On August 5, 2012, the Middle District Court of Florida joined courts in Georgia and California in dismissing claims of ordinary negligence filed by the Federal Deposit Insurance Corporation (FDIC) against former bank directors. In the first action during the current financial crisis brought by the FDIC against former directors in Florida, Judge Gregory Presnell applied Florida’s statutory framework and ruled that the negligence claims did not fall within any of the permissible categories of director liability under Florida law. FDIC v. Price, No. 2:12-cv-00148-UA-DNF, dkt # 41.
In the action, the FDIC filed a complaint against the former directors of Florida Community Bank for both ordinary negligence and gross negligence based on the operation of the bank and alleged underwriting deficiencies of seven loans. The former directors filed a motion to dismiss the complaint in its entirety for failure to state a claim upon which relief could be granted. In granting the motion in part, Judge Presnell held that Fla. Stat. § 607.830(1) establishes an ordinary negligence standard of care for directors, but does not permit personal liability for directors for ordinary negligence. Fla. Stat. § 608.0831.
The Court held that director liability for a violation of the duty of care must fall into one of the five categories set forth in Fla. Stat. § 607.0831(b). In this action, the Court found that the only category that could apply to the FDIC’s allegations was the provision that requires a plaintiff to show that the directors’ actions constituted a “conscious disregard for the best interest of the corporation, or willful misconduct,” which did not comport with a claim of ordinary negligence. See Fla. Stat. § 607.0831(1)(b)(4). Relying on FDIC v. Gonzalez-Gorrondona, 833 F. Supp. 1545 (S.D. Fla. 1993), the Court held that “the statute conditions directorial liability on something beyond ordinary negligence and the FDIC’s count asserting a claim for ordinary negligence must therefore be dismissed.” The Court left open the question of whether “conscious disregard or willful misconduct” is the equivalent of gross negligence. The Court ruled that the FDIC’s allegations were sufficient to state a claim for gross negligence under Florida law and denied the motion to dismiss the gross negligence claim.
As of this date, the Florida Community Bank case is the only action filed by the FDIC against Florida bank directors. To the extent the FDIC files claims against directors of Florida banks in future litigation, FDIC v. Price will serve as a precedent for the directors to seek dismissal of claims of ordinary negligence.