CAY CONSTRUCTION CO., A FLORIDA CORPORATION, SYLVAN B. KRAUSE, INDIVIDUALLY AND AS AN OFFICER, DIRECTOR AND STOCKHOLDER OF CAY CONSTRUCTION CO., AND AS AN OFFICER AND DIRECTOR OF CONLEE CONSTRUCTION COMPANY, AND J. LEON KAHN, INDIVIDUALLY AND AS A STOCKHOLDER OF CONLEE CONSTRUCTION COMPANY AND AS AN OFFICER, DIRECTOR AND STOCKHOLDER OF CAY CONSTRUCTION CO., APPELLANTS,
v.
CONLEE CONSTRUCTION COMPANY, A FLORIDA CORPORATION, APPELLEE
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Cay Construction Co. and its officers appealed discovery orders requiring production of extensive documents and financial records in an accounting suit. The court held that in an accounting action, discovery must first focus on whether the plaintiff has a right to an accounting before permitting discovery into the amount owed.
The court reversed the discovery orders to the extent they required production of documents not pertaining to the first triable issue—the plaintiff's right to an accounting—but affirmed the orders regarding documents relevant to that threshold issue. In accounting actions, the right to an accounting must be decided first before discovery into the amount owed.
“in an action for accounting there are two triable issues, the first being the right to an accounting. This issue must be decided first before the court can enter orders requiring production of documents related solely to the second issue, the accounting itself.”
Establishes the foundational rule that discovery into accounting amounts is premature before resolving the threshold right to an accounting
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Join FLexlaw to unlock all legal intelligenceConlee Construction Company sued Cay Construction Company, Sylvan B. Krause, and J. Leon Kahn for an accounting, alleging that Krause and Kahn, as off…
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The defendants, Cay Construction Company, Sylvan B. Krause and J. Leon Kahn, bring interlocutory appeal from orders directing them to produce certain documents in a suit brought by Conlee Construction Company. Krause was sued as an officer and director of Conlee as well as an officer and director of Cay. Kahn was sued as both a stockholder of Conlee and as an officer and director of Cay.
*564The complaint sought an accounting and alleged that Krause and Kahn seized a corporate opportunity by purchasing for themselves and Cay instead of Conlee certain real property situated in Brevard County. The complaint also alleged that Krause and Kahn formed Cay Construction Company, helped it compete with Con-lee, and used Conlee’s assets to help effectuate this purpose.
After preliminary motions the defendants filed an answer to the complaint. Plaintiff-Conlee then moved to amend the complaint and filed interrogatories relative to the purchase of property. The defendants responded to the interrogatories after which the plaintiff filed motions to produce numerous documents and writings in the possession of the defendants.
The trial court entered two orders requiring certain documents, objects and things to be produced by the defendants for inspection, copying and photographing by the plaintiff. It is from the granting of these motions that defendants appeal.
The orders to produce were very broad and included numerous items, copies of which were obtainable from the public records. The order also required the production of journals, ledgers, work papers, can-celled checks, vouchers, financial statements, minute books, stock books and similar items which could only have relevance as to the amount of any sums that might be due the plaintiff in an accounting and not to the issue of plaintiff’s right to the accounting.
The case of Charles Sales Corp. v. Rovenger, Fla.1956, 88 So.2d 551, set forth the rule in Florida that in an action for accounting there are two triable issues, the first being the right to an accounting. This issue must be decided first before the court can enter orders requiring production of documents related solely to the second issue, the accounting itself.
This case has been followed in Drucker v. Martin, Fla.App.1963, 157 So.2d 435; Cooper v. Fulton, Fla.App.1959, 107 So.2d 798.
Accordingly, the orders to produce appealed from are reversed to the extent that they require production of documents, objects and things not pertaining to the first triable issue, plaintiff’s right to an accounting. The orders are affirmed as to those parts of the orders pertaining to the right of the plaintiffs to an accounting.
Affirmed, in part; reversed, in part.
WALDEN, C. J., and CROSS, J., concur.
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Conlee Constr. Co. v. CAY Constr. Co., 221 So. 2d 792 (Fla. 4th DCA 1969)…o produce certain specified items. From such order granting the motion to produce the defendants took an interlocutory appeal and posted a supersedeas bond. By opinion of this court, Cay Construction Co. v. Conlee Construction Company, Fla.App.1967, 200 So. 2d 563, we affirmed in part and reversed in part, and by separate order ordered that the plaintiff-construction company recover of and from the defendants its costs and expenses upon appeal. On February 27, 1968, pursuant to motion previously filed by the…
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Wood v. Brackett, 266 So. 2d 398 (Fla. 1st DCA 1972)…g the said motion without having determined the plaintiff’s right to an accounting. In its brief the defendant relies upon the decision of the District Court of Appeal, Fourth District of Florida, in Cay Construction Co. v. Conlee Construction Co., 200 So. 2d 563 (Fla.App.1967). In that case Conlee filed an action for an accounting and later filed a motion to produce certain documents in Cay’s possession. The trial court ordered the production. In reversing the trial court, the District Court of Appeal cited…
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Armstrong v. Piatt, 201 So. 2d 830 (Fla. 4th DCA 1967)…Court of Florida set forth that discovery as to an accounting must be deferred until the preliminary issue of the right to the accounting is settled. This case has been followed in Cay Construction Co. v. Conlee Construction Company, Fla.App. 1967, 200 So. 2d 563; Drucker v. Martin, Fla.App.1963, 157 So. 2d 435; Cooper v. Fulton, Fla.App.1959, 107 So. 2d 798. See Zenith Radio Corporation v. Dictograph Products Co., Inc., D.C.D.Del.1947, 6 F.R. D. 597, and the numerous federal cases in accord, cited in 4 Moor…
Previewing 3 of 6 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Charles Sales Corp. v. Rovenger, 88 So. 2d 551 (Fla. 1956)
- Cooper v. Fulton, 107 So. 2d 798 (Fla. 3d DCA 1959)
- Drucker v. Martin, 157 So. 2d 435 (Fla. 3d DCA 1963)