Court Opinion

ID: 7878245
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:18:08.612081+00
Date Added: 2024-06-11T16:31:28.420323
License: Public Domain

SCHULTZ, Justice
(dissenting).
I believe that our statutory scheme does not allow the result reached by the majority, therefore, I dissent. The plain terms of Iowa Code section 496A.130 specify that “no action or proceeding thereon may be prosecuted by such corporation until it shall have been reinstated....” I believe the legislature spoke explicitly. It preserved rights of actions existing prior to cancellation, but prohibited the prosecution of these actions until reinstatement. The commencement of an action clearly is a prosecution by the corporation.
Another sentence makes a distinction which supports our conclusion. It states:
Any such action or proceeding against such corporation may be defended by the corporation, if it has not been reinstated, in its corporate name....
§ 496A.130 (emphasis added). This sentence makes a clear distinction between a corporation’s capacity to bring a lawsuit and its capacity to defend a lawsuit during a period of cancellation. The legislature’s intent is clear; a corporation can defend against a lawsuit brought against it but cannot initiate a lawsuit on behalf of the corporation during a period of cancellation. Any other interpretation would render this statutory distinction meaningless.
The majority opinion would hold that plaintiff’s incapacity is a temporary matter and defendants' challenge should be treated as a plea in abatement rather than in bar. This is a theory not claimed by plaintiff at the district court level or on appeal and should not be addressed.
I also disagree with the majority’s conclusion that the commencement of the action is not void ab initio. This reasoning ignores the plain and specific statutory language denying plaintiff the right to bring a lawsuit. I would hold that the specific command of the statute makes this action void and requires dismissal.
We also find support for our conclusion in the position that other courts have taken when the governing statutes contained similar or less specific language. See, e.g., PLM v. E. Randle Co., 797 F.2d 204, 205-06 (5th Cir.1986) (corporation could not maintain breach of contract action filed while corporate powers suspended); United States v. 2.61 Acres of Land, 791 F.2d 666, 668 (9th Cir.1985) (delinquent corporation may not bring suit, defend legal action, or appeal adverse ruling until reinstatement); Dawn Constr. Co. v. Paris Home Builders, Inc., 360 Mich. 281, 283-87, 103 N.W.2d 410, 411-13 (1960) (corporation prohibited from initiating contract action during suspension period); State ex rel. Dep’t of Highways v. Martin, 572 P.2d 611, 614 (Okla.Ct.App.1977) (corporation not entitled to sue or be sued during suspension period).
A problem not discussed by the majority and raised by defendants’ motion for summary judgment is the statute of limitations. If the limitation period accrued during the period of suspension, as claimed by defendants, the effect of the majority’s holding allows plaintiff to avoid defendants’ statute of limitations defense. The legislature did not intend to allow a reinstated corporation the right to avoid a defense that accrued during the suspension period. ABA Recov*296ery Servs., Inc. v. Konold, 198 Cal.App.3d 720, 724-25, 244 Cal.Rptr. 27, 29-30 (1988).
In summary, I would affirm the district court.