Court Opinion

ID: 2745435
Source: CourtListenerOpinion
Date Created: 2014-10-24 16:05:34.089119+00
Date Added: 2024-06-11T10:12:49.788033
License: Public Domain

STATE OF MICHIGAN

                               COURT OF APPEALS

ROBERT HOGG,                                                              FOR PUBLICATION
                                                                          October 23, 2014
                  Plaintiff-Appellant,                                    9:10 a.m.

v                                                                         No. 316898
                                                                          Livingston Circuit Court
FOUR LAKES ASSOCIATION, INC., CRYSTAL                                     LC No. 12-027239-CZ
KELLER, CHRISTOPHER ELLIOTT, CURTIS
WERNER, RANDY HOCKEY, BRYAN
GOGOLIN, ROBERT CAVILL, MARK WEISS,
RANDY HORNBY,

                  Defendants-Appellees.

Before: SAAD, P.J., and O’CONNELL and MURRAY, JJ.

SAAD, P.J.

       Plaintiff appeals the trial court’s order that denied his motion for summary disposition
and granted summary disposition to defendants. For the reasons stated below, we affirm.

                              I. FACTS AND PROCEDURAL HISTORY

        Defendant Four Lakes Association, Inc (“FLA”), was established on April 30, 1968,1 and
is incorporated under the Summer Resort Owners Act (“the SRO”),2 which permits individuals
who own homes in a resort area to “form a summer resort owners corporation for the better
welfare of said community and for the purchase and improvement of lands to be occupied for
summer homes and summer resort purposes.”3 The entities incorporated under the SRO
essentially function in a similar manner to homeowners associations, with special powers granted
by statute.4 FLA accordingly provides basic infrastructure services, including road maintenance,
snow removal, and water quality testing, for properties located in a forested lake area near

1
    FLA’s articles of association state that its “term of . . . corporate existence is perpetual.”
2
    MCL 455.201, et seq.
3
    MCL 455.201.
4
    See, for example, MCL 455.204.

                                                    -1-
Brighton. It also owns small parcels of common property. To fund its operations, FLA collects
dues from its members, and the individual parties to this suit, including plaintiff, have all served
as officers and directors of FLA at various times. Both plaintiff and defendants own property
within FLA’s area of operation.

        For reasons that are not entirely clear, plaintiff brought this suit in the Livingston Circuit
Court, and alleged that FLA was no longer a valid organization and should cease operations,
because MCL 455.202 prohibited SRO corporations from existing for more than 30 years. He
also asked the court to force FLA to return any corporate funds to its members, and moved for
summary disposition under MCR 2.116(C)(10).5 Defendants admitted that FLA’s term of
corporate existence had not been renewed, but emphasized that the members were discussing
new forms of association for the entity, and that they would lose essential infrastructure services
if the court held that FLA no longer existed.

        At a hearing, the trial court stated MCL 455.202’s 30-year limit on SRO corporate
existence was superseded by a section of Michigan’s General Corporation Act, MCL 450.371,
which allowed the term of existence of any corporation incorporated in Michigan to be perpetual.
After it heard additional arguments from both parties on MCL 450.371’s applicability, the trial
court denied plaintiff’s motion for summary disposition, and instead granted summary
disposition to defendants. It noted that the 1963 Michigan Constitution essentially abrogated the
SRO’s 30-year limit to SRO corporate existence when it eliminated the 1908 Constitution’s
reference to temporal limits on corporate existence. Furthermore, the court stated that the
Legislature intended MCL 450.371 to effect this change in public policy. Accordingly, the trial
court held that MCL 450.371 superseded MCL 455.202, and allowed FLA to operate in
perpetuity, as specified in its articles of association.

        Plaintiff appealed the ruling to our Court, and argues that the trial court erred when it
held that FLA was permitted by the SRO to declare that its existence was “perpetual” at the time
of its incorporation, and that MCL 450.371 does not apply to the term of existence for SRO
corporations. He also claims that the SRO is unconstitutional because the alleged vagueness of
its terms violates the Title-Object Clause, Const 1963, art 4, § 24.6 Plaintiff did not make this
constitutional argument at trial.

                                  II. STANDARD OF REVIEW

5
 It is unclear under what subrule plaintiff moved for summary disposition, but because the trial
court considered matters outside of the pleadings in its adjudication of the case, we review this
matter under MCR 2.116(C)(10). Silberstein v Pro-Golf of America, Inc, 278 Mich. App. 446,
457; 750 NW2d 615 (2008).
6
 We note that plaintiff’s entire appeal is puzzling—on one hand, he demands that the mandates
of the SRO be strictly enforced; on the other, he claims that the SRO is unconstitutional.
Plaintiff does not seem to grasp the dissonance that is inherent in his arguments, but his lack of
understanding is ultimately inconsequential, because both of his claims are without merit.

                                                 -2-
        A trial court’s ruling on a motion for summary disposition is reviewed de novo, and we
view the evidence in the light most favorable to the nonmoving party. Joliet v Pitoniak, 475
Mich. 30, 35; 715 NW2d 60 (2006). Matters of statutory interpretation are reviewed de novo. In
re McEvoy, 267 Mich. App. 55, 59; 704 NW2d 78 (2005). “The first step when interpreting a
statute is to examine its plain language, which provides the most reliable evidence of [legislative]
intent.” Ter Beek v City of Wyoming, 495 Mich. 1, 8; 846 NW2d 531 (2014). When the language
of a statute is unambiguous, “we presume that the Legislature intended the meaning clearly
expressed—no further judicial construction is required or permitted, and the statute must be
enforced as written.” Huron Mountain Club v Marquette Co Rd Comm, 303 Mich. App. 312, 324;
845 NW2d 523 (2013).

        As noted, plaintiff did not raise his constitutional arguments at trial. “Issues raised for
the first time on appeal are not ordinarily subject to review.” Booth Newspapers, Inc v Univ of
Mich Bd of Regents, 444 Mich. 211, 234; 507 NW2d 422 (1993). We may elect to review such
issues when they involve questions of law, and the facts necessary for their resolution have been
presented. Smith v Foerster-Bolser Construction, Inc, 269 Mich. App. 424, 427; 711 NW2d 421
(2006). Our review of any unpreserved issues is limited to plain error. Kloian v Schwartz, 272
Mich. App. 232, 242; 725 NW2d 671 (2006).

                                         III. ANALYSIS

                  A. THE SRO AND THE GENERAL CORPORATION ACT

       Michigan’s General Corporation Act, MCL 450.1, et seq., governs the issuance,
maintenance, and operation of corporate charters in the state. It provides that:

       Notwithstanding any other provision of law, the term of existence of every
       domestic corporation heretofore incorporated or hereafter incorporating under
       any law of this state may be perpetual or may be for a limited period of time, as
       fixed by its articles, or amendment thereto made before the expiration of its
       corporate term, or by a certificate of extension of its corporate term, or by a
       certificate of renewal of its corporate term. [MCL 450.371 (emphasis added).]

        Accordingly, any Michigan entity that is incorporated under any Michigan law may exist
perpetually or may exist “for a limited period of time, as fixed by its articles.” By its plain
language, then, MCL 450.371’s mandate: (1) includes corporations incorporated under the SRO;
and (2) supersedes the provisions of the SRO (namely, MCL 455.202) that imposed a 30-year
limit on the existence of any entity incorporated under the SRO.7

7
  “The rules of statutory construction . . . provide that a more recently enacted law has
precedence over the older statute.” Parise v Detroit Entertainment, LLC, 295 Mich. App. 25, 28;
811 NW2d 98 (2011). The Legislature enacted the SRO in 1929, and enacted MCL 450.371 in
1963. MCL 450.371 therefore governs the term of existence of any SRO corporation. The fact
that the Legislature made minor clerical amendments to MCL 455.251 in 1982 is irrelevant to

                                                -3-
       Here, FLA, which is located in Michigan, was incorporated in 1968 under the SRO.
Accordingly, it is a “domestic corporation” incorporated “under [a] law of this state,” and it thus
may exist in perpetuity or for a limited period of time “as fixed by its articles.” MCL 450.371.
FLA’s articles specify that its “term of . . . corporate existence is perpetual.” FLA is therefore in
existence and may carry out the functions specified in its articles.

        Plaintiff’s arguments to the contrary are completely unavailing. They ignore the plain
language of MCL 450.371 and instead make inapposite citations to the Business Corporation
Act,8 a subchapter of the General Corporation Act that has no relation to the operation of MCL
450.371.9 As noted, MCL 450.371 applies to “every domestic corporation heretofore
incorporated or hereafter incorporating under any law of this state”—not just those incorporated
under the Business Corporation Act or the General Corporation Act.10

MCL 450.371’s supremacy in the area of corporate term of existence, because “[w]hen a statute
continues a former . . . law, that law common to both acts dates from its first adoption, and only
such provisions of the old act as are left out of the new one are gone, and only new provisions
are new laws.” Wade v Farrell, 270 Mich. 562, 567; 259 N.W. 326 (1935).
The trial court and defendant’s observation that the Legislature enacted MCL 450.371 in the
same year as Michigan’s 1963 Constitution, which eliminated the 1908 Constitution’s 30-year
limit on corporate term of existence, supports the above interpretation. See Const 1908, Art 12 §
3 (“[n]o corporation shall be created for a longer period than 30 years . . .”).
8
    MCL 450.1101, et seq.
9
    Specifically, plaintiff cites MCL 450.1123(1), which states that:
          Unless otherwise provided in, or inconsistent with, the act under which a
          corporation is or has been formed, this act applies to . . . summer resort
          associations. . . . The entities specified in this subsection shall not be incorporated
          under this act.

As defendant correctly notes, MCL 450.1123(1)’s reference to “this act” is reference to the
Business Corporation Act—not MCL 450.371, which is contained in the General Corporation
Act, a broader chapter of which the Business Corporation Act is a part. See Miller v Allstate,
275 Mich. App. 649, 654; 739 NW2d 675 (2007) (implying that “this act” as used in MCL
450.1123(1) refers to “the Business Corporation Act”). The actual function of MCL 450.1123 is
merely to allow SRO corporations to take advantage of the procedures specified in the Business
Corporation Act, so long as the SRO does not provide otherwise.
10
   Our ruling conflicts with an unpublished decision of this Court, which held that an entity
incorporated under the SRO was “not permitted to have a perpetual term.” American Family
Homes, Inc v Glennbrook Beach Ass’n, unpublished opinion per curiam of the Court of Appeals,
issued May 28, 2013 (Docket Nos. 301489, 302331, 302780, 301490, 301496), slip op at *7.
This decision, however, only analyzed SRO corporations within the context of the SRO, and did
not mention, make citation to, or analyze the impact of MCL 450.371 on the SRO. Accordingly,
we think it is wrongly decided on this issue. In any event, it is not binding authority, because it
is unpublished. Neville v Neville, 295 Mich. App. 460, 468; 812 NW2d 816 (2012).

                                                   -4-
       Plaintiff’s claims on FLA’s term of corporate existence are therefore incorrect as a matter
of law, and the trial court properly granted defendants summary disposition under MCR
2.116(C)(10).

                               B. THE TITLE OBJECT CLAUSE

       As noted, plaintiff did not make his constitutional argument at trial, and we are therefore
not required to entertain this claim. Booth Newspapers, 444 Mich. at 234. However, we choose
to do so because his argument involves questions of law and the facts necessary to resolve his
claim have been presented. Smith, 269 Mich. App. at 427.

        The Title Object Clause of the Michigan Constitution states that: “No law shall embrace
more than one object, which shall be expressed in its title.” Const 1963, art 4, § 24. “When
assessing a title-object challenge to the constitutionality of a statute, all possible presumptions
should be afforded to find constitutionality.” Lawnichak v Dep’t of Treasury, 214 Mich. App.
618, 620; 543 NW2d 359 (1995). The purpose of the clause is to “prevent the Legislature from
passing laws not fully understood, and to ensure that both the legislators and the public have
proper notice of legislative content and to prevent deceit and suberterfuge.” Id. at 621. The
clause is “only violated where the subjects [of legislation] are so diverse in nature that they have
no necessary connection.” Id. at 620.

       The introduction of the SRO states that its purpose is

       to authorize the formation of corporations by summer resort owners; to authorize
       the purchase, improvement, sale, and lease of lands; to authorize the exercise of
       certain police powers over the lands owned by said corporation and within its
       jurisdiction; to impose certain duties on the department of commerce; and to
       provide penalties for the violation of by-laws established under police powers.
       [1929 PA 137.]

        Here, plaintiff unconvincingly asserts that the title of the SRO does not put effected
parties on notice of its contents, and that it cannot apply to FLA, because he does not consider
the area within FLA’s area of operation a “summer resort.” Plaintiff’s personal beliefs and the
fact that the SRO does not define “summer resort” do not render it unconstitutional under the
Title Object clause. Furthermore, plaintiff has completely failed to show that the subjects of the
SRO mentioned in the title are “so diverse in nature that they have no necessary connection.” 11
Accordingly, his claim under the Title Object clause is without merit.12

11
  We note that Michigan courts have repeatedly refused to find the SRO unconstitutional in its
entirety. See Whitman v Lake Diane Corp, 267 Mich. App. 176, 180–181; 704 NW2d 468 (2005);
Baldwin v North Shore Estates Ass’n, 384 Mich. 42, 49–50; 179 NW2d 398 (1970); and
American Family Homes, slip op at *5.
12
  Plaintiff makes the equally frivolous (and unpreserved) assertion that the SRO impermissibly
delegates legislative authority to organizations formed under its mandates. The SRO grants SRO

                                                -5-
       Affirmed.

                                                          /s/ Henry William Saad
                                                          /s/ Peter D. O’Connell
                                                          /s/ Christopher M. Murray

corporations the same powers and privileges as municipal corporations, which are administrative
in nature, and designates them as the “local governing body” in the area under their authority.
MCL 455.204. Because the Legislature may delegate administrative powers, and because the
duties of a summer resort organization, as defined by the SRO, are administrative in nature,
MCL 455.204 does not constitute an unconstitutional delegation of authority.

                                              -6-