(L-R)Brittany Hynes and Paul Lopez of Tripp Scott. Courtesy photos (L-R)Brittany Hynes and Paul Lopez of Tripp Scott. Courtesy photos

Litigation between and among members in a limited liability company (LLC) can be, to say the least, complicated. Disputes over money usually are, but when a minority group of members believe that they are entitled to profits and they believe the majority in control are making mistakes in running the company, oftentimes these situation lead to litigation if agreements cannot be reached. One of those complications is whether a lawsuit relating to the distribution of profits or breaches of fiduciary duties is brought derivatively on behalf of the company or directly on behalf of the members themselves. Usually, aggrieved members would prefer to sue directly so that they can directly recoup money damages, but as will be discussed below, Florida law provides for a narrow set of circumstances when members can sue other members directly. That said, as will be discussed below, if an operating agreement is in place and not drafted correctly, the parties could inadvertently broaden this narrow exception under Florida law and create avenues for direct claims by and between one another which are not  generally available to them under he Florida Revised Limited Liability Company Act (the Revised LLC Act).  Depending on your role in an LLC, you will want to pay close attention to how your operating agreement is drafted.

There are two basic types of actions a dissatisfied member might bring. The first is a direct action to assert a member's own injury by a manager, another member, or the LLC. Fla. Stat. Section 605.0801. The second is a derivative action on behalf of the LLC to assert an injury to it. The only statutory requirement for a member pursuing a direct action under this provision is that the member "must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company." If this requirement is not met, the member has no standing to bring a direct claim. If standing is denied to bring a direct action, a dissatisfied member may turn to a derivative action.