Demir v. Schollmeier

199 So. 3d 442, 2016 Fla. App. LEXIS 13180, 2016 WL 4536453
CourtDistrict Court of Appeal of Florida
DecidedAugust 31, 2016
Docket15-0213
StatusPublished
Cited by5 cases

This text of 199 So. 3d 442 (Demir v. Schollmeier) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Demir v. Schollmeier, 199 So. 3d 442, 2016 Fla. App. LEXIS 13180, 2016 WL 4536453 (Fla. Ct. App. 2016).

Opinion

LAGOA, J.

Appellant, Tulga Demir (“Demir”), appeals the trial court’s final order granting summary judgment in favor of Appellee, Georg Schollmeier (“Schollmeier”), on Count I of his complaint. Because the agreement governing the parties’ financial contributions made to Avrupa, LLC (“Av-rupa” or “the company”) precludes liability against Demir individually, we reverse the final judgment award assessed against him.

I. FACTUAL & PROCEDURAL HISTORY

Demir formed Avrupa for the purpose of managing and operating a night club on Miami Beach known as “Club Sin.” On January 3, 2007, Schollmeier, Demir’s personal friend, entered into an agreement with Demir and Demir’s brother, Tugend, titled the “Avrupa, LLC Contribution Agreement” (the “Agreement”), which contemplated that the three would become members of Avrupa. Pursuant to the Agreement, Schollmeier was to contribute $400,000.00 to Avrupa for a 20% interest in the company, and Demir and Tugend were to contribute $1,000,000.00 each, for 40% interests in-the company. Section 6(a) of the Agreement stated that “[cjoncurrently with the execution of this Agreement, the Members are making ... contributions to [Avrupa], which will constitute capital of [Avrupa]” and that “[c]ontributions can be made to Avrupa’s LLC’s bank account.” Section 3 of the Agreement also provided that “Schollmeier may decide to withdraw from ownership of [Avrupa], in which case Schollmeier’s contribution of $400,000.00 *444 U.S. shall be reimbursed.” Additionally, section 1 of the Agreement, which was titled Limited Liability Company Agreement, stated “[t]his Agreement is a limited liability agreement under and as provided in the Act,” 1 The Agreement was signed by Demir, Tugend, and Schollmeier as “the Members” of Avrupa.

In January 2007, Schollmeier wired $375,000.00 into Avrupa’s bank account. 2 Club Sin opened in early February 2007 and closed on March 29, 2007. On May 31, 2007, Schollmeier sent Demir notice of his election under the Agreement to withdraw as a member from the company, demanding that Demir wire $400,000.00 into Schollmeier’s bank account. After Demir failed to wire Schollmeier the funds, Schollmeier filed a four-count complaint against Demir and Tugend 3 on April 20, 2009, seeking $400,000.00 in damages for breach of contract (Count I), breach of fiduciary duty (Count II), breach of statutory duty of loyalty and care (Count III), and accounting (Count IV). In his answer, Demir denied, inter alia, breaching the Agreement and. asserted the following affirmative defenses: “estoppel,” “the doctrine of unclean hands,” and “assumption of risk.”

On August 29, 2014, Schollmeier filed a motion for summary judgment as to Count I of the complaint, claiming that no genuine issue of material fact regarding whether Demir breached the Agreement and caused Schollmeier $375,000.00 in damages. Demir filed a response in opposition to summary judgment, asserting that factual disputes did, in fact, remain as to whether he was personally liable to Scholl-meier for his contribution to Avrupa. De-mir subsequently filed a motion for leave to amend his answer and affirmative defenses to include this argument, as well as proposals for settlement as to Counts II, III, and IV of the complaint, which Scholl-meier later accepted.

On December 12, 2014, the trial court granted Schollmeier’s'motion for summary judgment, finding that Demir was personally liable to Schollmeier for breaching the Agreement. Five days later, on December 17, 2014, Demir filed a motion for judgment on the pleadings, asserting that the trial court failed to join Avrupa as an indispensable party. The trial court denied both Demir’s motion for leave to amend his answer and affirmative defenses and his motion for judgment on the pleadings. Final judgment was entered against Demir personally on January 13, 2016. This appeal followed.

II. STANDARD OF REVIEW

The standard of review for an order granting summary judgment is de novo. Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla.2000). Under Florida Rule of Civil Procedure 1.510(c), summary judgment is only appropriate when the “pleadings and summary judgment evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a *445 judgment as a matter of law.” Fla. R. Civ. P. 1.510(c).

III. ANALYSIS

The final judgment against Demir individually as it relates to Schollmeier’s financial contribution to Avrupa is based on the trial court’s determination that the Agreement between Demir, Tugend, and Schollmeier was not a limited liability company operating agreement under Florida’s Limited Liability Company Act (“the Act”), but instead a personal contract solely governing the terms of Schollmeier’s contribution to Avrupa. We disagree.

The record is clear that Demir, Tugend, and Schollmeier set out the parameters of their relationship and its accompanying obligations through the creation of a limited liability company with a governing operating agreement. See § 608.423(1), Fla. Stat. (2007) (“[A]ll members of a limited liability company may enter into an operating agreement ... to regulate the affairs of the limited liability company and the conduct of its business, establish duties ... and to govern relations among the members, managers, and company). Although the parties’ Agreement was not titled an “operating agreement,” nor was it executed at the time Avrupa was established as a limited liability company, the Agreement “could and did otherwise dictate the nature of [the parties’] relationship and the obligations each owed to the others.” Houri v. Boaziz, 196 So.3d 383, 389 (Fla. 3d DCA 2016); see also § 608.423(1), Fla. Stat. (2007) (“The members of a limited liability company may enter into an operating agreement before, after, or at the time the articles of organization are filed.... ”). Indeed, section 1 of the Agreement explicitly stated that “[the] Agreement is a limited liability company agreement under and as provided in the Act.” As we recently stated in Dinuro Investments, LLC v. Camacho, 141 So.3d 731, 742 (Fla. 3d DCA 2014), “limited liability is one of the paramount reasons for forming an LLC.” As discussed below, it is precisely those layers of protection from personal liability that preclude Schollmeier from recovering from Demir individually:

“An operating agreement is á contract.” Dinuro, 141 So.3d at 741. Thus, if Demir owed a financial duty directly to Schollmeier under the terms of the Agreement, Schollmeier could recover under a breach of contract claim and summary judgment would have been proper. “However, unlike a typical bilateral contract, where both signing parties owe duties to one another, operating agreements establish a more complicated and nuanced set- of contractual rights and duties;” Id. Operating" agreements govern the relations among the members, the managers, and the limited liability company itself, as well as the effect of these relations on third parties. See § 608.423(1), Fla.

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Cite This Page — Counsel Stack

Bluebook (online)
199 So. 3d 442, 2016 Fla. App. LEXIS 13180, 2016 WL 4536453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/demir-v-schollmeier-fladistctapp-2016.