HENRY DUBBIN AND DOROTHY DUBBIN, APPELLANTS,
v.
TOUCHE ROSS & CO., A FLORIDA PARTNERSHIP, AND TOUCHE ROSS & CO., A NEW YORK PARTNERSHIP, APPELLEES; DANIEL DUBBIN AND GLADYS DUBBIN, APPELLANTS, V. TOUCHE ROSS & CO., A FLORIDA PARTNERSHIP, AND TOUCHE ROSS & CO., A NEW YORK PARTNERSHIP, APPELLEES
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Stockholders of Canaveral International Corporation sued an accounting firm (Touche Ross) for malpractice and breach of contract related to services provided to the corporation. The court affirmed dismissal, holding that the stockholders' injuries were derivative of corporate injury rather than direct individual injury, and therefore lacked standing to sue.
Stockholders lack standing to sue directly for injuries that are primarily against the corporation or are shared by stockholders generally. The plaintiffs' claims of direct injury and third-party beneficiary status did not create an exception to this rule, as the injury was primarily to the corporation.
[1] A stockholder may bring a suit in their own right to redress an injury sustained directly by them, which is separate and distinct from injuries sustained by other stockho…
[2] If an injury is primarily against a corporation or stockholders generally, the cause of action belongs to the corporation, and an individual's right to bring suit is deri…
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Join FLexlaw to unlock all legal intelligence“A stockholder may bring a suit in his own right to redress an injury sustained directly by him, and which is separate and distinct from that sustained by other stockholders; however, if injury is primarily against corporations, or stockholders generally, then the cause of action is in the corporation and the individual's right to bring it is derived from the corporation.”
States the controlling rule for stockholder standing to sue third parties; establishes that direct injury separate from other stockholders is required
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Join FLexlaw to unlock all legal intelligenceHenry and Dorothy Dubbin, and Daniel and Gladys Dubbin, were stockholders of Canaveral International Corporation. The corporation retained Touche Ross…
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PER CURIAM.
These two appeals have been consolidated for all appellate purposes. In each case, the appeal is from a dismissal of the complaint with prejudice. The only difference between the two complaints is the amount of damages sought by the individual plaintiffs.
The plaintiffs filed their complaints charging the defendants, an accounting firm, with malpractice and breach of a contract for services to a public corporation known as Canaveral International Corporation. The plaintiffs recognize the rule as stated in Fried v. Easton, Fla.App.1974, 293 So. 2d 87, to wit:
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“A stockholder may bring a suit in his own right to redress an injury sustained directly by him, and which is separate and distinct from that sustained by other stockholders; however, if injury is primarily against corporations, or stockholders generally, then the cause of action is in the corporation and the individual’s right to bring it is derived from the corporation. Citizens National Bank of St. Petersburg v. Peters, Fla.App. 1965, 175 So. 2d 54.”
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The plaintiffs claimed that they suffered direct or individual damage and that they were third party beneficiaries to the contract for services between the corporation and the defendants. The trial court held that the above-quoted rule controlled and, therefore, dismissed the complaints. The plaintiffs urge that the fact that they sought to have their stock registered with the Securities and Exchange Commission so that its value would be enhanced, and the fact that it was necessary for them to make their application for registration as an adjunct to the corporation’s application to register stock, made them parties to, or third party beneficiaries of, the contract between the corporation and the public accounting firm. The trial court correctly determined that the facts pleaded did not create an exception to the rule. The injury, if any, was primarily to the corporation. See James Talcott, Inc. v. McDowell, Fla.App.1962, 148 So. 2d 36. Cf. Grandin Industries, Inc., v. Florida National Bank of Orlando, Fla.App.1972, 267 So. 2d 26. See also Cullum v. General Motors Acceptance Corporation, Tex.Civ.App.1938, 115 S.W. 2d 1196.
Affirmed.
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Charles "Bebe" Rebozo v. Royal Indem. Co. & Baldwin Ins. Agency, Inc., 369 So. 2d 644 (Fla. 3d DCA 1979)…h United States Fire did not cover the judgment against Washwell, Inc. .The appellees cite such cases as Fried v. Easton, 293 So. 2d 87 (Fla. 3d DCA 1974), and Nelson v. Miller, 212 So. 2d 66 (Fla. 3d DCA 1968). But see Dubbin v. Touche Ross & Co., 324 So. 2d 128 (Fla. 3d DCA 1975), cert. denied, 336 So. 2d 1181 (Fla.1976) (quoting exception that “[a] stockholder may bring a suit in his own right to redress an injury sustained direct [*646] ly by him, and which is separate and distinct from that sustained by…
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Invs. TAX Sheltered Real Est., Ltd. v. Laventhol, 370 So. 2d 815 (Fla. 3d DCA 1979)…be a showing that the accountant had been guilty of gross negligence, or, having knowledge that the third party intended to rely upon the statements prepared by him, was guilty of fraud in connection therewith. See also, Dubbin v. Touche Ross & Co., 324 So. 2d 128 (Fla.3d DCA1975) and Mulligan v. Wallace, 349 So. 2d 745 (Fla.3d DCA1977).7 See general [*818] ly, 46 A.L.R.3d 979, Liability of Public Accountant to Third Parties. We have carefully considered the record and points on appeal and have concluded tha…
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Coopers & Lybrand v. Trs. of the Archdiocese of Miami/Diocese of ST. Petersburg Health & Welf. Plan, 536 So. 2d 278 (Fla. 3d DCA 1988)…2d 767 (Fla.1980) (accountant not liable for negligence in preparation of financial statement to party not in privity); see also Mulligan v. Wallace, 349 So. 2d 745 (Fla. 3d DCA), cert. denied, 354 So. 2d 983 (Fla.1977); Dubbin v. Touche Ross & Co., 324 So. 2d 128 (Fla. 3d DCA 1975), cert. denied, 336 So. 2d 1181 (Fla.1976); Canaveral Capital Corp. v. Bruce, 214 So. 2d 505 (Fla. 3d DCA 1968); Dantzler Lumber & Export Co. v. Columbia Casualty Co., 115 Fla. 541, 156 So. 116 (1934) (cause of action lies for negl…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Citizens Nat'l Bank OF ST. Petersburg v. Peters, 175 So. 2d 54 (Fla. 2d DCA 1965)
- James Talcott, Inc. v. McDOWELL, 148 So. 2d 36 (Fla. 3d DCA 1962)
- Grandin Indus., Inc. v. Fla. Nat'l Bank AT Orlando, 267 So. 2d 26 (Fla. 4th DCA 1972)
- Mortimer Fried v. Easton, 293 So. 2d 87 (Fla. 3d DCA 1974)