broker later learned vessel had been sold through a second broker in violation of first Broker’s Exclusive Listing Agreement. Arbitration Panel found in favor of Broker for 10% commission and arbitration costs of $1700 plus attorney’s fees of $1240 for one session.

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Arbitration 00-046
BROKER v. SELLER
“Breach of Exclusive Listing Agreement”

Seller signed exclusive listing agreement saying Broker could have all monies over his NET price. Broker was to advertise vessel, display at Brokers’ expense at local in-the-water boat show and incur all slip expenses until vessel sold. Broker fulfilled his obligations and brought an offer to Seller for more than his requested NET price but Seller had already sold vessel himself. The California Department of Boating and Waterways and the California Yacht Brokers Association do not recognize NET listings. The Arbitration Panel held a short meeting with each party discussing possible weaknesses in their cases, then asked them to step outside to try to reach an agreement. The parties settled out of arbitration with the Seller agreeing to pay the Broker 50% of his requested $26,000 award plus one half of the Arbitration costs of $2,670 for one session.

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Arbitration 00-050
BUYER v. BROKER
“Expired Contract”

Buyer signs Offer to Purchase on vessel, gives broker 10% deposit. Contract has completion date of “1 day” and “financing” clause. Transaction continues for several months during which time buyer uses vessel for extended “sea-trials” with family members. Buyer pays 2 months slip fees as they come due and has vessel cleaned and waxed. Two months later, buyer wants out of contract and refund of his 10% deposit because he cannot find acceptable financing. Seller instructs Broker to hold funds as liquidated damages per the Sale and Purchase Agreement. Arbitration is requested by Buyer who delivers deposit check, arbitration check and travel reimbursement check, all of which are uncollectable. CYBA sends demand letter to which another check arrives about 45 days later which is also uncollectable. Arbitration fees are paid in full and Arbitration Panel awards Buyer $4,208 returned deposit and cost of arbitration for one session.

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Arbitration 01-061
BUYER v. NEW BOAT DEALER
“Breach of Contract”

Buyer signs contract for new vessel and makes deposit of $100,000 for immediate delivery of in-stock vessel. Dealer orders custom 1?2 tower, electronics and various upgrades requested by Buyer. Two weeks later Buyer cancels order and wants $100,000 deposit returned which Dealer keeps as liquidated damages. Dealers’ new boat contract, unlike our CYBA contract, did not have a liquidated damages clause. If it had, they would have probably been awarded the full deposit of $100,000. Without liquidated damages clause, the panel awarded Dealer $39,000 out of pocket expenses, plus title and possession of the custom 1?2 tower. Balance of deposit returned to Buyer. Arbitration fees of $6,910 were divided between both parties for one session.

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Arbitration 02-063
BUYER v. BROKER
“Breach of Contract”

Seller was out of the country during sea-trial and sale. Generator would not run on sea-trial. Mechanic inspected and said the problem was probably a start-stop solenoid ($150). To close sale in a timely manner Broker said he would repair generator at his cost. Generator turned out to be non-repairable. Buyer agreed to exchange generator for new inverter system to which Broker paid for inverter and 2 each 6-volt batteries, which amounted to more than the total commission on the sale of vessel. Buyer was not satisfied with placement of inverter in engine room of gasoline-fueled vessel. Without Broker’s knowledge, Buyer contracted another mechanic to move inverter from engine room to under stairs in cabin and install 2 more batteries. While moving inverter, buyer contracted with mechanic to upgrade wiring, install amp meter, change engine hoses and various other upgrades, which he wanted reimbursed by Broker. Total claim requested by Buyer to move inverter was $6200. Arbitration Panel found in favor of Buyer for the sum of $965 and 1?2 arbitration costs of $640.80 which was the estimated cost of moving the inverter from the engine room to cabin and installing the second battery system to which the Broker had agreed to install. Arbitration was one session.

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Arbitration 02-065
BUYER v. SELLER and LISTING BROKER
“Enforcement of Offer to Purchase and Sale Agreement”

Buyer and Seller signed Offer to Purchase and Sale Agreement. Buyer had mechanical survey on old high time engines after which he tried to renegotiate the purchase price. Seller counters Buyers’ counter-offer and further stipulates deal must close within 10 days. Buyer, not sure if he can complete deal within ten days, waits several days while arranging haul and survey. During this time Seller removes vessel from market. Arbitration Panel finds in favor of Seller. Arbitration fees to be paid by Buyer in the amount of $934. Before award was issued Seller sold vessel to Buyer. While Seller was using vessel one last time Seller blows one engine but repairs it before delivery to Buyer.

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Arbitration 03-070
Buyer v. Seller
"Breach of Contract"

The Sale and Purchase Agreement called for proration of personal property taxes on the vessel if invoiced. The Buyer failed to pay his prorata share of the currents year's property tax on the vessel he purchased. Seller requested July 1st as the proration date. The Sale and Purchase Agreement and the CYBA call for January 1st as the proration date. Arbitratioin Panel favored Seller but based award on the January 1st assessment date as stated in the Sale and Purchase Agreement. Seller awarded $2,649.51 plus arbitration fees of $1,302.00 and expenses of $387.10 for one session.

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Arbitration 03-071
SELLER v. BUYER & MARINE ENGINE SURVEYOR
“Breach of Contract”

While conducting the engine survey in the Seller’s slip, the engine surveyor failed to protect the “boat bath” from becoming entangled in the propellers resulting in damage to the vessel and “boat bath”.  Arbitration Panel favored Seller and found against Marine Engine Surveyor the sum of $440.00 plus arbitration fees of $425.00 for one session.

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Arbitration 04-074
BROKER v. BROKER, CO-OP BROKER, SELLER & BUYER
“Breach of Contract” 

Listing Broker obtained from Seller an Exclusive/Central Listing on Seller’s vessel and co-opted vessel with Broker B.  Broker B’s Buyer made offer which was rejected.  Listing Broker then lost his Exclusive/Central Listing.  Seller found Broker C and entered into an Exclusive/Central Listing.  Several months later Broker B’s Buyer purchased vessel through a co-op agreement with Broker C.  Broker A, the original listing agent, wanted a commission even though his Exclusive/Central Agreement had expired.  The Arbitration Panel found against Broker A and that each side shall bear its own costs and fees of arbitration.

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Arbitration 04-077  
BUYER V. BROKER
“Breach of Contract”

Buyer signed Offer to Purchase, performed sea-trial and survey then a later date rejected vessel.  Buyer asked for deposit to be returned whereupon Broker indicated Seller had asked for deposit to be held in trust as liquidated damages.  Buyer brought a Superior Court action against Broker.  Broker asked court for motion to compel CYBA Arbitration per Purchase Agreement that the Court awarded.  Arbitration Panel awarded Buyer return of $7000 deposit less Broker’s fees for defending Superior Court action and less $750 which Buyer had agreed to pay for her haul-out. Arbitration costs were to be split by the parties. Each party shall bear it’s own attorneys fees.

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Arbitration 06-083
SELLER v. BUYER & BROKER
“Breach of Contract”

Seller had been given fully executed Offer to Purchase by broker representing Buyer’s acceptance of all terms and conditions including sea trial and survey.  Seller believing vessel was sold, moved off vessel only to have Buyer reject vessel after final acceptance date.  Broker misinformed Buyer as to proper rejection date..  Seller requested Buyer’s full $20,000 deposit as liquidated damages. Arbitration Panel found Seller shall recover $5,000 from Buyer and $5,000 from Broker for a total of $10,000.  Buyer shall receive $15,000 of his deposit  after payment of $5000 to Seller.  Complainant shall bear the cost of the arbitration in the amount of $2,250. Each party shall bear it’s own attorneys and other costs related to the arbitration proceedings.

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Arbitration 07-086
BUYER v. SELLER
“Breach of Contract”

Buyer made an offer to purchase a vessel from a Seller.  The offer was accepted by the Seller and the sea trail and hull surveys were conducted.  Upon reading the survey recommendation list the Buyer asked the Seller to repair several recommendations that the Seller declined to accomplish.  The Buyer then retracted his initial offer in writing and the Seller demanded the Buyers deposit as liquidated damages even though the purchase contract had not been completed.  The Arbitration Panel found in favor of the Buyer and directed that he shall have and recover his deposit of $14,500 plus $1,334.79 in interest after the breach, $500.00 in attorney’s fees and $1,865.00 in costs of the arbitration.

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Arbitration 08-092
LISTING BROKER v. CO-OP BROKER
“Breach of Contract”

Broker co-opted with other brokerage house. Selling broker failed to pay listing broker full agreed amount of commission. The Arbitration Panel found in favor of the listing broker and directed that he shall have and recover his amount of commission due in the amount of $8,185.30 plus $1.986.71 in costs of arbitration.

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