Levine v. Levine

Decision Date02 July 1999
Docket NumberNo. 98-02296.,98-02296.
Citation734 So.2d 1191
PartiesPaul R. LEVINE, M.D., Stephen M. Zweibach, M.D., Mark R. Davis, M.D., P.A., a dissolved Florida professional association, Appellant, v. Paul R. LEVINE, M.D.; Susan W. Levine; Tampa Obstetrics, P.A., a Florida Professional Association; Richard Gordimer, C.P.A.; and Rivero, Gordimer & Company, P.A., Appellees.
CourtFlorida District Court of Appeals

N. Burton Williams, Valrico, for Appellant.

Thomas D. Shults of Hogreve & Shults, Sarasota, for Appellees Paul R. Levine, M.D., Susan W. Levine, and Tampa Obstetrics, P.A.

Stanford R. Solomon and Heather A. Pigman of Solomon & Benedict, P.A., Tampa, for Appellees Richard Gordimer, C.P.A., and Rivero, Gordimer & Company, P.A.

NORTHCUTT, Judge.

This appeal arises from a dispute among the three shareholders in the appellant corporation, a dissolved professional association of physicians. The order under review dismissed with prejudice the corporation's action against one of the shareholders and others. The circuit court held that the other two shareholders had caused the corporation to file the suit after they improperly removed the defendant shareholder from the corporation's board of directors. We conclude that the pleadings and exhibits before us reflect no impropriety in the defendant shareholder's expulsion from the board. Accordingly, we reverse with directions to reinstate the action.

BACKGROUND

The following facts are alleged in the corporation's first amended complaint or reflected in its exhibits. For purposes of the defendants' motions to dismiss and this appeal, they are taken as true.

The corporation, which we refer to as "LZD," ceased to do business in December 1990, and it was administratively dissolved by the Florida Department of State in August 1995. LZD's outstanding shares of common voting stock were owned in equal number by Drs. Paul Levine, Stephen Zweibach, and Mark Davis. Drs. Levine and Zweibach were the corporation's only directors, and Dr. Levine was its president. Dr. Levine's wife, Susan Levine, served as LZD's executive director. Dr. Levine was also the managing shareholder and president of another professional association, Tampa Obstetrics, P.A., and Mrs. Levine also functioned as that corporation's executive director.1 In 1996, the grantors of a note and mortgage given to LZD in 1988 sued for cancellation of the note and mortgage. At the June 1997 final hearing in that action, Dr. and Mrs. Levine testified that in December 1990 Dr. Levine, as president of LZD, had transferred all of LZD's furniture, fixtures, equipment and loans receivable to Tampa Obstetrics. Thereafter, the court hearing that matter rendered judgment declaring, among other things, that the transfer to Tampa Obstetrics was improper.2

In November 1997, Drs. Zweibach and Davis, holders of two-thirds of LZD's stock, voted to remove Dr. Levine from the corporation's board of directors and to replace him with Dr. Davis. This newly constituted board of directors then terminated Dr. Levine as LZD's president and caused the corporation to file the lawsuit giving rise to this appeal. These shareholder and director actions were accomplished by Dr. Zweibach's and Dr. Davis's written consent, without formal meetings and without prior notice.

PROCEEDINGS BELOW

LZD filed suit against the Levines and Tampa Obstetrics in January 1998, and shortly thereafter obtained an ex parte temporary injunction directing them to turn over LZD's corporate books and to maintain the assets alleged to have been improperly transferred to Tampa Obstetrics. As a condition to issuance of the injunction, LZD posted a $1,000 cash bond with the clerk of circuit court. On the defendants' motion, the court later ordered the injunction dissolved, at which time it directed the clerk to retain LZD's bond pending the court's determination whether the defendants were entitled to recover attorney's fees, costs or damages as a result of the injunction.

In due course, LZD filed an amended complaint that alleged six counts against five defendants. Count one was a replevin action against Tampa Obstetrics, seeking return of the assets transferred to it by Dr. Levine in December 1990. Count two charged Tampa Obstetrics with conversion of the same assets.

In count three, LZD alleged that between December 1990 and January 1998 Dr. and Mrs. Levine breached their fiduciary duties to the corporation by, among other things, transferring assets to Tampa Obstetrics and allowing that corporation to collect mortgage payments belonging to LZD, failing to properly conduct LZD's financial affairs, and failing to disclose the corporation's true financial condition to its directors and shareholders. Count four was an action against the Levines and Tampa Obstetrics for treble damages pursuant to chapter 772, Florida Statutes (1997).

Count five charged Dr. and Mrs. Levine, along with LZD's certified public accountant, Richard Gordimer, and his firm, Rivero, Gordimer & Company, P.A., with breaching fiduciary duties to the corporation. LZD asserted that these defendants had agreed among themselves to conceal the corporation's true financial condition by preparing and filing false or misleading state and federal tax returns between December 1990 and January 1998. Finally, count six alleged that Gordimer and his firm had committed malpractice during the same period.

All defendants moved to dismiss on several grounds. The circuit court granted their motions and dismissed the action with prejudice because "the Plaintiff did not have standing and did not have the legal basis for filing this lawsuit. Plaintiff did not follow and adhere scrupulously to the statutory condition precedents for the actions taken inasmuch as proper notice was not provided to one of the directors." Alternatively, the court ruled that if it was later determined that LZD did have standing to bring the action, count three was dismissed without prejudice for failure to state a cause of action, and the remaining counts were dismissed without prejudice because they were not filed within the applicable statutes of limitations.

Finally, the order dismissing the action directed the clerk of circuit court to release LZD's $1,000 injunction bond to the Levines and Tampa Obstetrics.

DISCUSSION

The defendants maintain that LZD had no right to file the lawsuit because the board of directors that authorized the action was improperly constituted. They argue that Dr. Levine's dismissal as a director was ineffective because it was not done at a noticed meeting of shareholders pursuant to section 607.0808(4), Florida Statutes (1997).3 That provision of the Florida Business Corporation Act provides:

(4) A director may be removed by the shareholders at a meeting of shareholders, provided the notice of the meeting states that the purpose, or one of the purposes, of the meeting is removal of the director.

LZD contends that because Drs. Zweibach and Davis together held sufficient votes to remove a director from the board, they were authorized to act in writing and without a noticed meeting by section 607.0704, Florida Statutes (1997), which, in pertinent part, states:

(1) Unless otherwise provided in the articles of incorporation, action required or permitted by this act to be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice, and without a vote if the action is taken by the holders of outstanding stock of each voting group entitled to vote thereon having not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted.

The parties have not directed us to any decision addressing the interplay of these statutes, nor have we found one. But the defendants argue that under principles of statutory construction the general statute permitting shareholders to act by written consent must yield to the specific statutory provision for the removal of directors only at a shareholder meeting that has been noticed for that purpose.

We acknowledge that principle, but conclude that it is inapplicable here. Whenever possible, the meaning of a statute must be gleaned from its plain language. See Starr Tyme, Inc. v. Cohen, 659 So.2d 1064 (Fla.1995). Courts may resort to rules of construction to interpret statutes only if the statutes are ambiguous or in conflict. See Starr Tyme, 659 So.2d at 1067. These two statutes are neither. Section 607.0808(4) provides that shareholders may remove a director at a noticed meeting. Section 607.0704(1) creates a mechanism by which shareholders possessing sufficient votes to take an action that is "required or permitted" by the Corporation Act to be taken at a shareholders' meeting may do so without meeting or notice. The two statutes are unambiguous and perfectly compatible; they simply do not conflict.

Moreover, if we were to accept the defendants' proposition we would run afoul of the requirement that we give effect to all of a statute's language. See Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So.2d 452, 456 (Fla.1992). A holding that the written consent statute does not apply whenever a shareholders' meeting is required by a specific provision of the Corporation Act would negate the statute's plain language making it applicable to actions that are "required or permitted" by the Act to be taken at a meeting. By its terms, section 607.0704 is an exception to the Act's shareholder meeting provisions, not vice versa.

The legislature's intention that the written consent statute is to prevail over specific provisions for shareholder meetings and notice is confirmed by our examination of other portions of the Corporation Act, specifically those relating to dissenters' rights. Each of the statutes addressing corporate action that gives rise to such rights...

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