GINSBERG PALACE MANAGEMENT INC v. RUDEY (2001)

Order and judgment (one paper), Supreme Court, New York County (Beatrice Shainswit, J.), entered June 15, 2000, which, in a derivative action, inter alia, directed defendant Rudey to return to Palace Management Inc. moneys he misappropriated from it, removed Rudey as an officer and director of Palace Management and Buena Vista Investment Corp., sanctioned Rudey $10,000, and awarded attorneys' fees of $30,000 to plaintiff estate, unanimously affirmed, without costs.

 The trial court properly precluded Rudey from offering evidence of, or conducting cross-examination concerning, plaintiff executor Ginsberg's alleged mishandling of plaintiff estate as irrelevant to the issue at trial, namely, whether Rudey, Ginsberg or both breached fiduciary duties owing to Palace Management and Buena Vista Investment Corp. Rudey's contention that the award of attorneys' fees was improper under Florida Statutes § 607.07401(6) is raised for the first time in his reply brief, and we decline to consider it. In any event, under Florida law, an award of attorneys' fees is within the court's discretion if the right vindicated by the derivative suit inheres primarily in the corporation and not the shareholders as individuals (see, Lane v. Head, 566 So.2d 508, 510).   Here, the right vindicated is clearly that of Palace Management to the funds improperly used by Rudey to pay legal fees he incurred in furtherance of his own self-interest in a family dispute over the distribution of the sales proceeds of a family-owned business.   The record does not support Ginsberg's contention that he requested a hearing on attorneys' fees.   We have considered and rejected the parties' remaining arguments for affirmative relief.