INVESTORS INSURANCE GROUP, INC., APPELLANT,
v.
ROGER E. KLING, APPELLEE
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Investors Insurance Group appeals from a judgment requiring it to indemnify Roger Kling, a former president of its subsidiary Ampat Group, under Florida's corporate indemnification statute. The court affirmed, holding that Kling met the statutory requirements for mandatory indemnification because he assumed the officer position at the parent company's request and successfully defended against a tax liability action.
The trial court correctly applied the statute. Under section 607.0850(1), a parent company may indemnify a director or officer of a subsidiary who took the position at the parent's request. Section 607.0850(3) makes indemnification mandatory when the protected person successfully defends the proceeding. Kling met both criteria, entitling him to mandatory indemnification.
[1] A parent corporation may indemnify a director or officer of a subsidiary corporation if the individual took the position at the request of the parent company.
[2] A corporation's bylaws may require indemnification of officers and directors to the extent permitted by statute.
Previewing 2 of 5 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“To the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in defense of any proceeding referred to in subsection (1) or subsection (2), or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses actually and reasonably incurred by him in connection therewith”
Establishes the mandatory indemnification provision when a protected person successfully defends a proceeding
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Join FLexlaw to unlock all legal intelligenceKling was asked by Gemco Corporation's president Ginsberg to become president of Ampat Group, a Gemco subsidiary, to consolidate the company's metal a…
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PER CURIAM.
Appellant, Investors Insurance Group, Inc. (“IIG”), appeals from a final judgment that indemnified appellee, Roger E. Kling, under section 607.0850, Florida Statutes (1995). The issue on appeal is whether the trial court correctly applied the statute to the facts of this case. We affirm.
According to Kling’s testimony, the president of Gemco Corporation (now IIG), Mr. Ginsberg, asked Kling to become president of a Gemco subsidiary. Apparently, Ginsberg wanted Klipg to bring together all of Gem-co’s metal and glass works into one cohesive subsidiary known as Ampat Group, Inc. Kling agreed to Ginsberg’s request and served as president of Ampat Group from 1981 to 1985. In 1993, the State of New York brought an action against Kling for the unpaid taxes, interest, and penalties of Am-pat Group during the time in which he was president. Kling successfully defended himself against the action and brought this complaint against IIG for indemnification under section 607.0850, Florida Statutes (1995), and IIG’s bylaws.
IIG’s bylaws, and those of Gemco as its predecessor in interest, required Gemco and IIG to indemnify all of the persons whom it was authorized to indemnify by statute. Under section 607.0850(1), Florida Statutes (1995), a parent company may indemnify someone who was a director or officer of a subsidiary corporation, if that person had taken the position at the request of the parent company. Furthermore, section 607.0850(3), Florida Statutes (1995) provides that in the event one of the protected persons has been successful on the merits or otherwise in defense of a proceeding of a nature subject to the discretionary indemnification provisions, the indemnification obligation becomes mandatory:
To the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in defense of any proceeding referred to in subsection (1) or subsection (2), or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses actually and reasonably incurred by him in connection therewith, (emphasis added)
Thus, under both its own bylaws and section 607.0850(3), IIG must indemnify Kling if he meets the criteria of section 607.0850(1).
The trial court chose to believe the testimony of Kling and found that “[t]he uncon-tradieted evidence apparently is that Gins berg wanted [Kling] in that position to consolidate and re-form all of the metal and glass subsidiaries of Gemeo.” Applying section 607.0850(1) to that factual finding, the trial court concluded that Kling was an officer of the subsidiary corporation at the request of the parent .corporation and was, therefore, entitled to indemnification. IIG attempts to re-argue the facts, but we find that there is competent and substantial evidence to support the trial court’s findings of fact. Accordingly, we defer to the trial court, and we find that the trial court did not abuse its discretion in determining that the request of the President Ginsberg amounted to the request of the parent corporation, entitling appellee Kling to indemnification.
AFFIRMED.
WEBSTER and LAWRENCE, JJ., and SHIVERS, DOUGLASS B., Senior Judge, concur.
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