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FINAL Intervener Complaint

VIEWS: 22 PAGES: 24

									                IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT
                       IN AND FOR PINELLAS COUNTY, FLORIDA
                                   CIVIL DIVISION


BANK OF AMERICA, N.A.,

          Plaintiff,

v.                                                            Case No. 09-12363-CI-20

PALMCREST HOMES OF TAMPA BAY,
LLC, et al,

          Defendants.


CHRIS SULLIVAN, an individual

          Plaintiff,
v.

BANK OF AMERICA, N.A.,

          Defendant.
                                                       /

                          THIRD PARTY INTERVENER COMPLAINT

          Third-Party Intervener, CHRIS SULLIVAN, pursuant to Fla. R. Civ. P. 1.230, sues

Plaintiff, BANK OF AMERICA, N.A. (“Bank of America”) and alleges as follows:

                                  JURISDICTION AND VENUE

          1.This is an action for breach of fiduciary duty, equitable subordination, and declaratory

relief.

          2.Jurisdiction is proper pursuant to §26.012, Fla. Stat., and venue is proper pursuant to

     §47.011, Fla. Stat. because this is an action for damages that exceed $15,000.00 exclusive of
  interest, attorneys’ fees and costs, the causes of action alleged herein accrued, partially, in

  Pinellas County, Florida and Bank of America conducts business in Pinellas County, Florida.

       3.All conditions precedent to the institution and maintenance of this action have occurred

or have been performed.

       4.Plaintiffs have retained the undersigned counsel to represent them in this action and are

obligated to pay reasonable attorneys’ fees.

                                               PARTIES

        5.     Chris Sullivan is a member of Palmcrest and is a resident of Hillsborough County,

       Florida.

       6.Bank of America, N.A. (“Bank of America”) is a national association bank,

headquartered in Charlotte, North Carolina, that conducts business in Florida.

                                  GENERAL ALLEGATIONS

                                    The Banking Relationship

       1.Chris Sullivan has maintained a banking relationship and accounts with Bank of

America, N.A., since the late 1980’s and maintained a relationship and accounts with its non-

bank affiliated entity, The Private Bank of Bank of America, now known as U.S. Trust, Bank of

America Private Wealth Management (the “Private Bank”) since 1992.


       2.On or about September 14, 2006, Chris Sullivan agreed to transfer the vast majority of

his personal wealth to Private Bank.


       3.This transfer of assets involved the establishment of a Family Office at Bank of

America. The establishment of a Family Office includes the organization of an advisory team

made up of Private Bank employees (the “Advisory Team”).


                                                  2
        4.The goal of the Advisory Team is to analyze the client’s financial assets, liabilities and

cash flows in order to obtain the client’s desired goals relating to the enhancement and

preservation of their wealth.


        5.The Advisory Team advises the clients in seven different areas: investment, exposure

management, credit, personal treasury management services, trusts and ownership structures,

philanthropic services, and personal information management services.


        6.Bank of America sells these services to high net worth individuals by promises that it

will provide hands-on, customized service to the needs of its clients.           Bank of America

encourages individuals who qualify for these services to trust Bank of America, that the Bank

will be its trusted advisor in all financial affairs. In exchange for these services, Chris Sullivan

agreed to pay to Bank of America an initial annual flat fee of $100,000.00, plus an investment

fee charged at the rate of 50 basis points on assets under management by Bank of America. The

fee arrangement would then be negotiated annually by Chris Sullivan and Bank of America.


      7.Within the framework of this close relationship with Private Bank and thus, Bank of

 America, Chris Sullivan relied on the advice and recommendation of the employees of these

 entities.

                        Kuna’s Involvement in the Formation of the Company

        8.At approximately the same time that Chris Sullivan determined to transfer the majority

of his assets into the Private Bank and to form the Family Office, Chris also became involved

with his son, Alexander Sullivan, and his son’s friend, Adam Schoenbaum (“Schoenbaum”), in

forming a real estate development company to develop certain real property that Alexander

Sullivan and Schoenbaum had acquired.

                                                  3
        9.The company that would eventually be formed was Palmcrest Homes of Tampa Bay,

LLC and various single purpose entities 1 (collectively, “Palmcrest”).


        10.Chris Sullivan was willing to provide some financing for Palmcrest, but because of his

passive role in the enterprise along with Alexander Sullivan’s and Schoenbaum’s lack of

experience in real estate development, Chris Sullivan determined to find a person with extensive

real estate development experience that could manage the company to be formed.


        11.Dean Kuna (“Kuna”), head of Bank of America’s Florida Home Builders Division,

was recommended to Chris Sullivan as the key person within the Bank of America organization

to assist Chris Sullivan in obtaining financing for the development of their real property if

necessary beyond the financing that Chris Sullivan would provide. Based upon Chris Sullivan’s

Private Bank relationship and the express encouragement of Bank of America to trust its

employees, Chris Sullivan believed he could trust and rely upon Kuna.


        12.Kuna became aware that Chris Sullivan was seeking a partner for Palmcrest with

extensive real estate development experience that also had the capability to serve as Chief

Executive Officer of Palmcrest.


        13.Kuna recommended a real estate developer, to whom he had provided financing for

many years, Gunther Flaig (“Flaig”). Kuna had, for many years, also provided financing to




1 Palmcrest Homes of Tampa Bay-II, LLC, a Florida limited liability company, Palmcrest Homes of Tampa Bay-III,
LLC, a Florida limited liability company, Palmcrest Homes of Tampa Bay-IV, LLC, a Florida limited liability
company, Palmcrest Homes of Tampa Bay-V, LLC, a Florida limited liability company, Palmcrest Homes of Tampa
Bay-VI, LLC, a Florida limited liability company, Palmcrest Homes of Tampa Bay-VII, LLC, a Florida limited
liability company, Palmcrest Homes of Tampa Bay-VIII, LLC, a Florida limited liability company, Palmcrest Homes
of Tampa Bay-IX, LLC, a Florida limited liability company, Palmcrest Homes of Tampa Bay-X, LLC, a Florida
limited liability company, and Palmcrest Homes of Tampa Bay-XI, LLC a Florida limited liability company.
                                                       4
Flaig’s family’s umbrella and group of single purpose entities, collectively known as

Schickedanz Brothers.2


         14.Kuna vouched for Flaig’s qualifications and experience in the real estate development

business.


         15.What Kuna failed to disclose to Chris Sullivan was his close, personal relationship

with Kuna that went well beyond an ordinary relationship between borrower and lender. Kuna

and Flaig were good friends, met regularly after work for drinks and had social gatherings in the

home that Kuna purchased from one of Flaig’s family entities.


         16.When the first meeting between Flaig and Chris Sullivan occurred, on or about

October 5, 2006, Kuna was invited for the sole purpose of introducing Flaig, but unknown to

Chris Sullivan, Kuna intended to attend and participate in the meeting. However, Kuna was not

invited to participate in the meeting.


         17.What had not been disclosed by Kuna was that he planned to be involved with

Palmcrest, potentially in the capacity of chief financial officer and to have an ownership interest

in Palmcrest.


         18.Based upon Kuna’s recommendation of Flaig, and Sullivan’s trust and confidence in

Bank of America, Chris Sullivan agreed to hire Flaig as the chief executive officer and to make

him a member of the limited liability company, with a fifty-percent (50%) membership interest

in Palmcrest.

2 The Florida registered Schickedanz entities are as follows: Schickedanz Bros, Inc., Schickedanz Bros – Hammock
Pines Ltd., Schickedanz Bros – Palm Beach, Ltd., Schickedanz Bros – Pinellas Ltd, Schickedanz Bros West, Inc.
Schickedanz Capital Group, LLC, Schickedanz Enterprises, Inc.            There are also various Canadian based
Schickedanz entities, and upon information and belief, other Schickedanz entities registered or incorporated in other
states.
                                                          5
        19.Flaig’s involvement complicated the original plans of the Sullivans and Schoenbaum,

because Flaig owned property, through his wholly owned entity, Schickedanz Bros-Pinellas, Ltd.,

that was in the early stages of development.      Flaig would not agree to become the CEO of

Palmcrest unless his property was purchased by Palmcrest and slated for immediate

development.     Unbeknownst to the Sullivans at the time, Flaig’s property had already been

financed for development by Bank of America on a Ten Million Dollar ($10,000,000.00) line of

credit, facilitated by Kuna, in the name of Schickedanz Bros-Pinellas, Ltd., a Florida limited

liability partnership.


        20.The eventual members of Palmcrest agreed that Palmcrest would purchase the

property, known as Northpointe, owned by the Sullivans’ entity, SAB Investors, LLC, a Florida

limited liability company, and Alexander Sullivan’s and Schoenbaum’s entity, Palmcrest

Properties, LLC, a Florida limited liability company, and the property owned by Flaig’s entity,

Schickedanz Bros-Pinellas Ltd., a Florida limited partnership, known as Wyndrush, reimbursing

the parties for all costs associated with their original purchase, maintenance, and development to

date of the properties.


        21.Chris Sullivan had provided partial financing, via loans, for the development to date of

Northpointe.      That financing had been provided, in part, via lines of credit from Bank of

America, N.A.


        22.Because of this need to acquire property beyond what was originally envisioned, Chris

Sullivan approached Bank of America, through Kuna, to obtain additional financing for the

acquisition and development of the properties by Palmcrest.



                                                 6
                                          The Palmcrest Loan


            23.   The additional funding requirements of Palmcrest created by the purchase of

       Flaig’s Wyndrush property necessitated a loan from a third party lender, beyond the

       financing that Chris Sullivan would provide to the entity.


       24.The eventual members of Palmcrest agreed that Chris Sullivan would provide a line of

credit through which Palmcrest could obtain partial funding for the development of the projects

as the projects progressed, while the third party lender would provide the funds for the

acquisition of the properties and the remainder of the funds needed for the development of the

projects.


       25.The eventual members of Palmcrest, formed in February 2007, began working with

Kuna in early November 2006, to obtain the third party financing they required, via a line of

credit extended by the Bank of America (the “Loan”).


       26.The Loan would initially finance the acquisition of the Wyndrush and Northpointe

Properties but would also be available for the development of the properties.


       27.The line of credit provided by Chris Sullivan, via his company, CTS Equities Limited

Partnership (the “CTS LOC”), would be subordinate to the Loan. The CTS LOC was funded by

monies from a line of credit extended by Bank of America, N.A. to CTS Equities Limited

Partnership (“CTS”).


       28.Bank of America’s role and involvement in the business of the borrower, Palmcrest,

via Kuna’s actions, was highly irregular during the time leading up to the closing of the Loan that

occurred in late April, 2007.
                                                 7
       29.Because of Flaig’s and Kuna’s close, personal relationship, Kuna eventually became

involved with advising Flaig on his partnership with the Sullivans and Schoenbaum. Kuna’s

involvement was not disclosed to the Sullivans or Schoenbaum.


       30.Kuna’s advice and recommendations, again given many times without the knowledge

of Chris Sullivan, was frequently sought by Flaig on a range of issues, much of the advice

relating to the financial structure that was most advantageous to Palmcrest and to Flaig, as its

CEO, by limiting Chris Sullivan’s ability to control his investment of $10 million dollars in

Palmcrest and by limiting his power as a member, and therefore, owner of Palmcrest.


                                    Chris Sullivan’s Line of Credit


       31.Kuna’s involvement in the negotiation of and drafting of the documentation for the

line of credit provided by Chris Sullivan, via CTS, greatly exceeded the scope of Bank of

America’s necessary involvement.


       32.Various conference calls and e-mails between Kuna and the attorneys assisting Chris

Sullivan leading up to the April 2007 closing, reveal Kuna’s overstepping as a lender reviewing a

subordinated loan.


       33.Kuna and Rich Gordon, another Bank of America employee, worked with Flaig to

substantially revise the terms of the line of credit, revising documents at 1:00 a.m. on April 11,

2007 and providing comments relating to the borrower’s (Palmcrest) need for changes in the

terms, not Bank of America’s.


       34.On April 24, 2007, in a conference call between Bank of America representatives,

Palmcrest representatives, and Chris Sullivan’s attorneys (the day before the closing of the line
                                                 8
of credit) Kuna ordered that Chris Sullivan’s attorney, Harley Riedel, stand down because Mr.

Riedel was going to “blow the deal.”


       35.Kuna’s order to stand down was unnecessary---Bank of America’s attorney, Bob

Glenn, had provided his clients’ comments relating to the line of credit, via e-mail, on April 20,

2007 to Harley Riedel. Glenn noted that he had no substantive changes, that the revisions were

mostly stylistic or editorial, and the remainder clarifying. Harley Riedel incorporated Glenn’s

suggested changes.


       36.Despite the parties original intention to have Chris Sullivan provide financing on a per

project basis and to only be drawn upon when necessary, Bank of America insisted that the full

$10 million dollar CTS LOC be fully disbursed to Palmcrest prior to the closing of the Loan.

Because of Bank of America’s requirement to disburse the full amount of the CTS LOC, Chris

Sullivan’s control of the funding he provided to Palmcrest was rendered nonexistent.


       37.To date, no re-payment of any portion of the fully funded CTS LOC has occurred.

                                          The Balance Sheets

       38.The eventual members of Palmcrest had agreed to hire a bookkeeper, Janice Metta

(“Metta”), to assist in determining the proper amounts owed to the Sullivans, Schoenbaum, and

Flaig for the sale of their respective properties to Palmcrest and for reimbursement of their costs

and expenses occurred for the maintenance and development of the properties to date.           The

bookkeeper created spreadsheets that contained these amounts, along with pay-off calculations

for liabilities owed by the parties (the “Balance Sheets”) and sent them to Kuna for review.

       39.Kuna reviewed and commented on the Balance Sheets, at various times noting that the

amounts did not match his original understanding of the costs associated with Northpointe and

                                                 9
Wyndrush.     Kuna began reviewing and commenting upon the Balance Sheets as early as

November 17, 2006---five (5) months prior to the closing.


       40.Eventually, the Balance Sheets were revised eleven (11) times, arriving at

reimbursement numbers that satisfied the underwriting requirements of the Bank of America.

Revised Balance Sheets continued to be sent to and reviewed by Kuna, even two (2) days after

the loan closing, when the funds had been disbursed based upon the amounts documented in the

loan closing statement prepared by Bank of America.


       41.These reimbursement amounts, however, in breach of the agreement between the

members of Palmcrest, did not fully reimburse Chris Sullivan (or Alexander Sullivan or Adam

Schoenbaum). Moreover, the payoff calculations did not reconcile with the remainder of the

amounts calculated for assets and liabilities in the Balance Sheets.


       42.These Balance Sheets, reviewed by Kuna, were never provided to Chris Sullivan and

Kuna’s involvement with the Balance Sheets was never revealed to Chris Sullivan (or Alexander

Sullivan or Adam Schoenbaum).          Only during the closing, when Alexander Sullivan and

Schoenbaum were able to review the final Balance Sheet, was Alexander Sullivan able to realize

that a large cost associated with Northpointe, a legal settlement payment in excess of

$870,000.00 (the “Settlement Payment”), had been excluded from the reimbursement amounts.

Only after the closing were the Sullivans and Schoenbaum able to determine that an additional

$643,000 in costs associated with the Northpointe property was not reimbursed to them (the

“Additional Costs”).




                                                  10
        43.The Settlement Payment had been paid by Chris Sullivan via a line of credit extended

by Bank of America. Bank of America was charged with determining the amounts owed to Chris

Sullivan for the full reimbursement of all costs associated with the Northpointe property and

failed to include the amount of the Settlement Payment in the total pay-off amount provided at

the time of the closing. Upon information and belief Bank of America failed to review all lines

of credit, loans, and accounts involving Chris Sullivan when determining the total pay-off and

instead, inappropriately relied only on an “All Loans” document which only reflects open loans.

The line of credit from which the Settlement Payment had been paid had been recently closed at

the time Bank of America determined the total pay-off amount.


        44.The Additional Costs not reimbursed were paid via loans to SAB Investors, LLC

(“SAB Investors”), A & S Properties of Florida, LLC (“A & S) and Palmcrest Properties. In

particular, the loan to SAB Investors was made by Bank of America, via that certain loan

agreement between Bank of America and SAB Investors dated December 21, 2005 (the “SAB

Loan”) and the loan to A & S Properties, LLC was made by Bank of America, via that certain

loan agreement between Bank of America and A & S dated June 17, 2004 (the “A & S Loan”).


        45.To date, a principal balance of $320,000 remains outstanding on the SAB Loan and a

principal balance of $100,000 remains outstanding on the A & S Loan, plus accrued interest and

fees.


                                             The Closing


        46.The closing was held at the Bank’s law firm in Tampa. The Bank had two lawyers

present from the same firm, Bob Glenn and Don Hart, of the firm of Glenn Rasmussen Fogarty


                                               11
& Hooker. The Sullivans and Schoenbaum were unrepresented by counsel after Kuna, Sullivan’s

trusted representative from Bank of America, claimed that Riedel was going to “blow the deal.”


       47.At closing, after a portion of the loan documentation had been executed by the parties,

it was disclosed to Alexander Sullivan and Adam Schoenbaum that the closing figures had to be

revised because of unpaid property taxes and that all parties needed to travel from Tampa to New

Port Richey to the Palmcrest office so they could access Excel files that contained pertinent

information. The different variations of the signed loan closing statement, however, reveal that

the amount of property taxes apportioned as one of the uses of funds, never changes.


       48.At Kuna’s insistence (along with that of Rich Gordon and Rick Sage, employees of

Bank of America) that the closing must occur that day or the Bank would not fund and the

underwriting process would have to begin anew, all parties remained in New Port Richey until

almost midnight. Kuna, working separately with Flaig and Metta, worked for several hours on

Excel spreadsheets and other records that Janice Metta maintained concerning the amounts to be

reimbursed to the parties. Palmcrest’s attorney was not present at the closing.


       49.Despite Kuna’s threat and insistence that the closing must occur that day “or else,”

Don Hart and Kuna left New Port Richey without closing the loan----the loan was not funded

until the next day and the final version of the loan closing statement, prepared by Bank of

America, was not executed until the next day and sent to the bank’s attorney at 11:51 a.m. on

April 26, 2007.


       50.Also, Bank of America undertook the responsibility of directly disbursing the funds to

the Sullivans, Schoenbaum, Flaig and/or the record title owners of the Northpointe and


                                                 12
Wyndrush properties, despite the closing on the properties actually being conducted by another

party.


          Bank of America’s Interference with, and control of, the Operations of Palmcrest


         51.Bank of America, through Dean Kuna, inappropriately interfered with the operations

and business decisions of Palmcrest.


         52.Bank of America forced Palmcrest to change its development plans for the Wyndrush

property from a high-end, waterfront project to a mixed use project containing commercial

parcels and affordable housing units.


         53.Palmcrest would not have made this drastic change in its development plans if not for

the insistence of Bank of America.


         54.Kuna’s advice and recommendations were continually asserted in the decision making

process of the management of Palmcrest.


                      The Re-Payment of the Intercompany Loan to Schickedanz


          55.Despite the availability of nearly $15 million in funds for the development of

 Northpointe and Wyndrush, through the Loan and the CTS LOC, Metta, after the closing and at

 the direction of Flaig, paid invoices ostensibly attributable to Palmcrest and the Northpointe and

 Wyndrush Properties from various Schickedanz Brothers’ bank accounts.


          56.The payment of these various invoices by funds from Schickedanz Brothers’

 accounts continued from approximately May 2007 through December 2007, unbeknownst to

 Chris Sullivan. Metta tracked the payment by Schickedanz of the alleged Palmcrest expenses

                                                 13
by creating an internal account called “Intercompany Loan.” The designation of the alleged

payment of expenses as an Intercompany Loan is inappropriate as Palmcrest is not a related

entity to Schickedanz Brothers.


       57.Furthermore, Flaig did not obtain the permission of the other Managers of Palmcrest

or separately, Chris Sullivan, to “borrow” from the Schickedanz Brothers nor did Flaig obtain

the consent of the other Managers or separately, the consent of Chris Sullivan, to repay the

Intercompany Loan.


       58.Upon information and belief, at least a part of the funds that comprised the

Intercompany Loan are not properly attributable to Palmcrest and are not part of any proper

reimbursement of funds to any of the Schickedanz Brothers entities.


       59.The invoices paid with Schickedanz Brothers’ funds, based upon records maintained

by Metta, allegedly totaled in excess of Nine-Hundred Fifteen-Thousand Dollars ($915,000.00).


       60.On August 5, 2008, Flaig drafted a fake demand letter for Waldemar “Wally”

Schickedanz, President of Schickedanz Bros, Inc, a Florida corporation (“Schickedanz Bros”),

to place on Schickedanz Bros letterhead, demanding repayment of the Intercompany Loan in

the approximate amount of Nine-hundred Seventy-Thousand Dollars ($970,000.00). This fake

demand letter was backdated to June 30, 2008.


       61.The demand included the payment of interest in excess of $45,000.00


       62.Flaig wanted the Intercompany Loan repaid before Chris Sullivan learned of its

existence and prohibited repayment or demanded an investigation. At no point did Flaig reveal

that he or an entity controlled by him was to receive “interest” on the Intercompany Loan and/
                                                14
or a portion of the repayment of the principal amount of the Intercompany Loan. Flaig and

Metta deleted emails of the effort to fabricate the demand letter.


       63.Also on August 5, 2008, Flaig initiated the transfer of One-Million Dollars

($1,000,000.00) from Palmcrest’s Bank of America money market account to Palmcrest’s Bank

of America’ checking account.


       64.Upon information and belief, this transfer of funds was facilitated by Kuna with

Kuna’s knowledge that the funds were to be paid to Schickedanz Bros.–Pinellas, Ltd.


       65.On August 6, 2008, check no. 10306, in the amount of $973,340.59, made payable to

Schickedanz Bros – Pinellas Ltd., Flaig’s entity, was issued from Palmcrest’s Bank of America

checking account (the “Check”). The Check was signed by Flaig and the memo line of the

check read, “to pay off Intercompany Loan per Wally Schickedanz.”


       66.On August 7, 2008 at 9:17 a.m., the Check was deposited into Schickedanz Bros-

Pinellas Ltd.’s Bank of America account.


       67.Through Creager’s review of Palmcrest’s financial documentation, she uncovered the

internal account that reflected the Intercompany Loan and the re-payment of the Loan.


       68.In August 2008, Chris Sullivan began reviewing and investigating certain

irregularities in the business operations of Palmcrest under the management of Flaig.     Jill

Creager (“Creager”), representing Chris Sullivan and in accordance with the CTS LOC loan

documents, requested on August 4, 2008 that Metta provide her with documentation concerning

the budget for the development projects of Palmcrest.



                                                 15
                                  Count I-Breach of Fiduciary Duty


         69.The allegations of paragraphs 1-74 are re-alleged and incorporated by reference as

 though fully set forth herein.


       70.Chris Sullivan’s banking relationship with the Bank of America, via his agreement for

advisory services with the Private Bank, created a fiduciary relationship between the parties.

Bank of America undertook additional, special services for Chris Sullivan, received exceptional

compensation for undertaking such services, and exercised extensive control over Chris

Sullivan’s assets.


       71.This agreement between Chris Sullivan and Bank of America for the provision of

advisory services created a relationship of trust and confidence in which Bank of America would

act in the best of interests of Chris Sullivan and perform its services in a professional and

competent manner.


       72.Because of the agreement to provide advisory services and the transfer of the vast

majority of his personal wealth to the Private Bank, Bank of America knew or should have

known that Chris Sullivan placed his trust and confidence in Bank of America and relied on

Bank of America to counsel and inform him. Bank of America voluntarily and for compensation

assumed the additional role of advisor with the accompanying responsibilities that properly

follow such a role.


       73.Chris Sullivan justifiably believed that Bank of America would act in his best interest

in all aspects of his investing, including his personal involvement with and extension of

financing to Palmcrest.

                                                16
       74.Bank of America, as a fiduciary, had a duty to not engage in activities that were self-

serving or detrimental to Chris Sullivan and had a duty to disclose material facts that would

affect Chris Sullivan’s decision to lend money and to become involved with Palmcrest and Flaig.


       75.Instead, Bank of America’s agent, Kuna, actively undermined Chris Sullivan’s

position as the subordinate lender to Palmcrest, inappropriately involving himself in the

negotiations between the borrower, Palmcrest, and Chris Sullivan, redrafting the CTS LOC

documents to make the terms more advantageous to the borrower and to Bank of America, and

ordering that the attorney for Chris Sullivan be prohibited from engaging in further negotiations.

Kuna’s inappropriate involvement was detrimental to Chris Sullivan as the subordinate lender

and beneficial to Bank of America as the superior lender.


       76.Kuna also inappropriately involved himself in the negotiations between Chris Sullivan

and Flaig in forming Palmcrest, advising Flaig as to how to make the deal more beneficial to

Flaig and further advising Flaig on how to operate Palmcrest.


       77.Kuna’s advice and recommendations to Flaig, at times given without the knowledge of

Chris Sullivan, were designed to make the deal between Chris Sullivan more advantageous to

Flaig and designed to limit Chris Sullivan’s ability to control his $10 million dollar investment in

Palmcrest. Bank of America had a duty to disclose to Chris Sullivan Kuna’s continuous advising

of Flaig, which was not only beneficial to Flaig, but to Bank of America as the superior lender

and was detrimental to Chris Sullivan as a member of and a subordinate lender to Palmcrest.


       78.Further, Kuna at the time that he vouched for Flaig’s abilities, failed to disclose his

close, personal relationship with him. This material fact, if known by Chris Sullivan at the time


                                                  17
Kuna vouched for Flaig, would have allowed Chris Sullivan to more fully evaluate Kuna’s

endorsement of Flaig’s abilities.


       79.Instead of suspending the closing until any issues could be properly discussed and the

appropriate attorneys contacted, Kuna forced the closing to continue, even after Bank of

America’s own counsel left. Kuna’s forced continuation of the closing led to Chris Sullivan,

along with Alexander Sullivan and Schoenbaum, being un-reimbursed for certain significant

costs associated with the Northpointe property---even when those significant costs were brought

to the attention of Kuna by Alexander Sullivan.


       80.Bank of America’s actions, via its agent, Kuna, breached the fiduciary duty owed to

Chris Sullivan.


       81.Bank of America knew or should have known of Kuna’s course of conduct with Chris

Sullivan or alternatively, negligently supervised Kuna in his role as a bank officer. Kuna was

extending a line of credit in the amount of $27 million to Palmcrest, a transaction involving one

of Bank of America’s most significant individual clients.


       82.Bank of America also breached the fiduciary duty owed to Chris Sullivan, via the

employee’s negligent performance of his duty to properly account for the amounts to be re-paid

to Chris Sullivan for Northpointe when charged with doing so as part of the services provided by

the Advisory Team.      Bank of America negligently supervised the employee charged with

determining the pay-off amounts.


       83.Bank of America’s breach of its fiduciary duty has damaged Chris Sullivan.




                                                  18
       WHEREFORE, Chris Sullivan demands judgment against Bank of America for

 compensatory damages, interest, costs, and such further relief as this Court deems proper.


                                     Count II-Equitable Subordination


         84.The allegations of paragraphs 1-74 are re-alleged and incorporated by reference as

 though fully set forth herein.


       85.Bank of America, N.A., via the Loan, alleges to have an interest superior to that of

Chris Sullivan, via the CTS LOC, in the property and assets of Palmcrest. In this action, Bank of

America is attempting to foreclose its interest in the property and assets of Palmcrest.


       86.Bank of America’s agent, Kuna, actively undermined Chris Sullivan’s position as the

subordinate lender to Palmcrest, inappropriately involving himself in the negotiations between

the borrower, Palmcrest, and Chris Sullivan, redrafting CTS LOC documents to make the terms

more advantageous to the borrower and to Bank of America, and ordering that the attorney for

Chris Sullivan be prohibited from engaging in further negotiations.           Kuna’s inappropriate

involvement was detrimental to Chris Sullivan as the subordinate lender and beneficial to Bank

of America as the superior lender.


       87.Kuna’s re-drafting of the CTS LOC documents were designed to limit Chris Sullivan’s

ability to control his $10 million dollar investment in Palmcrest. Furthermore, because of Kuna’s

insistence that the full amount of the CTS LOC be disbursed prior to full amount of the CTS

LOC prior to funding the Loan, Chris Sullivan’s control of the funding he provided to Palmcrest

was rendered nonexistent.




                                                  19
       88.Kuna’s inappropriate involvement and interference in the negotiation of the financial

structure of Palmcrest and the negotiation of the deal between Flaig and Chris Sullivan led to a

structure that was more advantageous to Flaig as a member of Palmcrest and detrimental to Chris

Sullivan as a member of Palmcrest.


       89.Bank of America’s actions were egregious, inequitable and injurious to Chris Sullivan

as a subordinate lender to Palmcrest and as an owner of Palmcrest.


       90.Equity dictates that any claim Bank of America may have as a creditor in the real

property and other assets of Palmcrest be accorded a priority inferior to that of any claim Chris

Sullivan may have as a creditor or owner in the real property and other assets of Palmcrest.


       WHEREFORE, Chris Sullivan respectfully requests this Court declare any claims Bank

 of America may have as a creditor of Palmcrest inferior to any claims Chris Sullivan may have

 as a creditor or owner of Palmcrest.


                                   Count III—Declaratory Judgment


       91.The allegations of paragraphs 1-74 are re-alleged and incorporated by reference as

 though fully set forth herein.


       92.This is an action for a declaratory judgment pursuant to Fla. Stat. § 86.01 et seq.


       93.Florida Statute § 86.021 governs declaratory judgments and provides:

               Power to construe. – Any person claiming to be interested or who may be
               in doubt about his or her rights under a …. contract … may have
               determined any question of construction or validity arising under such …
               contract … and obtain a declaration of rights, status, or other equitable or
               legal relations thereunder.

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       94.Sullivan seeks a determination from this Court as to his liability under those certain

continuing and unconditional guarantees, dated July 7, 2008, executed by Chris Sullivan, in

connection with the SAB and A&S Loans (collectively, “Guarantees”).            True and complete

copies of the SAB and A&S Loan documents and the Guarantees are attached hereto as Exhibits

A, B, C and D.

       95.The outstanding balances of the SAB Loan and A & S Loan were caused by Bank of

America’s negligence in determining the amounts to be reimbursed to Chris Sullivan for costs

associated with the Northpointe property.

       96.Despite its own negligence, Bank of America has made a demand to Chris Sullivan to

pay the outstanding amounts owed under the SAB Loan in accordance with the terms of the

Guarantees.

       97.Under certain cross-default provisions contained in loan documents for a loan to CTS

Equities Limited Partnership (“CTS Equities Loan”), in which Chris Sullivan is a party that

provided collateral, and a loan to Chris Sullivan, individually, (“Chris T. Sullivan Loan”) Bank

of America has declared these loans to be in default because of the declared defaults under the

Guarantees. Based on this alleged non-monetary default Bank of America has also instituted the

default rates of interest and has accelerated the outstanding balances of the loans, $10,064,970.14

and $2,000,995.26, respectively. Bank of America has made the demand for the payment in full

of both loans via demand letters. True and correct copies of the CTS Equities Loan documents,

Chris T. Sullivan Loan Documents, and the demand letters are attached hereto as Exhibits E, F,

G and H.

       98.Chris Sullivan is unsure as to his rights and obligations under the Guarantees and

under the loan documents for the CTS Equities Loan and the Chris T. Sullivan Loan. On the one

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hand, Chris Sullivan believes that he is not obligated to re-pay any amounts owed under the SAB

Loan or A & S Loan because the outstanding amounts are the result of Bank of America’s own

negligence and thus, Bank of America’s declared default and acceleration of the CTS Equities

Loan and the Chris T. Sullivan Loan are wrongful. On the other hand, Bank of America, via

demand letters and two suits filed in the Middle District of Florida, asserts that Chris Sullivan is

liable for the amounts owed on the SAB and A & S Loans under the terms of the Guarantees and

that it has rightfully declared a default and accelerated the amounts due on the CTS Equities

Loan and the Chris T. Sullivan Loan. True and correct copies of the complaints filed in the

Middle District of Florida are attached hereto as Exhibits I and J.

       99.As a result of the foregoing, there is a bona fide actual and present controversy and

need for a declaratory judgment with regard to the parties’ rights and obligations under the

Guarantees, the CTS Equities Loan and the Chris T. Sullivan Loan.

       WHEREFORE, Chris Sullivan requests that this Court issue a declaration of the rights

and responsibilities of the parties under the Guarantees, the CTS Equities Loan, and the Chris T.

Sullivan Loan, with respect to the controversy existing between them and that Chris Sullivan be

awarded his costs and such other further relief as is just.




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____________________________________
JOHN D. GOLDSMITH.
Florida Bar No. 0444278
AMANDA E. TAYLOR
Florida Bar No. 0017626
TRENAM, KEMKER, SCHARF, BARKIN,
FRYE, O'NEILL, & MULLIS, P.A.
200 Central Ave. Suite 1600
St. Petersburg, FL 33701
(727) 896-7171 Telephone
(727) 822-8048 Facsimile
Attorneys for Intervener




   23
                                          CERTIFICATE OF SERVICE

         I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished via

facsimile and by U.S. Mail to John M. Mullin, Esquire, Tripp Scott, P.A., 110 SE 6th Street, 15th

Floor, Fort Lauderdale, FL 33301, on this ____ day of April, 2010.




                                                          Attorney




4030119v1
Changes Accepted - Amended Bank of America Complaint-3813761v1


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