Hock v. Triad Guaranty Ins. Corp.

• Decision Date: 04 March 2020
• Docket Number: Case No. 2D16-4008
• Citation: 292 So.3d 37
• Parties: George HOCK, Appellant, v. TRIAD GUARANTY INSURANCE CORPORATION, Appellee.
• Court: Florida District Court of Appeals

292 So.3d 37

George HOCK, Appellant,

v.TRIAD GUARANTY INSURANCE CORPORATION, Appellee.

Case No. 2D16-4008

District Court of Appeal of Florida, Second District.

Opinion filed March 4, 2020

Jordan T. Isringhaus (withdrew after briefing); Ian R. Leavengood, St. Petersburg, for Appellant.

Walter L. Sanders of Walter L. Sanders, P.A., North Venice, and Corey M. Ackerman of Ackerman Law Associates, P.A., Pompano Beach, for Appellee.

EN BANC

NORTHCUTT, Judge.

George Hock appeals a final summary judgment rendered in favor of Triad Guaranty Insurance in the latter's action on a promissory note. Hock contended below and argues here that Triad was statutorily precluded from suing because it had been administratively dissolved for failing to file its annual report with the Florida Department of State. We conclude that Triad was permitted to pursue the action as part of its winding up process. Therefore, we affirm the judgment, and in so doing, we resolve an inconsistency in this court's prior decisions.¹

Section 607.1405(1), Florida Statutes (2016), a part of the Florida Business Corporation Act, provides that a dissolved corporation "may not carry on any business except that appropriate to wind up and liquidate its business and affairs." Thus, a dissolved corporation is entitled to collect its assets and do "every ... act necessary to wind up and liquidate its business and affairs." § 607.1405(1)(a), (e). More specifically, corporate dissolution does not "[p]revent commencement of a proceeding by or against the corporation in its corporate name" or "[a]bate or suspend a proceeding pending by or against the corporation on the effective date of dissolution." § 607.1405(2)(e), (f).

Notably, this right to wind up applies equally to corporations that are voluntarily dissolved and to corporations that are administratively dissolved. Section 607.1421(3) states that "[a] corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under s. 607.1405 and notify claimants under s. 607.1406."²

Notwithstanding those statutes, Hock contends that because Triad was administratively dissolved for failing to file an annual report, another provision in the Corporation Act, section 607.1622(8), barred it from commencing or participating in the action below.³ That section states:

Any corporation failing to file an annual report which complies with the requirements of this section shall not be permitted to maintain or defend any action in any court of this state until such report is filed and all fees and taxes due under this act are paid and shall be subject to dissolution or cancellation of its certificate of authority to do business as provided in this act.^{[4 ]}

Hock's argument is supported by this court's decision in Trans Health Management, Inc. v. Nunziata, 159 So. 3d 850 (Fla. 2d DCA 2014). In that case, the plaintiff sued Trans Health for damages arising from the death of a nursing home resident. Id. at 854. On the morning of trial, the circuit court granted the plaintiff's motion to strike Trans Health's pleadings on grounds that it had been dissolved and was therefore barred by section 607.1622(8) from defending against the action. Id. at 855. The court precluded Trans Health from participating in the trial, and it rendered a final judgment for damages for the plaintiff. Id.

When Trans Health appealed the judgment, the plaintiff again moved to dismiss pursuant to section 607.1622(8). Id. After the parties stipulated that Trans Health had been administratively dissolved for failing to file an annual report, this court dismissed its appeal, reasoning as follows:

While administratively dissolved corporations are generally permitted to wind up their affairs, see § 607.1421(3), and while administrative dissolution does not generally "[p]revent commencement of a proceeding by or against the corporation in its corporate name," § 607.1405(2)(e), these general rules do not apply to the specific circumstance of a corporation administratively dissolved for failing to file its annual report. Instead, for those corporations, the specific provisions of section 607.1622(8) control over the more general provisions of section 607.1405(2)(e).

Id. (alteration in original) (emphasis added).

That holding was inconsistent with this court's earlier decision in PBF of Fort Myers, Inc. v. D & K Partnership, 890 So. 2d 384 (Fla. 2d DCA 2004). In PBF, we held that section 607.1622(8) did not prohibit a corporation that was dissolved for failing to file its annual report from prosecuting or defending an action. Id. at 386. In fact, PBF opined that this statute was entirely inapplicable because "section 607.1622(8) pertains only to existing corporations which have failed to file annual reports, not corporations which have been dissolved." Id. (quoting Nat'l Judgment Recovery Agency, Inc. v. Harris, 826 So. 2d 1034, 1035 (Fla. 4th DCA 2002) (en banc)). PBF thus aligned this court with the holdings of our sister courts in Cygnet Homes, Inc. v. Kaleny Ltd. of Florida, Inc., 681 So. 2d 826 (Fla. 5th DCA 1996), and National Judgment, 826 So. 2d 1034.

We conclude that PBF correctly interpreted section 607.1622(8). The statutory construction principle employed in Trans Health—by which the specific is held to prevail over the general—is applicable only when necessary to resolve a conflict between statutory provisions. See, e.g., Mendenhall v. State, 48 So. 3d 740, 748 (Fla. 2010) (explaining that statute relating to particular part of general subject operates as exception to or qualification of the more comprehensive statute to the extent only of the repugnancy); Murray v. Mariner Health, 994 So. 2d 1051, 1061 (Fla. 2008) (noting that where two statutory provisions are in conflict, the specific provision controls the general provision), superseded by statute on other grounds as stated in Castellanos v. Next Door Co., 192 So. 3d 431 (Fla. 2016) ; Cricket Props., LLC v. Nassau Pointe at Heritage Isles Homeowners Ass'n, 124 So. 3d 302, 307 (Fla. 2d DCA 2013) (stating that if statutes at issue were in conflict, the more specific statute would control). But when in Trans Health we perceived a conflict among the statutes at issue here, we focused only on section 607.1622(8)'s prohibition against maintaining or defending legal actions. Our decision did not account for the other aspect of the section, which is key to interpreting the statute in harmony with the other provisions of the Corporation Act. See Larimore v. State, 2 So. 3d 101, 106 (Fla. 2008) ("[A] ‘statute should be interpreted to give effect to every clause in it, and to accord meaning and harmony to all of its parts.’ " (quoting Jones v. ETS of New Orleans, Inc., 793 So. 2d 912, 914–15 (Fla. 2001) )).

Recall that section 607.1622(8) prescribes two consequences of a corporation's failure to file its annual report: It "shall not be permitted to maintain or defend any action in any court of this state," and it "shall be subject to dissolution or cancellation of its certificate of authority to do business as provided in this act." Id. Manifestly, and consistent with PBF's interpretation of the statute, a corporation that is already dissolved cannot be "subject to dissolution." See Murray, 994 So. 2d at 1061 ("[A] statutory provision will not be construed in such a way that it renders meaningless or absurd any other statutory provision."). Beyond that, the statute's reference to dissolution "as provided in this act" underscores the necessity of construing this provision in light of the wider statutory scheme set forth in the Corporation Act. Statutes related to the same subject matter must be read in pari materia. Hill v. Davis, 70 So. 3d 572, 577 (Fla. 2011). "Where, as here, the Florida Legislature has provided a unified and comprehensive statutory scheme, this [c]ourt will ‘attempt to follow the requirements that it has set forth.’ " Id. (quoting E.A.R. v. State, 4 So. 3d 614, 629 (Fla. 2009) ).

When viewed in this manner, it can be seen that section 607.1622(8) does not conflict with other provisions of the Corporation Act. Rather, its purpose and effect is consistent with the Act's comprehensive scheme. Under the Act, a corporation that has not filed its annual report and paid the required fees by May 1 may be administratively dissolved if the failure is not corrected by the third Friday in September of that year. See §§ 607.1420(1)(a), .1421(1), .1622(2). In this interim, section 607.1622(8) precludes the corporation from maintaining or defending an action in court, but the corporation may continue doing business. If the corporation does not rectify the failure by the end of this period, however, it may be administratively dissolved. Id. As an administratively dissolved corporation, it no longer may carry on any business "except that necessary to wind up and liquidate its business and affairs under s. 607.1405." § 607.1421(3). As previously mentioned, under section 607.1405 a dissolved corporation may collect its assets and do "every other act necessary to wind up and liquidate its business and affairs." § 607.1405(1)(a), (e). Moreover, that statute expressly provides that dissolution does not "[p]revent commencement of a proceeding by or against the corporation in its corporate name." § 607.1405(2)(e).

Based on this analysis, we recede from the interpretation of section 607.1622(8) in Trans Health and hold that the statute does not preclude a corporation that has been administratively dissolved for failing to file an annual report from prosecuting or defending against an action in order to wind up its business and affairs.

Affirmed.

KHOUZAM, C.J., and CASANUEVA, SILBERMAN, KELLY, LaROSE, MORRIS, BLACK, SLEET, LUCAS, SALARIO, BADALAMENTI, ROTHSTEIN-YOUAKIM, and SMITH, JJ., Concur.

VILLANTI, J., Dissents with opinion.

ATKINSON, J., Dissents with opinion in which VILLANTI, J., Concurs.

VILLANTI,...