DOROTHY MCGLYNN AND JAMES MCGLYNN, APPELLANTS,
v.
STEVEN M. ROSEN, RICHARD A. KATZ, HERBERT ROCKWELL AND CONNIE DINKIER, APPELLEES
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Dorothy and James McGlynn, former sole stockholders of a dissolved corporation, filed suit in May 1978 against defendants alleging fraud in connection with the sale of corporate property, but the trial court dismissed the complaint as barred by the three-year statutory period for a dissolved corporation to conduct legal proceedings. The appellate court affirmed, holding that once the corporate winding-up period expires, even if a general statute of limitations has not run, the corporation cannot initiate court action.
The three-year statutory winding-up period for dissolved corporations, not the general four-year statute of limitations for fraud, governs the time within which legal action must be commenced. Once the three-year winding-up period expires, the corporation lacks legal capacity to sue, even if the general statute of limitations has not yet run. The complaint was therefore untimely under both the specific winding-up statute and the general three-year statute of limitations for fraud claims.
[1] A dissolved corporation's capacity to sue is limited to a statutory "winding up" period, after which it cannot initiate an action, even if the general statute of limitati…
[2] A statute of limitations that becomes effective after a cause of action has accrued does not apply to that cause of action.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Once that period has elapsed, even if the general statute of limitations has not yet run on the claim, the corporation cannot initiate an action in court.”
Establishes the holding that the three-year winding-up period is the controlling time limit for a dissolved corporation to sue, regardless of general statute of limitations.
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Join FLexlaw to unlock all legal intelligenceThe McGlynns were sole stockholders of 6410 Collins Avenue Corporation. On May 16, 1974, the same day the corporation was dissolved, the McGlynns exec…
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[*469] BASKIN, Judge.
The trial court dismissed the McGlynns’ amended complaint for damages on the ground that the suit was barred because the time for a dissolved corporation to seek redress in the courts had expired. We affirm.
The McGlynns were the sole stockholders of the 6410 Collins Avenue Corporation. On May 16,1974, the same day the corporation was dissolved, the McGlynns, as trustees of the corporation, executed an agreement to sell the property belonging to the corporation to appellee Rockwell. In May, 1978, the McGlynns, as individuals,1 filed suit alleging fraud and deceit by appellees in connection with the negotiation of the agreement and the sale of the corporate property, seeking damages and equitable relief.
In various motions to dismiss the cause, defendants claimed that the suit was not timely under either a general statute of limitations or the “winding up” statute which extends the life of a dissolved corporation for limited purposes. According to the trial court, the action could be brought only within three years of the date of dissolution. Since the complaint had been filed almost one year after the three-year extension of corporate existence expired, the action was barred by the operation of Section 607.297, Florida Statutes (1975).2
The McGlynns now appeal this judgment of dismissal claiming that the four-year statute of limitations provided by Section 95.11(3)(j), Florida Statutes (Supp. 1974), governs the time for bringing the suit rather than the three-year statute regulating the dissolution of a corporation. We find no merit in appellants’ contentions. The three-year “winding up” statute extends the life of the corporate body and continues its capacity to sue. Once that period has elapsed, even if the general statute of limitations has not yet run on the claim, the corporation cannot initiate an action in court. See generally Advance Machine Co. v. Berry, 378 So. 2d 26 (Fla. 3d DCA 1979).
In any event, the general statute of limitations relied upon by appellants would not alter the disposition of this cause. Section 95.11(3)(j), Florida Statutes (Supp. 1974), did not become effective until January 1,1975. As the supreme court recently held in Dade County v. Ferro, 384 So. 2d 1283 (Fla.1980), when a cause of action arises from an occurrence which predates the effective date of a statute of limitations, that statute does not apply. Thus, the four-year statute relied upon by appellants is inapplicable. If this action were not barred by the expiration of the “winding up” period, then the general statute of limitations as codified by Section 95.-ll(5)(d), Florida Statutes (1973), would govern. The latter statute requires a suit based on fraud to be commenced within three years. The McGlynns’ complaint is therefore untimely under both the general statute of limitations for fraud as well as under the “winding up” statute. Since the amended complaint could not again be amended to state a cause of action, dismissal with prejudice was proper. In reviewing plaintiffs request for equitable relief, we note that the corporation has long since been dissolved and neither the corporation nor its trustees may seek relief from the courts.
For the foregoing reasons, the judgment of the trial court is affirmed.
. In the judgment of dismissal, the trial court noted that only the corporation or its trustees could be the proper party plaintiff, but held that, in any event, the action would be barred by the passage of time.
. In passing, we note that the “winding up” statute in effect at the time the cause of action accrued was Section 608.30, Florida Statutes (1973). Since both this statute and the one referred to by the trial court provide for a three-year “winding up” period, the practical effect upon the case is the same.
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Senfeld v. The Bank of Nova Scotia Tr. Co. (cayman) Ltd., 450 So. 2d 1157 (Fla. 3d DCA 1984)…Trust Company knew or should have known of it at that time, then even assuming, arguendo, that the five-year statute of limitations provided in Section 812.035(10) applied, but see Dade County v. Ferro, 384 So. 2d 1283 (Fla.1980); McGlynn v. Rosen, 387 So. 2d 468 (Fla. 2d DCA 1980), rev. denied, 392 So. 2d 1376 (Fla.1981), the Trust Company’s action would have been limitations barred and the question of whether the statute is to be applied retroactively rendered moot. . The theft statute did not newly creat…
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Calder v. Uwanawich, 449 So. 2d 911 (Fla. 3d DCA 1984)…), Florida Statutes (1979), first became effective on January 1, 1975, and that as to actions arising beforehand, the predecessor three-year limitations period contained in Section 95.11(5)(d), Florida Statutes (1973), applies. See McGlynn v. Rosen, 387 So. 2d 468 (Fla. 3d DCA 1980). If Calder discovered or should have discovered the alleged fraud by September 1973, her action is clearly time barred under the three-year statute of limitations; if she did not discover or should not have discovered it until at…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Dade Cnty. v. Ferro, 384 So. 2d 1283 (Fla. 1980)
- Advance Mach. Co. v. Berry, 378 So. 2d 26 (Fla. 3d DCA 1979)