The 2023 Florida Statutes (including Special Session C)

Title XXXVI
BUSINESS ORGANIZATIONS

Chapter 607
FLORIDA BUSINESS CORPORATION ACT

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F.S. 607.0831

607.0831 Liability of directors.—

(1) A director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision to take or not to take action, or any failure to take any action, as a director, unless:

(a) The director breached or failed to perform his or her duties as a director; and

(b) The director’s breach of, or failure to perform, those duties constitutes any of the following:

1. A violation of the criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful. A judgment or other final adjudication against a director in any criminal proceeding for a violation of the criminal law estops that director from contesting the fact that his or her breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the director from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful;

2. A circumstance under which the transaction at issue is one from which the director derived an improper personal benefit, either directly or indirectly;

3. A circumstance under which the liability provisions of s. 607.0834 are applicable;

4. In a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful or intentional misconduct; or

5. In a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.

(2) For the purposes of this section, the term “recklessness” means the action, or omission to act, in conscious disregard of a risk:

(a) Known, or so obvious that it should have been known, to the director; and

(b) Known to the director, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such action or omission.

(3) A director is deemed not to have derived an improper personal benefit from any transaction if the transaction and the nature of any personal benefit derived by the director are not prohibited by state or federal law or regulation and, without further limitation:

(a) In an action other than a derivative suit regarding a decision by the director to approve, reject, or otherwise affect the outcome of an offer to purchase the shares of, or to effect a merger of, the corporation, the transaction and the nature of any personal benefits derived by a director are disclosed or known to all directors voting on the matter, and the transaction was authorized, approved, or ratified by at least two directors who comprise a majority of the disinterested directors (whether or not such disinterested directors constitute a quorum); or

(b) The transaction is fair to the corporation at the time it is authorized, approved, or ratified as determined in accordance with s. 607.0832.

(4) The circumstances set forth in subsection (3) are not exclusive and do not preclude the existence of other circumstances under which a director will be deemed not to have derived an improper benefit.

History.—s. 85, ch. 89-154; s. 24, ch. 93-281; s. 27, ch. 97-102; s. 100, ch. 2019-90.

F.S. 607.0831 on Google Scholar

F.S. 607.0831 on Casetext

Amendments to 607.0831

Arrestable Offenses / Crimes under Fla. Stat. 607.0831

Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 607.0831.

Annotations, Discussions, Cases:

Cases from cite.case.law:

CORNFELD, v. PLAZA OF THE AMERICAS CLUB, INC., 273 So. 3d 1096 (Fla. App. Ct. 2019)

. . . . § 607.0831(1), Florida Statutes (2018) (providing insulation for condominium association directors . . .

FONSECA v. TAVERNA IMPORTS, INC., 212 So. 3d 431 (Fla. Dist. Ct. App. 2017)

. . . circumstances, and in a manner he or she reasonably believes to be in the best interests of the corporation); § 607.0831 . . .

HARRELL S, LLC, a LLC, a v. AGRIUM ADVANCED U. S. TECHNOLOGIES, INC. a, 795 F. Supp. 2d 1321 (M.D. Fla. 2011)

. . . fiduciary duty of loyalty and obligation of good faith and fair dealing pursuant to Sections 608.4225 and 607.0831 . . .

In BANK UNITED FINANCIAL CORPORATION, v. FSB,, 442 B.R. 49 (Bankr. S.D. Fla. 2010)

. . . . §§ 607.0830, 607.0831; In re Aqua Clear Technologies, Inc., 361 B.R. 567, 575 (Bankr.S.D.Fla.2007); . . .

In TRAFFORD DISTRIBUTING CENTER, INC. a k a R. v. I. d b a X Co. I. d b a X Co. I. d b a X Co. I. d b a X Co. I. d b a X Co. I. M. d b a X Co. I. M. d b a X Co. I. d b a I. d b a M. s R. v. LLC, LC, LLC, R. v., 431 B.R. 263 (Bankr. S.D. Fla. 2010)

. . . common law fiduciary duty and for breach of fiduciary duty pursuant to Florida Statutes § 607.0830 and § 607.0831 . . . Stat. §§ 607.0830(1), 607.0831(l)(a) and common law. . . . Stat. § § 607.0830(1), 607.0831(l)(a) and common law and, as a consequence, she caused and increased . . .

HOLLYWOOD TOWERS CONDOMINIUM ASSOCIATION, INC. a v. HAMPTON,, 40 So. 3d 784 (Fla. Dist. Ct. App. 2010)

. . . See § 607.0831, Fla. Stat. (2009). . . .

RAPHAEL v. M. SILVERMAN, M. I. Ba- a, 22 So. 3d 837 (Fla. Dist. Ct. App. 2009)

. . . See §§ 607.0831(l)(b)2., and 617.0834(l)(b)2., Fla. Stat. (2008). . . .

AEROSPACE ACCESSORY SERVICE, INC. v. ABISEID,, 943 So. 2d 866 (Fla. Dist. Ct. App. 2006)

. . . director of Aerospace, in his defense Abiseid seeks to burrow under the protective blanket of section 607.0831 . . . Section 607.0831(l)(a), (l)(b)(2), Florida Statutes states in relevant part: “(1) A director is not personally . . . benefit from his noncompliance with the directive and is protected from liability to Aerospace by section 607.0831 . . . direct conflict with the protected decision of the board of directors is not itself protected by section 607.0831 . . . Certainly section 607.0831(l)(a), (l)(b)(2) was not enacted in order to create situations wherein a director . . .

D ADDARIO, RMS v. GELLER RMS G. N. v. H., 129 F. App'x 1 (4th Cir. 2005)

. . . . § 607.0831(l)(b)(2), (b)(4). . . .

SONNY BOY, L. L. C. v. ASNANI,, 879 So. 2d 25 (Fla. Dist. Ct. App. 2004)

. . . Similarly, section 617.0834(1), Florida Statutes (2002) and section 607.0831(1), Florida Statutes (2002 . . . Section 607.0831(1), Florida Statutes (2002), provides in part: (1) A director is not personally liable . . . Both section 617.0834(1) and section 607.0831(1) limit personal liability of directors of non-profit . . . Section 718.303(1) is in conflict with section 617.0834(1) and 607.0831(1). . . .

KLOHA, A. v. D. DUDA, S. R. R. W. A., 246 F. Supp. 2d 1237 (M.D. Fla. 2003)

. . . Agostino’s Ristorante, Inc., 775 So.2d 387, 388 (Fla. 2d DCA 2000) (noting that Florida Statute § 607.0831 . . .

FOX, v. PROFESSIONAL WRECKER OPERATORS OF FLORIDA, INC., 801 So. 2d 175 (Fla. Dist. Ct. App. 2001)

. . . Section 617.0831 makes section 607.0831 of the general corporations chapter applicable to nonprofit corporations . . . Section 607.0831, which is analogous to section 617.0834, essentially provides that directors are immune . . . When the allegations of Fox’s complaint are compared to the provisions of section 607.0831 in light of . . .

UNITED STATES v. DE LA MATA, a. k. a. A., 266 F.3d 1275 (11th Cir. 2001)

. . . . § 607.0831 as codifying the “business judgment rule” in Florida. Accord In re Toy King Distr. . . . In this way, F.S. § 607.0831(3)(c) establishes that it is not inappropriate, per se, for a director to . . . However, § 607.0831 did not abrogate the prohibition against theft of corporate opportunities or any . . . Goldberg, 700 So.2d 148, 150 (Fla. 3rd DCA 1997) (stating that F.S. § 607.0831 does not shield officers . . . F.S. § 607.0831. . . . .

C. CONNOLLY T. v. AGOSTINO S RISTORANTE, INC., 775 So. 2d 387 (Fla. Dist. Ct. App. 2000)

. . . Connolly breached and failed to perform their duties as directors as set forth in Section 607.0831 Fla . . . Although Agostino’s contended the Con-nollys violated section 607.0831, Florida Statutes (1995), by its . . .

In TOY KING DISTRIBUTORS, INC. v. FSB,, 256 B.R. 1 (Bankr. M.D. Fla. 2000)

. . . Section 607.0831, Florida Statutes, “will not permit liability for violation of the duties under the . . . Section 607.0831, Florida Statutes, which defines the “business judgment rule” in Florida, does not protect . . .

BANCO LATINO INTERNATIONAL, v. A. GOMEZ LOPEZ,, 95 F. Supp. 2d 1327 (S.D. Fla. 2000)

. . . . § 607.0831 (establishing standard for director liability); In re Southeast Banking Corp., 827 F.Supp . . .

PERLOW, v. Ed GOLDBERG, 700 So. 2d 148 (Fla. Dist. Ct. App. 1997)

. . . Stat.(1995); § 607.0831(1), Fla. Stat.(1995); § 718.303(l)(d), Fla. Stat. (1995). . . . Section 607.0831(1), Florida Statutes (1995), provides, in part: A director is not personally liable . . .

ATHERTON v. FEDERAL DEPOSIT INSURANCE CORPORATION, CITY SAVINGS, F. S. B., 519 U.S. 213 (U.S. 1997)

. . . . § 607.0831 (1993) (“recklessness or an act or omission . . . committed in bad faith or with malicious . . .

FEDERAL DEPOSIT INSURANCE CORPORATION, v. O. STAHL, F. P. W. C. Jr. E. M. Sr., 89 F.3d 1510 (11th Cir. 1996)

. . . . §§ 607.0830, 607.0831 (1989), to afford corporate officers and directors greater protection from liability . . .

RESOLUTION TRUST CORPORATION, F. S. B. v. CITYFED FINANCIAL CORP. E. K. W. Jr. E. J. R. Jr. G. E. P. A. M. RESOLUTION TRUST CORPORATION, F. S. B. v. W. ATHERTON, Jr. E. J. R. Jr. G. P. F. S. B. No. RESOLUTION TRUST CORPORATION v. J. SCHUSTER J. R. P. C. J. J. B. W. H. R. C. A. R. C. J. No., 57 F.3d 1231 (3d Cir. 1995)

. . . . § 607.0831 (West 1994) ("recklessness or an act or omission which was committed in bad faith or with . . .

In SOUTHEAST BANKING CORPORATION, A. BRANDT, Jr. v. S. BASSETT, N. A. M. D. Jr. J. R. H. C. Jr. O. W. G. C. D. Jr. C. J. J. FEDERAL DEPOSIT INSURANCE CORPORATION, N. A. v. A. BRANDT, Jr., 855 F. Supp. 353 (S.D. Fla. 1994)

. . . . § 607.0831 (West 1993). See Second Amended Complaint at ¶ 27. . . .

FEDERAL DEPOSIT INSURANCE CORPORATION, v. O. STAHL, C. P. W. M. Sr. E. F., 840 F. Supp. 124 (S.D. Fla. 1993)

. . . . § 607.0831(l)(b)(4) (1990) and Fla.Stat. § 607.1645 (1987). . . .

In SOUTHEAST BANKING CORPORATION, A. BRANDT, Jr. v. S. BASSETT, N. A. M. D. Jr. J. R. H. C. Jr. L. O. W. E. D. E. C. D. Jr. C. J. J. FEDERAL DEPOSIT INSURANCE CORPORATION, N. A. v. A. BRANDT, Jr., 827 F. Supp. 742 (S.D. Fla. 1993)

. . . . § 607.0831(1) (West 1990) (emphasis added). See also Glaab v. . . . Fla.Stat. § 607.0831 ... . . . conscious disregard for the best interest of the corporation, or willful misconduct Fla.Stat.Ann. § 607.0831 . . . Fla.Stat. s. 607.0831 ... . . . As far as this Court is aware, Mintz is the only case interpreting Fla.Stat. § 607.0831, therefore, there . . .

FEDERAL DEPOSIT INSURANCE CORPORATION, v. GONZALEZ- GORRONDONA, Jr. a k a a k a L. Jr. E. Jr. D. O F. A. E. Bo L. M. R., 833 F. Supp. 1545 (S.D. Fla. 1993)

. . . . §§ 607.0830, 607.0831 (West Supp.1992). . . . Stat. § 607.0831 (West 1993). . . . Florida Statutes § 607.0831 provides in pertinent part: 607.0831. . . . Fla.Stat. 607.0831 (West 1993). . . . .

FEDERAL DEPOSIT INSURANCE CORPORATION, FSLIC v. A. MINTZ, 816 F. Supp. 1541 (S.D. Fla. 1993)

. . . . § 607.0831 (preceded by § 607.1645). . . .