Flint Cold Storage v. Dep't of Treasury
| Decision Date | 08 September 2009 |
| Docket Number | Docket No. 286921. |
| Citation | 285 Mich. App. 483,776 N.W.2d 387 |
| Parties | FLINT COLD STORAGE v. DEPARTMENT OF TREASURY. |
| Court | Court of Appeal of Michigan — District of US |
Law Offices of Ezra N. Goldman, P.C. (by Ezra N. Goldman), Bloomfield Hills, for the plaintiff.
Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, and Heidi L. Johnson-Mehney, Assistant Attorney General, for the defendant.
Before: JANSEN, P.J., and FORT HOOD and GLEICHER, JJ.
In this action brought under MCL 567.247 to recover unclaimed property, plaintiff Flint Cold Storage appeals by right the circuit court's grant of summary disposition in favor of defendant Department of Treasury.1 We affirm.
Flint Cold Storage was a closely held Michigan corporation, established for the purpose of providing refrigerated cold storage for perishable products. It was incorporated in 1946 or 1947, and dissolved in October 1975. Plaintiff's final annual report, dated July 15, 1975, indicates that Vincent Meli was the president, that his wife Pauline Meli was the secretary, and that their son Angelo Meli was the vice president.2 At some point before its dissolution, Flint Cold Storage purchased a life insurance policy on the life of Vincent Meli from Metropolitan Life Insurance Company (MetLife).
MetLife demutualized in 20003 and began distributing demutualization funds to its policyholders. MetLife was unable to locate Flint Cold Storage, presumably because the corporation had been dissolved years earlier and no longer conducted business. Therefore, in 2003, MetLife sent $188,679.99 in demutualization funds, payable to Flint Cold Storage, to defendant's Unclaimed Property Division.4
Vincent Meli died in 2003, survived by his wife and son. Upon learning of the existence of the unclaimed $188,679.99 Pauline Meli attempted to claim the property in her capacity as an officer of the dissolved corporation. The Unclaimed Property Division requested documentation to prove that she was entitled to collect the unclaimed funds. Pauline Meli responded to the request by providing a copy of Flint Cold Storage's 1975 annual report, proof that she was the widow of Vincent Meli, and proof that she, her son, and her late husband were the sole officers of Flint Cold Storage at the time of its dissolution in 1975. She presented no proof of the identity of the historic shareholders of Flint Cold Storage. Nor did she provide any bylaws, board meeting minutes, stock certificates, tax returns, or other annual reports of Flint Cold Storage. As was later discovered, the Michigan Department of Labor & Economic Growth5 had either inadvertently destroyed its records concerning Flint Cold Storage or had destroyed them in the ordinary course of business. At any rate, it is beyond dispute that the department no longer retained any documents pertaining to the dissolved corporation. Electronic correspondence contained in the lower court file shows that Pauline Meli's son, Angelo Meli, attempted to obtain copies of plaintiff's tax returns from the Internal Revenue Service. However, he was apparently unsuccessful.
On May 7, 2007, defendant denied the claim. On June 15, 2007, plaintiff commenced this action in the Ingham Circuit Court pursuant to MCL 567.247. Plaintiff alleged that it was the rightful owner of the $188,679.99 in unclaimed funds and contended that it had done everything in its power to prove this to defendant. Plaintiff pointed out that there was no other claimant of the funds, and asserted that defendant had "no basis for withholding ... payment" of the funds.
Defendant admitted that the Unclaimed Property Division was "holding property in the amount of $188,679.99 under the name Flint Cold Storage." Defendant also acknowledged that Pauline Meli "was an officer of Flint Cold Storage for at least the year 1975." However, defendant asserted that because plaintiff had only produced an annual report from 1975, it could not be certain of the identity of the corporation's officers for any other year. Similarly, defendant asserted that it could not be certain of the identity of Flint Cold Storage's historic shareholders because plaintiff had produced no stock certificates or other documentation.
Defendant contended that Flint Cold Storage no longer existed as a legal entity and that the rightful owners of the unclaimed funds were therefore the historic shareholders of the dissolved corporation at the time of dissolution. However, defendant asserted that it did "not know who the shareholders were at the time of dissolution, as [defendant] has not been provided with this information by any representative of the plaintiff, or any other person." Because the historic shareholders had not been identified, defendant maintained that it was unable to release the $188,679.99.
Plaintiff moved for summary disposition pursuant to MCR 2.116(C)(10), arguing that it was beyond genuine factual dispute that Flint Cold Storage was the rightful owner of the unclaimed funds. Plaintiff argued that although it had dissolved in 1975, it had the authority under MCL 450.1833 "to continue doing business after dissolution for the purpose of collecting its assets." Plaintiff also argued that, though dissolved, it still had the power to sue and to hold assets under the provisions of MCL 450.1834. In addition to the 1975 annual report of Flint Cold Storage, plaintiff submitted a warranty deed, dated March 3, 1975, by which Flint Cold Storage sold and conveyed its real property at 925 South Dort Highway, Flint,6 for the amount of $180,000. The warranty deed was signed by Vincent Meli, as president of Flint Cold Storage, and Pauline Meli, as secretary of Flint Cold Storage. Plaintiff argued that the 1975 annual report proved that Vincent Meli, Pauline Meli, and Angelo Meli were the only officers of Flint Cold Storage at the time of its dissolution in 1975. Plaintiff further argued that the warranty deed proved that Vincent Meli and Pauline Meli had been authorized to act on behalf of the corporation before its dissolution.
Defendant responded to plaintiff's motion for summary disposition by arguing that Flint Cold Storage no longer existed as a legal entity and that the rightful owners of the unclaimed funds were therefore the historic shareholders of Flint Cold Storage at the time of dissolution. Because the identity of these historic shareholders had not been proven, defendant argued that plaintiff's motion for summary disposition should be denied. In the meantime, defendant had served plaintiff with several interrogatories and requests to admit. In its response of February 14, 2008, plaintiff admitted, among other things, that it could not "produce any Flint Cold Storage stock certificates" and that it could not "produce any documents indicating the names of the individuals who were shareholders and/or their percentage ownership at the time of dissolution of the corporation."
Defendant then filed its own motion for summary disposition pursuant to MCR 2.116(C)(5) and (10). Defendant argued that Flint Cold Storage lacked the capacity to sue because it no longer existed. Defendant asserted that Flint Cold Storage could not possibly be still winding up its affairs more than 32 years after dissolution, and that the dissolved corporation had therefore ceased to exist as a legal entity. Accordingly, defendant argued that Flint Cold Storage no longer possessed the power to sue and be sued, and that summary disposition should be granted in its favor under MCR 2.116(C)(5).
Defendant also argued that even if the Flint Cold Storage had not altogether ceased to exist as a legal entity, summary disposition should be granted pursuant to MCR 2.116(C)(10) because it was beyond factual dispute that the dissolved corporation, itself, was not the rightful owner of the $188,679.99 in unclaimed funds. Specifically, defendant contended that even if Flint Cold Storage was still arguably winding up its affairs after more than 32 years, the rightful owner of the unclaimed funds was no longer the dissolved corporation. Defendant argued that, more than 32 years having passed since the 1975 dissolution, the unclaimed funds now rightfully belonged to Flint Cold Storage's individual historic shareholders — not to the dissolved corporation itself. Defendant pointed out that plaintiff had admitted that it could not "produce any documents indicating the names of the individuals who were shareholders and/or their percentage ownership at the time of dissolution of the corporation."
Plaintiff responded to defendant's motion by arguing that it retained the capacity to sue and be sued and was the proper party to pursue this action. Relying on MCL 450.1833 and 450.1834, plaintiff asserted that it still existed as a legal entity and was authorized to continue its existence for as long as was necessary to wind up its affairs. Plaintiff argued that, as part of the winding up process, it was entitled to collect its assets, such as the $188,679.99 in unclaimed funds. In addition, plaintiff submitted the affidavit of Pauline Meli, dated April 29, 2008, in which she averred that "[t]he last shareholders of Flint Cold Storage were myself, my late husband Vincent Meli, and my late mother in law, Jenny Meli."
After hearing oral argument, the circuit court granted summary disposition in favor of defendant, presumably pursuant to MCR 2.116(C)(5), ruling:
It seems like the equities are with the plaintiff, and I don't find the law particularly illuminating.
But what I — I am going to rule in favor the defendant and against the plaintiff. I'm going to give you my reasoning. I am going to read it into the record so you've got it, in case you need it for further action.
* * *
First, I'm going to address the (C)(10) claim. A motion under this subrule tests whether there's a question of material fact for trial....
In my mind the main issue in this case centers on...
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