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Inn on The Gulf sits at center of six-year legal battle

HUDSON — A minute's drive from the blacktop of U.S. 19, the Inn on the Gulf overlooks a sparkling waterfront.

Bring a fishing pole and you can set up underneath a wooden bodega in the marina. Or bring a bathing suit, as some do, and lay out on the shore next to the boats underneath the sun.

Sometimes, on a sunny day, the roof matches the sky, and if you get a room on the second floor, you can sit and watch the sunset.

That sometime serenity, though, masks a years-long legal grapple for ownership of the inn between two Greek families who came to Pasco looking for new opportunities. Since 2008, there have been trials, tens of thousands in legal fees and endless punch and counterpunch legal motions.

With still no end in sight, it will take more days in court to resolve it all.

• • •

On one side, there's the Poulos family — Nick, Georgia and their two sons Billy and Tony. They bought the inn in 1980 for about $525,000. The boys grew up in it, and the inn helped pay for their college. Once the boys moved on, the family leased it out — a 15-year deal with an option to purchase.

Enter the Malacos family — patriarch George and siblings Michael, John and Eleni Sanfilippo.

In the lease, the families agreed that the Malacoses would pay a regular cost of living adjustment, but they overpaid due to a miscalculation. A disagreement over reimbursement was the catalyst for what came next.

"My son's a lawyer now," George Malacos said Nick Poulos told him. "He'll take care of it."

The Poulos family says the Malacoses failed to keep up the property and defaulted on the lease. George Malacos denies that, and during the disagreement decided to exercise his option to buy. After the sides couldn't agree on a sale price, they went to court. The lease said a sale price should be averaged from two appraisals — one from each party. Billy Poulos said the Malacoses got an appraisal for $1.45 million and his family got one for $2.95 million. The Pouloses offered $2.2 million. The Malacoses walked away.

But in official records, the Malacoses are now the owners of the inn.

The Poulos family claims their property was stolen from underneath them. They didn't find out about the sale, they say, until Billy Poulos checked the property appraiser's website. The say the Malacoses' attorney played both lawyer and real estate agent and through complicated legal maneuvering allowed the Malacos family to buy the inn at a deep discount.

There was no closing. The Pouloses signed no documents, and they haven't seen a penny from the sale.

• • •

The Malacos family sat around a table on a recent weekday afternoon before the lunch rush at the inn's restaurant.

"We exercised our option to purchase the property, and they refused to sell it," George Malacos said. "The only way they could do that is by saying we were in default."

George said the original agreement he had was with Nick Poulos. He said Nick told him "this place can be yours in eight years," a statement Nick Poulos denies.

George Malacos said after the disagreement over the cost of living adjustment, the Poulos family showed up like "the gestapo" one early morning in March 2008 and performed an impromptu inspection. The Pouloses then sent a default letter, and they got a letter back from the Malacoses that they wanted to buy the same month.

The Pouloses said no because of the default, and the Malacoses responded with a lawsuit.

There were more inspections, and the Pouloses took pictures of the second floor restaurant of the inn, which they say showed gross neglect and filth. For their part, the Malacoses said they only used the area for storage. The upstairs restaurant was closed and in decay when they got the place, they say.

On June 29, 2011, the case went to trial.

Circuit Judge Lowell Bray ruled in the Pouloses' favor — kind of. He said the breaches may have affected the value of the property, but they were minor. That meant the Malacoses got to stay on the property.

During all this, the Pouloses continued collecting rent.

In November of 2011, the Malacoses sued again for the same thing — the option to buy. At the second trial, the Pouloses were ordered to sell the property.

Cue the appeals.

The Pouloses argued Bray shouldn't have started a second case when the first hadn't yet been finalized. They also say it took almost two years for a higher court to hear the case because the clerk's office didn't include 90 pictures entered during the trial. The clerk's office told the Pouloses that Bray filed the evidence incorrectly.

"This took a long time to correct," Billy Poulos said. "We've been dealing with an unscrupulous attorney, tenants who do whatever they want — when they want — a judge that's obviously biased and will do anything to help the opposing side, and a clerk's office that has no control over the evidence."

The Poulos family has raised this issue on the record with Bray.

"If you continue to believe that, and apparently you do," Bray said, "that the court is involved in some kind of fraud and is skirting the law in the case, then I think probably you'd better file your complaint with the Judicial Qualifications (Commission)."

• • •

The inn sold in August for $825,000, according to county records. The Malacos family borrowed $701,250 from Regions Bank to buy it.

In order to push through a sale without the owner's consent, a judge appoints someone to act as the seller — a special master.

That job fell to New Port Richey attorney Matthew Ellrod.

A court records search shows that the Malacoses' attorney, Roland Waller, and Ellrod have worked together as counsel and special master in numerous cases. That relationship is another source of complaint from the Pouloses. Waller dismisses any charge of a conflict of interest. He says the case comes down to the Poulos family refusing to honor a contract they signed.

"Guess what?" Waller said. "You were ordered to do it and you didn't, and we needed to figure out how it would be done."

Billy Poulos said most people would just sell the property instead of spending thousands of dollars in legal fees to keep it.

"You can't sell someone's property without their knowledge," he said, "and then give them the money when you feel like it."

The Malacoses, who also own a nearby marina, say they want to move on. As far as they're concerned, the fight for the inn is over, and they won.

The Pouloses plan to fight on.

On Monday, they'll all meet in court again.

Inn on The Gulf sits at center of six-year legal battle 10/18/13 [Last modified: Friday, October 18, 2013 11:48pm]
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