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Tycoon Nicolas Estrella drops $3 million insurance claim for his Key Biscayne yacht

Key Biscayne tycoon Nicolas Estrella on Tuesday gave up on his increasingly difficult claim to collect $3 million for the loss of his sunken yacht off the Bahamas more than three years ago.

Estrella’s lawyers informed U.S. District Judge Kathleen Williams that they were voluntarily dropping his lawsuit against Federal Insurance Co. because of their belief that he could not obtain a fair civil trial set for early November.

Estrella, 60, whose fortune is built on an auto insurance company named after him, was not in the courtroom Tuesday. His lawyers made their decision only after the judge refused their request to delay the civil trial until a parallel state criminal insurance fraud case against Estrella’s former boat captain, Robert Figueredo, is resolved.

Figueredo faces trial on insurance fraud charges stemming from his alleged theft of Estrella’s 85-foot Azimut yacht, Star One, from his Key Biscayne property on May 3, 2009.

Two of Figueredo’s boating buddies, Eric MacKenzie and Jose Caballero, have been convicted in the state case after admitting they helped steal Estrella’s yacht and scuttle it in a deep trench off the Bahamas. It was recovered partially submerged near Andros Island.

MacKenzie also gave a sworn statement in the state case, saying he was told by Figueredo that Estrella directed Figueredo to sink the vessel to collect the insurance money in exchange for a percentage of the payout. Estrella has not been charged with any wrongdoing.

Had the civil insurance dispute gone to trial, MacKenzie and Caballero planned to testify for Federal Insurance against Estrella. Figueredo was expected to invoke his Fifth Amendment right not to testify at that trial, according to lawyers in the case.

Nicolas Estrella’s son, a lawyer who goes by the same name and now runs his company, sat through the proceeding in federal court Tuesday, but said nothing. Estrella’s main civil attorney, who consulted with his client by phone during a break in the hearing, later issued a statement.

“Mr. Estrella’s repeated efforts to go to trial were frustrated by events beyond his control,” attorney Robert Burlington said in the statement. “He asked to go trial immediately after his former captain’s criminal case is over so that he would have the benefit of testimony that is not available to him today.

“He wanted a fair fight but, as he shared with me: ‘Life’s too short and I can’t wait forever. I’m putting this behind me.’ I understand and respect his decision.”

As the controversial case headed for trial, Federal Insurance’s lawyers asserted that Estrella plotted with his former boat captain and the two other men to sink his boat, saying it was an “intentional scuttling.” Estrella owned the boat outright, but had struggled to sell it.

Federal’s main lawyer, Christopher Fertig, said Estrella’s suit seeking payment of his $3 million claim was filed in “bad faith,” and that he plans to seek upward of $290,000 in costs and undetermined legal fees following his client’s victory.

Among those costs: hauling Estrella’s yacht from the Bahamas to Miami, storage of the vessel at a boatyard on the Miami River, and other marine services. Also included were $45,000 in expenses related to the legal fight with Estrella.

Estrella’s attorney said that, with voluntary dismissal of the case, his client is only responsible for Federal Insurance’s court costs.

As for the status of Estrella’s yacht: Star One is no longer seaworthy, but it still might fetch hundreds of thousands of dollars.