SUN STATES UTILITIES, INC., APPELLANT,
v.
DESTIN WATER USERS, INC., A FLORIDA NOT-FOR-PROFIT CORPORATION, APPELLEE
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Sun States Utilities appealed the dismissal of its action against a competitor for alleged encroachment into its service area. The trial court dismissed the case based on Sun States' transfer of its physical assets to another corporation during litigation, finding it lacked standing. The appellate court reversed, holding that divestiture of assets does not terminate standing to maintain an action.
A company's divestiture of its physical assets pending litigation does not terminate its standing to maintain the action. Under Florida Rule of Civil Procedure 1.260(e), transfer of interest in a cause of action pending litigation may be the basis for substitution of parties, but not dismissal of the action.
[1] A plaintiff's divestiture of physical assets pending litigation does not terminate its standing to maintain the action.
[2] Under Florida Rule of Civil Procedure 1.260(e), a transfer of interest in a cause of action pending litigation may be the basis for substitution of parties, but not dismi…
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Join FLexlaw to unlock all legal intelligence“Appellant's divestiture of its physical assets pending litigation did not terminate Appellant's standing to maintain the instant action.”
States the core holding of the case regarding standing after asset transfer.
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Join FLexlaw to unlock all legal intelligenceSun States Utilities, a sewer services company, brought an action against Destin Water Users, a competitor, alleging encroachment into its service are…
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BOOTH, Judge.
This cause is before us on appeal from the trial court’s final judgment dismiss ing Appellant’s cause of action. Appellant, a company that provides sewer services, brought the action against Appellee, a competitor, for alleged encroachment into Appellant’s service area resulting in business damages. The trial court’s order dismissing the cause was based on Appellant having transferred its physical assets to another closed corporation, also owned by Mr. Gibson, during the pendency of the litigation. We hold that Appellant’s divestiture of its physical assets pending litigation did not terminate Appellant’s standing to maintain the instant action.1 Smith v. Spitale, 675 So. 2d 207, 209 & n. 1 (Fla. 2d DCA 1996); Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2d 490, 496 (Fla. 3d DCA 1994), rev. denied, 659 So. 2d 272 (Fla.1995); Florida Power Corp. v. McNeely, 125 So. 2d 311, 318 (Fla. 2d DCA 1960), cert. denied, 138 So. 2d 341 (Fla.1961). Accordingly, we reverse the trial court’s ruling that Appellant lacks standing.
We note that the record contains evidence of an assignment of the right to maintain the instant action to Mr. Gibson personally. Florida Rule of Civil Procedure 1.260(e) provides:
(c) Transfer of Interest. In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.
Under this rule, transfer of an interest in a cause of action pending litigation may be the basis for the substitution of parties, but not dismissal of the action. In Gas Dev. Corp. v. Royal Oak Builders, Inc., 253 So. 2d 738, 741 (Fla. 4th DCA 1971), the district court of appeal held:
Sometime after the filing of the suit, Royal Oak Builders, Inc., was caused to be dissolved by its 99% stockholder, Mr. Atkins. The appellants contend that the dissolution of the corporation deprived it of standing to maintain the action because all of the assets of the corporation, including this cause of action, were transferred to Mr. Atkins. Assuming that the appellants are correct in their position that Mr. Atkins received all property of the corporation, their ultimate conclusion, i.e., that the suit should have been dismissed because it was not maintained in the name of the real party of interest, is untenable. Rule 1.260(e), F.R.C.P., 30 F.S.A. fully answers this contention.
In Miami Airlines, Inc., v. Webb, 114 So. 2d 361, 363 (Fla. 3d DCA 1959), the court held:
two alternatives are presented where there is a transfer of the cause of action pending suit. The action may be continued in the name of the original party, or the court may upon application allow substitution of the transferee.
See Collier v. Canal Ins. Co., 511 So. 2d 736, 738 (Fla. 1st DCA 1987); Schmidt v. Mueller, 335 So. 2d 630, 631 (Fla. 2d DCA 1976).
Thus, the trial court’s final judgment is REVERSED and the case is REMANDED to the trial court for further consideration in light of rule 1.260, and to allow such substitution of parties as may be appropriate.
JOANOS and VAN NORTWICK, JJ., concur. . Standing to maintain a lawsuit depends on whether the party has a personal stake in the outcome of the proceeding, such as an injury that may be redressed by the suit. Peregood v. Cosmides, 663 So. 2d 665, 668 (Fla. 5th DCA 1995), rev. denied, 673 So. 2d 29 (Fla.1996); Gregory v. Indian River County, 610 So. 2d 547, 554 (Fla. 1st DCA 1992). When considering standing, the .trial court must accept all the material allegations as true, and construe them in favor of the challenged party. See Coalition for Adequacy and Fairness in Sch. Funding v. Chiles, 680 So. 2d 400, 403 (Fla.1996); In re Huff, 109 B.R. 506, 509 (S.D.Fla.1989). Standing should not be confused with the merits of a claim. St. Martin's Episcopal Church v. Prudential-Bache Sec., Inc., 613 So. 2d 108, 110 n. 4 (Fla. 4th DCA 1993).
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Levine v. Nicholas Gonzalez, M.D., 901 So. 2d 969 (Fla. 4th DCA 2005)…ow [the person to whom the interest was transferred] to be either substituted for or joined with the original party-plaintiff. Schmidt v. Mueller, 335 So. 2d 630, 631 (Fla. 2d DCA 1976); see also Sun States Utils., Inc. v. Destin Water Users, Inc., 696 So. 2d 944 (Fla. 1st DCA 1997); C.A. Leasing Serv. Corp. v. Zorn’s (Howard) Equip. Serv., 565 So. 2d 744 (Fla. 5th DCA 1990); Gas Dev. Corp. v. Royal Oak Builders, Inc., 253 So. 2d 738 (Fla. 4th DCA 1971); Narrows Corp. v. Boca Ciega Sanitary Dist., 230 So. 2d…
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Martin Cnty. Conservation Alliance & 1000 Friends of Fla., Inc. v. Martin Cnty., 73 So. 3d 856 (Fla. 1st DCA 2011)…3). The fourth requirement is the only standing element at issue here. We are obligated to accept the material facts supporting standing as true and construe them in favor of the challenged party. Sun States Utils., Inc. v. Destin Water Users, Inc., 696 So. 2d 944, 945 n. 1 (Fla. 1st DCA 1997). In this proceeding, the appellants challenged Martin County ordinances that would have amended the Martin County Comprehensive Growth Management Plan. Before the administrative law judge (ALJ), the appellants introduc…1 / 2
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Delgado v. Agency for Health Care Admin., 237 So. 3d 432 (Fla. 1st DCA 2018)…ng AHCA to recover third-party benefits from "[a]ny person who has received the third-party benefits"). Consequently, Appellants have at least a $357,407.05 "stake" in the outcome of this action. Sun States Utils., Inc. v. Destin Water Users, Inc. , 696 So. 2d 944, 945 n.1 (Fla. 1st DCA 1997) ("Standing to maintain a lawsuit depends on whether the party has a personal stake in the outcome of the proceeding, such as an injury that may be redressed by the suit."); see also Ft. Meyers , 53 So. 3d at 1162 ("The a…
Previewing 3 of 8 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited (13 total)
- Morton L. Ginsberg & MLG Props., Inc. v. Lennar Fla. Holdings, 645 So. 2d 490 (Fla. 3d DCA 1994)
- Coal. FOR Adequacy & Fairness IN Sch. Funding, Inc. v. Lawton Chiles, 680 So. 2d 400 (Fla. 1996)
- Fla. Power Corp. v. McNEELY, 125 So. 2d 311 (Fla. 2d DCA 1960)
- Eyrie Land Co. v. Moncrief, 610 So. 2d 547 (Fla. 5th DCA 1992)
- Peregood v. Cosmides, 663 So. 2d 665 (Fla. 5th DCA 1995)
- Schmidt v. Mueller, 335 So. 2d 630 (Fla. 2d DCA 1976)
- Miami Airlines, Inc. v. Webb, 114 So. 2d 361 (Fla. 3d DCA 1959)
- Smith v. Spitale, 675 So. 2d 207 (Fla. 2d DCA 1996)
- ST. Martin's Episcopal Church v. Prudential-Bache Sec., Inc., 613 So. 2d 108 (Fla. 4th DCA 1993)
- Westinghouse Elec. Corp. v. Carol, 138 So. 2d 341 (Fla. 1961)