Motion to intervene in garnishment proceedings; MCR 3.101(L)(2); Standing; The Michigan Business Corporations Act (MBCA) (MCL 450.1101 et seq.); Effect of a limited liability company’s lack of a certificate of authority; MCL 450.2051(1) & (2); Inapplicability of the MBCA to insurance, surety, savings & loan associations, fraternal benefit societies, & banking corporations; MCL 450.1123(2); Whether a foreign corporation is “transacting business” in Michigan; MCL 450.2012(1); Intervention of right; MCR 2.209(A)(1)-(3); Harmless error

Holding that appellant-lender “established standing, a right to intervene, and that denial of its right to intervene” was not harmless error, the court concluded that the trial court erred in denying its motion to intervene in plaintiff’s garnishment proceeding. After plaintiff obtained an arbitration award in its favor against defendants, the trial court entered a judgment in plaintiff’s favor against them. During the subsequent “garnishment proceeding, appellant filed a motion to intervene, objection to garnishment, and motion for acknowledgment of priority of its interest in defendants’ accounts. Appellant, part of” a bank, contended “that defendants were indebted to it for $7.1 million, and appellant held a first-priority security interest in defendants’ accounts.” It also asserted that it had notified defendants’ debtors to forward any payment owed to them to appellant, as lender. The trial court determined that appellant could not establish standing to intervene because it could not show it was registered in Michigan. On appeal, the court agreed with appellant that “MCL 450.1123(2) would likely preclude the MBCA from applying to appellant” given that it is a subsidiary of a bank and the MBCA does not apply to banking corporations. Further, the court concluded that even “if the MBCA applied, appellant was not required to have a certificate of authority to intervene because it was not ‘transacting business’ in Michigan, under the applicable definitions” – specifically, pursuant to “MCL 450.2012(h), enforcement of a security interest is not a business transaction in Michigan that requires a certificate of authority.” In addition, the court noted that even if such an “action was a business transaction, appellant was permitted to defend its perfected, senior security interest in plaintiff’s garnishment proceeding as an intervenor without a certificate of authority” under MCL 450.2051(2) and MCR 3.101(L)(2). It had a “substantial interest in the litigation[.]” Reversed and remanded.