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petitioner did not independently investigate what those
restoration costs might be.
Neither petitioner, any members of petitioners’ family, nor
Norman had any experience buying, owning, selling, operating, or
chartering yachts.
On March 1, 1990, without going to Florida to see and
inspect the Feadship, petitioner signed a written contract to
purchase the Feadship for $1.625 million. On the next day,
petitioner signed an addendum to the purchase contract restating
his purchase price for the Feadship to be $1.3 million. At the
time petitioner signed the purchase contract, he made a cash
downpayment of $100,000 to Boats, Yachts & Ships. Petitioner was
to pay the balance of the purchase price at closing.
In the above written contract, the stated owner and seller
of the Feadship was Boats, Yachts & Ships, Mogul’s yacht
brokerage firm located in Florida. On March 1, 1990, however,
Boats, Yachts & Ships did not actually own the Feadship. Rather,
Boats, Yachts & Ships apparently purchased the yacht on May 30,
1990, for a stated purchase price of $1 million, pursuant to a
contract entered into on or about March 28, 1990, with the former
owner of the Feadship.
The former owner of the Feadship also paid Boats, Yachts &
Ships a “commission” of $245,620.50, apparently in connection
with the sale of the Feadship to petitioner.
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