Allied Roofing Industries, Inc. v. Venegas

• Decision Date: 16 July 2003
• Docket Number: No. 3D02-2802.,3D02-2802.
• Citation: 862 So.2d 6
• Parties: ALLIED ROOFING INDUSTRIES, INC., Appellant, v. Denilo VENEGAS, et al., Appellees.
• Court: Florida District Court of Appeals

862 So.2d 6

ALLIED ROOFING INDUSTRIES, INC., Appellant, v. Denilo VENEGAS, et al., Appellees.

No. 3D02-2802.

District Court of Appeal of Florida, Third District.

July 16, 2003.

Rehearing and Rehearing Denied January 20, 2004.

David Harris Singer, Miami, and Maureen O'Donnell, for appellant.

Charlton Stoner, Miami, for appellees.

Before LEVY, RAMIREZ, and WELLS, JJ.

Rehearing and Rehearing En Banc Denied January 20, 2004.

WELLS, Judge.

Allied Roofing Industries, Inc. appeals from an order of dismissal with prejudice. For the following reasons, we reverse.

In January 2002, Allied brought suit against Denilo and Sandra Venegas to foreclose a construction lien for labor and materials allegedly provided from August through the end of November 2000 to improve the Venegases' home. The Venegases moved to dismiss the complaint claiming that Allied was a dissolved corporation that could neither conduct business nor bring suit to foreclose a lien. The Venegases requested that the foreclosure action be dismissed "until such time as the Plaintiff dissolved corporation has complied with the statutory requirements for reinstatement...."

Although counsel for the Venegases failed to appear at the hearing on their motion to dismiss, counsel for Allied appeared and asked the court to deny the motion because Allied was winding down its affairs and collecting its assets. The motion was denied.

The Venegases subsequently moved for reconsideration, claiming that Allied was not in the process of winding down its affairs, but was instead still actively engaging in business. The Venegases again asked that the foreclosure action be dismissed "until such time as the Plaintiff dissolved corporation has complied with the statutory requirements for corporate reinstatement and is in fact reinstated...." The Venegases also asked the trial court to sanction Allied by dismissing the action because Allied's "misrepresentation" regarding its corporate status related to a "factual matter that is central to the claimed rights at issue...." Allied sought to abate hearing on the motion pending expedited reinstatement of its corporate status.

On May 1, 2002, Allied's corporate status was reinstated retroactive to September 22, 2000, the date on which it was administratively dissolved for failure to file annual reports. Despite Allied's reinstatement, on July 17, 2002, the trial court vacated its earlier order denying the Venegases' motion to dismiss and dismissed the foreclosure action with prejudice nunc pro tunc to March 21, 2002, the date of the first dismissal order. The grounds for the dismissal were two-fold: first, because Allied was a dissolved corporation at the time of the original hearing on the Venegases' motion to dismiss, and second, because but for Allied's misrepresentation that it was merely winding down, the court would have dismissed the action at that time. The court also discharged Allied's lien and vacated its lis pendens. Allied timely appealed. We reverse.

Section 607.1622 of the Florida Statutes (2003) requires corporations to file annual reports with, and to pay fees and taxes to, the Department of State. Failure to do so deprives a corporation of the right to "maintain or defend any action in any court of this state until such report is filed and all fees and taxes due" are paid. § 607.1622(8), Fla. Stat. (2003)(emphasis added). Failure to file annual reports and to pay fees and taxes also subjects a corporation to administrative dissolution, as happened to Allied here. Id.

Under current Florida law, administratively dissolved corporations continue their corporate existence after dissolution, but may not carry on any business except that necessary to notify claimants and to wind up and liquidate business by collecting assets, disposing of properties, discharging liabilities and taking related actions, including bringing or defending legal proceedings associated with winding up or liquidation. See §§ 607.1421(3); 607.1405(1), Fla. Stat. (2003); Nat'l Judgment Recovery Agency, Inc. v. Harris, 826 So.2d 1034 (Fla. 4th DCA 2002); Cygnet Homes, Inc. v. Kaleny Ltd. of Florida, Inc., 681 So.2d 826 (Fla. 5th DCA 1996); see also K & M Shipping, Inc. v. Penel, 834 So.2d 876 (Fla. 3d DCA 2002). However, a corporation administratively dissolved for technical reasons may reinstate itself by filing a satisfactory current annual report. Such reinstatement "relates back to and takes effect as of the effective date of the administrative dissolution," and treats the corporation as though it had never been dissolved.¹ § 607.1422(2)-(3), Fla. Stat. (2003); Cosmopolitan Distribs., Inc. v. Lehnert, 470 So.2d 738, 739 (Fla. 3d DCA 1985) ("[t]he effect of section [607.1422, previously section 607.271(5)], allowing reinstatement at any time of a corporation which has been involuntarily dissolved for certain technical reasons, is to treat the corporation as though it has never been dissolved").

The trial court could not, therefore, have dismissed Allied's action on July 17, 2002. By that time, Allied had been reinstated nunc pro tunc to September 2000 and was entitled to maintain this action as though it had never been dissolved. Nor should the trial court have dismissed the action nunc pro tunc to the date of the first hearing (at a time at which Allied had not yet been reinstated). The sanctions authorized for failing to file an annual report—involuntary dissolution and the inability to carry on any business, including bringing or defending a lawsuit, other than that necessary to wind up its affairs under sections 607.1420 and 607.1421—are intended to benefit the State, not third parties outside the corporation/State relationship. Hence, the Venegases, "who are strangers to the dealings between plaintiff and the State, should not be allowed to take advantage of the plaintiff's default ... to escape their own obligations to the plaintiff...." Lehnert, 470 So.2d at 739-40,quoting J.B. Wolfe, Inc. v. Salkind, 3 N.J. 312, 70 A.2d 72, 76 (1949).

Where, as here, a corporation has failed to reinstate itself by the time of a hearing on a dispositive motion, consideration of that motion should be deferred to permit compliance:

A distinct but analogous inquiry is what ought to occur when the corporation itself lacks the legal capacity to properly bring suit. The answer to this latter inquiry is that in general, corporations lacking the ability to bring suit, due to a temporary impediment, have been given leave to remove the impediment. See Town of Davie v. Hartline, 199 So.2d 280 (Fla.1967) (where a corporate plaintiff paid its delinquent taxes during the pendency of the suit, but before final disposition of the suit, there was no occasion to dismiss); Industrial National Mortgage Company v. Blake, 406 So.2d 103 (Fla. 3d DCA 1981) (in suit brought by a corporation to contest tax assessments, corporate plaintiff which failed to file old reports and taxes given leave to do so and would be dismissed only if the errant corporation failed to file its over due reports and pay its back taxes within a reasonable amount of time); Ambassador Insurance Company v. Highlands General Hospital, 383 So.2d 254 (Fla. 2d DCA 1980) (corporation doing business in Florida which was not registered with the Department of State granted leave to qualify with the Department rather than being dismissed out of court); Clifford Ragsdale, Inc. v. Morganti, Inc., 356 So.2d 1321 (Fla. 4th DCA), cert. denied, 362 So.2d 1051 (Fla. 1978) (corporation given leave to comply with fictitious name statute, but action eventually dismissed since corporation took too long to comply with stat

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