A developer’s attempt to put the screws to a contractor in a pay dispute backfired when the Third District Court of Appeal ruled executives of Biltmore-Sevilla Debt Investors LLC could not use shell companies to purchase—then foreclose on—their own construction loan.

In 2006, the developer set out to build 25 luxury homes on three parcels in Coral Gables using several holding companies, including Riviera Biltmore LLC and Riviera Sevilla LLC.