If this opinion indicates that it is “FOR PUBLICATION,” it is subject to 

revision until final publication in the Michigan Appeals Reports.

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

C O U R T O F A P P E A L S

RAN-STARR, INC.,

Plaintiff-Appellant,

UNPUBLISHED

September 2, 2021

v No. 351686

Oceana Circuit Court

CRAIG A. HERREMANS, LC No. 17-012474-CK

Defendant-Appellee.

Before: RONAYNE KRAUSE, P.J., and BECKERING and BOONSTRA, JJ.

PER CURIAM.

Plaintiff corporation, Ran-Starr, Inc., appeals by right the trial court’s order granting 

defendant’s, Craig A. Herremans’s, motion for summary disposition on the grounds that Randy 

Fedo, as a mere half-owner of plaintiff with no formal authorization, could not unilaterally bring 

suit on behalf of plaintiff. We affirm.

I. BACKGROUND

According to plaintiff’s complaint, defendant is Vice President, Secretary, and a 50% 

owner of plaintiff corporation. The complaint also states that Fedo is President, Treasurer, and 

other 50% owner of plaintiff corporation. Plaintiff does not have any bylaws, has no formal board 

of directors, and otherwise never formally elected or appointed any officers or directors. Plaintiff 

contends that Fedo handled almost all of the day-to-day management of the corporation’s business, 

which was the operation of a restaurant. However, plaintiff tacitly concedes that Fedo simply did

so to fill a vacancy in management, not pursuant to any formal arrangement. Meanwhile, 

defendant tacitly does not dispute Fedo’s claim that Fedo acted as if he were plaintiff’s president, 

disputing only Fedo’s claim that he holds that position in any official capacity. Thus, the two 

critical matters upon which the parties agree are that Fedo and defendant are the only shareholders 

of plaintiff, each with a 50% interest, and that plaintiff has no formal bylaws or directorship.

Defendant filed for Chapter 12 Bankruptcy in 2015. In August 2017, plaintiff sued 

defendant for embezzlement and breach of fiduciary duty after defendant withdrew $15,000 from 

the corporation’s bank account, allegedly without authorization. Plaintiff requested that the trial 

court issue a permanent injunction against defendant participating in the corporation. Plaintiff 
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stated that it needed to spend approximately $160,000 to renovate the restaurant and renew the 

franchise, and that defendant’s withdrawal of the money endangered funds plaintiff needed to 

make employee payroll payments, acquire restaurant supplies, and remit to the IRS. In lieu of an 

answer, defendant moved for summary disposition pursuant to MCR 2.116(C)(5) (party asserting 

the claim lacked the legal capacity to sue) and (C)(8) (party failed to state a claim on which relief 

could be granted), arguing that there were no shareholder agreements governing shareholder 

withdrawals and that Fedo was attempting to “litigate [defendant] into the ground” because 

defendant was already suing plaintiff in another state court case, defendant had initiated a 

counterclaim against plaintiff for shareholder oppression, and the parties were involved in 

proceedings in bankruptcy court.

The trial court granted defendant’s motion. The trial court’s opinion did not specify under 

which rule it granted the motion, and it only explicitly found that Fedo did not have authority to 

initiate the lawsuit on behalf of the corporation. Of note, the trial court remarked that “[i]f Fedo 

has the authority to institute this law suit on behalf of the corporation, [defendant] as 50% owner 

would have the authority to dismiss the lawsuit,” and that “this suit should have been brought as a 

shareholder derivative action.” This appeal followed.

II. STANDARDS OF REVIEW

This Court reviews de novo a trial court’s decision to grant or deny a motion for summary 

disposition. See Hoffner v Lanctoe, 492 Mich 450, 459; 821 NW2d 88 (2012). This Court also 

reviews de novo whether a party has standing. Barclae v Zarb, 300 Mich App 455, 467; 834 

NW2d 100 (2013). Although the better practice might have been for the trial court to identify the 

subrule under which it granted summary disposition, its failure to do so is irrelevant so long as the 

court’s reasoning is discernable and no confusion ensued. Johnson v Heite, 243 Mich App 578, 

584-585; 624 NW2d 738 (2000); Computer Network, Inc v AM Gen Corp, 265 Mich App 309, 

312; 696 NW2d 49 (2005). Indeed, appellate courts review grants or denials of summary 

disposition under the substantively correct rule, irrespective of the rule upon which a trial court 

relied. Spiek v Dep’t of Transp, 456 Mich 331, 338 n 9; 572 NW2d 201 (1998). 

The trial court granted summary disposition on the substantive reasoning that Fedo, as a 

mere 50% shareholder with no formal position or power, did not have the authority to unilaterally 

bring suit against defendant on behalf of plaintiff corporation. The trial court’s basis for granting 

summary disposition was therefore not a lack of legal capacity to sue, which would be properly 

brought and decided under MCR 2.116(C)(5). “Lack of ‘capacity to sue’ refers to some legal 

disability, such as infancy or mental incompetency, which deprives a party of the right to come 

into court” and does not refer to whether a party has a cause of action. Moorhouse v Ambassador 

Ins Co, Inc, 147 Mich App 412, 419 n 1; 383 NW2d 219 (1985). Rather, the trial court essentially 

held that plaintiff did not have a right to adjudicate the claimed injury under the circumstances, 

which is a matter of standing. See Federated Ins Co v Oakland Co Road Comm, 475 Mich 286, 

290; 715 NW2d 846 (2006). “[T]he real-party-in-interest is not the same as the legal-capacity-tosue defense,” and a defense based on the plaintiff not possessing a cause of action is properly 

brought under MCR 2.116(C)(8) or (10). Leite v Dow Chem Co, 439 Mich 920, 920; 478 NW2d 

892 (1992).
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It appears that the trial court may have considered materials beyond the pleadings, or at 

least considered the fact that plaintiff failed to provide evidence of any bylaws it might have, so 

we will treat summary disposition as having been granted pursuant to MCR 2.116(C)(10). 

Cuddington v United Health Svcs, Inc, 298 Mich App 264, 270; 826 NW2d 519 (2012). 

Nevertheless, any mistake as to the appropriate subrule is harmless, given the parties’ agreements 

as to the critical facts.1 When reviewing a motion under MCR 2.116(C)(10), which tests the factual 

sufficiency of the complaint, this Court considers all evidence submitted by the parties in the light 

most favorable to the non-moving party and grants summary disposition only where the evidence 

fails to establish a genuine issue regarding any material fact. Maiden v Rozwood, 461 Mich 109, 

120; 597 NW2d 817 (1999).

III. STANDING OR AUTHORITY TO BRING SUIT

Plaintiff argues that the trial court erred by finding that plaintiff lacked standing or 

authority to initiate the lawsuit against defendant. We disagree.

Michigan “law treats a corporation as entirely separate from its shareholders, even when 

one person owns all the corporate stock.” Belle Isle Grill Corp v Detroit, 256 Mich App 463, 473-

474; 666 NW2d 271 (2003). “Michigan law is well settled that a plaintiff may pursue an action 

against a corporate official in his personal capacity when the plaintiff alleges that the official’s 

own tortious conduct harmed the plaintiff.” Dep’t of Agriculture v Appletree Marketing, LLC, 485 

Mich 1, 4; 779 NW2d 237 (2010). However, although a shareholder may bring suit on his or her 

own behalf to vindicate wrongs personal to that shareholder as an individual, “a suit to enforce 

corporate rights or to redress or prevent injury to a corporation, whether arising from contract or 

tort, ordinarily must be brought in the name of the corporation.” Belle Isle Grill Corp, 256 Mich 

App at 474.

Plaintiff argues that Michigan law permits Fedo to bring suit on plaintiff’s behalf. Plaintiff 

would be correct, had Fedo pursued a shareholder derivative action, as the trial court noted should 

have been done.2 However, under the circumstances and posture of this case, we disagree. 

Plaintiff relies first on German Corp of Negaunee v Negaunee German Aid Soc, 172 Mich 650; 

138 NW 343 (1912). In that case, a majority of the members of the defendant corporate entity 

were opposed to its defense, which was pursued by a finance committee within the defendant 

corporate entity. Id. at 652, 657. As plaintiff points out, our Supreme Court held that under the 

“special circumstances” of that case, even though the finance committee was a minority of the 

members, “the finance committee had the right to defend in the name and on behalf of the 

 

1 The parties dispute the propriety of certain exhibits proffered by plaintiff on appeal. We need 

not address whether those exhibits were proper, because we find it unnecessary to consider those 

exhibits under the circumstances.

2 We do not express any opinion as to what Fedo should have done, nor do we express any opinion 

as to the substantive merits or timeliness of such a claim at this time. However, the trial court was 

correct that one shareholder may seek redress from another person for a wrong allegedly done to 

their corporation by commencing a shareholder derivative action. See, e.g., Dean v Kellogg, 294 

Mich 200, 207-208; 292 NW 704 (1940).
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[defendant corporate entity] and to make all necessary provisions to that end.” Id. However, as 

plaintiff fails to point out, the “special circumstances” in German Corp included the fact that the 

defendant corporate entity’s bylaws expressly conferred responsibility for management of the 

entire entity upon the finance committee. Id. Plaintiff thus omits a fatal factual distinction between 

German Corp and this case: as the parties agree, plaintiff has no bylaws, and Fedo is not even 

formally a director. Because Fedo has no formal powers beyond being a 50% owner of plaintiff, 

German Corp is irrelevant.

Plaintiff additionally relies on Ceeder v HM Loud & Sons Lumber Co, 86 Mich 541, 544-

545; 49 NW 575 (1891), and Altobelli v Hartmann, 499 Mich 284, 296-297; 884 NW2d 537, 543 

(2016), to argue that a corporate president has the authority to handle the corporation’s business. 

However, both of those cases involved agency principles. In both cases, our Supreme Court 

explained that directors and officers of a corporation should be treated as agents of the corporation, 

so their acts within the scopes of their employment should be considered binding upon the 

corporation. Ceeder, 86 Mich at 544-545; Altobelli, 499 Mich at 297. Presuming Fedo is, in fact, 

plaintiff’s President, then under Ceeder and Altobelli, Fedo could bind plaintiff in business 

transactions with third parties. Nowhere did Ceeder or Altobelli hold that an agent of a corporation 

had the power to dictate to the corporation. As defendant properly argues, defendant is not 

objecting to Fedo’s ability to do business on behalf of plaintiff, which was at issue in those cases, 

but rather his authority to sue defendant in the name of the corporation. We also note that there is 

seemingly no dispute that Fedo styles himself as “President” of plaintiff, but it is questionable 

whether he holds that position in any formal capacity.

The trial court relied on Gross v Adcomm, Inc, 478 SW3d 396, 400-404 (Ky Ct App, 2015), 

in which the Kentucky Court of Appeals held that a 50% owner of a corporation was not authorized 

to initiate litigation against the other 50% owner because a corporation could only file suit when a 

majority of its board voted to do so. “Although not binding, authority from other jurisdictions may 

be considered for its persuasive value.” Est of Voutsaras v Bender, 326 Mich App 667, 676; 929 

NW2d 809 (2019). Although plaintiff argues that Gross is a minority position, the Kentucky Court 

of Appeals relied on the decisions of several other courts. Gross, 478 SW2d at 403-404. In any 

event, we agree with the trial court’s conclusion that Gross is substantively persuasive. Defendant, 

a 50% owner of the corporation, presumably would not have voted to file suit against himself, and, 

therefore, plaintiff would not have had a majority vote in order to initiate the lawsuit. As the trial 

court aptly observed, if Fedo had the authority to initiate this suit, then defendant would have had 

the authority to terminate it.

Plaintiff urges adoption of an alternative position supported by the New York Court of 

Appeals in West View Hills v Lizau Realty Corp, 6 NY2d 344; 160 NE2d 622 (NY 1959). In that 

case, the court held that a corporation’s president’s power to bring suit could be terminated by 

affirmative action by the corporation’s board or limited by express provisions in the corporation’s 

bylaws, but otherwise the president is presumptively empowered to prosecute or defend suits in 

the corporation’s name, even if no such power is explicitly set forth in the corporation’s bylaws. 

Id. at 346-348. However, West View Hills clearly relied on case law unique to New York. Id. at 

346. Moreover, as the dissenting opinion in West View Hills clarified, the case law upon which 

the West View Hills majority relied involved deadlocked corporate management that had paralyzed 

the corporations at issue, in which case the president could undertake suits, “especially against 

‘outsiders,’ ” when an urgent need arose. Id. at 348-349. We find more persuasive the dissent’s 
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assertion that the majority “opinion runs counter to the basic principles of corporate law and holds 

in effect that a corporation is to be managed by its president and not by its board of directors.” Id. 

at 348. Fedo acted on his own behalf in initiating the lawsuit against defendant, without the 

consent of his equal co-owner, and therefore had no majority consent to commence the action. 

Furthermore, leaving aside the questionable formality of Fedo’s title of President, this is a suit 

against another member of the corporation rather than an outside entity. The trial court, therefore, 

did not err by granting defendant’s motion to dismiss.

Because the trial court did not err by granting defendant’s motion to dismiss on the basis 

of Fedo’s authority to initiate the lawsuit, this Court need not address plaintiff’s remaining issues. 

Affirmed.

/s/ Amy Ronayne Krause 

/s/ Jane M. Beckering 

/s/ Mark T. Boonstra