A-Rod’s Former In-Law Refines Contract Claims

(CN) - A former brother-in-law of Alex Rodriguez claims in a lawsuit that the New York Yankees star kicked him out of a real estate investment partnership and kept over a million dollars in profits for himself.

In an amended complaint filed on Aug. 26, Constantine Scurtis, the brother of Rodriquez's ex-wife, Cynthia Scurtis, says he formed a general partnership with the controversial infielder in 2003, "to acquire, rehabilitate, develop and manage real property."

Under the terms of the partnership, Rodriguez owned 95 percent of the property the two men acquired, while Scurtis owned five percent. Scurtis said the agreement also dictated that he was to receive "an acquisition fee representing three percent of the purchase price of each piece of real property acquired by the Rodriguez-Scurtis partnership."

Scurtis says that prior to formalizing the partnership in March 2003, the men created A.C.R.E.I. LLC, which stands for "Alex Constantine Real Estate Investments" to act on its behalf. Six months later, he says, they formed Newport Property Ventures Ltd., which was in charge of executing contracts to purchase properties on behalf of the partnership.

Scurtis claims that the terms of several subsequent limited partnership agreements, he would be the sole member of New Port Property Ventures, acting as the general partner, and that Rodriguez would a limited partner in order to insulate him from liability.

"From 2003 through 2008, the Rodriguez-Scurtis Partnership, acting through A.C.R.E.I. LLC, and NPV, acquired in excess of $300,000,000 worth of real property. As of December 31, 2013, the Rodriguez-Scurtis Partnership had earned Rodriguez more than $40,000,000 in realized gains as reported to the Internal Revenue Service," the complaint says.

Scurtis claims the partnership began to unravel after his sister filed for divorce against Rodriguez, claiming the all-star infielder had cheated on her. The situation came to a head on Sept. 18, 2008, the day the divorce was finalized, when Rodriguez cut ties with his business partner -- and walked off with over $8 million in unpaid acquisition fees, the complaint says.

Scurtis also claims that between 2009 and December 2013. Rodriguez sold several properties owned by the partnership without his consent, generating over $2 million in profits, which were withheld from him.

According to the complaint, Rodriguez denied Scurtis his "right of first refusal" on the sale of the properties, and then generated a tax bill for him in the amount of $2,170,390.

Scurtis says he was unable to pay the unexpected tax bill, and the Internal Revenue Service is holding him liable for it. As part of the agency's enforcement action, IRS investigators alleged showed up at his home, "frightening the family's young children," and though he tried to explain his situation to the IRS. "there is currently a $388,000 IRS tax lien" against him, and the agency is threatening to seize his assets.

The complaint goes on to allege that Rodriguez fraudulently transferred ownership of the partnership to a new entity named Monument Capital Management to strip Scurtis of his ownership interest.

"Rodriguez forced Scurtis out of the operation of the Rodriguez-Scurtis Partnership, appropriated Scurtis' investment criteria, operating platform, goodwill in the commercial real estate community, and the renamed the original entities as MCM and MRES," the complaint says.

Scurtis, who has a degree in finance and a minor in economics, claims that he taught Rodriguez "his investment criteria and operating platform for income-producing real estate."

He seeks compensatory damages on claims of breach of contract, breach of fiduciary duty, constructive fraud, civil conspiracy, unjust enrichment and tortious interference.

He is represented by Vincent Duffy of Miami, Fla.

Rodriguez's attorney, John Lukacs Sr.. from Hinshaw & Culberston, did not respond to a request for comment from Courthouse News.

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