Business Law

This summary also appears under Real Property

 

Issues: Summer Resort Owners Act (SRO)(MCL 455.201 et seq.); MCL 455.202's 30-year limit on SRO corporate existence; Whether MCL 455.202 was superseded by a section of Michigan's General Corporation Act (MCL 450.1 et seq.); MCL 450.371; Statutory interpretation; Ter Beek v. City of Wyoming; Huron Mountain Club v. Marquette Cnty. Rd. Comm'n; Issues raised for the first time on appeal; Booth Newspapers, Inc. v. University of MI Bd. of Regents; Smith v. Foerster-Bolser Constr., Inc.; Interplay between a more recently enacted law and an older statute; Parise v. Detroit Entm't, LLC; Wade v. Farrell; Whether an entity incorporated under the SRO is permitted to have a perpetual term; American Family Homes, Inc. v. Glennbrook Beach Ass'n (Unpub.); Non-binding nature of unpublished decisions; Neville v. Neville; Title-Object Clause; Const. 1963, art. 4, § 24; Lawnichak v. Department of Treasury; Constitutionality of the SRO; Whitman v. Lake Diane Corp.; Baldwin v. North Shore Estates Ass'n

Court: Michigan Court of Appeals (Published)

Case Name: Hogg v. Four Lakes Ass'n, Inc.

e-Journal Number: 58394

Judge(s): Saad, O’Connell, and Murray

 

The court held that the trial court properly denied the plaintiff-property owner's (Hogg) motion for summary disposition, and properly granted the defendants-association (FLA) and property owners' motion for summary disposition, because FLA may exist in perpetuity and the SRO is not unconstitutional. Hogg sued FLA alleging it "was no longer a valid organization and should cease operations because MCL 455.202 prohibited SRO corporations from existing for more than 30 years," and asked the trial court to force FLA to return any corporate funds to its members. The trial court held that MCL 450.371 superseded MCL 455.202, and allowed FLA to operate in perpetuity, as specified in its articles of association. On appeal, the court rejected Hogg's argument that the trial court erred in holding 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. "By its plain language . . . 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." It noted that "FLA, which is located in Michigan, was incorporated in 1968 under the SRO," and 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.'" FLA's articles specified that "its 'term of . . . corporate existence is perpetual.' FLA is therefore in existence and may carry out the functions specified in its articles." The court also rejected Hogg's argument that the SRO is unconstitutional because the alleged vagueness of its terms violates the Title-Object Clause. "[P]laintiff 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." Further, he "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.'" Thus, his claim lacked merit. Affirmed.

 

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