Cornfeld v. Plaza of the Americas Club, Inc.
After a unit owner's shareholder derivative action against a not-for-profit condominium club was involuntarily dismissed, the trial court awarded the Club over $125,000 in costs for a court-appointed independent investigator under rule 1.420(d) and section 57.041. The Third DCA reversed, holding that entitlement to expenses in a derivative proceeding is governed exclusively by the more specific section 617.07401(5), which requires a finding that the proceeding was commenced without reasonable cause — a finding the trial court never made.
Key facts
- Unit owner filed a shareholder derivative action against Plaza of the Americas Club, Inc., a not-for-profit condominium club, challenging certain club decisions or conduct.
- The trial court involuntarily dismissed the derivative action and awarded the Club over $125,000 in costs for a court-appointed independent investigator under rule 1.420(d) and section 57.041.
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Why it matters
This is the clearest Third DCA statement that defendants who defeat a Chapter 617 derivative suit cannot route around section 617.07401(5)'s 'without reasonable cause' predicate by invoking rule 1.420(d) or the general… — full analysis with a trial
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