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### STATE OF MICHIGAN

COURT OF APPEALS

FRANK KERN III,

Plaintiff-Appellant/Cross-Appellee, FOR PUBLICATION June 20, 2017 9:00 a.m.

v No. 330183 Oakland Circuit Court BONNIE KERN-KOSKELA, LARRY KOSKELA, CHRISTOPHER KELLY, MAXITROL COMPANY, and MERTIK MAXITROL, INC, LC No. 2012-127856-CB

Defendants-Appellees/CrossAppellants, and

DAVID KALL, MICHAEL LATIFF, and MCDONALD HOPKINS LLC,

Defendants-Appellees.

Before: S TEPHENS , P.J., and K. F. K ELLY and M URRAY , JJ.

P ER C URIAM

. Plaintiff appeals by right from a final order reforming a leas e contract. However, several issues on appeal relate to the trial court’s prior orders dismi ssing a number of plaintiffs’ claims and granting summary dispositi on. The individual defendants an d Maxitrol cross-appeal from the final order, arguing that they were entitled to attorney fe es and costs. Finding no error warranting reversal, we affirm.

I. BASIC FACTS AND P ROCEDURAL HISTORY

Plaintiff and his sister, defe ndant Bonnie Kern-Koskela, both own a 50 percent interest in Maxitrol and Mertik Maxitrol. Plaintiff, Kern-Koskela and Kern -Koskela’s husband 1 , Larry Koskela, compose Maxitrol’s board of directors. Kern-Koskela s erves as the Board’s Chair and

1 We will refer to Kern and Kern-Koskela by name or as individua l defendants.-2- as the Executive Vice President and Chief Executive Officer of Maxitrol. Koskela serves as the Board’s Vice Chair and as President and Chief Operating Officer of Maxitrol. Defendant Christopher Kelly is Maxitrol’s C hief Financial Officer and Vic e President of Finance. Defendants David Kall, Michael L atiff and McDonald Hopkins, LLC , served as counsel for the corporate defendants.

In 2012, plaintiff sued the individual defendants and Kelly fo r shareholder oppression and breach of fiduciary duty, asse rting that Kern-Koskela exclu ded plaintiff from any control or oversight over the corporations and was mis-managing the busine sses so as to enrich herself at the expense of the corporations and plaintiff. Plaintiff alleg ed a myriad of wrongdoing. For purposes of this appeal, the focus is on a lease agreement betw een Bates Group, LLC, a company wholly owned by the individual defendants, and Maxitrol – the s o-called M-Annex lease. Plaintiff also made claims against corporate counsel defendants , arguing that they owed a fiduciary duty to him as a shareholder in a closely-held corpor ation and breached that duty by performing legal work for Kern-Koskela at the same time they we re serving as corporate counsel for Maxitrol.

The trial court granted corpor ate counsel summary disposition, finding that there was no fiduciary relationship between p laintiff and corporate counsel. Thereafter, Maxitrol moved for the appointment of a “disinterested person” pursuant to MCL 450 .1495 to investigate whether the continuation of plaintiff’s derivative suit was in the best interests of the corporation. The trial court appointed attorney Joel H. Serlin to act as a “disi nterested person” under the act and charged him with investigating whether the continuation of plai ntiff’s suit was in the best interests of the corporati on. Serlin’s July 7, 2014 report con cluded:

As the Disinterested Person, the undersigned has expended cons iderable time and effort in reviewing and analyzing all of the informati on, documentation and claims presented. Disputes involving family members of a cl osely held corporation, where each party is a 50% Shareholder, are among t he most difficult to reconcile, and resolve. During the undersigned’s lengthy inv estigation of the issues presented, it was clear that all witnesses, respective c ounsel, and the submissions presented to the undersigned were done so in a high ly professional and forthright manner. After a c omprehensive investigation, the undersigned makes the following recommendations:

1. Plaintiff Frank Kern III should be permitted to proceed wit h a derivative claim related to the M Annex, and the Annex Lease, entered into by and between Bates Group, LLC and Defendant Maxitrol Company, because those transactions may have constituted usurpation of a corporate opportunity and self-dealing.

2. As owners of Bates Group, LLC (the landlord), Defendants Bo nnie Kern-Koskela and Larry Koskela, as well as Defendant Maxitrol C ompany (the tenant), are necessary parties to the derivative claim.

3. The Disinterested Person finds that all remaining claims as serted by Plaintiff Frank Kern III lack merit, and to proceed with those derivative claims would not be in the best inte rest of the Companies.-3- 4. The Disinterested Person fu rther finds that Defendant Chris topher Kelly has not breached his fiduciary duties or acted improperly, and no derivative claims should proceed against him.

Based on Serlin’s report, Max itrol sought dismissal solely in reliance on Serlin’s report. Kern-Koskela, Koskela and Kelly joined the motion. Plaintiff r esponded, in part, by challenging the constitutionality of MCL 450.1495 as a violation of the sep aration of powers doctrine as well as an improper delegation of the trial court’s constitutionally -mandated function to a non-judicial court-appointed advisory expert . The trial court indicated that the motion was more properly characterized as a motion to dismiss brought under MCL 450.1495 and rejected plaintiff’s constitutional claims. In a written opinion read into the reco rd, the trial court concluded that Serlin’s determination was made in good faith after conducting a reasonable investigation. Consequently, MCL 450.1495 required dismissal of those claims t hat Serlin determined should not proceed. The trial court di smissed with prejudice plaintif f’s third amended complaint against Mertik and Kelly. He also dismissed plaintiff’s third amended complaint “as to Defendants Bonnie Kern-Koskela, Larry Koskela, and Maxitrol Company – withthe exception of Plaintiff’s claim ‘related to the M Annex, and the Annex Lease, entered int o by and between Bates Group, LLC and Defendant Maxitrol Company’ – which may proceed to tria l.”

The jury found that the lease was unfair to Maxitrol and that Maxitrol was damaged in the amount of $51,015. The trial cour t denied a number of post -judgment motions.

II. DISMISSAL OF CLAIMS BASED ON THE DISINTERESTED PERSON’S RE PORT

Plaintiff raises constitutional challenges to MCL 450.1495. F irst he argues that to the extent the statute dictates a procedure for summary disposition , the statute should be declared unconstitutional as a violation of Michigan’s separation of pow ers doctrine, Const. 1963, art. 3 § 2, Const. 1963 art. 6 § 1, and Const. 1963 art. 6 § 5. Next, p laintiff argues that the statute is also unconstitutional because it commands the judiciary to delegate its constitutionally mandated function and adopt the findings of a non-judicial court-appoint ed disinterested person. Finally, plaintiff maintains that, even assuming that the statute is con stitutional, the trial court erred in granting summary disposition where there were numerous question s of fact regarding plaintiff’s claims for removing Kern-Koskela and Koskela as corporate offic ers and for an accounting. We reject each of these challenges.

This Court reviews constitutional questions de novo. In re AMAC , 269 Mich App 533, 536; 711 NW2d 426 (2006). “[A] statute is presumed to be const itutional unless its unconstitutionality is clearly apparent.” McDougall v Schanz , 461 Mich 15, 24; 597 NW2d 148 (1999).

Plaintiff asserts that MCL 450.149 5 violates the separation of powers doctrine because the statute impermissibly infringes on our Supreme Court’s excl usive authority under Const 1963, art 6, § 5, to promulgate rules governing procedure by pr oviding a procedural mechanism for summary disposition. As observed in McDougall :-4- It is beyond question that the authority to determine rules of practice and procedure rests exclusively w ith this Court. Indeed, this Cour t’s primacy in such matters is established in our 1963 Constitution:

The supreme court shall by general rules establish, modify, amend and simplify the practice and procedure in all courts of this
state.

This exclusive rule-making authority in matters of practice and procedure is further reinforced by separation of powers principles. See Con st 1963, art 3, § 2; In re 1976 PA 267 , 400 Mich 660; 255 NW2d 635 (1977). Thus, in Perin v Peuler (On Rehearing) , 373 Mich 531, 541; 130 NW2d 4 (1964), we properly emphasized that “[t]he function of enacting and amending judici al rules or practice and procedure has been committed exclusively to this C ourt . . . ; a function with which the legislature may not meddle or interfere save as the Court may acquiesce and adopt for retention at judicial will.”

At the same time, it cannot be gainsaid that this Court is not authorized to enact court rules that establish, abrogate, or modify the subst antive law. Shannon v Ottawa Circuit Judge , 245 Mich 200, 223; 222 NW 168 (1928). Rather, as is evident from the plain language of art 6, § 5, this Court’s con stitutional rulemaking authority extends only to matters of practice and procedure. Shannon
, supra at 222-223. . . . [ McDougall , 461 Mich at 26-27 (footnotes omitted; italics in original).]

This Court need not address plaintiff’s constitutional challen ge, however, if MCL 450.1495 and MCR 2.116(C)(10) can be construed so as not to con flict. McDougall , 461 Mich at 24. “When there is no inherent conflict, ‘[w]e are not requ ired to decide whether [the] statute is a legislative attempt to supplant the Court’s authority.’” McDougall , 461 Mich at 24, quoting People v Mateo , 453 Mich 203, 211; 551 NW2d 891 (1996). Moreover, this Court should ‘not lightly presume that the Legislature intended a conflict, calli ng into question this Court’s authority to control practice and procedure in the courts.’ McDougall , 461 Mich at 24, quoting People v Dobben , 440 Mich 679, 697 n 22; 488 NW2d 726 (1992). Despite plainti ff’s protestations to the con trary, MCL 450.1495 and MCR 2.116(C)(10 ) do not inherent ly conflict.

The purpose of MCL 450.1495 was cogently summarized in Virginia M Damon Trust v North Country Financial Corporation , 406 F Supp 2d 796, 800-801(WD Mich 2005), as follows:

. . . The purpose of the section [MCL 450.1495] is to give a corporate board an honest, informed, and objective opinion on whether mai ntaining particular litigation is in the best interests of the corporati on. Derivative claims are, after all, claims on behalf of the corporation, not an inv estor. The Michigan statute allows the court to put this determination in the hands of one or more disinterested persons appointed by the court. . . . This statutory scheme is designed to save the corporation money in defending or prosecut ing a weak case originally bought as a derivative claim and to give the corporation the incentive to take the case if the derivative claims have merit. . . .-5- The purpose of MCR 2.116(C)(10) is to “avoid extensive discovery and an evidentiary hearing when a case can be quickly resolved on an issue of law.” Shepherd Montessori Ctr Milan v Ann Arbor Charter Twp , 259 Mich App 315, 324; 675 NW2d 271 (2003); see also American Community Mut Ins Co v Commissioner of Ins , 195 Mich App 351, 362; 491 NW2d 597 (1992).

In light of these stated purposes, MCL 450.1495 and MCR 2.116( C)(10) do not conflict. The statute allows a disinterested party to stand in the stead of the corporation and determine, on behalf of the corporation, whether a continuation or dismissal of any portion of the derivative suit is in the best interests o f the corporation. The court ru le allows for an ongoing suit to be quickly resolved, in the absence of material factual issues, on the merits of the legal questions raised. Thus, MCL 450.1495 addresses the question whether a su it should be maintained in the first instance to vindicate the rights of the corporation, whil e MCR 2.116(C)(10) a ddresses which party prevails on the merits. U nder MCL 450.1495, the trial co urt never reaches the merits of the underlying claims. Rather, the court may only conduct a limite d inquiry into the process employed by the interested person or persons; i.e., whether the investigation was reasonable and whether the determination was made in good faith, if the indepe ndence of the process is challenged by the plaintiff. Otherwise, the business judgment of the disinterested person or persons is not subject to judicial scrutiny. Thus, the statute and court rule address different concerns at different stages of a civil proceeding. For these reasons, the statute and the court rule do not inherently conflict. McDougall , 461 Mich at 24.

Plaintiff also argues that MCL 450.1495 is unconstitutional be cause it mandates that a trial court delegate its judicial powers to a person or group o f persons who are outside the judiciary.

“It is within the peculiar provi nce of the judiciary to adjudi cate upon and protect the rights and interests of the citi zens and to construe and apply the laws.” Carson Fischer Potts and Hyman v Hyman , 220 Mich App 116, 121; 559 NW2d 54 (1996). As observed in Carson Fisher :
. . . The judicial branch is provided for in article 6 of our state constitution. Const 1963, art 6, § 1 provides:

The judicial power of the state is vested exclusively in one court of justice which shall be divided into one supreme court, one court of appeals, one trial court of general jurisdiction known as the circuit court, one probate court, and courts of limited jurisdiction that the legislature may establish by a two-thirds vote of the members elected to and serving in each house.

Further, Const 1963, art 6, § 27 provides:

The supreme court, the court of appeals, the circuit court, or any justices or judges thereof, shall not exercise any power of appointment to public office except as provided in this constitution.

In Michigan, judicial power is vested in the courts under our state constitution. Johnson v Kramer Bros Freight Lines, Inc , 357 Mich 254, 258; 98-6- NW2d 586 (1959). Although the Supreme Court is empowered by th e Michigan Constitution to authorize persons who have been elected and hav e served as judges to perform judicial duties for limited periods or specif ic assignments, Const 1963, art 6, § 23, there are no constitutional or statuto ry authorities permitting a circuit court judge the power to appoint a retired judge or any other person to sit as a court in a civil action. Brockman v Brockman , 113 Mich App 233, 237; 317 NW2d 327 (1982). Rather, Const 1963, art 6, § 27 specifically prohibits such action. . . . [ Carson Fischer , 220 Mich App at 120.]

Plaintiff’s delegation of duties argument is predicated on a m isapprehension of the workings of MCL 450.1495. The statute does not mandate a trial judge to delegate his or her judicial duties to an individual or individuals outside the jud icial realm. Rather, as previously noted, the disinterested person or group of persons stand in th e stead of the corporation, on behalf of which the derivative suit was brought, and exercises the decision-making authority of the corporation in good faith a nd after reasonable investigatio n to determine whether the best interests of the corporation will be served if the suit or any portion of the suit continues. The disinterested person does not make recommendations to the trial judge regarding the merits of the claim or claims advanced in the derivative action and the trial judge makes no ruling on the merits. The statute only requires the court to respect and imp lement the business judgment of the disinterested person or persons regarding whether any portion o f the suit should continue if the process by which the decision was made was reasonable and undertaken in good faith. For these reasons, plaintiff’s constitutional challenge must fail.

Finally, plaintiff argues that e ven assuming that the statute is constitutional, the trial court erred in granting summary disposition where there were numerous questions of fact regarding plaintiff’s claims for removing Kern-Koskela and Koskela as cor porate officers and for an accounting, especially in light of the jury’s later determinati on that the lease was unfair to Maxitrol. However, the trial court did not grant summary dispo sition under MCR 2.116(C)(10); instead, the trial court dism issed the action under MCL 450.149 5:

In the present motion, Maxitrol argues that certain of Plainti ff’s claims should be dismissed as Mr. Serlin determined that continuing th eir pursuit was not in the corporations ’ best interests.

In response, Plaintiff argues that Maxitrol’s procedural choic e to move under MCR 2.116(C)(10) is wrong because it would not allow the Court to consider Mr. Serlin’ s report. T he Court agrees that Plaintiff’ s motion is one properly brought under MCL 450.1495 (and not MCR 2.116(C)(10), but Maxitrol also brought the present motion under MCL 450.1495. As a result , the Court rejects each of Plaintiff’s arguments related to the Court’s ru ling on a (C)(10) motion. The Court’s ruling is based solely on application of M CL 450.1495. [11/19/14 Opinion and Order, p 2.]

We reject plaintiff’s attempt to frame the issue in a manner in consistent with the lower court record.

III. SUMMARY DISPOSITION IN F AVOR OF CORPORATE COUNSEL-7- Plaintiff argues that corporate counsel owed him a fiduciary d uty under Fassihi v Sommers, Schwartz, Silver, Schwartz & Tyler , 107 Mich App 509; 309 NW2d 645 (1981) and that the trial court erred in gr anting corporate counsel summary disposition. We disagree.

Summary disposition under MCR 2.116(C)(10) should be granted w here the affidavits or other documentary evidence show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Smith v Globe Life Ins Co , 460 Mich 446, 454-455; 597 NW2d 28 (1999). To avoid summary disposition under MCR 2.116(C)(10) the party opposing the motion must show, via affidavit or docum entary evidence, that a genuine issue of fact exists for trial. Smith , 460 Mich 455-456 n 2; MCR 2.116( G)(4). As a general rule a motion for summary disposition under MCR 2.116(C)(10) is prem ature if discovery has not been completed, unless there is no fair likelihood that further discovery will yield support for the nonmoving party’s position. Liparoto Construction, Inc v General Shale Brick, Inc
, 284 Mich App 25, 33-34; 772 NW2d 801 (2009).

Whether a fiduciary relationship exists is a question of law f or the court to decide. Prentis Family Foundation Inc v Karmanos Cancer Center , 266 Mich App 39, 43; 698 NW2d 900 (2005), lv den 474 Mich 871 (2005).

The trial court did not err when it granted summary dispositio n on plaintiff’s breach of fiduciary duty claim against corporate counsel. Even where the number of shareholders is very small, a corporation exists as a separate legal entity apart fr om its shareholders. Fassihi , 107 Mich App at 514. When an attorney is hired to represent a cor poration, his client is the corporation rather than the shareholders of that corporation. Prentis Family Foundation , 266 Mich App at 44; Fassihi , 107 Mich App at 514. A fiduciary relationship may arise between corporate counsel and a shareholder where the non-client shareh older reposed “faith, confidence, and trust” in the lawyer’s advice or judgment. Beaty v Hertzberg & Golden, PC 456 Mich 247, 260-261; 571 NW2d 716 (1997); Prentis Family Foundation, 266 Mich App at 43-44. However, that placement of trust, confid ence, and reliance must be reaso nable, and is not reasonable if the interests of the client and non- client are adverse or potential ly adverse. Id

. Plaintiff’s claim against corporate counsel was not brought onbehalf of Maxitrol, but instead on his own behalf as a shareholder of closely-held corp orations. While the shareholders of a closely-held corporation may often “repose their faith, co nfidence, and trust” in the advice or judgment of the corporation’s counsel, courts cannot assume that this is always true. Fassihi
, 107 Mich App at 516. In this case, plaintiff presented no evid ence which would suggest that he reposed his faith, confidence, and trust in the advice or judgm ent of the corporate counsel. Plaintiff’s own affidavit states that he communicated with the corporate attorneys through his own personal attorney and did so when demanding to review the c orporate financial records. He has presented nothing which suggests that he had any other sign ificant communications with the corporate attorneys. Since plaintiff had no communications with corporate counsel, he did not place faith, confidence or trust in their advice or judgment. Even if plaintiff had relied on communications or advice from the attorney defendants, that rel iance would not have been reasonable under the circumstances. The context of plaintiff’s contacts with corporate counsel, where he communicated through his own counsel and demanded to r eview the corporations’ financial records, indicates apotentially adverse relationship with corporate counsel.-8- Nor was it improper for the trial court to grant summary dispo sition on this issue before discovery was completed. Plaintiff was obviously aware of his own communications with the attorney defendants and should have been able to identify any i nstances where he relied upon or trusted their advice or judgment. He did not set forth any suc h facts in his own affidavit. Since there was no fair likelihood that further discovery would provi de support for plaintiff’s position, the court properly granted summary disposition under MCR 2.116( C)(10) before discovery was completed.

IV. DISQUALIFICATION OF CORPORATE COUNSEL

Plaintiff argues that the trial court erred in denying plainti ff’s motion to disqualify corporate counsel based on its conflict of interest. We declin e to address this issue based on plaintiff’s failure to provide the relevant transcripts.

Plaintiff moved to disqualify corporate counsel “under both MRPC 1.13 and 1.7, as well

as Fassihi .” Plaintiff argued that, under MRPC 1.13, a lawyer retained b y an organization represents the organization and not the individual shareholders . Plaintiff alleged that corporate counsel had assisted the individual defendants with their “self -dealing and usurpation of corporate opportunity” by review ing the M-Annex lease. Plainti ff argued that MRPC 1.7(b) required that corporate counsel b e disqualified. The trial cou rt denied the motion after a hearing on November 10, 2014. No hearing transcripts have been provide d.

MCR 7.210(B)(1)(a) provides:

(B) Transcript.

(1) Appellant’s Duties; Orders; Stipulations.

(a) The appellant is responsibl e for securing the filing of the transcript as provided in this rule. Except in cases governed by MCR 3.977(J)(3) or MC R 6.425(G)(2), or as otherwise provided by Court of Appeals order or the remai nder of this subrule, the appellant shall orde r from the court reporter or r ecorder the full transcript of testimony and other proceedings in the trial court or tribunal. Once an appeal is filed in the Court of Appeals, a party must serve a copy of any request for transcript prepara tion on opposing counsel and file a copy with the Court of Appeals.

“[T]his Court will refuse to consider issues for which the appe llant failed to produce the transcript.” PT Today, Inc v Comm’r of Office of Fin & Ins Services , 270 Mich App 110, 151– 152; 715 NW2d 398 (2006). However, the Court may consider an i ssue if the transcript was not relevant to the issue on appeal or if the issue on appeal is si mply one of law. Leelanau County Sheriff v Kiessel , 297 Mich App 285, 289; 824 NW2d 576 (2012). However, here th e issue is one of fact. “The determination of the existence of a conflict of interest that disqualifies counsel is a factual question that we review for clear error.” Avink v SMG , 282 Mich App 110, 116; 761 NW2d 826 (2009) (footnotes omitted). The trial court’s cursoryorder denying plaintiff’s motion to disqualify corporate counsel stated simply:-9- This matter having come before the Court upon Plaintiffs Motio n to Disqualify McDonald Hopkins as Corporate Counsel, the Court hav ing held oral argument and being otherwise apprised therein:

IT IS HEREBY ORDERED that Plaintiffs Motion to Disqualify McDonald Hopkins as Corpor ate Counsel is denied.

Absent the transcripts, we are unable to discern the trial cour t’s reasoning and, therefore, we decline to address this issue.

V. JUDICIAL BIAS

During a September 12, 2014 pre-trial status conference, plain tiff indicated that he intended to proceed with his statutory claim for removal. The trial court responded that removal “wasn’t going to happen.” The trial court then threatened that it would “throw out” plaintiff’s case in its entirety. Plaintiff argues that such statements sh ow bias under MCR 2.003(C)(1)(a) and (b). 2 We disagree.

“We review a trial court’s f actual findings regarding a motion for disqualification for an abuse of discretion and its application of the facts to the law de novo.” In re MKK , 286 Mich App 546, 564; 781 NW2d 132 (2009). “An abuse of discretion occ urs when the trial court’s decision is outside the range of reasonable and principled outc omes.” Id. (internal quotation marks omitted).

“Due process requires that an unbiased and impartial decision- maker hear and decide a case.” Mitchell v Mitchell , 296 Mich App 513, 523; 823 NW2d 153 (2012). However “[a] tri al judge is presumed unbiased, and th e party asserting otherwise h as the heavy burden of overcoming the presumption.” Mitchell , 296 Mich App at 523; see also Cain v Dep’t of Corrections, 451 Mich 470, 497; 548 NW2d 210 (1996). Grounds for disqualif ication are provided in MCR 2.003(C), which provides:

(1) Disqualification of a judge is warranted for reasons that include, but are not limited to, the following:

(a) The judge is biased or prej udiced for or against a party o r attorney.

(b) The judge, based on objec tive and reasonable perceptions, has either (i) a serious risk of actual bias impacting the due process rig hts of a party as enunciated in Caperton v Massey , 556 US 868; 129 S Ct 2252; 173 L Ed 2d 1208 (2009), or (ii) has failed to adhere to the appearance of impro priety standard set forth in Canon 2 of the Michiga n Code of Judicial Conduct.

2 Our review is not hampered by plaintiff’s failure to provide r elevant transcripts where the trial court provided a detailed writt en opinion and order, which full y detailed its decision.-10- Under MCR 2.003(C)(1)(a), a judge must be disqualified from he aring a case in which he cannot act impartially or is biase d against a party. “[J]udici al rulings, in and of themselves, almost never constitute a valid b asis for a motion alleging bia s, unless the judicial opinion displays a deep-seated favoritism or antagonism that would make fair judgment impossible and overcomes a heavy presumption of judicial impartiality.” Armstrong v Ypsilanti Charter Twp
, 248 Mich App 573, 597; 640 NW2d 321 (2001), quoting Cain v Dep’t of Corrections , 451 Mich 470, 503; 548 NW2d 210 (1996). In fact, “a trial judge’s remarks made during trial, which are critical of or hostile to counsel , the parties, or their cases, ordinarily do not establish disqualifying bias.” In re MKK , 286 Mich App 546, 567; 781 NW2d 132 (2009), lv den 486 Mich 909 (2010). Under MCR 2.003(C)(1)(b), the test for determ ining whether there is an appearance of impropriety is “w hether the conduct would create in reasonable minds a perception that the judge’s ability to carry out judicial respo nsibilities with integrity, impartiality and competence is impaired.” People v Aceval , 486 Mich 887, 888-889; 781 NW2d 779 (2010), quoting Caperton , 129 S Ct at 2255.

Plaintiff has failed to meet his heavy burden of demonstrating that Judge Alexander was biased. Judge Alexander’s statement that he would not consider removing the individual defendants as officers is in keeping with Serlin’s report that removal was not in the corporation’s best interests. Additionally, Judge Alexander’s comment that p laintiff’s entire case might be dismissed was also based on Serlin’s report, which concluded th at the vast majority of plaintiff’s claims were unfounded. In fact, Judge Alexander warned all parties at various times that they should seek settlement because no one would be happy with the o utcome. The judge nevertheless conducted the extens ive jury trial in a temperate and fair manner.

VI. COMPLETE AND ACCURATE JUDGMENT

Plaintiff argues that the trial court’s judgment was incomplet e and failed to show that plaintiff prevailed on Counts I and II (breach of fiduciary duty) of his complaint. We disagree.

MCR 2.602(B)(2) provides that a “court shall sign [a] judgment or order when its form is approved by all the parties and if, in the court’s determinatio n, it comports with the court’s decision.” “The proper interpretation and application of a court rule is a question of law, which we review de novo.” Henry v Dow Chem Co , 484 Mich 483, 495; 772 NW2d 301 (2009).

The jury verdict form posed the question: “Was the lease of the M Annex between Bates Group, LLC and Maxitrol Company fair to Maxitrol at the time of the transaction in 2010?” The jury answered “No.” The second question asked: “Did Maxitrol i ncur any damage as a result of the M Annex Lease between Bates Group, LLC and Maxitrol Company ?” The jury answered “Yes.” Finally, the jury was a sked: “What is the amount of da mages that Maxitrol Company has incurred as a result of [the] Lease between Bates Group, LL C and Maxitrol Company?” The jury answered “$51,015.”

Defendants’ proposed judgment provided:

This matter having been tried before a jury, and the jury havi ng returned a verdict in this matter in favor of Maxitrol Company and against Defendants-11- Bonnie Kern Koskela and Larry Koskela in the amount of $51,015. 00 for overpayment of rent;

IT IS HEREBY ORDERED that a judgment of $51,015.00 is hereby entered in favor of Maxitrol Company and against Defendants Bon nie KernKoskela and Larry Koskela.

Plaintiff objected to the proposed order, arguing that it fail ed to reflect the counts upon which plaintiff prevailed. Pla intiff looked to the trial court ’s previous summary disposition order, which provided that the only surviving claims were plain tiff’s breach of fiduciary claims (Counts I and II). In that orde r, the trial court noted:

For all of the foregoing reasons, the Court finds that Mr. Ser lin’s determination was made “in go od faith after conducting a reason able investigation.” As a result, under MCL 450.1495, the Court DISM ISSES with prejudice Plaintiff’s Third Amen ded Complaint against Defendant s Mertik Maxitrol and Kelly.

The Court also DISMISSES Plaintiff’s Third Amended Complaint a s to Defendants Bonnie Kern-Koskela, Larry Koskela, and Maxitrol Com pany - with the exception of Plaintiff’s claim “ related to the M Annex, and the Annex Lease
, entered into by and between Bates Group, LLC and Defendant Maxi trol Company” - which may proceed to trial. [Emphasis added.]

The trial court rejected plai ntiff’s proposed order and ultima tely entered an order to reflect that the jury determin ed the M-Annex lease to be unfair :
This matter having been tried before a jury, and the jury havi ng determined that the lease between Maxitrol Company and Bates Gr oup LLC was unfair to Maxitrol Company and that the Maxitrol Company suffer ed damages in the amount of $51,015.00 for overpayment of rent;

IT IS HEREBY ORDERED that a judgment of $51,015.00 is hereby entered in favor of Maxitrol Company and against Defendants Bon nie KernKoskela and Larry Koskela.

A review of the record makes it clear that the jury was asked to decide the very narrow issue of whether the lease was fair to Maxitrol under MCL 450.1 545a, which provides, in relevant part:

(1) A transaction in which a director or officer is determined to have an interest shall not, because of the interest , be enjoined, set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, if the person interested in the transactionestablishes any of the following:

(a) The transaction was fair t o the corporation at the time ent ered into.-12- (b) The material facts of the transaction and the director’s or officer’s interest were disclosed or known to the board, a committee of the board, or the independent director or directors , and the board, committee, or independent director or directors authori zed, approved, or ratified the tra nsaction.

(c) The material facts of the transaction and the director’s or officer’s interest were disclosed or known to the shareholders entitled to vote an d they authorized, approved, or ratified the transaction.

(2) For purposes of subsection (1)(b), a transaction is authori zed, approved, or ratified if it received the affirmative vote of the majority of the directors on the board or the committee who had no interest in the transaction, though less than a quorum, or all independent directors who had no interest in the transaction. The presence of, or a vote cast by, a director with an interest in the transaction does not affect the validity of the a ction taken under subsection (1 )(b).

Notably absent from the statute is any language regarding fiduc iary duty. Despite how plaintiff couches the issue, the very narro w question presented to the ju ry was whether the M-Annex lease was fair to Maxitrol. The jury determined that it was not and that Maxitrol suffered damages of approximately $51,000. The judgment was a fair representation of the jury’s verdict and comported with the trial c ourt’s previous rulings.

VII. AMENDING THE JUDGMENT

Plaintiff argues that the trial court erred in denying plainti ff’s motion to amend the judgment to provide for additiona l equitable relief. We disagr ee.
An appellate court reviews a trial court’s ruling on a motion to amend a judgment for an abuse of discretion. Ligon v City of Detroit , 276 Mich App 120, 124; 739 NW2d 900 (2007). To the extent these issues involve matters of statutory interpreta tion, such a question of law is reviewed de novo. Hecht v Nat’l Heritage Academies, Inc , 499 Mich 586, 604-605; 886 NW2d 135 (2016).

Again, MCL 450.1545a(1)(a) provides:

A transaction in which a director or officer is determined to h ave an interest shall not, because of the interest, be enjoined, set aside, or give r ise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, if the person interested in the transactionestablishes any of the following:

(a) The transaction was fair t o the corporation at the time ent ered into.

Plaintiff reads the statute as one that prohibits “self-dealin g.” In so doing, plaintiff seeks to re-write the statute to provide substantive relief when, in fact, the statute provides neither a substantive cause of action nor aremedy. Our Supreme Court ha s admonished:-13- When interpreting a statute, we follow the established rules of statutory construction, the foremost of which is to ascertain and give ef fect to the intent of the Legislature. We begin this analysis by examining the langua ge of the statute itself, as this is the most reliable evidence of that intent. I f the language of a statute is clear and unambiguous, we presume that the Legislatu re intended the meaning clearly expressed. Accordingly, the statute must be enf orced as written and no further judicial construction is permitted. [ Gardner v Dep’t of Treasury
, 498 Mich 1, 5-6; 869 NW2d 199 (2015) (internal footnotes omitte d).]

The plain language of MCL 450.1545a makes no reference at all t o “self-dealing.” It does not set forth the elements of a cause of action nor does it list sp ecific remedies. Instead, the plain language of the statute provides that the mere fact that a tran saction involves an officer of a corporation does not mean that t he transaction should be enjoin ed, set aside, or give rise to an award of damages or other sanctions if it is shown that the transaction was fair to the corporation at the time. The statute’s focus in on whether a transaction i s fair to the corporation, not the behavior of individual co rporate officers.

Here, the jury was not asked to judge the corporate officers’ actions but the jury did determine that the transaction was not fair to Maxitrol. In light of that finding, pl aintiff sought t o rescind the lease agreement entirely. However, plaintiff alternatively argued that “[a]s an alternative to rescission, the C ourt could reform the lease con sistent with the terms as testified to by Plaintiff’s real estate expert Mr. Milia.” At the hearing o n the motion to amend, the trial court cited Thomas v Satfield Co , 363 Mich 111, 123; 108 NW2d 907 (1961) and found that it was within the court’s power to reform the lease: “The Court is goi ng to avail itself of that opportunity and reform the lease . . .in conformance with the jury verdict.” Thomas involved a similar situation as the case at bar where two closely held cor porations conducted business with one another. After it was determined that the lease terms were not fair to one of the corporations the trial court in that case reformed the lease. This Court af firmed, noting that “[o]n all the facts, it appears that the reformed lease reaches the result which all parties contemplated as being fair prior to its execution.” Thomas , 363 Mich at 123. In reforming the lease in this case, the tr ial court referenced its equitable powers under Thomas and made no reference to MCL 450.1545a.

The jury had clearly rejected M ilia’s opinion that the fair market value of the rental was $5.60/square foot. Therefore, trial court properly reformed th e lease, not on the basis of Milia’s testimony, but to reflect the jury’s verdict and provide a resu lt that was fair to Maxitrol. Plaintiff, having requested reformation, should not be heard to complain about receiving what he asked for. A party may not claim error “premised on an error t o which he contributed by plan or negligence.” People v Bosca , 310 Mich App 1, 29; 871 NW2d 307, app held in abeyance 872 NW2d 492 (Mich 2015).

VIII. ATTORNEY FEES

Both plaintiff and the individua l defendants believe they are entitled to attorney fees. We disagree.

An appellate court reviews a trial court’s decision on attorne y fees and costs for an abuse of discretion. Smith v Khouri , 481 Mich 519, 526; 751 NW2d 472 (2008). “An abuse of-14- discretion occurs when the trial court’s decision is outside th e range of reasonable and principled outcomes.” Id. at 526.

As to plaintiff’s claim for attorney fees, the individual defe ndants aptly note that plaintiff did not seek attorney fees under the section of the act that en ables the court to award costs and attorney fees in a derivativ e action. MCL 450.1497(b) provides :

On termination of the derivat ive proceeding, the court may order 1 of the following:

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(b) The corporation to pay the p laintiff’s reasonable expenses, including reasonable attorney fees, incurr ed in the proceeding if it find s that the proceeding has resulted in a substantial benefit to the corporation. The court shall direct the plaintiff to account to the corporation for any proceeds receiv ed by the plaintiff in excess of expenses awarded by the court, except that this shall not apply to a judgment rendered for the benefit of an injured shareholder onl y and limited to a recovery of the loss or damag e sustained by him or her. [Emphas is added.]

Although cited in his verified bill of taxable costs, plaintiff did not cite or argue that MCL 450.1497(b) was applicable in his mo tion to amend the judgment. Nor does he mention the statute on appeal except in a footnote to his reply brief. In any event, plaintiff is not entitled to attorney fees and costs under MCL 450.1497. The statute specif ically states that a court “may” order a corporation to pay the p laintiff’s reasonable expenses and fees if it finds that the derivative action resulted in a substantial benefit to the corp oration. “[T]he term ‘may’ is relevantly defined as being ‘use d to express opportunity or per mission’ . . . In general, our courts have said that the term ‘may’ is ‘permissive,’ as opposed to th e term ‘shall,’ which is considered ‘mandatory’ . . .” Manuel v Gill , 481 Mich 637, 647; 753 NW2d 48 (2008). The trial court, therefore, had the discretion to award fees and declined to do so, having conclude d that the jury’s verdict provided only “de minimis damages” and, therefore, was not a substantial benefit to Maxitrol. Additionally, the trial court seemed to conclude tha t the $51,000 verdict reflected that plaintiff’s expenditure of over a million dollars was not “reas onable” under the statute.

Instead of addressing MCL 4 50.1497, plaintiff cites MCL 450.15 62 and MCL 450.1564b(4) for an award of attorney fees. MCL 450.1562 provi des:

A corporation has the power to indemnify a person who was or i s a party or is threatened to be made a party to a threatened, pending, o r completed action or suit by or in the right of the corporation to procure a judg ment in its favor by reason of the fact that he or she is or was a director, officer , employee, or agent of the corporation, or is or was serving at the request of the cor poration as a director, officer, partner, trustee, empl oyee, or agent of another foreig n or domestic corporation, partnership, joint venture, trust, or other enterp rise, whether for profit or not, against expenses, includ ing attorneys’ fees, and amount s paid in settlement actually and reasonably incurred by the person in connection wi th the action or suit, if the person acted in good faith and in a manner the person reasonably-15- believed to be in or no t opposed to the best inte rests of the corporation or its shareholders. Indemnification shall not be made for a claim, is sue, or matter in which the person has been found liable to the corporation excep t to the extent authorized in [MCL 450.564c]. [ MCL 450.1562 (emphasis added).]

There is a dearth of case law interpreting § 1562. In one unpublished case, Hampton Block Co v Hampton , unpublished opinion per curiam of the Court of Appeals, enter ed October 27, 2000 (Docket No. 211468), the plaintiff argued that the trial court abused its discretion in failing to award him attorney fees in his suit against his brother, a fell ow officer in the company. This Court considered MCL 450.1562, along with MCL 450.1563, which p rovides:

To the extent that a director or officer of a corporation has b een successful on the merits or otherwise in defense of an action, suit, or proceedin g referred to in section 561 or 562, or in defense of a claim, issue, or matter in the action, suit, or proceeding, the corporation shall indemnify him or her against actual and reasonable expenses, including attorneys’ fees, incurred by him or her in connection with the action, suit, or proceeding and an action, suit, or proceeding brought to enforce the mandatoryindemnification provided in th is section.

The Court concluded:

Under the plain language of thos e statutes, [the plaintiff] is not entitled to attorney fees. The statutes indicate that directors and officers are pro tected in defending themselves against claims by a shareholder and do not compensat e plaintiffs who bring suit against officers and directors of a corporation. MCL 450.1563; MSA 21.200(563) clearly states that inde mnification applies when anofficer or director is successful “in defense of an action” (emphasis added). Consequently, there is no support under either statute for [the plaintiff’s] contentio n that he is entitled to attorney fees in conn ection with the suit that he brought again st [his brother]. [ Hampton , slip op, p 3.]

Although unpublished opinions are not binding precedent, MCR 7. 215(C)(1), an unpublished opinion may be persuasive or instructive. In re Kanija , 308 Mich App 660, 668 n 6; 866 NW2d 862 (2014). Along with the fact t hat these statutes seem to lo gically flow to indemnification of corporate officers made defendant s in actions, plaintiff had th e obstacle of showing that he acted in good faith and in a manner the person reasonably believed to be in Maxitrol’s best interests. Again, such language imbues in the trial court a fair amount ofdiscretion. Plaintiff filed a multicount complaint alleging a varie ty of claims against the indivi dual defendants. Most of these claims were deemed without merit in Serlin’s report. The trial court may have considered the fact that plaintiff, even if he acted in good faith, did not ac t reasonably, again as demonstrated by the relatively de minimus awa rd in light of the heavy expenditure.
Next, MCL 450.1564b(4) provides: “A provision in the articles of incorporation or bylaws, a resolution of the board or shareholders, or an agreem ent making indemnification mandatory shall also make the advancement of expenses mandatory unless the provision, resolution, or agreement specifi cally provides otherwise.” Art icle XI, § 11.02 of Maxitrol’s bylaws somewhat mirrors MCL 450.1562 and provides:-16- 11.02 Derivative Actions. Subject to all of the provisions of this Article XI, the corporation shall indemn ify any person who was or is a party to or is threatened to be made a party to any threatened, pending or com pleted action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or offi cer of the corporation, or, while serving as a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, partner, tru stee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprises, whether for profit or not, against expens es (including attorneys’ fees) and amounts paid in settlement actually and re asonably incurred by the person in connection with such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the co rporation or its shareholders . However, indemnification shall not be made for any claim, issue, or matt er in which such person has been found liable to the corporation unless and onlyto the extent that the court in which such action or suit was brought has determin ed upon application that, despite the a djudication of liability but in view of all circumstances of the case, such person is fairly and reasonablyentitled to indemnification for the reasonabl e expenses incurred. [Emphasis added.]

However, Article XI, § 1 1.05 further provides:

11.05 Contract Right: Limitation on Indemnity. The right to indemnification conferred in thi s Article XI shall be a contrac t right, and shall apply to services of a director o r officer as an employee or ag ent of the corporation as well as in such person’s capacity as a director or officer. Except as provided in Section 11.03 of these Bylaws, the corporation shal l have no obligations under this Article XI to indemnify any person in co nnection with any proceeding, or part thereof, initiated by such person without a uthorization by the Board of Directors.

Therefore, there is no clear obl igation to indemnify plaintiff under Maxitrol’s by-laws. Article XI, § 11.02 requires that the director act in good faith and ina manner reasonably believed to be in Maxitrol’s best interest. A rticle XI, § 11.05 requires that a director is not entitled to indemnification if a proceeding i s initiated without the author ization of the board of directors.

Just as plaintiff was not, as a matter of law, entitled to att orney fees, nor were the individual defendants or M axitrol under MCL 450.1497. MCL 450. 1497(a) provides:

On termination of the derivative proceeding, the court may orde r 1 of the following:

(a) The plaintiff to pay any of the defendant’s reasonable expe nses, including reasonable attorney fees, incurred in defending the proceeding if it finds that the proceeding was commenced or maintained in bad faith or without reasonable

cause . [Emphasis added.]-17- Again, “may” indicates that the trial court has discretion in o rdering attorney fees. Here, the trial
court may order costs if it determines that the action was commenced or maintained in ba d faith or without reasonable cause. The trial court’s comments clearl y indicate that it questioned the reasonableness of plaintiff’s ac tion. Both the trial court and Serlin noted that Maxitrol was a profitable company that was properly managed. Still, the trial court was within its right to determine that plaintiff did not act in bad faith or without re asonable cause, especially in light of the fact that plaintiff prevailed on the issue of the fairness of the M-Annex lease. In light of the jury’s verdict in Maxitrol’s favor, it makes sense that the tri al court would decline to award the individual defendants their a ttorney fees. In addition, Maxitr ol has another problem. The statute clearly provides that a trial c ourt may order the payment of defendant’s reasonable expenses. True, Maxitrol was a nominal defendant in the technical sense, but it really stood in plaintiff’s shoes in this shareholder de rivative action. The jury’s $51,00 0 verdict flowed directly to Maxitrol. Therefore, at least under these particular circumsta nces, the statute does not appear to apply to Maxitrol.

IX. TAXABLE COSTS

Finally, each party claims that the trial court erred in faili ng to award taxable costs. We disagree.

An appellate court reviews a trial court’s decision on attorne y fees and costs for an abuse of discretion. Smith , 481 Mich at 526.

MCR 2.625 provides, in relevant part:

(A) Right to Costs.

(1) In General. Costs will be allowed to the prevailing party in an action, un less prohibited by statute or by these rules or unless the court dir ects otherwise, for reasons stated in writing and filed in the action.

(2) Frivolous Claims and Defenses. In an action filed on or after October 1, 1986, if the court finds on motion of a party that an action or defen se was frivolous, costs shall be awarded as provided by MCL 600.2591.

(B) Rules for Determining Prevailing Party.

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(2) Actions With Severa l Issues or Counts. In an action involving several issues or counts that state different cause s of action or different defen ses, the party prevailing on each issue or count may be allowed costs for that issue or count. If there is a single cause of acti on alleged, the party who prevai ls on the entire record is deemed the prevailing party.

Additionally, MCL 600.2591 provides:-18- (1) Upon motion of any party, if a court finds that a civil act ion or defense to a civil action was frivolous, the c ourt that conducts the civil a ction shall award to the prevailing party the costs and fees incurred by that party in connection with the civil action by assessing the costs and fees against the no nprevailing party and their attorney.

(2) The amount of costs and fees awarded under this section sha ll include all reasonable costs actually incurre d by the prevailing party and any costs allowed by law or by court rule, including c ourt costs and reasonable a ttorney fees.

(3) As used in this section:

(a) “Frivolous” means that at least 1 of the following conditio ns is met:

(i) The party’s primary purpose in initiating the action or ass erting the defense was to harass, embarrass, or injure the prevailing party.

(ii) The party had no reasonable basis to believe that the fact s underlying that party’s legal position were in fact true.

(iii) The party’s legal position w as devoid of arguable legal m erit.

(b) “Prevailing party” means a party who wins on t he entire rec ord.

Plaintiff is not entitled to costs. His claim for costs is ba sed on his assertion that he prevailed in full on Counts I and II of his third amended compl aint. Plaintiff did not come close to prevailing on each of the a llegations couched within Counts I and II of his third amended complaint. In fact, following Serlin’s report, many of these a llegations were dismissed. However, neither were the individual defendants entitled to tax able costs. Most telling is the verdict against them in the amount of $51,000.

The trial court is entitled to discretion in awarding taxable costs. The court rule indicates that a prevailing party is entitled to costs, “ unless . . . the court directs otherwise, for reasons stated in writing.” Here, the trial court observed:

This case has a long, torturous and pretty well-known history to the Court in parts. Mr. Kern has filed not less than three lawsuits seeki ng relief because he claims that he was--has been--because he claims that the direct ors, being his sister and brother-in-law, have entered into a willfully unfair and op pressive conduct and thus other damages.

Plaintiffs filed a multi-count complaint. As a result of that, the Court appointed a disinterested director . This disinterested director came in and as a result of his report, in his long and--and completely thorough investigation, the Court dismissed all of the counts in the complaint, save the co unt regarding the— the lease between, basically the sister, Ms. Kern-Koskela and h er husband and the company for a piece of land in Southfield.-19- The case was tried to a jury. The jury came back and found the lease was unfair and awarded, really based on the type of case this was, de minimis damages in the amount of $50,000--$51,015. As a result, since the Court has--since the jury has found the lease unfair, the C ourt is, pursuant to MCL 450.1 545a(1), the Court has pretty large powers to reform the lease.

Under the Court’s equitable powers, once the lease was determi ned to be unfair, the Court--Court is within its power to reform the leas e, Thomas v Satfield, 363 Michigan 111. The Court is going to avail itself of that opportunity and reform the lease . . .in conformance with the jury verdict and will rule that the lease, for year six through te n, the lease rates are year s ix, $10.79 per square foot triple net; year seven, $11.29 per square foot triple net; year eight, $11.79 per square foot triple net; year nine, $12.29 per square foot tripl e net and year ten, $12.79 per square foot triple net.

Next, the Court has to deal with the award for attorney fees-- of attorney fees. The individual defendants, the corporation and the plaint iff has—have all sought reim--reimbursement for their attorney fees; however, in this case, neither party prevailed in full. Therefo re, the Court will deny all requests for attorney fees and the individuals and the corporation will remain personally liable for their attorney’s fees.

The Court has also found that the actions of the defendant dir ectors, although they may have been unfair, did not rise to the level o f willfully unfair and oppressive conduct, far from it. While these bro—this broth er and sister may still be upset about the fact that somebody got a nicer bike th an the other one got 20 or 30 or 40 or 50 years ago, the y don’t get along. Okay.

The business is successful. Th e business is running profitably . Everybody is making money on this deal. The re is no willful and oppressiv e conduct. They don’t like each other, but since the Court has found that there is no willful and oppressive conduct, the Court does not have authority or jurisd iction to do anything about corporate governance and therefore, the motion t o amend the judgment and for equitable relief, is denied.

The trial court’s statement indicates that no party truly preva iled in this action. It properly exercised its discretion in denyi ng taxable costs to plaintiff and the individual defendants.

Affirmed.

/s/ Cynthia Diane Stephens /s/ Kirsten Frank Kelly /s/ Christopher M. Murray