Florida Statute 617.07401 | Lawyer Caselaw & Research

The 2024 Florida Statutes

Title XXXVI
BUSINESS ORGANIZATIONS

Chapter 617
CORPORATIONS NOT FOR PROFIT

View Entire Chapter

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: District Court of Appeal of Florida | Date Filed: 2024-10-02

Snippet: but by the more specific provisions of section 617.07401(5), Florida Statutes, that address with particularity

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

Court: District Court of Appeal of Florida | Date Filed: 2024-08-28

Snippet: an “independent panelist” pursuant to section 617.07401(3)(c), Florida Statutes (2021), to investigate

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

Court: District Court of Appeal of Florida | Date Filed: 2024-08-28

Snippet: an “independent panelist” pursuant to section 617.07401(3)(c), Florida Statutes (2021), to investigate

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

Court: District Court of Appeal of Florida | Date Filed: 2024-03-27

Snippet: award of fees in this case, rather than section 617.07401(5), Florida Statutes (2022). We agree

TARA EZER v. JACQUELINE HOLDACK

Court: District Court of Appeal of Florida | Date Filed: 2023-03-01

Snippet: court dismissed the action pursuant to section 617.07401(3)(b), Florida Statutes (2020), because an independent

Cornfeld v. Plaza of the Americas Club

Court: District Court of Appeal of Florida | Date Filed: 2019-05-01

Citation: 273 So. 3d 1096

Snippet: serve a pre-suit demand pursuant to section 617.07401, Florida Statutes (2016); (2) Cornfeld’s claims

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

Court: District Court of Appeal of Florida | Date Filed: 2018-08-01

Citation: 254 So. 3d 584

Snippet: 617, unless otherwise noted. Id. Section 617.07401, Florida Statutes, restricts the ability of members

Collado v. Baroukh

Court: District Court of Appeal of Florida | Date Filed: 2017-08-30

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

ELENA COLLADO, ETC. v. BRIGITTE BAROUKH

Court: District Court of Appeal of Florida | Date Filed: 2017-08-30

Snippet: the owner corrected the error by citing section 617.07401, Florida Statutes (2015), and demanded to inspect

Udick v. Harbor Hills Development, L.P.

Court: District Court of Appeal of Florida | Date Filed: 2015-11-20

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 Operators

Sharma v. Ramlal

Court: District Court of Appeal of Florida | Date Filed: 2011-11-02

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