Article

Note: Luis Gasparini (Officer), an officer and shareholder of International Trading and Financial Corporation (Issuer), undertook to "arrange for the lease of a standby letter of credit . . . which could then be used to obtain financing for the purchase" of a group of Wendy's restaurants by Carmen Perez (Would-be Purchaser). Miguel Villa Pordomingo (Owner), the owner of the restaurants, paid a US$300,000 fee to Issuer. Would-be Purchaser's assets as well as the assets of the Wendy's restaurants were to serve as collateral for the LC. Issuer refused to issue the LC upon finding that Would-be Purchaser had misrepresented her assets on her financial statement and that the Wendy's restaurants were in bad financial shape.

Owner sued Officer and Issuer for the return of the US$300,000 fee. The Miami-Dade County Circuit Court, Rodriguez, J., entered judgment against Officer and Issuer for unjust enrichment, civil theft, and conversion, and awarded treble and compensatory damages. On appeal, the Florida District Court of Appeals, Green, Rothenberg, and Salter, JJ., in a per curiam opinion, vacated the portion of the judgement against Officer, and reversed in part and affirmed in part the judgment against Issuer.

The appellate court ruled that Officer was not personally liable for damages caused by Issuer's actions, because the obligation was that of the corporation and the corporate form was not used fraudulently or for an improper purpose. It also concluded that Issuer was not liable for conversion or civil theft of the US$300,000 fee because Issuer was free to use the funds as it pleased. The treble damage awards for conversion and civil theft against Issuer were reversed, and the judgment against Issuer for unjust enrichment was affirmed.

Comment:

If the opinion accurately reflects the intended transaction, namely to "lease" a standby, then it is a scam. There is no such thing as a lease of a standby. Whatever the technicalities about conversion or civil theft, the Applicants were defrauded in this all-toocommon scam. Even though they received a judgment, the Applicants will need much luck in collecting the money from the so-called "Issuer".

[JEB/pbl]

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