Florida Statute 617.07401 | Lawyer Caselaw & Research

The 2024 Florida Statutes

Title XXXVI
BUSINESS ORGANIZATIONS

Chapter 617
CORPORATIONS NOT FOR PROFIT

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F.S. 617.07401

617.07401 Members’ derivative actions.—

(1) A person may not commence a proceeding in the right of a domestic or foreign corporation unless the person was a member of the corporation when the transaction complained of occurred or unless the person became a member through transfer by operation of law from one who was a member at that time.

(2) A complaint in a proceeding brought in the right of a domestic or foreign corporation must be verified and allege with particularity the demand made to obtain action by the board of directors and that the demand was refused or ignored by the board of directors for at least 90 days after the date of the first demand unless, before the expiration of the 90 days, the person was notified in writing that the corporation rejected the demand, or unless irreparable injury to the corporation would result by waiting for the expiration of the 90-day period. If the corporation commences an investigation of the charges made in the demand or complaint, the court may stay any proceeding until the investigation is completed.

(3) The court may dismiss a derivative proceeding if, on motion by the corporation, the court finds that one of the groups specified in paragraphs (a)-(c) has made a good faith determination after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative suit is not in the best interests of the corporation. The corporation has the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation. The determination shall be made by:

(a) A majority vote of independent directors present at a meeting of the board of directors, if the independent directors constitute a quorum;

(b) A majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum; or

(4) A proceeding commenced under this section may not be discontinued or settled without the approval of the court. If the court determines that a proposed discontinuance or settlement substantially affects the interest of the members of the corporation, or a class, series, or voting group of members, the court shall direct that notice be given to the members affected. The court may determine which party or parties to the proceeding shall bear the expense of giving the notice.

(5) Upon termination of the proceeding, the court may require the plaintiff to pay any defendant’s reasonable expenses, including reasonable attorney’s fees, incurred in defending the proceeding if it finds that the proceeding was commenced without reasonable cause.

(6) The court may award reasonable expenses for maintaining the proceeding, including reasonable attorney’s fees, to a successful plaintiff or to the person commencing the proceeding who receives any relief, whether by judgment, compromise, or settlement, and may require that the person account for the remainder of any proceeds to the corporation; however, this subsection does not apply to any relief rendered for the benefit of injured members only and is limited to a recovery of the loss or damage of the injured members.

History.—s. 24, ch. 2009-205.

F.S. 617.07401 on Google Scholar

F.S. 617.07401 on Casetext

Amendments to 617.07401

Arrestable Offenses / Crimes under Fla. Stat. 617.07401

Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 617.07401.

Annotations, Discussions, Cases:

Cases Citing Statute 617.07401

Total Results: 11

Florida Department of Health v. Kenneth Woliner, M.D.

Court: Fla. Dist. Ct. App. | Date Filed: 2024-10-02T00:00:00-07:00

Snippet: but by the more specific provisions of section 617.07401(5), Florida Statutes, that address with particularity…evading the more stringent requirements of section 617.07401(5) and rendering that statutory provision meaningless

Leslie Gratz, etc. v. 1750 James Condominium Association, Inc.

Court: Fla. Dist. Ct. App. | Date Filed: 2024-08-28T00:00:00-07:00

Snippet: an “independent panelist” pursuant to section 617.07401(3)(c), Florida Statutes (2021), to investigate…trial court also concluded, pursuant to section 617.07401(3), that Robbins’ determination was “made in good… good faith and 1 Section 617.07401(3)(c), Florida Statutes, provides that a trial court may dismiss…the Association attorney’s fees under section 617.07401(5), Florida Statues (2021), because there was …requirement under that statute. 2 2 Section 617.07401(5), Florida Statutes, provides: Upon

Leslie Gratz, etc. v. 1750 James Condominium Association, Inc.

Court: Fla. Dist. Ct. App. | Date Filed: 2024-08-28T00:00:00-07:00

The Marbella Condominium Association, Inc. v. Richard A. Josepher

Court: Fla. Dist. Ct. App. | Date Filed: 2024-03-27T00:00:00-07:00

Snippet: award of fees in this case, rather than section 617.07401(5), Florida Statutes (2022). We agree…directors, the motion sought fees pursuant to section 617.07401(5). At the hearing on the Association’s trial…” The trial court then ruled that section 617.07401(5) applied to the fees determination and that …attorney’s fees by incorrectly applying section 617.07401(5) to the motion rather than section 718.303(1…both in the trial court and on appeal. Section 617.07401(5) was merely an alternative basis upon which

TARA EZER v. JACQUELINE HOLDACK

Court: Fla. Dist. Ct. App. | Date Filed: 2023-02-28T23:53:00-08:00

Snippet: court dismissed the action pursuant to section 617.07401(3)(b), Florida Statutes (2020), because an independent…s behalf, sue the directors. Although section 617.07401(2) provides that a member must give a board of… within ninety days. See § 617.07401(2), Fla. Stat. (2020) (stating that an association…-day period”). In accordance with section 617.07401(3), the Association commenced an investigation…independent directors constitute a quorum[.] § 617.07401(3)(b). In December, the majority of Association

Cornfeld v. Plaza of the Americas Club

Court: Fla. Dist. Ct. App. | Date Filed: 2019-05-01T00:53:00-07:00

Snippet: serve a pre-suit demand pursuant to section 617.07401, Florida Statutes (2016); (2) Cornfeld’s claims…how they wanted to proceed, tracking section 617.07401. That statute provides that, in order to determine

Iezzi Family Limited Partnership v. Edgewater Beach Owners Association, etc.

Court: Fla. Dist. Ct. App. | Date Filed: 2018-08-01T00:53:00-07:00

Snippet: 617, unless otherwise noted. Id. Section 617.07401, Florida Statutes, restricts the ability of members…comply with the pre- suit requirements of section 617.07401, would necessarily create a conflict between the…possible, we conclude that sections 718.303(1) and 617.07401 do not conflict. See Abbott Labs. v. Mylan Pharm…1976. Part C discusses the enactment of section 617.07401 in 2009, and the limited case law following it…it. We conclude by finding that section 617.07401 applies to the instant action and Iezzi’s failure to

ELENA COLLADO, ETC. v. BRIGITTE BAROUKH

Court: Fla. Dist. Ct. App. | Date Filed: 2017-08-30T00:53:00-07:00

Snippet: the owner corrected the error by citing section 617.07401, Florida Statutes (2015), and demanded to inspect…filed a verified complaint, pursuant to section 617.07401, alleging: (1) breach of fiduciary duty; (2) negligence…it is governed by Chapter 617. Section 617.07401(2), Florida Statutes, provides that a suit cannot…trial court properly dismissed the complaint. § 617.07401, Fla. Stat. The trial court also correctly…verified complaint failed to comply with section 617.07401 by failing to plead an exception to the ninety-day

Collado v. Baroukh

Court: Fla. Dist. Ct. App. | Date Filed: 2017-08-30T00:00:00-07:00

Citation: 226 So. 3d 924, 2017 Fla. App. LEXIS 12469, 2017 WL 3727049

Snippet: the owner corrected the error by citing section 617.07401, Florida Statutes (2016), and demanded to inspect…filed a verified complaint, pursuant to section 617.07401, alleging: (1) breach of fiduciary duty; (2) negligence…corporation, it is governed by Chapter 617. Section 617.07401(2), Florida' Statutes, provides that a suit…trial court properly dismissed the complaint. § 617.07401, Fla. Stat. The trial court also correctly found…verified complaint failed to comply with section 617.07401 by failing to plead an exception to the ninety-day

Udick v. Harbor Hills Development, L.P.

Court: Fla. Dist. Ct. App. | Date Filed: 2015-11-20T00:00:00-08:00

Citation: 179 So. 3d 489, 2015 Fla. App. LEXIS 17422, 2015 WL 7302585

Snippet: nonprofit corporations, such as the HOA. See § 617.07401, Fla. Stat. (2010); Fox v. Prof' l Wrecker

Sharma v. Ramlal

Court: Fla. Dist. Ct. App. | Date Filed: 2011-11-02T00:00:00-07:00

Citation: 76 So. 3d 955, 2011 Fla. App. LEXIS 17349, 2011 WL 5188986

Snippet: compliance with the presuit requirements of section 617.07401, Florida Statutes (2009), applicable to nonprofit