Leila Corp. of St. Pete v. Ossi

138 So. 3d 470, 2014 WL 185202, 2014 Fla. App. LEXIS 449
CourtDistrict Court of Appeal of Florida
DecidedJanuary 17, 2014
DocketNo. 2D12-6105
StatusPublished
Cited by2 cases

This text of 138 So. 3d 470 (Leila Corp. of St. Pete v. Ossi) 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
Leila Corp. of St. Pete v. Ossi, 138 So. 3d 470, 2014 WL 185202, 2014 Fla. App. LEXIS 449 (Fla. Ct. App. 2014).

Opinion

ALTENBERND, Judge.

The Appellants, the Leña Corporation of St. Pete; Susan J. Agia, individually and as trustee of the Susan J. Agia Living Trust; and Dr. Raymond Agia, appeal a final judgment, which the Appellees, Far-eed Ossi; Ossi Consulting Engineering, Inc.; and Ossi Construction, Inc., also appeal. The trial court entered a final judgment on numerous claims and counterclaims. It denied relief to all parties seeking affirmative relief on a theory that all claims were barred by the doctrine of unclean hands. We conclude that the trial court erred in deciding that the claims were all barred by this doctrine. We doubt that any of the claims are barred by this doctrine. Accordingly, we reverse the judgment on appeal and remand for further proceedings.

I. THE CONDOMINIUM DEVELOPMENT AND RESULTING LAWSUIT

The facts in this case are quite complex. The explanation of the facts in this opinion is intended to explain our holding; it may exclude details that would be important to the trial court in ultimately deciding the various claims on remand.

In 1976, Dr. Agia purchased undeveloped land in St. Pete Beach, Florida. In 1993, he transferred this land to an irrevocable trust, the beneficiaries of which were his two daughters. His wife Susan Agia was the trustee of this irrevocable trust. Despite this transfer, it appears that Dr. Agia may have maintained practical, if not legal, control over this property and over the decisions to develop the property.

Fareed Ossi worked with Dr. Agia beginning in the 1990s to develop this property. This working relationship was . not adequately documented by written employment contracts or partnership agreements. Mr. Ossi prepared plans for a condominium development known as the Cabrillo Condominiums. Some of this work was performed by his corporation, Ossi Consulting Engineers, Inc.

In 2005, the Leila Corporation was formed to be the owner and developer of this property. The corporation purchased the land from the irrevocable trust for $5,850,000. Some of the money to purchase the land was borrowed from a bank by the Leila Corporation. The corporation apparently also gave a promissory note in the amount of $2,850,000 to the irrevocable trust to purchase the land. This loan was guaranteed by Mr. Ossi.

Dr. Agia had no ownership interest in the Leila Corporation. As a legal matter, it would appear that he had had no ownership of any part of this development after he transferred the land to the irrevocable trust in 1993. The Leila Corporation, as a stock corporation, was seventy-five percent owned by Susan Agia and twenty-five percent owned by Mr. Ossi. The two shareholders entered into a written shareholders’ agreement. Mr. Ossi was president of the corporation and contributed an initial $125,000 to its capital. Susan Agia contributed $375,000 to its capital. Thus, their initial capital contributions aligned [472]*472with their equity ownership in the corporation.

The Leila Corporation entered into a construction contract with Ossi Construction, Inc., which was owned by Robert Ossi, the son of Fareed Ossi, to construct the condominiums. That work was performed primarily in 2005 and 2006.

During the construction of the condominium, there allegedly was a need for additional capital contributions. Mr. Ossi did not or could not make his contributions, and Mrs. Agia advanced money in addition to her own contributions to cover the shortfall. When the units were ready to be sold, allegedly Dr. Agia and his wife purchased one of the units for fair market value and the other units were available for sale to the public. The timing of the completion of this condominium development unfortunately coalesced with a downturn in the real estate market. The result was a long list of disputes between and among these parties. Because Dr. Agia and Fareed Ossi seemingly had strong influence over their respective families, the litigation took on the appearance of a family feud between the Agías and the Ossis.

Without attempting to describe every claim in the lawsuit, Fareed Ossi sued to dissolve the corporation and obtain an accounting. He also sought damages of more than $500,000 from Dr. Agia and his wife. Ossi Consulting Engineers sought $322,050 from Dr. Agia for services allegedly rendered on an oral contract to provide construction administration services. Susan Agia sought damages against Far-eed Ossi for the capital contributions that she made on his behalf. The Leila Corporation sought damages from Fareed Ossi both in his capacity as an officer of the corporation and for alleged professional negligence. The Leila Corporation also sought damages from Ossi Consulting Engineers for breach of the oral contract for construction administration and for professional negligence. Finally, Ossi Construction sued the Leila Corporation for the unpaid balance of the construction contract, and the Leila Corporation counterclaimed for damages arising from construction defects. By our count there were seven different legal parties seeking relief for, against, or among one another. Although the interests of each party seem distinct to this court and this dispute probably could have been severed into several separate lawsuits, it was tried with one law firm representing the parties associated with the Agia family and another law firm representing the parties associated with the Ossi family.

At the end of the nonjury trial, the trial court entered a final judgment denying relief to every party seeking relief based on a determination that all claims were barred by the doctrine of unclean hands arising from actions taken by Dr. Agia in connection with an automobile accident.

II. THE AUTOMOBILE ACCIDENT

In 2004, Dr. Agia was in an automobile accident. He apparently was at fault in the accident and someone died. He was concerned that his insurance coverage was inadequate and that he might have personal liability for the accident. He was sued as a result of the accident, but our record contains no information about the outcome of that case. Because of his concern, Dr. Agia was hesitant to have assets in his name alone that could be used to satisfy a judgment. Apparently, the decision to have the stock in the Leila Corporation owned by Susan Agia was influenced by Dr. Agia’s concerns.

At the time the corporation was created, Dr. Agia had not been sued for the accident. It was only a possibility that a judgment might eventually be entered against him. No asset owned by Dr. Agia that could have been used to satisfy any [473]*473future judgment was placed into the corporation. We do not know whether Dr. Agia owned the car involved in the accident, but if he owned it jointly with his wife, the stock of the Leila Corporation actually created an easy asset against which to collect a judgment.

Even if the corporate structure was created to permit Susan Agia to use funds in a jointly owned bank account to fund the construction of the condominiums, that plan would not appear to defraud creditors or to be unlawful in any manner.

III. THE DOCTRINE OF UNCLEAN HANDS CANNOT BAR ALL CLAIMS

We note that the doctrine of unclean hands was not raised as a defense to all claims, although it was raised in a generic fashion as a defense to a portion of the claims. The trial court seems to have gravitated toward this defense for all claims due to the amalgamated fashion in which the case was tried.

As explained in the preceding section, the steps taken by Dr.

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Related

The Leila Corporation of St. Pete v. Ossi
144 So. 3d 644 (District Court of Appeal of Florida, 2014)

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Bluebook (online)
138 So. 3d 470, 2014 WL 185202, 2014 Fla. App. LEXIS 449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leila-corp-of-st-pete-v-ossi-fladistctapp-2014.