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Bryan Burrough: The Legacy Sails Away
Regular Vanity Fair readers may recall a piece I did back in January 2007 concerning a mammoth sailing yacht, the Legacy , that had gotten itself hopelessly marooned on the salt flats just outside the harbor at Key West, Florida. Well, it's taken more than two years, but the yacht has finally been floated free.
It all started back in October 2005, when Hurricane Wilma wrenched the 158-foot Legacy from its moorings and tossed it into a federal sealife sanctuary, where it stuck in the mud like a majestic marine statue. (At low tide the water barely covered my ankles.) The ship's owner, Florida businessman Peter Halmos, got into a prolonged tussle with Washington bureaucrats over the best way to salvage it without damaging the surrounding salt flats. In the meantime, Halmos and his crew rented a group of houseboats, lashed them together, and anchored a mile away, taking up permanent residence in Man O' War Channel to protect his ship.After two years of arguing, everyone finally agreed on a salvage plan this winter. A company named Byrd Salvage brought in a barge, the Helen B. , which used two 80-ton pulling cables to drag Legacy off the flats into open water. To minimize damage to the sanctuary, enormous underwater pumps were used to belch sand and mud into the trench the yacht created as it lurched along its three-mile journey through a line of special "turbidity" curtains, which prevented all that churned-up sediment from spreading across the flats. Legacy finally floated free on February 25.
The original Vanity Fair story sparked a flurry of follow-up articles around the world, but Legacy 's removal has gone mostly unnoticed outside Key West. For now, the yacht remains anchored offshore. Halmos, who was planning to search for a sunken Spanish galleon at the time of his shipwreck, remains in his self-styled "Aqua Village," happily laying plans to refit the ship. Knowing Peter, a hardheaded, ambitious sort, he'll be up and running and looking for treasure again before you know it.
Bryan Burrough
Special correspondent.
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After 2 Years Aground, Yacht to Be Freed
KEY WEST | Looking like Noah's Ark after the flood, a sleek, 158-foot yacht driven aground by a hurricane lies just offshore, mired for most of the past two years in a dispute with the government over how to free it without doing too much damage to the seagrass.
Through it all, the boat's owner, Peter Halmos, has stubbornly insisted on staying aboard or living close by on a cluster of houseboats so he can guard his beloved Legacy against pirates and thieves plying the calm waters off Key West.
A Hungarian emigre who made a fortune selling theft protection to credit-card holders, Halmos estimates he is spending more than $1 million a month maintaining the houseboats and moving the Legacy, which is finally - though slowly, very slowly - being pulled free.
"After two years, you kind of get numb to it. It used to make me physically sick," said Halmos, who bought the boat in 1995 for $16 million.
Plastered with "No Trespassing" signs, the sailing yacht with a gleaming white bridge sits upright in less than a foot of water about two miles offshore, a tattered American flag flying above.
Its mast and boom are gone, its dark-blue hull is scuffed, its wooden deck weatherbeaten.
But the hull is intact and Halmos says it will float.
Halmos, who is in his early 60s, was aboard the Legacy with six others when Hurricane Wilma struck in October 2005.
Instead of heading out for the open sea, he decided to drop anchor and ride out the storm near shore.
But the anchors did not hold, and Wilma repeatedly lifted the boat and slammed it down. Everyone donned lifejackets.
"I don't know how the boat held together," Halmos said. "I thought, 'Just end it.'"
When the storm had passed, the Legacy was aground miles away from where it had anchored, stuck in the sand in a federally protected area where sensitive varieties of seagrass provide a habitat for fish.
If Halmos were simply to drag the Legacy out, it would damage the grass and he could be hit with millions of dollars in fines.
But for months, Halmos and the National Oceanic and Atmospheric Administration were unable to come to terms on a plan to remove the Legacy.
NOAA special counsel Craig O'Connor said that there were "misunderstandings and miscommunication," and that some of the early removal suggestions appeared too damaging to the environment.
"Our people wanted to be sure they understood what Peter was doing," O'Connor said. He added: "Aside from the fact that Peter is a colorful person, I find him to be a person of high integrity. We could be dealing with somebody who could care less about the environment."
The two sides finally came to an understanding in January - Halmos will have to replant the damaged seagrass at his own expense. But then they had to work out the details of the plan to extricate the boat. And then a diving company had to specially make a pump.
Finally, in mid-September, workers from a salvage company began operating a machine that uses powerful streams of water to cut into the sea bottom in front of the Legacy. A boat hundreds of yards away is using a large winch and two heavy cables to pull the Legacy into deeper water.
The work is said to be going well, though the Legacy is moving only about 10 feet per day. With a total of about 1,300 feet to be covered, the job will take several weeks.
"There's been some red ink that last couple of years. Luckily, I have enough zeros after my name that I can absorb it," Halmos said.
After the wreck, Halmos, his captain and two crew members stayed aboard the Legacy for six months. Later, they began staying on eight lashed-together houseboats nearby, while Halmos' wife continues to live at the couple's house in Palm Beach County.
"There's lunatics who come out here and try to go aboard, and I have to come out here and tell them that I'm going to blow their heads off," Halmos said.
But given the beauty on and around his houseboat - fish swimming near the surface, a gaggle of cormorants, seagulls and pelicans, the salty smell of the ocean mixing with the scent of sweet jasmine - it is not at all certain Halmos will leave once the Legacy has been freed.
"People who spend some time out here genuinely feel there's a healing aspect to it," he said. "I'm sensing there's something meaningful here. I can't see myself resuming the life I had onshore. I can't even envision it."
Yacht free after two years
Legal issues trapped legacy.
KEY WEST - Looking like Noah's Ark after the flood, a sleek, 158-foot yacht driven aground by a hurricane lies just offshore, mired for most of the past two years in a dispute with the government over how to free it without doing too much damage to the seagrass.
Through it all, the boat's owner, Peter Halmos, has stubbornly insisted on staying aboard or living close by on a cluster of houseboats so he can guard his beloved Legacy against pirates and thieves plying the calm green-and-azure waters off Key West.
A Hungarian emigre who made a fortune selling theft protection to credit-card holders, Halmos estimates he is spending more than $1 million a month maintaining the houseboats and moving the Legacy, which is finally - though slowly, very slowly - being pulled free.
"After two years, you kind of get numb to it. It used to make me physically sick," said Halmos, who bought the boat in 1995 for $16 million.
Plastered with "No Trespassing" signs, the sailing yacht with a gleaming white bridge sits upright in less than a foot of water about two miles offshore, a tattered American flag flying above. Its mast and boom are gone, its dark-blue hull is scuffed, its wooden deck weatherbeaten.
But the hull is intact and Halmos says it will float.
Halmos, who is in his early 60s, was aboard the Legacy with six others when Hurricane Wilma struck in October 2005. Instead of heading out for the open sea, he decided to drop anchor and ride out the storm near shore.
But the anchors did not hold, and Wilma repeatedly lifted the boat and slammed it down. Everyone donned lifejackets.
"I don't know how the boat held together," Halmos said. "I thought, 'Just end it."'
When the storm had passed, the Legacy was aground miles away from where it had anchored, stuck in the sand in a federally protected area where sensitive varieties of seagrass provide a habitat for fish.
If Halmos were simply to drag the Legacy out, it would damage the grass and he could be hit with millions of dollars in fines.
But for months, Halmos and the National Oceanic and Atmospheric Administration were unable to come to terms on a plan to remove the Legacy.
NOAA special counsel Craig O'Connor said that there were "misunderstandings and miscommunication," and that some of the early removal suggestions appeared too damaging to the environment.
"Our people wanted to be sure they understood what Peter was doing," O'Connor said. He added: "Aside from the fact that Peter is a colorful person, I find him to be a person of high integrity. We could be dealing with somebody who could care less about the environment."
The two sides finally came to an understanding in January - Halmos will have to replant the damaged seagrass at his own expense. But then they had to work out the details of the plan to extricate the boat. And then a diving company had to specially make a pump.
Finally, in mid-September, workers from a salvage company began operating a machine that uses powerful streams of water to cut into the sea bottom in front of the Legacy. A boat hundreds of yards away is using a large winch and two heavy cables to pull the Legacy into deeper water.
The work is said to be going well, though the Legacy is moving only about 10 feet per day. With a total of about 1,300 feet to be covered, the job will take several weeks.
"There's been some red ink that last couple of years. Luckily, I have enough zeros after my name that I can absorb it," Halmos said.
After the wreck, Halmos, his captain and two crew members stayed aboard the Legacy for six months. Later, they began staying on eight lashed-together houseboats nearby, while Halmos' wife continues to live at the couple's house in Palm Beach County.
"There's lunatics who come out here and try to go aboard, and I have to come out here and tell them that I'm going to blow their heads off," Halmos said.
But given the beauty on and around his houseboat - fish swimming near the surface, a gaggle of cormorants, seagulls and pelicans, the salty smell of the ocean mixing with the scent of sweet jasmine - it is not at all certain Halmos will leave once the Legacy has been freed.
"People who spend some time out here genuinely feel there's a healing aspect to it," he said. "I'm sensing there's something meaningful here. I can't see myself resuming the life I had onshore. I can't even envision it."
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Peter Halmos, et al v. Insurance Company of North America, et al, No. 11-16128 (11th Cir. 2013)
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DEEP POCKETS AND HIS 'LEGACY'
Looking like Noah's Ark after the flood, a 158-foot yacht driven aground by a hurricane lies just offshore, mired for almost two years in a dispute with the government over how to free it without doing too much damage to the sea grass.
Through it all, the boat's owner, Peter Halmos, has insisted on staying aboard or living close by on a cluster of houseboats so he can guard his beloved Legacy against pirates plying the waters off Key West.
Halmos estimates he is spending more than $1-million a month maintaining the houseboats and moving the Legacy, which is finally, and slowly, being pulled free.
"After two years, you kind of get numb to it. It used to make me physically sick," said Halmos, who bought the boat in 1995 for $16-million.
Plastered with "No Trespassing" signs, the yacht sits upright in less than a foot of water about 2 miles offshore, a tattered American flag flying above. Its mast and boom are gone, its deck weatherbeaten.
But the hull is intact.
Halmos, who is in his early 60s, was aboard the Legacy with six others when Hurricane Wilma struck in October 2005. Instead of heading out for the open sea, he decided to ride out the storm near shore.
But the anchors did not hold, and Wilma repeatedly lifted the boat and slammed it down.
When the storm had passed, the Legacy was aground miles away from where it had anchored, stuck in a federally protected area where sensitive varieties of sea grass provide a habitat for fish.
If Halmos were simply to drag the Legacy out, it would damage the grass, and he could be hit with millions of dollars in fines.
But for months, Halmos and the National Oceanic and Atmospheric Administration were unable to come to terms on a plan to remove the Legacy.
The sides finally came to an understanding in January. Halmos must replant the damaged sea grass at his own expense. Then they had to work out the details of the plan to extricate the boat, and diving company had to make a special pump.
Finally, in mid September, workers from a salvage company began operating a machine that uses powerful streams of water to cut into the sea bottom in front of the Legacy. A boat hundreds of yards away is using a large winch and two heavy cables to pull the Legacy into deeper water.
The Legacy is moving about 10 feet per day. With a total of about 1,300 feet to be covered, the job will take several weeks.
After the wreck, Halmos, his captain and two crew members stayed aboard the Legacy for six months. Later, they began staying on eight lashed-together houseboats, while Halmos' wife continues to live at the couple's house in Palm Beach County.
But given the beauty on and around his houseboat, it is not at all certain Halmos will leave once the Legacy has been freed.
"People who spend some time out here genuinely feel there's a healing aspect to it," he said. "I'm sensing there's something meaningful here. I can't see myself resuming the life I had onshore. I can't even envision it."
Feet Peter Halmos' luxury yacht, the Legacy, must be moved to unground it.
Feet the yacht is being moved each day, so it doesn't hurt protected sea grass.
Houseboats in AquaVillage, where Halmos is living while the Legacy moves.
Amount Halmos spends monthly to maintain houseboats and move the Legacy.
Amount Halmos paid for the Legacy, which is 158 feet long, in 1995.
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Keeping to his pact owner continues SY Legacys recovery
Nestled in a marina near Key West, not far from where she laid for several years beaten and tattered from Hurricane Wilma in 2005, S/Y Legacy remains under the care of her owner, Peter Halmos, and her recovery remains a work in progress.
It’s been eight years since that fateful day when the 158-foot Legacy, Halmos, then Capt. Ed Collins and crew were sucked out of Key West Harbor and ravaged by Wilma, only to be deposited a mile into the Great White Heron National Sanctuary in three feet of water. Wounds were deep: both masts snapped, windows broken, hull and superstructure gashed. Pockets had to be deeper.
Halmos spent several years and unimaginable resources to get Legacy out of the sand while entrenched in legal, federal and natural constraints. Why?
“Because I made a pact with the boat,” he said recently, relaxing in the shade of the aft deck. “I told Legacy that if she saved us [during Wilma], that I would save her.”
And for a man who has battled federal and local agencies as well as insurance companies and just about anyone else who got in the way, he holds true to the promise he made during a storm that could have well been his last stand.
The root cause of the shipwreck points to the ground tackle. The anchors required 50 percent more weight to be added to them as per the manufacturer, Perini Navi, which was done prior to 2001. But there was no instruction to upgrade the connecting swivels to handle the new loads. In 2001, while anchored off the Intracoastal Waterway in Palm Beach, Legacy’s starboard anchor was fouled by an unmanned vessel adrift, likely compromising the starboard anchor gear.
Halmos contends that due to Wilma’s speed and resurgence as it came off the Yucatan Peninsula, making a beeline for the continental U.S. with Key West its first stop, Legacy couldn’t outrun it.
When Wilma hit in late 2005, Halmos and crew were on Legacy, anchored in Key West Harbor during an expedition for Spanish treasure. As the storm bore down, the starboard anchor failed when the winds were about 60-70 knots. Thinking they were just dragging, Capt. Collins powered up to try and reset the anchor, to no avail. In addition, the strain to the port anchor gear was too much and that swivel failed also.
By then it was too late to abandon ship. A call to the local Coast Guard station for assistance came with the reply to “have everyone on board write their social security number on their arm to help us notify next of kin,” Halmos said.
Legacy’s anchors have not been recovered, despite efforts, and remain somewhere near Key West.
Legacy sat on the flats two and a half years until, in February 2008, the idea to dig a trench deep enough for the 11-foot-draft yacht to float out on. But since the area is under federal protection, Halmos couldn’t damage more of the sanctuary and instead had to “go out the way you came in,” a mile-long path through the seagrass. Even as the trench finished, Legacy remained in place while legal issues were debated. In June 2010, she motored out and headed to the Bahamas.
Time has changed Halmos’ attitudes, perspectives and goals. Now 70, and with most of the court proceedings behind him, he waxed philosophical regarding what the entire event has done to him. He doesn’t consider Legacy an inanimate object. Basically, Halmos offers the understanding that Legacy is essentially an extension of him. And to restore her is “the right thing to do,” he said.
His days of high adventure and sailing the Seven Seas are behind him, as he’s more akin to sailing locally, “maybe a run to the Tortugas or Caribbean, or just anchor out off of Key West,” he said.
Looking trim after dealing with a few health crises over the past few years, Halmos has a renewed outlook on life, albeit at a slower pace.
“I’m more a part of the environment,” he said, and rightly so, as he lived aboard Legacy and then the Aqua Village he constructed to oversee Legacy’s recovery. Aqua Village was a series of as many as eight houseboats and barges rafted together and anchored a few miles from where Legacy grounded. Halmos spent the majority of the recovery time living there.
During those years, he learned to identify specific birds and fish, not only by species, but individually. He would go on afternoon junkets to quiet shallows, jump in the water and be engaging with the fish so much that at times they would follow him. Sometimes, he’d feed the barracuda that befriended him.
Per doctor’s orders, Halmos stays out of the sun, hence the fabric tarps that cover the fore and aft decks as well as his signature floppy hat.
“I could just sit here, listen to the waves and enjoy the breeze,” he said as several hammocks swung with the yacht’s motion on the upper deck.
Sitting around the aft deck table, Halmos shared an update on Legacy’s restoration. He’s added battery systems, extra bilges, a solar system and water generators, not to mention the restoration of the engines and interior.
“We’ll put her back to what she should be, but she is an 18-year-old yacht, and systems need to be replaced, like AC units and generators,” he said.
Built of fine mahogany, the interior woodwork was awash in saltwater from the storm. Bringing it back to its original luster has been an effort but is paying off.
“We still have spots to fix,” Halmos said as he showed a window frame and evidence of corrosion in the corner. One area that still needs attention is the inside helm station. Several of the windshields are shattered and finding the exact, properly curved glass panes has been, well, a pain.
And it may be some time before Legacy is once again sporting her 146-foot main and 120-foot mizzen masts, or her 10,650 square feet of sails. But with a capacity of 11,000 gallons of fuel and her twin 12V MTUs, Legacy has gotten out a bit, motoring up to Palm Beach during the boat show a couple years ago.
Capt. Collins has since retired and returned to his family in the U.K., so Halmos had to find another captain, the one who worked on Legacy from 1995 to 2003. In 2010, Capt. James Cooper returned to help Halmos with his efforts, which included a transit to Bradford Grand Bahama to have the hull repaired, new rudder installed and stabilize the keel. Halmos beamed speaking about Capt. Cooper.
“We had a wonderful time [on Legacy] and he loves her,” Halmos said.
Capt. Cooper is currently the only full-time crew onboard, though Halmos pulls in dayworkers as needed as well as local trade professionals to handle big work.
Halmos’ family has mixed feelings about the yacht. His son Nick was recently onboard with his fiancé and seems to be the one likely to carry on the legacy. At home fishing or skipping across the surface to his next waterborne adventure, Nick may be displaying traits a younger Halmos once had.
Legacy has become the platform in a way for father and son to spend time together. His other son and wife aren’t interested in the “Robinson Crusoe” lifestyle, he said.
Legacy’s resting spot after Wilma has been cleaned of all debris and the trench that was dug to release Legacy from the shallows has refilled. The houseboats of Aqua Village are gone, and any outward signs of the shipwreck are now in the stories that may be told around town.
The legal program, as Halmos explained, wasn’t about money in the end; he was paid from the insurance policies. It was about what he had to go through to get to the end.
“We could have decreased the amount of damage and impact if the policy was settled on time,” he said.
Halmos said he hopes to get her out exploring a bit again soon.
“We’ll get out and do some treasure hunting again,” he said, pointing to a few large boxes filled with sonar gear. He may not be another Mel Fisher, but then again, Peter Halmos doesn’t pretend to be anyone other than himself.
Would he ever sell Legacy?
“I’m content here and can’t sell her,” he said. “She’ll need a home someday, but I can’t see it yet.”
Capt. Tom Serio is a freelance captain, writer and photographer in South Florida. He is a frequent contributor to The Triton and has written extensively about Legacy and her recovery. Comments on this story are welcome at [email protected] .
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How S/Y Legacy wound up stuck in the tidal flats in the Florida Keys National Marine Sanctuary is a gripping tale that never seems to end. Since Hurricane Wilma tossed the 158-foot Perini Navi vessel into the federally protected marine preserve near Key West in 2005, owner Peter Halmos has spent millions of his own money to free his shipwrecked superyacht from the seaweed. Eight years later , Legacy sits very near where she was once, seemingly, hopelessly stuck as Halmos appeals his case against the insurance company over the boat’s agreed value policy.
Why did it take two-and-a-half years to drag a hurricane-ravaged megayacht back out the 5,000-foot track to the channel that Wilma blew it into, only to have it remain a mile from whence it came for more than another year?
Even the fictitious, half-wit Gilligan and the Professor could have rigged a coconut-conch contraption to rock the boat more quickly.
While Halmos searched for the Spanish galleon Atocha’s trove of gold bullion, Legacy became caught in a toe-curling hurricane that nearly killed him and his crew and actually planted his yacht with her keel stuck in mere inches of seagrass and substrate. Inches might as well have been a mile.
This bizarre, but true, tale has had every strange turn imaginable. Halmos’ odyssey is the harrowing tale of a boat owner who just wouldn’t quit in spite of catastrophic nautical inconvenience. Halmos battled heroically to free his shipwreck from inches of sacred seagrass. Yet the heralded floatation on Feb. 24, 2008, passed with all the fanfare of a damp cornflake. On her 851st day of captivity, Legacy left her entrenchment in Key West’s Calda Channel, unnoticed, while Byrd Salvage literally shifted critical mass, pulling her to freedom.
An Act of God
The yacht’s rigging collapsed during Wilma, crashing starboard onto the bridge. The yacht had 400 feet of line on the two main anchors and a midship anchor that allowed Legacy to swing 360 degrees with the winds. Then she lost holding. Halmos later discovered that the top and bottom parts of both main anchors had inexplicably separated – despite being American Bureau of Shipping classed with their annual survey completed only months earlier.
“The anchors didn’t drag, they split in two,” Halmos says, displaying the chains and what’s left of the anchors. “Both anchors came apart in the same place.”
As Legacy was dragged out to sea, the waves grew to 25 feet. Incoming water forced the crew to shut down power. Halmos wasn’t sure if they would sink from the water coming in, flip or fall apart, but the steel hull held. This nightmare lasted hours until the yacht was dragged over the tidal flats, hitting ground with tremendous impact followed by shudders. The fallen rigging was a godsend, the weight slowed Legacy’s progress to sea just long enough for the hurricane to pass. Then the winds turned and blew the yacht into the safe, shallow waters of the Sanctuary.
When she finally stilled, the yacht was completely upright. In the morning’s 60-knot winds, unable to see land or the sea bottom, Halmos taped a hammer onto a PVC pole and lowered it into the water to check the depth. The hammer fell off and stuck upright.
“That’s when I knew we would make it,” Halmos says. “The act of god wasn’t Wilma. Legacy was gently placed upright and everybody’s safe. To be in the sand and sitting upright, there is no explanation for that.”
Halmos, 70, is a non-attorney partner in a Washington, D.C.-based law firm. He dons a T-shirt and shorts, barefoot with a broad brimmed hat sheltering him from the Keys’ harsh rays. He applies sunblock constantly, especially lip balm. It’s bright white and outlines his lips with a Ronald McDonald caricature likeness. His eccentricities include his individual crusade to right the world’s wrongs.
That sounds like suave rhetoric for being litigious, but Halmos put depth behind his convictions, grabbing an old, worn copy of Aesop’s Fables, the moral ditties written by a freed, Greek slave in 600 B.C. As he thumbed its weathered pages, I could tell he’d read the book over and again.
“When you violate one person’s rights, you risk violating everyone’s rights,” Halmos says. “People understood this 3,000 years ago. A slave had no rights, but everyone’s rights are worth fighting for, for everyone, not just yourself. Unfairness and injustice is probably the cause of most every human adverse conduct.”
“People go along with unfairness,” he continues, “because it’s in best their interests. If I can’t satisfy my interests on my own merits without being unfair to anyone, I deserve to have my interest dissatisfied. What if it happened to you? It’s not something to turn your back on.”
The Removal
A custom-made pump developed by Byrd Salvage sliced an 11-foot hole underneath the yacht. Dragging the boat out was the third plan approved by the Natural Resource Damage Assessment and Restoration Division after tedious negotiation with the National Oceanic and Atmospheric Administration to reduce environmental impact and liability.
“The pump’s high-pressure water jets combined with its remote-controlled movement surgically ‘cut’ the seabed rather than sucking with brute force. Think laparoscopy as compared to a hatchet,” says Halmos.
Two 80-ton rated pull cables from Byrd Salvage’s Helen B barge led her to free water. Byrd’s prototype submersion pump excavated and deposited sand/mud substrate in the trench directly aft of the yacht as she was pulled. A hose connected to the pump’s dome routed the substrate to a ‘parking’ area.
When Legacy was removed, the substrate was pumped back, refilling the hole in leapfrog fashion. Miles of turbidity curtains skirted the operation so sediment wasn’t distributed over the seagrass. Halmos fronted the removal costs, which ran about $1.5 million per month.
For six months, Legacy was dragged for one mile into the Gulf of Mexico’s open waters to the entrance of the Northwest Channel, then into Man O’ War Channel. Basically, she made a huge loop two miles from where she started.
While the vessel may be free from the mud, she is now entangled in legal wrangling with the insurance company .
Halmos sued Insurance of North America for not paying all his claims and lost. He appealed, requested a jury trial and lost. At press time, Halmos filed a request to rehear with the 11th Circuit Court and says the last step is the U.S. Supreme Court. As he bangs out e-mails to his army of lawyers, Halmos lives on his beloved and partially refurbished boat, which is once again habitable.
“The more I spend on Legacy, the bigger the problem,” Halmos says. “On one hand, the insurance company wants to cut their exposure and not pay another cent on Legacy, and they also want to argue that they own her. It’s diabolical. That’s why she’s still sitting there. I can’t move her.”
The insurance company initially indicated that Legacy was a total loss, Halmos says, but later included a clause in a renewal policy that reserved their right to argue an agreed value policy, which essentially means that if the insurance company pays the $16 million policy limit on the boat – a vessel in which the insurance company once said it had no further financial interest in – the insurance company is legally allowed to take possession of the vessel that is considered a total loss.
“The insurance company knew in October 2005 that the cost of repair was over $16 million (the value of the policy) and that she was a total loss. I said, ‘Give me a check, but they didn’t.’ Three years later, they admit what they knew three years earlier,” Halmos growls.
Halmos says the insurance company earned $4 million in interest during the three years they avoided paying Halmos’ $16 million policy, one that he had tried to increase the value on prior to Hurricane Wilma due to warranty work, a third set of sails, and other work that increased her value. The yacht originally cost $14 million.
Representatives from ACE Insurance Company, a Swiss holding company headquartered in Bermuda that is the parent company of INA, did not immediately return calls.
Halmos’ latest set of appeals for a jury trial is his sixth such request after enduring a bench trial by the magistrate who became both fact-finder and mediator. Halmos’ appeal claims his lawsuit was never filed in admiralty court but still wound up there. He also argues the vessel’s agreed value policy and what actually constitutes the bitter end of a salvage operation.
In the bench trial, INA counterclaimed and prevailed that the vessel’s insurance policy coverage was invalid in the first place after already paying Halmos several million in removal costs.
The magistrate said Halmos committed fraud by failing to disclose an aged list warranty claims sent to Perini Navi that were benign to the issue of seaworthiness (i.e. paint blistering/fairing problems allegedly resulting from the manufacturer not following the specifications). These gripes to the manufacturer, according to the magistrate, purport Legacy to be unseaworthy – in spite of the vessel having been thoroughly inspected by the insurance company surveyor who then raised her coverage by $2 million before Wilma.
In addition, INA proved successful in its counterclaim to not pay salvage costs once Legacy was movable via tow, in spite of the fact that damage to her downed keel, collapsed rigging and three year deterioration in the mud rendered her inoperable under her own power to really get out of harm’s way and avoid hitting submerged pipelines in a protected area.
Halmos has two tips for boat owners filing an insurance claim.
He says the insurance company only keeps a certain amount of coverage and then reinsures with another company who’s calling all the shots – a company with which you have no contract.
1) “The first thing is to assume you’re going to get screwed,” Halmos says. “Don’t believe their [insurance company’s] crap. That ‘we’re here to help you and are on your side’ is all bull.”
2) The second thing is to hire a lawyer right away.
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