ARNOLD L. KANOV, APPELLANT,
v.
JEAN BITZ, M.D., APPELLEE; ARNOLD L. KANOV, APPELLANT, V. MICHAEL BITZ, M.D., APPELLEE
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Arnold Kanov appealed summary judgments dismissing his claims to pierce the corporate veil of K.B. Enterprises, Inc. against two physician shareholders. The court affirmed the dismissal as to Michael Bitz, who was merely an agent of the disclosed corporation, but reversed and remanded as to Jean Bitz, the controlling shareholder, finding genuine issues of material fact regarding whether the corporation was organized or operated for fraudulent purposes.
Summary judgment was properly granted as to Michael Bitz because, as an agent of a disclosed principal, he cannot be held personally liable for the corporation's contract debts absent an express agreement to the contrary. Summary judgment was improperly granted as to Jean Bitz because genuine issues of material fact exist regarding whether the corporate entity was organized or utilized to defraud Kanov, precluding summary judgment disposition of the veil-piercing claim.
[1] Piercing the corporate veil requires proof of "improper conduct" or an unjust purpose, not merely that the corporation was the alter ego of its shareholder.
[2] The alter ego or instrumentality test, previously used for piercing the corporate veil, was rejected by the Florida Supreme Court in Dania Jai-Alai Palace, Inc. …
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Join FLexlaw to unlock all legal intelligence“an agent is not personally liable for the contract debts of a disclosed principal, absent an express agreement to the contrary”
Establishes the legal principle supporting affirmance of summary judgment for Michael Bitz as an agent of the disclosed corporation
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Join FLexlaw to unlock all legal intelligenceArnold Kanov filed a four-count amended complaint against K.B. Enterprises, Inc. and physicians Jean Bitz and Michael Bitz, seeking rescission of an e…
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PER CURIAM.
Arnold Kanov, plaintiff below, filed a four count amended complaint against K.B. Enterprises, Inc., Jean Bitz, M.D. and Michael Bitz, M.D. for rescission of an amended employment contract; breach of employment agreement; compensation due; and to disregard or pierce the corporate veil to impose personal liability against the Bitzes individually. Both Michael and Jean Bitz filed separate motions for summary judgment on the count to disregard the corporate veil. The trial court granted these motions and Kanov filed the instant appeal.
We find that summary judgment was properly entered in favor of Michael Bitz, M.D. where he was never an officer, director or shareholder of K.B. Enterprises, Inc. and served at all times in his dealings with Kanov as an agent for the disclosed corporate entity. The law is well settled that an agent is not personally liable for the contract debts of a disclosed principal, absent an express agreement to the contrary. Blount v. Tomlinson, 57 Fla. 35, 48 So. 751 (1909); Philip Schwartz, Inc. v. Gold Coast Graphics, Inc., 623 So. 2d 819, 820 (Fla. 4th DCA 1993); Andrew H. Boros, P.A. v. Arnold P. Carter, M.D., P.A., 537 So. 2d 1134, 1135 (Fla. 3d DCA 1989); cf. E & C Computers, Inc. v. Livingston, 621 So. 2d 509, 510 (Fla. 3d DCA 1993) (holding that, under UCC § 3-403, signature of executive on note ostensibly on behalf of company did not subject executive to personal liability).
As to defendant Jean Bitz, M.D., the controlling shareholder, sole officer and sole director of K.B. Enterprises, Inc., we reverse the summary judgment entered in her favor. A critical issue in the determination of whether the corporate veil will be pierced for the imposition of personal liability is whether the corporate entity was organized or operated for an improper or fraudulent purpose. See, e.g., Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114, 1120-21 (Fla.1984); Hilton Oil Transp. v. Oil Transp. Co., S.A., 659 So. 2d 1141, 1151 (Fla. 3d DCA 1995); Ally v. Naim, 581 So. 2d 961, 962 (Fla. 3d DCA 1991).
We find that genuine issues of material fact remain as to whether this corporate entity was organized or utilized by Jean Bitz, M.D., to defraud Kanov as alleged thereby precluding the disposition of this issue by way of summary judgment. See Holl v. Talcott, 191 So. 2d 40 (Fla.1966); Underwriters at Lloyds, London v. VIP Distribs., Inc., 629 So. 2d 291 (Fla. 3d DCA 1993); Henry v. ISS Int’l Serv. Sys., Inc., 627 So. 2d 115 (Fla. 3d DCA 1993); Nelson v. Balkany, 620 So. 2d 1138 (Fla. 3d DCA 1993).
We find no merit to the remaining points on appeal.
Affirmed in part and reversed and remanded in part.
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Crescent Miami Ctr., LLC v. Dep't of Revenue, 857 So. 2d 904 (Fla. 3d DCA 2003)…rpose of facilitating future unsecured financing. The result effectively transformed CMC into a viable entity owning property. We note that as a limited liability company, CMC insulates its owner, Crescent Funding, from liability. See Kanov v. Bitz, 660 So. 2d 1165 (Fla. 3d DCA 1995); Seminole Boatyard, Inc. v. Christoph, 715 So. 2d 987 (Fla. 4th DCA 1998). We are also mindful of the fact that in situations where a limited liability company merges with any other business entity, recor-dation of deeds and payme…
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Validsa, Inc. v. Pdvsa Servs. Inc., 632 F. Supp. 2d 1219 (S.D. Fla. 2009)…and Bariven of PSI’s intent to be liable for the Contracts. Such express manifestation of intent makes PSI liable under the Contracts. See Bertram v. Sterling Bank & Trust, 820 So.2d 963, 965 (Fla. 4th DCA 2002); see also Kanov v. Bitz, 660 So.2d 1165, 1165-66 (Fla. 3d DCA 1995); Philip Schwartz, Inc. v. Gold Coast Graphics, Inc., 623 So.2d 819, 820 (Fla. 4th DCA 1993). The undisputed facts demonstrate that PSI conducted itself such that it expressly and impliedly indicated an intent to…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited (12 total)
- Gory Roofing Tile Mfg., Inc. v. Davison, 191 So. 2d 40 (Fla. 1966)
- Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114 (Fla. 1984)
- Hilton OIL Transp. v. OIL Transp. Co., S.A., 659 So. 2d 1141 (Fla. 3d DCA 1995)
- Blount v. Tomlinson, 57 Fla. 35 (Fla. 1909)
- Mohamood Ally v. Naim, 581 So. 2d 961 (Fla. 3d DCA 1991)
- City OF Miami v. AFSCME, 537 So. 2d 1134 (Fla. 3d DCA 1989)
- Andrew H. Boros, P.A. v. Arnold P. Carter, M.D., P.A., 537 So. 2d 1134 (Fla. 3d DCA 1989)
- Nelson v. Caron Balkany, 620 So. 2d 1138 (Fla. 3d DCA 1993)
- Schwartz v. Gold Coast Graphics, 623 So. 2d 819 (Fla. 4th DCA 1993)
- Underwriters AT Lloyds v. VIP Distribs., Inc., 629 So. 2d 291 (Fla. 3d DCA 1993)