REHAVAM ADIEL AND RIVKA ROSENBAUM, INDIVIDUALLY AND COLLECTIVELY ON BEHALF OF EFS, INC., APPELLANTS,
v.
ELECTRONIC FINANCIAL SYSTEMS, INC., JACK W. COX, WILLIAM R. FUSSELMAN AND EDGAR D. SCHRAUB, APPELLEES
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The court affirmed the trial court's disqualification of two shareholders as representative plaintiffs in a derivative action, finding that one plaintiff's self-interested motivations to engineer a merger involving his own corporation rendered him unfit to represent the shareholder class, and the other plaintiff was merely acting under his direction.
The trial court did not abuse its discretion in disqualifying both plaintiffs. Adiel's attempts to cajole the board into approving a merger with his own corporation demonstrated motivations inimical to shareholder interests, rendering him an improper party. Rosenbaum, acting under Adiel's direction, was similarly improper as a representative plaintiff.
[1] A trial court's determination regarding the qualifications of plaintiffs to adequately represent a class of shareholders in a shareholder derivative action will not be di…
[2] A plaintiff's motivation in pursuing a shareholder derivative suit is inimical to the interests of shareholders when the plaintiff attempts to cajole the board of directo…
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Join FLexlaw to unlock all legal intelligence“A trial court's determination as to the qualifications of plaintiffs to adequately represent a class of shareholders in a shareholders' derivative action will not be disturbed on appeal absent a showing of a clear abuse of discretion.”
Establishes the standard of review for disqualification of representative plaintiffs in derivative actions.
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Join FLexlaw to unlock all legal intelligenceRehavam Adiel and Rivka Rosenbaum, his elderly aunt, sought to serve as representative plaintiffs in a shareholder derivative action against Electroni…
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PER CURIAM.
We affirm the trial court’s order disqualifying both Rehavam Adiel and Rivka Rosenbaum from acting as representative plaintiffs in this shareholder derivative action. A trial court’s determination as to the qualifications of plaintiffs to adequately represent a class of shareholders in a shareholders’ derivative action will not be disturbed on appeal absent a showing of a clear abuse of discretion. See Rothenberg v. Security Management Co., 667 F. 2d 958 (11th Cir.1982); Owen v. Modem Diversified Indus., Inc., 643 F. 2d 441 (6th Cir.1981); Homreich v. Plant Indus., Inc., 535 F. 2d 550 (9th Cir.1976); cf. Malchman v. Davis, 761 F. 2d 893 (2d Cir.1985) (whether plaintiffs representation in antitrust class action suit is adequate is within the sound discretion of the trial court), cert. denied, 475 U.S. 1143, 106 S.Ct. 1798, 90 L.Ed.2d 343 (1986).
The trial court was well within its discretion in determining that Adiel’s attempts to cajole the board of directors of Electronic Financial Systems, Inc. into effectuating a merger with a corporation he controlled demonstrated that his motivation in pursuing the suit was inimical to the interests of the shareholders and made him an improper party to maintain this action. See Davis v. Comed, Inc., 619 F. 2d 588 (6th Cir.1980); Blum v. Morgan Guar. Trust Co., 539 F. 2d 1388 (5th Cir.1976); G.A. Enters v. Leisure Living Communities, Inc., 517 F. 2d 24 (1st Cir. 1975); Nolen v. Shaw-Walker Co., 449 F. 2d 506 (6th Cir.1971); Roussel v. Tidelands Capital Corp., 438 F.Supp. 684 (N.D.Ala.1977).
Likewise, the trial court did not abuse its discretion by finding that Rosenbaum, Adiel's elderly aunt, was acting under Adiel’s direction and is, therefore, also an improper party to bring the action. See Nolen, 449 F. 2d at 506.
Accordingly, we affirm the trial court’s order disqualifying both Rehavam Adiel and Rivka Rosenbaum from pursuing this shareholder derivative action.
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Juanita v. Ramos, 743 So. 2d 24 (Fla. 3d DCA 1999)…This opinion does not disturb the trial court’s finding that the class representatives effectively and adequately represented all class members.6 See McFadden v. Staley, 687 So. 2d 357, 359 (Fla. 4th DCA 1997); Adiel v. Electronic Fin. Sys., Inc., 513 So. 2d 1347, 1347 (Fla. 3d DCA 1987); see also Broin, 641 So. 2d 888. Having concluded that several objectors have standing to intervene, we now address whether the trial court abused its discretion in its approval of the settlement and of the class counsel’s…
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Marco Island Civic Ass'n, Inc. v. Luc Christian Mazzini, 805 So. 2d 928 (Fla. 2d DCA 2001)…(2001). The adequacy of class representation is a factual issue within the discretion of the trial court, and the court’s determination will not be disturbed on appeal absent a showing of a clear abuse of discretion. Adiel v. Elec. Fin. Sys., Inc., 513 So. 2d 1347 (Fla. 3d DCA 1987); Crum v. Hous. Auth. of Tampa, Fla., 841 F. 2d 376, 378 (11th Cir.1988). In the present case, the trial court determined that a class exists under rule 1.220(b)(3) and that Mrs. Bhav-nani will fairly and adequately represent the c…
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McFADDEN v. Staley, 687 So. 2d 357 (Fla. 4th DCA 1997)…. 1221, 99 L.Ed.2d 421 (1988). A trial court’s determination as to the qualifications of plaintiffs to adequately represent a class will not be disturbed on appeal absent a showing of a clear abuse of discretion. Adiel v. Electronic Fin. Sys., Inc., 513 So. 2d 1347 (Fla. 3d DCA 1987). Appellant argues that courts in the past have refused to certify class actions in mass tort cases. However, we note several instances in which both state and federal courts have recognized that class action treatment is appropri…
Previewing 3 of 9 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Gates v. Johnson, 475 U.S. 1143 (U.S. 1986)
- Benedum v. Perini, 475 U.S. 1143 (U.S. 1986)
- Rothenberg v. Sec. Mgmt. Co., Inc., 667 F.2d 958 (11th Cir. 1982)
- Nolen v. The Shaw-Walker Co., 449 F.2d 506 (6th Cir. 1971)
- G. A. Enters., Inc. v. Leisure Living Cmtys., Inc., 517 F.2d 24 (1st Cir. 1975)
- Hornreich v. Plant Indus., Inc., 535 F.2d 550 (9th Cir. 1976)
- Davis v. Comed, Inc., 619 F.2d 588 (6th Cir. 1980)
- Blum v. Morgan Guar. Tr. Co. OF NEW York, 539 F.2d 1388 (5th Cir. 1976)
- Malchman v. Davis, 761 F.2d 893 (2d Cir. 1985)
- Owen v. Modern Diversified Indus., Inc., 643 F.2d 441 (6th Cir. 1981)