JAMES G. KARNEGIS, GEORGE C. KARNEGIS, THEODORA KARNEGIS AND ROYAL BAKING CO., INC., A FLORIDA CORPORATION, APPELLANTS,
v.
ARISTIDES LAZZO, APPELLEE
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
Minority stockholder brought a derivative action and personal claims against majority stockholders for alleged self-dealing and mismanagement. The appellate court upheld the trial court's denial of the motion to dismiss on substantive grounds but reversed on the ground of improper misjoinder of causes of action, requiring separate pleading of derivative versus personal claims.
The allegations were sufficient to state causes of action, but the trial court erred in rejecting the misjoinder ground. Derivative stockholder claims and personal claims must be pleaded separately; the plaintiff must either choose one cause of action in an amended complaint or file separate actions.
[1] A derivative stockholder action may be brought on behalf of a corporation to seek accounting and damages from individual defendants for actions detrimental to the corpora…
[2] A stockholder may also have a separate personal cause of action against individual defendants for damages distinct from the corporation's claims.
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“we are of the opinion that the trial court committed error in rejecting the ground of the motion to dismiss claiming' misjoinder of causes of action”
Establishes the core holding that the trial court erred by not granting the misjoinder objection.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligencePlaintiff was a minority stockholder and secretary of a corporation; defendants were majority stockholders and officers/directors. Plaintiff alleged d…
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
This is an interlocutory appeal by the defendants below from an order denying their motions to dismiss and to strike portions of the amended complaint. The ap-pellee-plaintiff was a minority stockholder in the defendant corporation. The individual defendants owned the remainder of the stock, representing the majority interest. Plaintiff was secretary of the corporation. The individual defendants were officers and directors thereof. Alleging various actions and practices of the individual defendants which were financially detrimental to the corporation, including payment to themselves of excessive salaries, and alleging their negotiation of a proposed sale of all assets of the corporation to an outside party, at a price alleged to be less than the value thereof with separate financial benefits to accrue therefrom to the individual defendants, and which was alleged to be an indirect violation of an agreement between the stockholders against sale of stock without opportunity of stockholders to buy the same, proceeding by derivative stockholder action for the benefit of the corporation, the plaintiff sought accounting by the individual defendants to the corporation. Also, plaintiff personally sought accounting and damages from said defendants. In the amended complaint the two causes of action were not set forth in separate counts, or otherwise pleaded separately.
The defendants filed a lengthy motion to dismiss the amended complaint, contending generally that the allegations were insufficient upon which to predicate relief, and including a ground claiming improper join-der of causes of action. The defendants also filed a motion to strike certain portions of the amended complaint. The trial court denied the motions to dismiss and to strike, and the defendants appealed.
We uphold the order of the trial court to the extent that it constituted a ruling that the allegations of the amended complaint were sufficient to state the causes of action referred to above. However, on authority of General Dynamics Corporation v. Hewitt, Fla.App.1969, 225 So.2d 561, we are of the opinion that the trial court committed error in rejecting the ground of the motion to dismiss claiming' misjoinder of causes of action. On the authority of the cited cases, we hold that the trial court should have granted the motion to dismiss, with leave to the plaintiff to file an amended complaint setting forth either the derivative stockholder’s (corporation’s) cause of action or the plaintiff’s separate personal cause of action against the individual defendants, without prejudice to the plaintiff to file a separate action on the cause of action not so included' in such new amended complaint.
Accordingly, the order appealed from is affirmed in part and reversed in part, and the cause is remanded to the circuit court for further proceedings not inconsistent herewith.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
-
Wolfe v. Am. Sav. & Loan Assoc. OF Fla., 539 So. 2d 606 (Fla. 3d DCA 1989)…wrongful recapitalization personal right belonging to stockholder); Reifsnyder v. Pittsburgh Outdoor Advertising Co., 405 Pa. 142, 173 A. 2d 319 (1961) (shareholder may bring direct action to protect voting rights). See generally Karnegis v. Lazzo, 243 So. 2d 642 (Fla. 3d DCA 1971) (allegations of both individual and derivative claims sufficient to state separate causes of action). The trial judge erred in ruling to the contrary. As we have noted, the lower court reached neither the legal nor the factual va…
-
The Dep't OF Ins. OF the State OF Fla. v. Coopers & Lybrand, 570 So. 2d 369 (Fla. 3d DCA 1990)…e actions on the dismissed causes of action. See Pensacola Elec. Co. v. Soderlind, 60 Fla. 164, 53 So. 722 (1910) (proper procedure is for party to elect which of improperly joined claims it wishes to proceed on in original suit); Karnegis v. Lazzo, 243 So. 2d 642 (Fla. 3d DCA 1971) (trial court should have granted motion to dismiss, with leave to plaintiff to file amended complaint, and without prejudice to plaintiff to file separate action on cause of action not included in new amended complaint). Affirme…
-
Haas v. ROE, 696 So. 2d 1254 (Fla. 2d DCA 1997)…0) (trial court properly permitted department option to choose one of nine capacities it sued in to continue in pending lawsuit, and properly dismissed remaining eight claims without prejudice to raising them in separate actions); Karnegis v. Lazzo, 243 So. 2d 642 (Fla. 3d DCA 1971) (plaintiff may not by shareholders’ derivative action seek in same lawsuit accounting from corporation when he personally sought accounting and damages from majority stockholders, officers, and directors; trial court should have g…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Gen. Dynamics Corp. v. Hewitt, 225 So. 2d 561 (Fla. 3d DCA 1969)