Opinion ID: 3006557
Heading Depth: 2
Heading Rank: 2

Heading: Tort claims are claims.

Text: ¶14. Williams also claims that the survival statute does not apply to tort claims. Williams cites no authority in support of this argument. Indeed, one of the primary purposes of survival statutes like that of Florida is to allow claimants to bring suit against a dissolved corporation for a limited time. See Smith, 879 P.2d 1198; Model Bus. Corp. Act § 14.07 cmt. (amended 2005) (specifically mentioning the purpose of the rule is to permit lawsuits to be filed against dissolved corporations for a set number of years); 19 C.J.S. Corporations §§ 952, 953 (2007) (noting corporate-survival statutes exist, in part, to allow suits against dissolved corporations); see also Mejia v. Ruiz, 985 So. 2d 1109, 1114 (Fla. Ct. App. 2008) (applying 8 Florida corporate-dissolution statute Section 607.1406 to a tort claim). This argument is without merit. C. Corporate-survival statutes are constitutional. ¶15. Williams further argues that enforcing the Florida statute would violate his due process and equal protection rights. Williams says the Florida law results in different treatment of similarly situated plaintiffs who rely on Mississippi’s discovery rule. He claims that the Florida statute unconstitutionally permits one class of persons – those who discover their injuries and file within four years of dissolution – to maintain a suit, while preventing another class – those who do not discover their injuries in time to file within four years – from bringing a claim. ¶16. Williams cites no authority on point. Indeed, the U.S. Supreme Court and other courts considering this issue have ruled the other way. Chicago Title & Trust Co. v. Forty-One Thirty-Six Wilcox Bldg. Corp., 302 U.S. 120, 128, 58 S. Ct. 125, 128, 82 L. Ed. 147 (1937) (“There is nothing in the Federal Constitution which operates to restrain a state from terminating absolutely and unconditionally the existence of a state-created corporation, if that be authorized by the statute under which the corporation has been organized.”); In re All Cases Against Sager Corp., 967 N.E.2d 1203, 1205 (Ohio 2012), (“In conformity with constitutional requirements of due process and the Full Faith and Credit Clause, the law of the state of incorporation controls whether a corporation is amenable to suit.”); see also Oklahoma Nat. Gas Co. v. State of Okla., 273 U.S. 257, 259-60, 47 S. Ct. 391, 392, 71 L. Ed. 634 (1927) (noting no constitutional defects in finding dissolved corporations cease to 9 be entities that can be sued and that “corporations exist for specific purposes, and only by legislative act, so that if the life of the corporation is to continue even only for litigating purposes it is necessary that there should be some statutory authority for the prolongation.”). II. Whether the center-of-gravity test applies in this case. ¶17. The center-of-gravity analysis is a choice-of-laws mechanism that this Court uses to resolve conflicts of law. Mitchell v. Craft, 211 So. 2d 509, 515 (Miss. 1968) (“This doctrine is a rule whereby the court trying the action applies the law of the place which has the most significant relationship to the event and parties, or which, because of the relationship or contact with the event and parties, has the greatest concern with the specific issues with respect to the liabilities and rights of the parties to the litigation.” (citing 15A C.J.S. Conflict of Laws 8(2) (1967))); see also Zurich, 920 So. at 433; Restatement (Second) Conflict of Laws §§ 145, 146 (Am. Law Inst. 1971). Here, Williams claims there is a conflict between Florida’s corporate-survival statute and Mississippi’s statute of limitations and discovery rule. Yet, the center-of-gravity test is inapplicable to the instant matter. ¶18. Where there is a conflict of laws, Mississippi follows the Restatement (Second) Conflict of Laws. Newman v. Newman, 558 So. 2d 821, 823-24 (Miss. 1990). The Restatement (Second) Conflict of Laws provides in Section 299 that a corporation’s existence is determined by the laws of the state of incorporation. Restatement (Second) Conflict of Laws § 299 (Am. Law Inst. 1971). The Florida statute at issue here terminates a corporation’s existence for purposes of unknown claims four years after its filing notice dissolution. Williams filed suit after Clark Sand ceased to exist under Florida law. 10 ¶19. Mississippi will apply the substantive law of a foreign state where the other state’s law is not “offensive to the deeply ingrained or strongly felt public policy of the state.” Boardman v. United Servs. Auto. Ass’n, 470 So. 2d 1024, 1038 (Miss. 1985). Mississippi’s corporate-survival statute is identical to Florida’s, except Mississippi’s is slightly more restrictive, in that it extends the privilege to sue a dissolved corporation only for three years instead of four. Compare Miss. Code Ann. § 79-4-14.07, and Fla. Stat. Ann. § 607.1407. To state the obvious, applying a statute essentially identical to Mississippi’s own is not offensive to this State’s public policy. Indeed, Mississippi law holds that, where another state’s law creates a right of action and places limits on that action, it is not controlled by Mississippi’s statute of limitations. Louisville & Nashville R.R. Co. v. Dixon, 150 So. 811, 812-13 (Miss. 1993). ¶20. Moreover, not only is the Florida corporate-survival statute not in conflict with Mississippi’s corporate-survival statute in this case, Williams does not assert that Mississippi’s statute of limitations conflicts with any actual Florida statute of limitations. Consequently, there is no conflict requiring application of the center-of-gravity test. See Mitchell, 211 So. 2d at 515 (holding Mississippi applies the center-of-gravity (most substantial relationship) test to conflicts between substantive laws). To the extent that a conflict ostensibly does exist, the authorities point to application of Florida law. See, e.g., Louisville & Nashville R.R. Co. v. Dixon, 150 So. 811, 812-13 (Miss. 1933); Newman, 558 So. 2d at 823-24; Restatement (Second) Conflict of Laws § 299. 11 ¶21. A recent Ohio Supreme Court decision is instructive. There, Ohio plaintiffs, like Williams here, argued the center-of-gravity test in Restatement (Second) Conflict of Laws Section 146 required the application of Ohio law to determine whether their claims were barred against an Illinois corporation for injuries allegedly occurring in Ohio. Sager, 967 N.E.2d at 1206. The plaintiffs, like Williams, claimed that under conflicts-of-law analysis, Ohio’s statute of limitations and discovery rule permitted suit against the Illinois corporation despite the running of Illinois’s five-year corporate-survival statue. Id. ¶22. Rejecting the plaintiff’s argument, the Ohio court, citing Chicago Title2 and Oklahoma Natural Gas,3 held that the determination of whether a corporation is amenable to suit is controlled by the state of incorporation, regardless of the statute of limitations and discovery rule of the forum state. Sager, 967 N.E.2d at 1207-10 (“the law of the state of incorporation [applies] in deciding whether a dissolved corporation has capacity to be sued in a forum state.”). The court noted that, because a corporation’s existence is determined by the state of incorporation, its existence is a separate legal consideration from the statute of limitations. Id. at1208-09. The court then noted numerous other jurisdictions reaching the 2 Chicago Title, 302 U.S. at 128 (“There is nothing in the Federal Constitution which operates to restrain a state from terminating absolutely and unconditionally the existence of a state-created corporation . . . .”); 3 Oklahoma Nat. Gas Co., 273 U.S. at 259-60 (“[C]orporations exist for specific purposes, and only by legislative act, so that if the life of the corporation is to continue even only for litigating purposes it is necessary that there should be some statutory authority for the prolongation. The matter is really not procedural or controlled by the rules of the court in which the litigation pends. It concerns the fundamental law of the corporation enacted by the state which brought the corporation into being.”). 12 same conclusion. Id. (citing Halliwell Assocs., Inc. v. C.E. Maguire Servs., Inc., 586 A.2d 530, 531-532 (R.I. 1991) (“since Halliwell Associates is a Massachusetts corporation, Massachusetts law governs the capacity of a Massachusetts corporation or its shareholders to sue or be sued”); Velasquez v. Franz, 123 N.J. 498, 510, 589 A.2d 143 (1991) (“The choice-of-law question regarding a corporation’s capacity to be sued has been answered by reference to the laws of the state of incorporation since long before the rule’s incorporation into the federal rules of civil procedure”); Gassert v. Commercial Mechanisms, Inc., 277 N.W.2d 392, 393 (Minn. 1979) (“We have held that the law of the state of incorporation applies to a dissolved corporation. Since it is undisputed that CMI is a Missouri corporation, the Missouri survival statute applies.”) (citation omitted); Casselman v. Denver Tramway Corp., 195 Colo. 241, 244, 577 P.2d 293 (1978) (“We hold that the question of whether a foreign corporation can be sued after dissolution depends upon the law of the state of incorporation”); Bazan v. Kux Mach. Co., 52 Wis. 2d 325, 333, 190 N.W.2d 521 (1971) (“It is the rule that when a corporation becomes defunct by dissolution in the state of its creation, it is defunct in every other state unless such other state has also granted it a charter”)); Owens v. Allied Underwriters, 207 La. 437, 450, 21 So. 2d 490 (1945) (“Since the life of the corporation has been terminated under the laws of Texas, it no longer has the capacity to be sued in Louisiana”); Chaplin v. Selznick, 293 N.Y. 529, 540, 58 N.E.2d 719 (1944) (the California survival statute “is entitled to recognition and enforcement by the courts of this State”); Meehl ex rel. Eagle Indem. Co. v. Barr Transfer Co., 305 Mich. 276, 283, 9 N.W.2d 540 (1943) (“There is no question but that the dissolution of a corporation is 13 governed by the laws of the state granting its charter”); Floerchinger v. Sioux Falls Gas Co., 68 S.D. 543, 547, 5 N.W.2d 55 (1942) (applying New Jersey corporation law); Wettengel v. Robinson, 288 Pa. 362, 370, 136 A. 673 (1927) (“The Riverside Company being a West Virginia corporation, the law of that state governs the status and powers of the corporation and its directors after the surrender of its charter”) ¶23. A recent Michigan case made a similar finding. After noting that Michigan’s corporate-saving statute was not a statute of limitations, the Michigan Court of Appeals held that the savings statute applied to latent injuries discovered after the savings period expired. Gilliam, 677 N.W.2d at 866-69. The court noted that the intent of corporate-saving statutes is to bar unknown claims “‘that arise after the dissolution of the corporation . . . , thus cutting off the possibility that the corporation’s potential liability could never be completely resolved.” Id. at 669 (quoting Freeman v. Hi Temp Prods., Inc., 229 Mich. App. 92, 96, 580 N.W.2d 918, 922 (1998)). Consequently, the Michigan court found asbestos-related claims discovered after the corporate-survival statute had expired were barred, despite the injuries being latent and undiscoverable before the dissolution became final. Id. ¶24. We find these cases persuasive. And, importantly, the above analysis comports with the requirements of the Full Faith and Credit Clause. Article IV, Section 1, of the United States Constitution requires Mississippi courts to accord “full faith and credit” to “the public Acts, Records, and judicial Proceedings of every other State.” U.S. Const. art. IV, § 1. Accordingly, Florida’s organization and dissolution laws are entitled to enforcement in Mississippi. CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69, 89, 107 S. Ct. 1637, 14 95 L.Ed.2d 67 (1987) (“No principle of corporation law and practice is more firmly established than a State’s authority to regulate domestic corporations.”); Lilliquist v. Copes-Vulcan, Inc., 2011 PA Super. 102, 21 A.3d 1233, 1235 (2011) (applying Alabama survival statute to claims filed in Pennsylvania, finding the claims were filed after dissolution and thus barred).4 Consequently, we affirm the trial court on this issue. III. Whether Clark Sand’s alleged failure to follow Florida law in regard to Section 607.1406 in prior suits affects the current case. ¶25. Florida Statute 607.1406 provides “The dissolved corporation or successor entity shall deliver to each of its known claimants written notice of the dissolution at any time after its effective date.” Fla. Stat. Ann. § 607.1406(2). Williams’s attorneys claim they had forty to fifty known claims pending against Clark Sand when the corporation filed for dissolution, and that Clark Sand never sent the law firms notice of dissolution. As a result, the law firms allege they did not expedite filing the current suits. They claim sixteen of the seventeen suits potentially could have been filed before the cutoff date, had they known of the dissolution. ¶26. Williams relies on Mejia v. Ruiz, 985 So. 2d 1109 (Fla. 3d Dist. Ct. App. 2008). There, the Florida Court of Appeals for the Third District found that, where the shareholders and directors of a corporation defrauded a judgment creditor and failed to provide notice of their corporation’s dissolution as part of that fraud, they were not entitled to the benefits of dissolution. Id. at 1114. In other words, the shareholder’s wrongdoing prevented them from 4 Conversely, if a judgment was granted against Clark Sand in Mississippi, that judgment would not be entitled to full faith and credit in Florida, i.e., a Florida court would have no obligation to enforce that judgment in Florida. Pendleton v. Russell, 144 U.S. 640, 645, 12 S. Ct. 743, 745, 36 L. Ed. 574 (1892). 15 invoking the dissolution’s shield against lawsuits. See id. (“Shareholders and directors that follow the procedures set forth in section 607.1406 are given limited immunity. Conversely, those that ignore its dictates are not.”). ¶27. To be clear, the notice requirements of Section 607.1406 do not apply to any of the current plaintiffs. It also is not disputed that the notice of dissolution relevant to unknown claimants was posted on the Florida Secretary of State’s website upon Clark Sand’s filing. Williams’s argument is that Clark Sand may have withheld actual notice intentionally to these law firms in an effort to defraud or somehow hinder subsequent plaintiffs represented by these law firms. Williams does not explain, however, why the law firms were entitled to notice, as opposed to their clients, but Clark Sand never objected to this assertion. Therefore, we give Williams the benefit of the doubt that the lawyers were entitled to notice. ¶28. The trial court found no evidence that Clark Sand was trying to perpetrate a fraud or to hinder these plaintiffs. Indeed, no evidence has been presented showing that Clark Sand failed to provide notice to any known claimants for an improper purpose. However, Williams’s attorneys stated to the trial court that they never received notice of dissolution and requested leave to depose Clark Sand’s former owner in an effort to determine why they were never provided notice. Clark Sand did not deny they failed to provide notice to the attorneys. Nevertheless, the trial court found that the notice requirements of Section 607.1406 did not apply to the unknown plaintiffs, and that, because there was no evidence of fraud or intent to hinder subsequent unknown plaintiffs, Clark Sand was entitled to judgment. 16 ¶29. In response to a motion for summary judgment, “parties may not simply rely on their pleadings, nor may they escape summary judgment by outlining what they might discover later.” Franklin Collection Serv., Inc. v. Kyle, 955 So. 2d 284, 291 (Miss. 2007). Importantly here, there is no evidence that Clark Sand withheld notice in an effort to defraud or hinder Williams. Williams’s attorneys essentially argued there may have been an improper purpose for withholding notice regarding known suits and then sought leave, ore tenus, to conduct further discovery. In effect, they merely “outlin[ed] what they might discover later.” See Kyle, 955 So. 2d at 291. ¶30. Accordingly, we find that the trial court correctly sustained Clark Sand’s motion for summary judgment regarding this issue. Under Mejia, a Florida corporation may not be entitled to shield itself from liability where the corporation’s dissolution is employed in an effort to defraud or hinder claimants. But here, Williams’s attorneys failed to support their allegations that Clark Sand withheld notice of the corporation’s dissolution in other suits in order to perpetrate a fraud or hinder Williams. Moreover, Clark Sand complied with the notice requirements to unknown claimants, which applies here. As a result, the judgment of trial court is affirmed.