Business Records Request- Court Intervention

By James M. Gonzalez February 26, 2021 Posted in Community Association Law Share

Florida Limited Liability Companies

Business Records Requests – Court Intervention

As a follow up to the previous discussion: Florida Limited Liability Companies, Business Records Requests – A Member’s Demand and Company’s Response, this article provides the options available to a member if a company fails to comply with a member’s demand for inspection of records.

Florida Statute, §605.0411(1) provides that “[i]f a limited liability company does not allow a member … to inspect and copy any records required by [§605.0410] to be available for inspection, the circuit court in the county where the limited liability company’s principal office is or was last located … may summarily order inspection and copying of the records demanded, at the limited liability company’s expense, upon application of the member, manager, or other person.” To do so, the requesting member must initiate an action in the relevant court.

In seeking court intervention, the member should provide the court with documentation evidencing that the member complied with the proper notice requirements under §605.0410. Specifically, the member’s demand for inspection should provide the company with a description of the records sought to be inspected under the statute. Given that the company has a statutorily provided ten (10) days to respond – in writing – to the member’s demand, any such filing with the court should not take place prior to the expiration of the company’s time frame to respond. Additionally, the member should confirm that they have directed the notice of demand to the proper address via a service method that provides tracking and confirmation of receipt by the company.

Next, upon initiation of an action seeking court intervention, the court may order the company to make available any or all of the records requested within the inspection demand letter. If the court enters an order requiring the company to comply with the member’s records demand, the court shall also order the company to reimburse the member for all costs, including the member’s attorney’s fees, incurred in seeking the records for inspection and obtaining the court order. As a result, it is imperative that a company act diligently in its response to a records request and only deny access to those records that the company has a good faith belief are outside a member’s right to inspect under Florida Statute, §605.0410.

Lastly, Florida Statute, §605.0411(3) provides the court with options to limit a member’s use or distribution of the company’s records. Therefore, if a company believes that the requested documents are confidential, proprietary, or sensitive in nature, and the court has ordered the production of such documents, the company should seek to have the court impose restrictions on the use and dissemination of such documents.

If you are a member seeking certain records or a manager of a company that has recently received a demand for record inspection and have questions regarding your rights, responsibilities and obligations, please feel free to contact us for further discussion.

For the previous blog in this series, visit here.