JAMES CODY AND DEBBIE CODY, PETITIONERS,
v.
COLONIAL IMAGING PRODUCTS & SERVICE, ET AL., RESPONDENTS
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Cody sought certiorari review of orders awarding attorney fees and staying litigation. The trial court awarded fees to Colonial and Calkins based on section 607.1431(4), Florida Statutes, but failed to make the required statutory findings that Cody acted arbitrarily, frivolously, vexatiously, or in bad faith. The appellate court quashed the fee awards and the stay.
The trial court departed from the essential requirements of law by awarding attorney fees without making the requisite statutory findings that Cody acted arbitrarily, frivolously, vexatiously, or in bad faith. Additionally, even if attorney fees were recoverable, section 607.1431(4) does not authorize staying litigation pending payment.
[1] A court may award attorney's fees and expenses to parties affected adversely by another party's arbitrary, frivolous, vexatious, or bad-faith actions in a corporate disso…
[2] A voluntary dismissal of a corporate dissolution complaint does not, in itself, establish that the dismissing party acted arbitrarily, frivolously, vexatiously, or not in…
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Join FLexlaw to unlock all legal intelligence“If the court determines that any party has commenced, continued, or participated in an action under 607.1430 (seeking judicial dissolution of a corporation) and has acted arbitrarily, frivolously, vexatiously, or not in good faith, the court may in its discretion award attorney's fees and other reasonable expenses to the other parties to the action who have been affected adversely by such actions”
Establishes the statutory requirement for attorney fee awards under section 607.1431(4), which requires specific findings about the party's conduct.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceCody filed a complaint against Colonial Imaging Products and Service and co-owners Fatima and David Calkins for corporate dissolution and appointment …
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DAUKSCH, Judge.
Petitioners, James Cody and Debbie Cody (hereinafter “Cody”), seek certiorari review of orders awarding attorney fees in favor of respondents and staying litigation until the attorney fees are paid. The underlying action involves respondent corporation, Colonial Imaging Products and Service (“Colonial”), and its officers, Cody and respondents Fatima Calkins and David Calkins (“Cal-kins”), who are deadlocked in the management of the corporation’s affairs.
Cody filed a complaint against Colonial and Calkins for dissolution of corporation and appointment of a receiver. Calkins served an answer and counterclaim against Cody for breach of fiduciary duty. Cody voluntarily dismissed the complaint for dissolution of corporation, and served an answer and “counterclaim” to Calkins’ counterclaim. Calkins and Colonial moved for attorney fees and costs. After a hearing, the court determined that Colonial and Calkins were entitled to attorneys fees for defending the first action brought by Cody, which was later voluntarily dismissed. The court found that Cody’s subsequent “counterclaim” to the Cal-kins’ counterclaim was improper and unauthorized under the civil rules of procedure. The court also found that Cody’s “counterclaim” was based on the same claims raised by the initial complaint because it attempted to establish Cody’s majority interest in Colonial and alleged that Calkins had breached their fiduciary duty and attempted to destroy Colonial. The court ordered Cody to pay Calkins the amount of $6,869 for attorney fees and $755.30 for costs, for a total of $7,624.30. The court ordered Cody to pay Colonial the amount of $1,962.37 for attorney fees. The court further ordered that Cody’s counterclaim and pending motions would be stayed until Cody complied with the terms of the order and made payment.
Section 607.1431(4), Florida Statutes (1997) reads as follows:
If the court determines that any party has commenced, continued, or participated in an action under 607.1430 (seeking judicial dissolution of a corporation) and has acted arbitrarily, frivolously, vexatiously, or not in good faith, the court may in its discretion award attorney’s fees and other reasonable expenses to the other parties to the action who have been affected adversely by such actions, (parenthetical added)
The court in awarding attorney’s fees did not find that Cody acted arbitrarily, frivolously, vexatiously, or in bad faith. Nor did any party allege that there was a contractual provision for the recovery of attorney’s fees. There was no other cited statutory basis for the award of attorney’s fees other than section 607.1431(4), Florida Statutes, and the court did not make the requisite findings under that statute to support the award. Florida Rule of Civil Procedure 1.420(d) provides for costs to be assessed for the dismissal of a civil action. It further provides that if a party who has dismissed a claim commences an action based upon the same claim against the same adverse party, the court shall make an order for the payment of costs of the claim previously dismissed and shall stay the proceedings until the party has complied with the order. Rule 1.420(d), though, only provides for costs, not attorney fees. See O.A.G. Corp. v. Britamco Underwriters, Inc., 707 So. 2d 785 (Fla. 3d DCA 1998).
The trial court departed from the essential requirements of law in awarding attorney’s fees. The court likewise erred by staying Cody’s proceedings. Even if attorney fees had been recoverable under section 607.1431(4), the statute does not authorize a stay of litigation pending payment. Certio-rari relief is appropriate in this case because of the erroneous stay. We therefore grant the petition for certiorari and quash the orders awarding attorney fees.
PETITION GRANTED; ORDERS QUASHED.
GOSHORN and HARRIS, JJ., concur.
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