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Geigo Properties, L.L.P. v. R.J. Gators Real Estate Group, Inc.
Citations: 849 So. 2d 1109; 2003 Fla. App. LEXIS 8988; 2003 WL 21396452Docket: No. 4D02-2441
Court: District Court of Appeal of Florida; June 18, 2003; Florida; State Appellate Court
The trial court determined that the use of a shell corporation, R.J. Gators Real Estate Group, Inc., to lease space for a restaurant did not amount to improper conduct justifying the piercing of the corporate veil, especially after the corporation abandoned the premises and an uncollectible judgment of $37,500 was entered against it. Reginald Timoteo, who owned multiple restaurants through various corporations, had R.J. Gators Real Estate Group, Inc. incorporated in 1995 for a failed real estate purchase. The corporation remained inactive until 1999, when it signed a lease with Geigo but subsequently failed to occupy the premises, make further payments, and abandoned the lease. Geigo attempted to pierce the corporate veil to collect from Timoteo or another corporation, citing the lack of R.J.'s business activities, such as having no assets, no bank account, and no income reported on its tax returns. The trial court found that Timoteo made a legitimate business decision to open a restaurant elsewhere and that R.J. was neither organized to evade creditors nor engaged in improper conduct. Geigo's reliance on precedent cases, such as USP Real Estate Investment Trust v. Discount Auto Parts, Inc. and Ocala Breeders’ Sales Co. v. Hialeah, Inc., was deemed misplaced as those involved corporations that were actively operating businesses and thus violating lease agreements. The court concluded that merely using a shell corporation for a lease and subsequently breaching it did not constitute the necessary improper conduct to pierce the corporate veil. The trial court's decision was affirmed with judges GROSS and TAYLOR concurring.