Opinion
Docket No. 316898.
2014-10-23
HOGG v. FOUR LAKES ASSOCIATION, INC.
Laurie S. Longo , Ann Arbor, for plaintiff. Secrest Wardle , Troy (by John L. Weston and Sidney A. Klingler ), for defendants.
Limitation Recognized
MCL 455.202Laurie S. Longo, Ann Arbor, for plaintiff.
Secrest Wardle, Troy (by John L. Weston and Sidney A. Klingler), for defendants.
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 in this opinion, we affirm.
I. FACTS AND PROCEDURAL HISTORY
Defendant Four Lakes Association, Inc. (Four Lakes), was established on April 30, 1968, and is incorporated under the summer resort owners act (the SRO), 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....” The entities incorporated under the SRO essentially function in a similar manner to homeowners associations, with special powers granted by statute. Four Lakes accordingly provides basic infrastructure services, including road maintenance, snow removal, and water-quality testing, for properties located in a forested lake area near Brighton. It also owns small parcels of common property. To fund its operations, Four Lakes collects dues from its members, and the individual parties to this suit, including plaintiff, have all served as officers and directors of Four Lakes at various times. Both plaintiff and the individual defendants own property within the area of operation of Four Lakes.
The articles of association for Four Lakes state that its “term of ... corporate existence is perpetual.”
.MCL 455.201 et seq.
See, for example, MCL 455.204.
For reasons that are not entirely clear, plaintiff brought this suit in the Livingston Circuit Court, and alleged that Four Lakes 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 Four Lakes to return any corporate funds to its members, and moved for summary disposition. Defendants admitted that the term of corporate existence for Four Lakes had not been renewed, but emphasized that the members were discussing new forms of association for the entity, and asserted that they would lose essential infrastructure services if the court held that Four Lakes no longer existed.
It is unclear under what subrule plaintiff moved for summary disposition, but because the trial court considered matters outside the pleadings in its adjudication of the case, we review this matter under MCR 2.116(C)(10). See Silberstein v. Pro–Golf of America, Inc., 278 Mich.App. 446, 457, 750 N.W.2d 615 (2008).
At a hearing, the trial court stated the 30–year limit in MCL 455.202 on SRO corporate existence was superseded by MCL 450.371, which allowed the term of existence of any Michigan corporation to be perpetual. After it heard additional arguments from both parties on the applicability of MCL 450.371, 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 on 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 Four Lakes to operate in perpetuity, as specified in its articles of association.
Plaintiff appealed, and argues that the trial court erred when it held that Four Lakes 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. Plaintiff did not make this constitutional argument in the trial court.
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.
II. STANDARD OF REVIEW
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 N.W.2d 60 (2006). Matters of statutory interpretation are reviewed de novo. In re McEvoy, 267 Mich.App. 55, 59, 704 N.W.2d 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 N.W.2d 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 N.W.2d 523 (2013) (quotation marks and citation omitted).
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 N.W.2d 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 Constr., Inc., 269 Mich.App. 424, 427, 711 N.W.2d 421 (2006). Our review of these unpreserved issues is limited to plain error. Kloian v. Schwartz, 272 Mich.App. 232, 242, 725 N.W.2d 671 (2006).
III. ANALYSIS
A. THE SRO AND MCL 450.371
MCL 450.371 provides:
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. [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....” Id. By its plain language, then, the mandate in MCL 450.371: (1) applies to corporations incorporated under the SRO, and (2) supersedes the provision of the SRO (namely, MCL 455.202) that imposed a 30–year limit on the existence of any entity incorporated under the SRO.
The rules of statutory construction provide that a more recently enacted law has precedence over an older statute. Parise v. Detroit Entertainment, LLC, 295 Mich.App. 25, 28, 811 N.W.2d 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, which concerns the continuance of corporate existence for summer resort associations, in 1982 is irrelevant to the supremacy of MCL 450.371 in the area of corporate terms 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) (citation and quotation marks omitted). The trial court's 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 terms of existence, supports our interpretation. See Const. 1908, art. 12, § 3 (“No corporation shall be created for a longer period than 30 years....”).
Four Lakes, 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. Four Lakes' articles specify that its “term of ... corporate existence is perpetual.” Four Lakes 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 include inapposite citations of the Business Corporation Act, a separate act that has no relation to the operation of MCL 450.371. As noted, MCL 450.371 applies to “every domestic corporation heretofore incorporated or hereafter incorporating under any law of this state”—which, of course, includes domestic corporations incorporated under the SRO.
.MCL 450.1101 et seq.
Specifically, plaintiff cites MCL 450.1123(1), which states:
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 defendants correctly note, the reference in MCL 450.1123(1) to “this act” is reference to the Business Corporation Act—not MCL 450.371, which is contained in a separate act to provide for the term of existence of domestic corporations. 1963 (2d Ex. Sess.) PA 26, title. See also Miller v. Allstate Ins. Co. (On Remand), 275 Mich.App. 649, 654, 739 N.W.2d 675 (2007) (implying that “this act” as used in MCL 450.1123(1) refers to the Business Corporation Act), aff'd on other grounds 481 Mich. 601, 751 N.W.2d 463 (2008). The actual function of MCL 450.1123 is merely to allow SRO corporations, and additional corporations formed under other acts, to take advantage of the procedures specified in the Business Corporation Act, so long as the act under which the corporation was formed does not provide otherwise.
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, and 301496), p. 7, 2013 WL 2319470. This decision, however, only analyzed SRO corporations within the context of the SRO, and did not mention, cite, 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 N.W.2d 816 (2012).
Plaintiff's claims regarding the term of corporate existence for Four Lakes 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, 507 N.W.2d 422. 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, 711 N.W.2d 421.
The Title–Object Clause of the Michigan Constitution states, “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 N.W.2d 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, 543 N.W.2d 359. The clause is “only violated where the subjects [of the legislation] are so diverse in nature that they have no necessary connection.” Id. at 620, 543 N.W.2d 359.
The title of the SRO states that the purpose of the act 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, title.]
Plaintiff unconvincingly asserts that the title of the SRO does not put affected parties on notice of its contents, and that it cannot apply to Four Lakes, because he does not consider the area within Four Lakes' area of operation a summer resort. Plaintiff's personal beliefs and the fact that the SRO does not define the term “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.” Lawnichak, 214 Mich.App. at 620, 543 N.W.2d 359. Accordingly, his claim under the Title–Object Clause is without merit.
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, 183, 704 N.W.2d 468 (2005), Baldwin v. North Shore Estates Ass'n, 384 Mich. 42, 49–50, 179 N.W.2d 398 (1970), and American Family Homes, unpub. op. at 5.
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 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.
Affirmed.