Michigan Supreme Court Lansing, Michigan
Chief Justice: Justices: Clifford W. Taylor Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly 

# Opinion

Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED JULY 2, 2008 WILLIAM MILLER,

v Plaintiff-Appellee,
No. 134393 ALLSTATE INSURANCE COMPANY,

and Defendant/Cross-Defendant-Appellant,

PT WORKS, INC., Cross-Plaintiff-Appellee.

________________ _______________ WILLIAM MILLER,

v Plaintiff-Appellee,
No. 134406
ALLSTATE INSURANCE COMPANY

and Defendant/Cross-Defendant-Appellee,

PT WORKS, INC., Cross-Plaintiff-Appellant.

________________ _______________BEFORE THE ENTIRE BENCH
M ARKMAN , J. We granted leave to app eal to consider: (1) whet her plaintiff corporation was improperly incorporated under the Business Corpo rations Act (BCA), MCL 450.1101 et seq .; and, if so, (2) whether an improperly incorporated entity rendering physical therapy treatment has “lawfully” rendered such treatment under MCL 500.3157. However, because defendant insurance company lacks statutory standing to challenge plaintiff’s corp orate status under MCL 450.1221, which grants the power to challenge corporate status solely to the Attorney General, the above questions are not prop erly before us. Accordingl y, we affirm the judgment of the Court of Appeals in plaintiff’s favor, albeit on a lternative grounds, and we remand to the trial court for further proceedings.
I. FACTS AND PROCEDURAL HISTORY William Miller was injured in separate car accidents on February 27, 2002, and September 13, 2002. 1 Miller was diagnosed w ith whiplash; his doctor prescribed physical therapy, and referred Miller to plaintiff PT Works, Inc. Miller was treated by PT Works fro m April 2, 2003, through A ugust 28, 2003, incurring a bill for $29,150.

1 Although William Miller is the named pl aintiff in this case, he is no longer involved in the litigation; hence, all references to “plaintiff” are to cross

plaintiff PT Works, Inc., and all references to “defendant” are to cross-defendant Allstate Insurance Company.

2Miller was insured with d efendant Allstate Insuran ce Company (Allstate). PT Works billed Allstate fo r $29,150, but Allstate refus ed to pay. Miller then filed this lawsuit against A llstate for no-fault benefits, and subsequently assigned his claim to PT Works, who then filed a claim against A llstate as cross-plaintiff. Allstate moved for summary dispos ition, arguing that PT Works was unlawfully incorporated under the BCA, b ecause PT Works was required to incorporate under the Pro fessional Services Corpor ations Act (PSCA), MCL 450.221 et seq . Allstate argued that, because it was obligated to pay no-fault benefits only for treatment “lawfully” rendered, MCL 500.3157 , PT Works could not recover no-fault benefits if it was unl awfully incorp orated. The trial court denied Allstate’s motion, concluding th at physical therapy did not constitute “professional services” under the PSCA, and hence PT Works could incorporate under the BCA. Allstate appealed, and the Court of Appeals affirmed. Miller v Allstate Ins
Co , 272 Mich App 284; 726 NW2d 54 (2006). The Court of Appeals held that, regardless of whether PT Works was lawfu lly incorporated un der the BCA, the treatment rendered to Miller was “lawfu l” under MCL 500.3 157 because it was rendered by properly license d physical therapists. Id . at 286-287. Allstate then filed an application for leav e to appeal with th is Court, and, in lieu of granting leave, we vacated the initial Court of A ppeals judgment and remanded to the Court of Appeals to co nsider whether PT Works was lawfully

3incorporated and, if PT Works was unlawfully incorpor ated, to reconsider whether treatment was lawfully rendered . 477 Mich 1062 (2007). On remand, the Court of Appeals again affirmed the trial court’s denial of summary disposition. Miller v Allstate Ins Co ( On Remand ), 275 Mich App 649; 739 NW2d 675 (2007). The Court of App eals held that PT Works could have incorporated under the PS CA, and thus was unlawfully incorporated under the BCA, citing MCL 450.1251(1). 2 Id . at 654. In particular, the Court of Appeals noted that physical therapy constituted a personal service to the public, and required a license under Michigan law. Id . However, the Court of Appeals adopted its prior analysis and concluded that the improper incorporation under the BCA did not render the treatment “unlawful” under MCL 500.3157. Id . at 655

- 658. PT Works appealed the decision of the Court of Appeals that it was unlawfully incorporated . In a separate application, A llstate appealed the decision of the Court of Appeals that , despite the unlawful incorp oration, the treatment was “lawfully rendered.” This C ourt granted both applicati ons for leave to appeal. 480 Mich 938 (2007).

2 MCL 450.1251(1) of the BCA states: A corporation may be formed under this act for any lawful purpose, except to engage in a bu siness for which a corporation may be formed under any other statute of this state unless that statute permits formation under this act.

4II. STANDARD OF REVIEW Questions of statutory interp retation are reviewe d de novo. Lash v Traverse City , 479 Mich 180, 186; 735 NW2d 628 (2007).
III. ANALYSIS Our constitution requires that a plainti ff possess standing before a court can exercise jurisdiction over th at plaintiff’s claim. Rohde v Ann Arbor Public Schools , 479 Mich 336, 346; 73 7 NW2d 158 (2007). This constitutional standing doctrine is longstanding and stems fro m the separation of powers in our constitution. Nat’l Wildlife Federation v Cleveland Cliffs Iron Co , 471 Mich 608, 612; 684 NW2d 800 (2004). Because the constitution lim its the judiciary to the exercise of “judicial power,” Const 1963, art 6, § 1, the Legislature encroaches on the separation of powers by attempting to grant standing to litigants who do not meet constitutional standing requirements. 3 Rohde , supra at 350.

3 To establish constitu tional standing, a plaintiff must satisfy three elements: First, the plaintiff must have suffered an “injury in fact”—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical.’” Second, there must be a causal connection between the injury and the cond uct complained of—the injury has to be “fairly . . . traceable to the challe nged action of th e defendant, and not . . . the result [of] the independ ent action of some third party not before the court.” Third, it must be “likely,” as opposed to merely “speculative,” that th e injury will be “redre ssed by a favorable decision.” [ Nat’l Wildlife Federation , supra at 628-629 (citations omitted).]

5Although the Legi slature cannot expand beyond constitutional limits the class of persons who possess standing, the Legislature may permissibly limit the class of persons who may challenge a statutory violation. That is, a party that has constitutional standing may be precluded from enforcing a statutory provision, if the Legislature so provides . This doctrine has been referred to as a requirement that a party possess “statutory standing.” See, e.g., Graden v Conexant Systems,
Inc , 496 F3d 291, 294 (CA 3, 2007). Statutory standing “simply [entails] statutory interpretation: the question it asks is whether [the Legisl ature] has accorded this injured plaintiff the right to sue the defendant to redress his injury.” Id . at 295 (emphasis in original). In this case, plaintiff asks this Cour t to conclude that, under the express terms of the BCA, defenda nt may not bring any cha llenge against plaintiff’s corporate status. That is, defendant’s l ack of statutory sta nding would act as a jurisdictional bar to defenda nt’s affirmative defense that plaintiff was unlawfully incorporated. If the BCA categorically bars defendant ’s claim, then the lower courts should not ha ve considered the subs tance of defendant’s claim, as they each did in different ways; rather, they should have simply determined that defendant may not raise the affirmative defense that plaintiff was unlawfully incorporated. Accordingly, before consideri ng whether an entity is la wfully incorporated under the BCA, a court must consider whether the party challenging corporate status has statutory standing to raise that claim.

6Statutory standing, which necessitates an inquiry into whether a statute authorizes a plaintiff to sue at all, mu st be distinguished from whether a statute permits an individual claim for a particular type of relief. See Steel Co v Citizens for a Better Environment , 523 US 83, 92; 118 S Ct 1 003; 140 L Ed 2d 210 (1998) (distinguishing between “wheth er [a statute] authorizes this plaintiff to sue” and “whether the scope of the [sta tutory] right of action incl udes past violations,” and stating that the latter “goes to the merits and not to statutory standing”). The statutory standing inquiry is generally ju risdictional; the claim-for-relief inquiry is non-jurisdictional. Lerner v Fleet Bank, NA , 318 F3d 113, 127 (CA 2, 2003); see also Steel Co , supra at 92 (stating that the clai m for relief inquiry is non

jurisdictional, and contrasting that inquir y with the statutory standing inquiry); Northwest Airlines, Inc v Kent Co , 510 US 355, 365; 114 S Ct 855; 127 L Ed 2d 183 (1994) (“The ques tion whether a . . . statute creat es a claim for relief is not jurisdictional.”); but see Canyon Co v Syngenta Seeds, Inc , 519 F3d 969, 975 n 7 (CA 9, 2008) (rejecting the pr oposition that statutory sta nding is jurisdictional). We acknowledge that the line dividing these inquiries is not always susceptible to easy demarcation; as Steel Co points out, “the merits inquiry and the statutory standing inquiry often ‘overlap.’” Steel Co , supra at 97 n 2, quoting Nat’l R Passenger Corp v Nat’ l Ass’n of R Passengers , 414 US 453, 456; 94 S Ct 690; 38 L Ed 2d 646 (1974). An example illustrates the distinction. This Court considered during its last term whether an individual plaintiff “may maintain a private cause of action for

7money damages against” a public empl oyer for a violation of MCL 15.602. 4 Lash , supra at 191. We held that, based on the te xt of the statute, “the Legislature did not intend to create a privat e cause of action for viola tion of this particular provision.” Id . at 196. We further noted that the plaintiff could seek enforcement of the statute through a cl aim for injunctive relief or a declaratory judgment. Id . at 196-197. Thus, an individual plai ntiff could bring some cause of action to enforce MCL 15.602, thereby indicating th at an individual plainti ff has statutory standing. However, an individual plai ntiff could not bring every particular type of action, namely in that case an acti on for money damages. This latter question goes to the scope of the cause of action. Two conclusions should be drawn from th is. First, a determination that a plaintiff lacks statutory standing to ass ert a cause of action is essentially the equivalent of concluding th at a plaintiff cannot bring any action in reaction to an alleged legal violation. Second, an in quiry regarding statutor y standing and an inquiry regarding the merits of a partic ular claim for relief both follow the same method: both analyze the statutory langua ge to determine legislative intent. However, the two inquiries ask different que stions: the former asks whether any plaintiff may ever assert a violation of the statute, whereas the latter asks whether the plaintiff may assert a particular cause of action for the violation.

4 This statute restricts a public em ployer’s ability to impose residency restrictions on employees.

8Here, the initial question is whether d efendant Allstate may challenge the incorporation of PT Works under the BCA. 5 Because the relevant question is whether the BCA authorizes defendant to make such a challenge, the issue presented is properly characterized as one of stat utory standing. MCL 450.1221 of the BCA states: The corporate existence shall begin on the effective date of the articles of incorporation as provided in [MCL 450.1131 6 ]. Filing is conclusive evidence that all conditions precedent required to be performed under this act have been fulfilled and that the corporation has been formed under this act, except in an action or special proceeding by the a ttorney general. This statute indicates that once articles of incorporation under the BCA have been filed, such filing constitu tes “conclusive evidence” that : (1) all the requirements for complying with the BCA have been fulfilled; and (2) the co rporation has

5 Ordinarily, statutory standing qu estions involve a challenge to a plaintiff’s standing. Here, however, plaintiff ch allenges defendant’s ability to assert plaintiff’s allegedly unlawful incorpo ration under the BCA as an affirmative defense. If the BCA p revents defendant from bringing an original action against plaintiff based on unlawful incorporatio n, then it would be illogical to permit defendant to assert the same grounds as an affirmative d efense. See, e.g., Cinema North Corp v Plaza At Latham Assoc , 867 F2d 135, 139 (CA 2, 1989) (stating that ordinarily a guarantor who has been sued doe s not possess standing to assert, as an affirmative defense, a claim that inheres in a principal); United States v Dunifer , 997 F Supp 1235, 1239 (ND Cal, 1998) (“Where the defendant asserts an affirmative defense requiring the litigation of issues not encompassed in the plaintiff’s case-in-chief, the defendant is in a similar si tuation on those issues to a plaintiff who is invoking the jurisdiction of the court.”). Accordingly, we must inquire into whether defendant has statut ory standing to assert this particular affirmative defense.

6 MCL 450.1131 establishes general procedures for filing articles of incorporation.

9actually been formed in co mpliance with the BCA. Th us, the statute generally creates an irrebuttable pres umption of proper incorporation once the articles of incorporation have been filed. 7 The statute then creates a single exception to this general rule by granting the Attorney General the sole authority to challenge whether a corporation has been properly incorporated under the BCA. That is, only the Attorney General is not affected by the irrebutta ble presumption in favor of legality. By naming only the Attorney General in this respect, the Legislature has indicated that the Attorney General alone has the authority to challenge corporate status, un der the principle “ expressio unius est exclusio alterius ,” that is, “the expression of one thing is the exclusion of another.” Miller v Chapman Contracting , 477 Mich 102, 108 n 1; 730 NW2d 462 (2007). Thus, the filing of the articles of incorporation serves as “conclusive evidence” that PT Works has been properly formed, and this Court cannot, under the terms of MCL 450.1221, conclude otherwise, except as a conseque nce of a suit brough t by the Attorney General. In essence, MCL 450.1221 prevents any person-- other than the Attorney General-- from bringing any challenge to co rporate status under the BCA: every such challenge would be doomed to failure, because the mere f iling of articles of

7 In contrast with the irrebuttabl e presumption established in MCL 450.1221, the Legislature has on other o ccasions created rebuttable presumptions. See, e.g., MCL 333.17031( 3) (filing a written statement regarding educational history creates a “rebuttabl e presumption” that stat ement was filed “in good faith”).

10incorporation constitutes “ conclusive evidence” of the corporation’s legality. Because the Legislature has expressly forbidden Allstate from raising the affirmative defense asserted in this litigation, Allstate lacks statutory standing to challenge the corporate status of PT Works. 8 Moreover, MCL 450.1221 pr esents a jurisdictiona l bar to defendant’s affirmative defense. Because MCL 450.1221 indicates that only the Attorney

8 This conclusion is bolstered by other provisions of the BCA that limit the authority of certain individuals to cha llenge proper incorporation. The BCA, MCL 450.1821, states: (1) The attorney general may br ing an action in the circuit court of the county in which the principal place of business or registered office of the corporation is located for dissolution of a corporation upon the ground that the corporation has committed any of the following acts: (a) Procured its organi zation through fraud. (b) Repeatedly and willfully exceeded the authority conferred upon it by law. (c) Repeatedly and willfully co nducted its business in an unlawful manner. (2) The enumeration in this sect ion of grounds for dissolution does not exclude any other statut ory or common law action by the attorney general for di ssolution of a corpora tion or revocation or forfeiture of its corporate franchises. Thus, MCL 450.1821 vests authority in the Attorney General to pursue dissolution of a corporation. Simil arly, MCL 450.1823 permits the shareholders and directors of a corporation to pursue dissolution under certain circ umstances. See also MCL 450.1488(1)(g) (allowing shareholders to dissolve a corporation by agreement). Because the expression of one thin g is the exclusio n of another, Chapman Contracting , supra at 108 n 1, these statutes indicate that an outsid e party may not pursue dissolution, and thus reflect a general legislative intent to prevent outside parties from challenging an entity’s corporate status under the BCA.

11General may pursue a claim that a corpor ation such as plaintiff is improperly incorporated under the BCA, the lower courts should not have considered the merits of Allstate’s claim. Allstate argues that MCL 450.1221 se ts forth a general rule that only the Attorney General may challe nge corporate status under the BCA, but that the no

fault act, MCL 500.3157, provides a specifi c exception to that general rule. MCL 500.3157 states in part: A physician, hospital, clinic or other person or institution lawfully rendering treatment to an in jured person for an accidental bodily injury co vered by personal protec tion insurance, and a person or institution providing rehabilitative occupational training following the injury, may charge a reasonable amount for the products, services and accommodations ren dered. [Emphasis added.] “[S]pecific provisions . . . prevail over any arguable inc onsistency with the more general rule . . . . ” Jones v Enertel, Inc , 467 Mich 266, 271; 650 NW2d 334 (2002). The question raised by Allstate is how to ascertain which provision is more specific and which is more general. As with any question of statutory interpretation, we examine th e language of the statutes to discern the Legislature’s intent. Fluor Enterprises, Inc v Dep’t of Treasury , 477 Mich 170, 174; 730 NW2d 722 (2007). In order to determine which provision is truly more specific and, hence, controlling, we consider which provision applie s to the more narrow realm of circumstances, and which to the mo re broad realm. MCL 500.3157 grants a right to insurers to refuse payment for treat ment that is unlawfully rendered. This right encompasses all forms of unlawfulne ss, and hence would seem to apply to

12the challenge made here. However, MCL 450.1221 applies to one specific form of unlawfulness-- improper corporate formati on. Because MCL 450.1221 applies to one form of unlawfulness, and MCL 500. 3157 applies to all forms, MCL 450.1221 is the more specific provision and, therefore, prevails ov er MCL 500.3157. Contrary to Allstate’s ar gument, MCL 500. 3157 does not sp ecifically grant an insurer the ri ght to challenge all forms of lawfulness, regardless of other statutes that impose limitations or excep tions upon such an ability. Rather, MCL 500.3157 sets up a general ability to challenge lawful ness, but neither states nor implies that a right has been established that trumps a ny other statutory limitation on an insurer’s ability to contest the lawful ness of treatment. Hence, Allstate’s argument fails, and we conclude that MCL 450.1221 preven ts an insurer from challenging the corporate status of a corporation formed under the BCA. 9 Although our analysis res ts solely on our interp retation of the relevant statutes, we note that MCL 450.1221 en capsulates at least 100 years of common

law practice in Michigan. In Int’l Harvester Co of America v Eaton Circuit Judge , 163 Mich 55; 127 NW 695 ( 1910), this Court stated: This brings us to the doctrine, founded in pub lic policy and convenience and suppor ted by an almost un animous consensus of judicial opinion, which is that right fulness of the existence of a body claiming to act, and in fact acting in the face of the State, as a

9 We emphasize that in no way are we passing judgment on the lawfulness of plaintiff’s incorporati on. Because a court cannot entertain an individual’s challenge to corporate status under MCL 450.1221, plaintiff must be presumed lawfully formed until its in corporation has been succe ssfully challenged by the Attorney General.

13corporation, cannot be litigated in actions between private individuals, or between privat e individuals and the assumed corporation, but that the rightfulness of the existence of the corporation can be questioned only by the State; in other words, that the question of the rightful existe nce of the corporation cannot be raised in a collateral proceeding. [ Id . at 67 (quotations and citation omitted).] Indeed, Michigan courts have long held th at the state possesses the sole authority to question whether a corporation has been properly incorp orated under the relevant law. See, e.g., Flueling v Goeringer , 240 Mich 372, 375; 215 NW 294 (1927) (stating that a particular taxicab company “is a corp oration, and its right to be such under the provisions of the act aut horizing corporations . . . , if questioned, must be at the instance of proper State authority”); Allied Supermarkets, Inc v Grocer’s Dairy Co , 45 Mich App 310, 317; 206 NW2d 490 (1973) (“Only the state may challenge the validity of an in corporation.”); see also OAG, 1981-1982, No 5893, pp 167-168 (May 8, 1981) (“The validity of an incorporation can be questioned only by the state in a pr oper proceeding and cannot be questioned collaterally.”), citing Besson v Crapo Toll Rd , 150 Mich 655; 11 4 NW 924 (1908). Moreover, a party cannot raise an argumen t challenging a cor poration’s corporate status in a collateral proceed ing; rather, such an argum ent may only be brought in a direct proceeding to challenge such status. Attorney General v Lapeer Farmers
Mut Fire Ins Ass’n , 297 Mich 174, 184; 297 NW 232 (1941); Cahill v Kalamazoo
Mut Ins Co , 2 Doug 124, 141 (Mich 1845). Thu s, in historical context, MCL 450.1221 codifies Michigan’s longs tanding common-law practice of only

14permitting the state to challenge corporate status, and to do so only in a direct proceeding on that issue. One need not look far to ascertain the merits of this limitation. As one treatise states: It would produce endless c onfusion and hardship, and probably destroy the corporation, if the legality of its existence could be drawn in question in every suit to which it was a party . . . . [18A Am Jur 2d, Corporations, § 208, p 88.] Indeed, if the legality of every Michigan corporation were s ubject to continual assault by any person, it would be difficu lt to see how a stable economic climate could ever exist. Relevant to this cas e, no insured person could obtain medical treatment without undertak ing a laborious inquiry into whether the entity providing treatment has co mplied with every applicab le corporate statute and regulation. Whether an insu red person could obtain ben efits would largely depend on the ingenuity of lawyers in ferreting out aspects of corp orate non-compliance with applicable statutes. However, the Legislature has deemed it fit that residents of Michigan may depend on the corporate status of any corpo ration formed under the BCA and appr oved by the state, a nd we do nothing more h ere than enforce that policy decision-- a decision root ed in relevant statutes a nd in longstanding judicial practice.
IV. CONCLUSION Because Allstate lacks statutory sta nding to assert that PT Works was improperly incorporated, the Court of Appeals correctly held that summary

15disposition should be granted to PT Wo rks, albeit on alternative grounds. Accordingly, we affirm the conclusion of the Court of App eals, but vacate its rationale, and we remand to the trial court for further proceedings consistent with this opinion.

Stephen J. Markman Clifford W. Taylor Maura D. Corrigan Robert P. Young, Jr.

C AVANAGH , J. I concur in the result only.
Michael F. Cavanagh

16S T A T E O F M I C H I G A N SUPREME COURT

WILLIAM MILLER,

v Plaintiff-Appellee,
No. 134393 ALLSTATE INSURANCE COMPANY,

and Defendant/ Cross-Defendant-Appellant,

PT WORKS, INC., Cross-Plaintiff-Appellee.

________________ _______________ WILLIAM MILLER,

v Plaintiff-Appellee,
No. 134406 ALLSTATE INSURANCE COMPANY,

and Defendant/ Cross-Defendant-Appellee,

PT WORKS, INC., Cross-Plaintiff-Appellant.

________________ _______________W EAVER , J. ( concurring in the result only ). I concur in the result of the major ity opinion because defendant Allstate Insurance Company lacks the authority to challenge th e corporate status of cross

plaintiff PT Works, Inc. Under MCL 450.1221, only the Attorney General is authorized to challenge an entity’s corporate status. I write separately because I disagree w ith the opinion’s strained discussion of the standing test erroneously created by the majority of four (Chief Justice Taylor and Justices Corrigan, Young, and Markman) in Lee v Macomb Co Bd of
Comm’rs , 1 Nat’l Wildlife Federation v Cleveland Cliffs Iron Co , 2 Rohde v Ann Arbor Pub Schools , 3 and Michigan Citizens for Water Conservation v Nestlé Waters North America Inc

. 4 In those cases, the major ity of four systematically dismantled Michigan’s law on standing an d replaced years of precedent with its own test that denies Michigan citizens access to the courts. 5

Elizabeth A. Weaver Marilyn Kelly

1 Lee v Macomb Co Bd of Comm’rs , 464 Mich 726; 629 NW2d 900 (2001).

2 Nat’l Wildlife Federation v Cleveland Cliffs Iron Co , 471 Mich 608; 684 NW2d 800 (2004).

3 Rohde v Ann Arbor Pub Schools , 479 Mich 336; 737 NW2d 158 (2007).

4 Michigan Citizens for Wa ter Conservation v Nestlé Waters North America Inc , 479 Mich 280; 737 NW2d 447 (2007).

5 See my opinions chroniclin g the majority of four’s assault on standing in Lee , 464 Mich at 742; Nat’l Wildlife , 471 Mich at 651; Rohde , 479 Mich at 366; and Michigan Citizens , 479 Mich at 310.

2