CONSTRUCTION  LAW CORNER

May 2009

By Stephen Gebeloff, Esq.

Stephen B. Gebeloff, P.A.                 

Boca Raton, FL

 Q:          My engineering firm prepared site plans for a project under direct contract with the owner, an out of state corporation. The contract was executed by one of the officers of the corporation in Florida but, not in a corporate capacity. The project broke ground. However, a month later the project stopped.   Subsequently, I found out that the corporation was never registered in Florida.  The corporation now appears to be out of business. Is there anything I can do to attempt to collect our money?

 A:            It is unfortunate that the project came to a halt.  As you are aware today this appears to be the norm rather than the exception.   Because the corporation was not registered in Florida,   and was doing business in this state, you could assert cause of action against the officer personally.  You would claim that the officer could not seek to hide behind a corporation not recognized under Florida Law. Thus, you would be going after Joe Owner trading as XYZ Development Corp. The officer may try to retroactively register the corporation, but the defense should fail.

Once you establish possible liability, an analysis must be done to determine whether pursuing the officer may be cost effective; most likely there are more creditors out there. However, not all creditors will look for alternative legal theories of recovery and just write off their account as bad debt. It is important before writing off a debt to consider alternative avenues. Remember each case is different and should at least be preliminarily explored.

 

The advice given in this article is for informational purposes only. Each case has its own set of fact patterns and there always exceptions to the general rule.  You should always consult an attorney to discuss the circumstances surrounding your case.  If you would like to discuss any issue contained in this article or have a question pertaining to construction law,   Contact Stephen Gebeloff, Esq. (561)953-4600  or steve@gebelofflaw.com

Mr. Gebeloff is an experienced litigator with the firm of Stephen B. Gebeloff, P.A. in Boca Raton. His primary areas of practice are commercial law, creditors’ rights and construction law. He has extensive experience prosecuting officers, directors and members of entities for fraudulent transfers of assets. He has represented developers, property owners, contractors, subcontractors, material suppliers and design professionals in all facets of construction and debt collection law.