Brian Gallagher was the COO and CFO of defendant Santefort Family Holdings, LLC (LLC). At deposition, he testified that the Santefort Family 2012 Irrevocable Trust (Trust) owned a subsidiary, which in turn owned and operated the LLC. He further testified that there were at least 11 companies related to the Trust’s real estate business, including single-purpose entities that owned each real property asset, as well as a management entity and a payroll entity providing services to them.
This type of structure is common in family and other real estate investment and development companies. In fact, single-purpose entities are generally required by commercial real estate lenders, who want borrowers to be single-purpose entities to facilitate pursuit of collateral in the event of a default. In Angell, the actual owner of the home at issue was not the LLC, but one of the other companies affiliated with the Trust’s real estate business, Midwest Home Rentals, LLC. Midwest’s revenues were recorded on the LLC’s books. Gallagher was the COO of Midwest.
The LLC filed a motion for summary judgment contending that it owed no duty to plaintiff because it did not own the home at issue. Angell responded by arguing...
