FORT PIERCE CORPORATION, APPELLANT,
v.
C.L. IVEY, ETC., ET AL., APPELLEES
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Fort Pierce Corporation appeals a trial court's award of $52,000 in attorney's fees to Linda Williams. The Fourth District Court of Appeal reverses, holding that Williams' claim for stock ownership was a personal action, not a derivative shareholder action, and therefore did not qualify for attorney's fees under Florida's derivative action statute.
The court held that Williams' action was personal, not derivative, and therefore did not entitle her to attorney's fees under the derivative action statute. The injury was to Williams individually, not to the corporation or stockholders generally.
[1] A shareholder's derivative suit enforces a right of action existing in the corporation, not in the individual shareholder.
[2] A direct or individual shareholder action enforces a right of action existing in the shareholder to redress an injury sustained directly and individually, separate from o…
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Join FLexlaw to unlock all legal intelligence“a derivative suit as an action in which a stockholder seeks to enforce a right of action existing in the corporation”
Court's definition of derivative action under Florida law
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Join FLexlaw to unlock all legal intelligenceLinda Williams filed a multi-count suit against Fort Pierce Corporation and its officers. The trial court denied most of her claims but found that Wil…
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POLEN, Judge.
Fort Pierce Corporation appeals the final order granting attorney’s fees and interest to Linda Williams. We reverse.
Linda Williams filed a multi-count suit against the Fort Pierce Corporation and its officers. The trial court denied most of her claims, but did find that Ms. Williams was entitled to thirty-three percent of the stock in the Fort Pierce Corporation. Following the judgment, Ms. Williams filed a post-judgment motion for attorney’s fees pursuant to section 607.07401, Florida Statutes (1993). Ms. Williams believed that she prevailed in a derivative suit and was therefore entitled to fees under section 607.07401. The trial court agreed and awarded her $52,000.
The trial court erred in awarding Ms. Williams fees based on a derivative cause of action. Shareholders’ derivative actions are brought under section 607.07401, Florida Statutes. The courts have defined a derivative suit as an action in which a stockholder seeks to enforce a right of action existing in the corporation. Citizens Nat’l Bank of St. Petersburg v. Peters, 175 So. 2d 54 (Fla. 2d DCA 1965) (citing James Talcott, Inc. v. McDowell, 148 So. 2d 36 (Fla. 3d DCA 1962)). Conversely, a direct action, or as some prefer, an individual action, is defined as a suit by a stockholder to enforce a right of, action existing in the stockholder. Id. at 56. What these definitions convey is that stockholders may bring a suit in their own right to redress an injury sustained directly by them individually and which is separate and distinct from that sustained by other stockholders. If, however, the injury is primarily against the corporation, or the stockholders generally, then the cause of action is in the corporation and the individual’s right to bring it is derived from the corporation.
In the case at bar, Ms. Williams prevailed on a cause of action that was personal and not derivative. At trial, Ms. Williams produced the articles of incorporation that showed she was entitled to thirty-three percent of Fort Pierce Corporation stock. Fort Pierce Corporation’s decision not to issue that stock to her does not cause injury to the corporation or the stockholders as discussed in Peters. It cannot be said that the corporation suffered as a result of Mrs. Williams’ failure to possess stock. In requesting the court to order Fort Pierce Corporation to issue that stock, she was not suing to enforce a right of action existing in the corporation. Instead, Ms. Williams was suing to enforce a right of action existing in her, and attempting to redress her own injury. She was the only person injured by the corporation’s decision not to issue the stock. Such an action is personal and did not entitle her to fees under the statute.
Accordingly, we reverse the trial court’s award of fees under section 607.07401, Florida Statutes (1993).
REVERSED.
WARNER and FARMER, JJ., concur.
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Salit v. Ruden, 742 So. 2d 381 (Fla. 4th DCA 1999)…ate right or to prevent or remedy a wrong to the corporation, where the corporation, because it is controlled by the wrongdoers or for other reasons, fails and refuses to take appropriate action for its own protection. See Fort Pierce Corp. v. Ivey, 671 So. 2d 206, 207 (Fla. 4th DCA 1996); Alario v. Miller, 354 So. 2d 925, 926 (Fla. 2d DCA 1978). A direct or individual action is a suit by a stockholder to enforce a right of action existing in the stockholder. See Fort Pierce Corp., 671 So. 2d at 207. As this…
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FOX v. Prof'l Wrecker Operators OF Fla., Inc., 801 So. 2d 175 (Fla. 5th DCA 2001)…Action On Behalf Of A Member Of A Not-For-Profit Corporation. A derivative action is generally defined as a cause of action on behalf of a stockholder to enforce a right of action that exists on behalf of the corporation. Fort Pierce Corp. v. Ivey, 671 So. 2d 206 (Fla. 4th DCA 1996). It seeks redress for an injury suffered by the corporation or the stockholders generally. Id. A direct action, on the other hand, is a cause of action on behalf of a stockholder to enforce a right of action that exists on behalf…
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Dinuro Invs., LLC v. Felisberto Figueira Camacho, 141 So. 3d 731 (Fla. 3d DCA 2014)…ida corporate law, as nearly all subsequent cases deciding whether an action is direct or derivative have quoted Peters or one of its progeny. See, e.g., Karten v. Woltin, 23 So. 3d 839, 840-41 (Fla. 4th DCA 2009) (quoting Fort Pierce Corp. v. Ivey, 671 So. 2d 206, 207 (Fla. 4th DCA 1996)); Ivey, 671 So. 2d at 207 (quoting Peters, 175 So. 2d at 56); Alano v. Miller, 354 So. 2d 925, 926 (Fla. 2d DCA 1978) (quoting Peters, 175 So. 2d at 56); Fried v. Easton, 293 So. 2d 87, 88 (Fla. 3d DCA 1974) (quoting Peters,…
Previewing 3 of 12 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Citizens Nat'l Bank OF ST. Petersburg v. Peters, 175 So. 2d 54 (Fla. 2d DCA 1965)
- James Talcott, Inc. v. McDOWELL, 148 So. 2d 36 (Fla. 3d DCA 1962)