THEODORE N TOMPKINS V HI TEMP PRODUCTS INC
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STATE OF MICHIGAN
COURT OF APPEALS
LOVALL GILLIAM and KANSAS GILLIAM,
Plaintiffs-Appellees,
v
FOR PUBLICATION
December 18, 2003
9:05 a.m.
No. 238102
Wayne Circuit Court
LC No. 00-036330-NP
HI-TEMP PRODUCTS INC,
Defendant-Appellant,
and
A BEST PRODUCTS CO, ADIENCE INC, A J
BAXTER CO, ALLEN BRADLEY CO INC,
ALLIANCE MACHINE CO, ALLIS CHALMERS
PRODUCT LIABILITY TRUST, AMCHEM
PRODUCTS INC, A P GREEN REFRACTORIES
CO, ARGUS SUPPLY CO, ARMSTRONG
WORLD IND INC ASBESTOS CLAIMS MGMT
CORP, BW/IP INTERNATIONAL INC,
CHICAGO FIREBRICK CO, COON DEVISSER
CO, CORHART REFRACTORIES CO, CROWN
CORK & SEAL CO, DETREX CORP, DRESSER
INDUSTRIES, DURABLA MANUFACTURING
CO, DURAMETALLIC CORP, DYNAMIC
SEALS INC, EATON CORP, F B WRIGHT CO,
FLEXITALLIC GASKET CO INC, FOSECO INC,
FREEPORT BRICK CO, FURON CO, GAF
CORP, GARLOCK INC, GENERAL ELECTRIC
CO, GENERAL REFRACTORIES CO, GEORGIA
PACIFIC CORP, GOODYEAR TIRE & RUBBER
CO, GOULDS PUMPS INC, HERCULES
CHEMICAL CORP, IMO INDUSTRIES INC,
INGERSOLL-RAND CO, ITT INDUSTRIES INC,
KAISER ALUMINUM & CHEMICAL, K&C
SUPPLY INC, KENNEDY HYDRAULICS,
MANITOWAC CRANES INC, MCGRAW
EDISON CO, MIDLAND ROSS CORP, MOBIL
OIL CORP, MORGAN ENGINEERING SYSTEM,
-1-
NORTH AMERICAN REFRACT CO, OWENS
CORNING INC, PLIBRICO CO, QUIGLEY CO
INC, RADIATOR SPECIALTY CO, RAPIDAMERICAN CORP, REX/ROTO CORP, RIC-WIL
INC, ROME CABLE CORP, RUST
INTERNATIONAL INC, SEALITE INC,
SIEMENS CORP, SOUTHERN URETHANE &
PACKING, STANDARD FUEL ENGINEERING,
STOCKHAM VALVE & FITTINGS, THIEM
CORP, UNITED STATES GYPSUM CO,
WALWORTH CO, WESTINGHOUSE ELECTRIC
CO, WITCO CORP, YORK RUBBER CO, and
MICHIGAN MEDICAL COUNSEL,
Defendants.
CHARLES R. MULLETT and PHYLLISS
MULLETT,
Plaintiffs-Appellees,
and
MICHIGAN MEDICAL PARTICIPANTS,
Intervening Plaintiff,
No. 238224
Midland Circuit Court
LC No. 00-003080-NP
v
HI-TEMP PRODUCTS INC f/k/a
ASBESTOS SPECIALTIES CO,
Defendant-Appellant,
and
ACME INSULATIONS INC, ALEXANDER
STAFFORD CORP, ALLIS CHALMERS
PRODUCT LIABILITY TRUST, AMCHEM
PRODUCTS INC f/k/a BENJAMINE FOSTER
CO, A P GREEN INDUSTRIES INC f/k/a A P
GREEN REFRACTORIES CO, ASBESTOS
CLAIMS MGMT CORP f/k/a NATIONAL
GYPSUM CO, ATLAS TURNER f/k/a ATLAS
ASBESTOS CO, AUSTIN CO, BAY CITY
-2-
HARDWARE CO, GOODRICH CORP, BW/IP
INTERNATIONAL INC, CARBORUNDUM CO,
CEMENT ASBESTOS PRODUCTS CO f/k/a
CAPCO PIPE CO, CHEMPRENE INC, CHICAGO
FIREBRICK CO, COLTEC INDUSTRIES INC
f/k/a COLT INDUSTRIES, CRANE CO f/k/a
CRANE DELAWARE CO, CROWN CORK &
SEAL CO, DURABLA MANUFACTURING CO,
DURAMETALLIC CORP, DURO SUPPLY CO,
EDWARD VOGT VALVE CO, EXCELSIOR INC,
FLEXITALLIC GASKET CO INC, FOSTER
WHEELER CORP, GAF CORP, GARLOCK INC,
GENERAL ELECTRIC CO, GENERAL
REFRACTORIES CO, GOULDS PUMPS INC,
HARRISON PIPING SUPPLY CO, HOLLINGER
& CO, INGERSOLL-RAND CO, ITT
INDUSTRIES INC, JENNISON HARDWARE
CO, LUNKENHEIMER CO, MARLO SEALING
CO INC, MARTIN FLUID POWER CO,
NORTHERN BOILER & MECHANICAL,
PARKER-HANNIFIN CORP, PLIBRICO CO,
RADIATOR SPECIALTY CO, RAPIDAMERICAN CORP, RILEY STOKER CORP,
ROCKWELL INTERNATIONAL CORP,
SEALITE INC, SOUTHERN URETHANE &
PACKING, STOCKHAM VALVE & FITTINGS,
SURE SEAL PRODUCTS CO, UNITED STATES
GYPSUM CO, WICKES LUMBER CO, WITCO
CORP, YARWAY CORP f/k/a YARMALL
WARING CORP, ALLIED SIGNAL INC,
AMERICAN STANDARD INC, A O SMITH,
BORG WARNER CORP, BROWN BOVERI
ELECTRIC INC, CARVER PUMP CO,
CHICAGO BLOWER CORP, COON DEVISSER
CO, DAVID BROWN UNION PUMPS CO f/k/a
UNION STEAM PUMP CO, DETROIT PUMP &
MFG, DRESSER INDUSTRIES, DYNAMIC
SEALS INC, EATON CORP, FAULKNER
CONSTRUCTION CO, FEL-PRO INC,
FURMANITE AMERICAN INC, FURON CO,
a/k/a SEPCO CORP, GREENE TWEED & CO,
HERCULES CHEMICAL CORP, HONEYWELL
INC, IMO INDUSTRIES INC, KAISER
ALUMINUM & CHEMICAL, METROPOLITAN
LIFE INS, MIDLAND ROSS CORP, PEERLESS
PUMPS, PNEUMO ABEX CORP, STANDARD
-3-
FUEL ENGINEERING, UNITED STATES
MINERAL PROD, WESTINGHOUSE ELECTRIC
CO, WITCO CORP, and YORK RUBBER CO,
Defendants.
MARY G NELSON, Personal Representative of
The Estate of WILLIAM E NELSON,
Plaintiff-Appellee,
and
RICHARD R MALONE,
Intervening Plaintiff,
No. 238341
Bay Circuit Court
LC No. 2001-003096-NP
v
HI-TEMP PRODUCTS INC,
Defendant-Appellant,
and
ALEXANDER STAFFORD CORP, ALLIS
CHALMERS PRODUCT LIABILITY TRUST,
AMERICAN RADIATOR & STANDARD,
AMERICAN STANDARD INC, A P GREEN
INDUSTRIES INC, ARTHUR J PEACOCK & CO,
AWMCO INC, BEHLER YOUNG CO,
GOODRICH CORP a/k/a B F GOODRICH,
BIGELOW LIPTAK CORP, BW/IP
INTERNATIONAL INC, CHICAGO BLOWER
CORP, CHICAGO FIREBRICK CO, CLEAVER
BROOKS CO, COLLINS & AIKMAN, COLTEC
INDUSTRIES INC, CONSUMERS ENERGY CO,
CROWN CORK & SEAL CO, DAUBERT
CHEMICAL CO, DETREX CORP, DETROIT
EDISON, DETROIT STOKER CO, DOW
CHEMICAL CO, DRESSER INDUSTRIES,
DURABLA MANUFACTURING CO,
DURAMETALLIC CORP, DURO SUPPLY CO,
ELOF HANNSON INC, EVERT ASBESTOS,
FEDERAL MOGUL CORP, FORD MOTOR CO,
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GARLOCK INC, GENERAL ELECTRIC CO,
GENERAL MOTORS CORP, GENERAL
REFRACTORIES CO, GOODYEAR TIRE &
RUBBER CO, GOULDS PUMPS INC, GREENE
TWEED & CO, HOLLINGER & CO, HUNTER
HUGHES INC, IMO INDUSTRIES INC,
INGERSOLL-RAND CO, JAY L ANGEL INC, J
O GALLOUP CO, KAISER ALUMINUM &
CHEMICAL, LANSING BOARD OF WATER &
LIGHT, MELRATH GASKET INC,
METROPOLITAN LIFE INS, MIDLAND ROSS
CORP, NORTH AMERICAN REFRACT CO,
NORTHERN BOILER & MECHANICAL,
PARKER-HANNIFIN CORP, PFIZER INC,
PLIBRICO CO, QUIGLEY CO INC, RAPIDAMERICAN CORP, REX/ROTO CORP,
RICHARD KLINGER INC, RILEY STOKER
CORP, RUST INTERNATIONAL INC, SEALITE
INC, SOUTHERN URETHANE & PACKING,
STANDARD FUEL ENGINEERING,
TOWNSEND & BOTTUM INC, UNITED
STATES MINERAL PROD, WESTINGHOUSE
ELECTRIC CO AND WITCO CORP,
Defendants.
THEODORE N. TOMPKINS and SHARON
TOMPKINS,
Plaintiffs-Appellees,
No. 238375
Kalamazoo Circuit Court
LC No. 00-000702-NP
v
HI-TEMP PRODUCTS INC a/k/a
ASBESTOS SPECIALTIES CO,
Defendant-Appellant,
and
A BEST PRODUCTS CO, ACME INSULATIONS
INC, A J BAXTER CO, ALEXANDER STAFFORD
CORP, ALLIS CHALMERS PRODUCT
LIABILITY TRUST, AMCHEM PRODUCTS INC
-5-
a/k/a BENJAMINE FOSTER CO, AMERICAN
STANDARD INC, A O SMITH, A P GREEN
INDUSTRIES INC a/k/a GREEN REFRACTORIES
CO, ASBESTOS CLAIMS MGMT CORP, ATLAS
TURNER a/k/a ASBESTOS CO, AWMCO INC a/k/a
ASBESTOS WOOD MFG, BAY CITY
HARDWARE CO, BEAZER EAST INC, BEHLER
YOUNG CO, B F GOODRICH CO, BIGELOW
LIPTAK CORP, BOND SUPPLY CO, BW/IP
INTERNATIONAL INC, CARBORUNDUM CO,
CHICAGO FIREBRICK CO, COPES VULCAN
INC, CRANE CO a/k/a CRANE DELAWARE CO,
DETROIT PUMP & MFG, DRESSER
INDUSTRIES, DURABLA MANUFACTURING
CO, DURAMETALLIC CORP, DURO SUPPLY
CO, DYNAMIC SEALS INC, ECOLAIRE INC,
EDWARD VOGT VALVE CO, EVERT
ASBESTOS, FEDERAL MOGUL CORP, FISHER
CONTROLS INTERNATIONAL, FLEXITALLIC
GASKET CO INC, FLINTKOTE CO, FOSTER
WHEELER CORP, FURMANITE AMERICAN
INC, GAF CORP, GAGE CO, GARLOCK INC,
GENERAL ELECTRIC CO, GENERAL
REFRACTORIES CO, GOODYEAR TIRE &
RUBBER CO, GOULDS PUMPS INC, GREENE
TWEED & CO, HARRISON PIPING SUPPLY CO,
HERCULES CHEMICAL CORP, HOLLINGER &
CO, HUNTER HUGHES INC, IMO INDUSTRIES
INC, INGERSOLL-RAND CO, ITT INDUSTRIES
INC, JAY L ANGEL INC, JENNISON
HARDWARE CO, J O GALLOUP CO, J P
STEVENS & CO INC, KAISER ALUMINUM &
CHEMICAL, LAMONS METAL GASKET CO,
MARLO SEALING CO INC, METROPOLITAN
LIFE INS, MOBIL OIL CORP, NATIONAL
VARNISH CO, NORTH AMERICAN REFRACT
CO, NORTHERN BOILER & MECHANICAL,
OWENS-ILLINOIS, PARKER-HANNIFIN CORP,
PLIBRICO CO, QUIGLEY CO INC, RADIATOR
SPECIALTY CO, RAPID-AMERICAN CORP,
RICHARD KLINGER INC, RIC-WIL INC, RILEY
STOKER CORP, ROBERTSON CECO CORP,
ROCKWELL INTERNATIONAL CORP, SCHAD
BOILER SETTING COMPANY d/b/a SCHAD
REFRACTORY CONSTRUCTION, SEALITE INC,
SERVICE PRODUCTS INC, SOUTHERN
-6-
URETHANE & PACKING, STANDARD FUEL
ENGINEERING, STOCKHAM VALVE &
FITTINGS, SURE SEAL PRODUCTS CO, DAVID
BROWN UNION PUMP CO, TOWNSEND &
BOTTUM INC, TURNER & NEWALL PLC,
UNITED CONVEYOR CORP, UNITED STATES
GYPSUM CO, WICKES LUMBER CO, WILLIAM
POWELL CO, WITCO CORP, YARWAY CORP
a/k/a YARMALL WARING CORP, and YORK
RUBBER CO,
Updated Copy
February 27, 2004
Defendants.
Before: Whitbeck, C.J., and Cavanagh and Markey, JJ.
MARKEY, J.
In each of these consolidated appeals, defendant Hi-Temp Products, Inc., appeals by
leave granted the trial court's order denying its motion for summary disposition. Hi-Temp
argues that plaintiffs' claims of asbestos-related personal injury are barred by MCL 450.1842a1
because they were filed beyond the one-year period allowed for the filing of claims after HiTemp published notice of its dissolution. We agree and reverse.
I. Summary of Facts and Proceedings
Hi-Temp sold asbestos products. Many individuals have claimed that their exposure to
Hi-Temp's products caused asbestos-related diseases. They have sued Hi-Temp frequently and
continuously since the mid-1980s. In 1992, Hi-Temp ceased active business operations. Its sole
shareholder resolved on October 8, 1993, that Hi-Temp be dissolved and its assets distributed.
On October 14, 1993, Hi-Temp filed a certificate of dissolution pursuant to subsection 831(b).
The Bureau of Corporations and Securities stamped the certificate filed on October 25, 1993,
thereby making the dissolution effective. Subsection 131(3); subsection 804(7); Freeman v Hi
Temp Products, Inc, 229 Mich App 92; 580 NW2d 918 (1998). Hi-Temp averred that it made a
"complete distribution of its corporate assets" by selling its inventory and equipment, collecting
its receivables, paying bills, and making provisions for the payment of its outstanding liabilities.
It is undisputed that Hi-Temp made a final distribution of assets in the amount of $9,571.99. But
it is also undisputed that from 1978 through 1985 Citizens Insurance Company provided HiTemp with products-liability insurance coverage, and that the limits of the policies have not been
exhausted.
1
MCL 450.1842a is § 842a of the Business Corporation Act (BCA), MCL 450.1101 et seq.
Further reference to the BCA will be by section number.
-7-
Hi-Temp published a notice of dissolution in the Oakland Press on October 25, 1993,2
July 3, 1996, and October 20, 1998. Hi-Temp also gave notice of its dissolution through its
counsel directly to plaintiffs' counsel on October 15, 1993, and October 21, 1998. MCL
450.1842a(3) essentially provides that all claims against a dissolved corporation are barred
unless "the claimant commences a proceeding to enforce the claim against the dissolved
corporation within 1 year after the publication date . . . ." Plaintiffs' actions alleging personal
injury or death as a consequence of the use of, or exposure to, asbestos in Hi-Temp's products
were filed after October 21, 1999. In all cases, Hi-Temp moved for summary disposition,
asserting the statutory bar to claims filed more than one year after publication of notice in
accordance with § 842a. Plaintiffs argued that they had shown good cause for not presenting
their latent claims earlier and that Hi-Temp's insurance coverage was an undistributed asset
within the meaning of subsection 851(2), an exception to § 842a.
MCL 450.1851(2) provides: "For good cause shown, and so long as a corporation has
not made complete distribution of its assets, the court may permit a creditor who has not
delivered his or her claim or commenced a proceeding to enforce his or her claim within the time
limits provided in sections 841a and 842a to file the claim or to commence a proceeding within
the time as the court directs." Plaintiffs also argued that Hi-Temp was estopped from invoking §
842a because Hi-Temp had failed to provide for payment of its obligations as required by §
855a. In each of these cases, the trial court rejected Hi-Temp's argument and denied summary
disposition for the reasons we hereafter summarize.
In Docket No. 238102 (Gilliam), Wayne Circuit Judge Robert J. Colombo, Jr., first
rejected plaintiffs' argument that Hi-Temp was estopped by § 855a to assert the bar of § 842a
because § 855a specifically provides: "Provision need not be made for any debt, obligation, or
liability that is or is reasonably anticipated to be barred under section 841a or 842a." Judge
Colombo reasoned that the Legislature intended § 842a to bar future claims against dissolved
corporations, citing Freeman, supra at 96. Judge Colombo further reasoned that plaintiffs'
claims were "contingent" within the meaning of subsection 842a(3)(c) because asbestos-related
diseases may take years to manifest after exposure to asbestos fibers, or may never occur.
Having concluded that § 842a would otherwise bar plaintiffs' claims, Judge Colombo
next considered whether under subsection 851(2) "good cause" existed for plaintiffs' delay, and
whether Hi-Temp had not completely distributed its assets. Judge Colombo determined that
plaintiffs had established "good cause" because plaintiffs could not bring suit until their claims
accrued upon discovery, or when plaintiffs should have with reasonable diligence discovered
their asbestos-related disease and discovered the causal connection between their disease and HiTemp's alleged breach of duty. Moll v Abbott Laboratories, 444 Mich 1, 16; 506 NW2d 816
(1993); Larson v Johns-Manville Sales Corp, 427 Mich 301; 399 NW2d 1 (1986).
2
This Court held in Freeman, supra at 100, that publication of notice on the date of dissolution
was ineffective to invoke the one-year period after which claims would be barred by subsection
842a(3) because publication did not occur "'after the effective date of dissolution'" as required by
subsection 1 of § 842a (emphasis added).
-8-
Regarding whether Hi-Temp had distributed all its assets, Judge Colombo found most
persuasive Nat'l Union Fire Ins Co of Pittsburgh, PA v City Savings FSB, 28 F3d 376 (CA 3,
1994), which held that for the purposes of 12 USC 1821(d)(3), (d)(13)(D)3 an insurance policy
was an "asset" of an insolvent financial institution. The Nat'l Union court applied the common
legal definition of "asset" from Black's Law Dictionary (6th ed, 1990) to conclude that the
policies of insurance held by the insolvent bank, on which the Resolution Trust Corporation, as
receiver, was attempting to collect $152 million in losses from fraudulent conduct of bank
employees, were "assets" of the bank for purposes of 12 USC 1821(d)(13)(D). Nat'l Union,
supra at 384. Relying on Nat'l Union, Judge Colombo ruled "a corporation has not made a
complete distribution of its assets when it has an unexhausted insurance policy." Accordingly,
Judge Colombo concluded that Hi-Temp's insurance carrier could be liable for any judgments
plaintiffs obtained because a dissolved corporation can be sued under Michigan law,4 and
subsection 851(2) applied to override the bar of § 842a.
In Docket No. 238224 (Mullett), Midland Circuit Judge Paul Clulo also denied HiTemp's motion for summary disposition. Judge Clulo concluded:
The court will not repeat the grounds for its decision, which have been
stated and restated in a number of Circuit Court decisions in Michigan in recent
years. Suffice it to say that the court finds the rationale of the judges in Ernest v
Duro Supply, 96-012998-NP-5, Saginaw County Circuit Court (8/2/2000), and
Miller v Alexander-Stafford Corporation, 99-05792-NP, Gratiot County Circuit
Court (12/4/2000), to be persuasive. In addition, this court also finds that the
decision in Williams v Grossman, 409 Mich 67 [293 NW2d 315] (1980), is
persuasive on the issue of whether an insurance policy is an undistributed asset
thus implicating MCL 450.1851(2).
In Ernest, a fact situation similar to the instant cases, Saginaw Circuit Judge Leopold P.
Borrello found that § 842a did not apply. Judge Borrello reasoned that the purpose of § 842a, to
require creditors reasonably expected to file their claims against a dissolved corporation to do so
within one year, would not be furthered when the plaintiffs did not realize that their claims
existed. For this point, Judge Borrello relied on this Court's finding that the purpose of § 842a's
predecessor, § 842, was "'to compel all creditors who may reasonably be expected to file their
claims to do so within the prescribed time and to . . . [bar] . . . the claim upon failure to do so'".
In re Dissolution of Esquire Products Int'l, Inc (On Remand), 145 Mich App 106, 113-114; 377
NW2d 356 (1985), quoting Commissioner's Comment, 1972 Amendments to NJ Rev Stats §
14A:12-13. Second, Judge Borrello, citing Larson, supra, found that applying the bar of § 842a
would not serve the purposes of a statute of limitations, which are: "1) to encourage plaintiffs to
3
Federal law requires exhaustion of administrative proceedings before a federal court has
jurisdiction over claims to assets of any institution for which the Resolution Trust Corporation is
appointed the receiver.
4
MCL 450.1833; MCL 450.1834.
-9-
pursue claims diligently, and 2) to protect defendants from having to defend against stale or
fraudulent claims." Larson, supra at 311. Judge Borrello reasoned that these purposes were not
furthered by barring the plaintiffs' asbestos claims because "the plaintiffs had no idea they even
had" a claim. Moreover, Judge Borrello found that applying § 842a would undermine the
discovery rule applied to statutes of limitations in products-liability asbestos cases. Moll, supra
at 5; Larson, supra at 311. Third, Judge Borrello found that it would be "patently unfair" or
"inherently unfair" to apply § 842a to bar the plaintiffs' claims because it would have been
impossible for the plaintiffs to have timely filed their complaints. Thus, Judge Borrello did not
address subsection 851(2).
In Miller, the other circuit court decision relied on by Judge Clulo, Gratiot Circuit Judge
Randy L. Tahvonen concluded that § 842a did not apply to bar the plaintiffs' asbestos claims.
Judge Tahvonen concluded that a latent asbestos claim simply did not come within the meaning
of "contingent" as used in subsection 842a(3), which provides that "the claim of each of the
following claimants is barred" one year after proper notice: "A claimant whose claim is
contingent or based on an event occurring after the effective date of dissolution." MCL
450.1842a(3)(c). Judge Tahvonen reasoned:
I don't think the word contingent in section 842 [sic] can be read as
barring claims which are neither known to the claimant nor which should be
known to the claimant. The claimant has no reason to know of the claim, no
reasonable person using an objecting [sic] test in the claimant's position would
understand the claim exists. It seems to me that that is not a contingent claim.
. . . A claim the existence of which is hidden, because the development of
the cancer doesn't manifest itself until six months after the period otherwise
applicable. That is a latent claim. I don't think contingent and latent are the
same, and my view is if the Legislature wanted to bar completely latent claims, it,
perhaps, could have tried to do so. [Miller, supra, hearing on motion for
summary disposition, December 4, 2000, pp 23-24.]
Although Judge Tahvonen did not find an insurance policy to be an undistributed asset,
the court nonetheless concluded that even if § 842a barred the plaintiffs' claims, § 851 "is
designed and intended to deal with good cause for filing claims after that period of time, and it
seems to me that these latent claims fit that bill." Miller, supra at 25.
In Docket No. 238341 (Nelson), Bay Circuit Judge William J. Caprathe denied HiTemp's motion for summary disposition "for the reasons stated on the record." Judge Caprathe
adopted the opinion of Judge Lawrence M. Bielawski in Davenport v Duro Supply Co, No. 004005-NP-B, Bay Circuit Court, May 10, 2001, in which Judge Bielawski found that subsection
851(2) applied to the circumstances these consolidated appeals present. Judge Bielawski noted
that this Court has held that § 851 "manifests an intent to repose considerable discretion in the
court to control the determination of claims by creditors." Esquire Products, supra at 115.
Further, the court stated that the plaintiff in Davenport had "good cause" because he had no
claim, i.e., no manifestation of asbestos-related disease, before the period provided by § 842a
had expired. Judge Bielawski also relied on Judge Borrello's reasoning in Ernest, supra, and
Judge Tahvonen's reasoning in Miller, supra. By analogy to Williams, supra, Judge Bielawski
-10-
also determined the insurance policy involved to be an undistributed asset. Judge Bielawski
concluded "at the very minimum, a question of fact still exists regarding the 'undistributed asset'
prong of Sec. 851." Opinion and order denying summary disposition, Davenport, supra at 9.
Judge Bielawski also found that a question of fact remained for trial regarding whether the
defendant had complied with its duty under § 855a to provide for foreseeable future claims.
In Docket No. 238375 (Tompkins), Kalamazoo Circuit Judge William G. Schma denied
Hi-Temp's motion on the basis of a ruling the court had issued denying a similar motion by Duro
Supply. Judge Schma ruled that the issues concerning whether plaintiffs had good cause under
subsection 851(2) for not bringing their claims within one year of the dissolution because their
asbestos-related disease had not yet manifested itself and whether Hi-Temp's insurance policy
was an asset not completely distributed on dissolution were genuine issues of material fact that
precluded summary disposition.
We granted leave to appeal on May 9, 2002, and ordered these appeals consolidated on
July 23, 2002.
II. Standard of Review
This Court reviews de novo the interpretation and application of statutes as questions of
law. Abbott v John E Green Co, 233 Mich App 194, 198; 592 NW2d 96 (1998); Freeman, supra
at 96. Also, this Court reviews de novo a trial court's grant or denial of summary disposition.
Spiek v Dep't of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998).
In these consolidated appeals, although Hi-Temp moved for summary disposition under
MCR 2.116(C)(3), (7), (8), and (10), its argument on appeal implicates only subrule C(7) (the
claim is barred because of immunity granted by law), or C(10) (except with regard to damages,
there is no genuine issue concerning any material fact and the moving party is entitled to partial
or full judgment as a matter of law). Under MCR 2.116(C)(7), a plaintiff 's pleadings are
accepted as true and construed in the plaintiff 's favor. Abbott, supra. But, the parties may
submit documentary evidence that the trial court must consider in deciding whether a material
issue of fact exists and, if not, whether the claim is barred by immunity granted by law. Id.;
Maiden v Rozwood, 461 Mich 109, 119-120; 597 NW2d 817 (1999). Here, because the material
facts relevant to Hi-Temp's motion are not disputed, the issue becomes whether Hi-Temp is
entitled to judgment as a matter of law when those facts are applied to the relevant statutes.
MCR 2.116(C)(7) and (C)(10); Abbott, supra; Warren Consolidated Schools v W R Grace & Co,
205 Mich App 580, 583; 518 NW2d 508 (1994).
When interpreting a statute, this Court's primary obligation is to ascertain and give effect
to the intent of the Legislature. Gladych v New Family Homes, Inc, 468 Mich 594, 597; 664
NW2d 705 (2003); Freeman, supra at 96. This Court must presume the Legislature intended the
meaning clearly expressed and must enforce a statute as written. Gladych, supra; Freeman,
supra at 96. The fact that a statute appears to be impolitic, unwise, or unfair is not sufficient to
permit judicial construction. The wisdom of a statute is for the determination of the Legislature
and the law must be enforced as written. Smith v Cliffs on the Bay Condo Ass'n, 463 Mich 420,
430; 617 NW2d 536 (2000). But if an ambiguity requires interpretation, the statutory language
-11-
should be construed reasonably, keeping in mind the purpose of the act. Draprop Corp v Ann
Arbor, 247 Mich App 410, 415; 636 NW2d 787 (2001).
III. Analysis
We conclude that plaintiffs' claims are barred when the plain language of § 842a is
applied to the undisputed facts of these consolidated appeals. Hi-Temp properly published
notice of its dissolution. Plaintiffs' claims are "contingent" within the plain meaning of
subsection 842a(3)(c), but they were not filed within one year of publication of notice of
dissolution as required by subsection 842a(3). An insurance liability policy is not an asset that a
corporation could distribute in the process of winding up its affairs after dissolution. Therefore,
it is not an undistributed asset of a corporation that has dissolved and distributed all assets
capable of distribution. Accordingly, subsection 851(2) affords no relief from the bar of § 842a
even if plaintiffs have "good cause" for not timely filing their claims. Finally, because § 855a
plainly states that dissolved corporations need not provide for future contingent claims that will
reasonably be barred by either § 841a or § 842a, Hi-Temp may assert the bar of § 842a.
MCL 450.1842a governs publication of notice of corporate dissolution and provides:
(1) A dissolved corporation may also publish notice of dissolution at any
time after the effective date of dissolution and request that persons with claims
against the corporation present them in accordance with the notice.
(2) The notice must be in accord with both of the following:
(a) Be published 1 time in a newspaper of general circulation in the county
where the dissolved corporation's principal office, or if there is no principal office
in this state, its registered office, is or was last located.
(b) State that a claim against the corporation will be barred unless a
proceeding to enforce the claim is commenced within 1 year after the publication
date of the newspaper notice.
(3) If the dissolved corporation publishes a newspaper notice in
accordance with subsection (2), the claim of each of the following claimants is
barred unless the claimant commences a proceeding to enforce the claim against
the dissolved corporation within 1 year after the publication date of the newspaper
notice:
(a) A claimant who did not receive written notice under section 841a.
(b) A claimant whose claim was timely sent to the dissolved corporation
but not acted on.
(c) A claimant whose claim is contingent or based on an event occurring
after the effective date of dissolution.
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(4) Notwithstanding subsection (3), a claimant having an existing claim
known to the corporation at the time of publication in accordance with subsection
(2) and who did not receive written notice under section 841a is not barred from
commencing a proceeding until 6 months after the claimant has actual notice of
the dissolution. [Emphasis supplied.]
By its plain language, § 842a generally bars claims against a dissolved corporation that
has published notice of dissolution unless the suits are brought within one year of publication.
This Court has acknowledged that the purpose of the statute is "'to compel all creditors who may
reasonably be expected to file their claims to do so within the prescribed time and to . . . [bar] . . .
the claim upon failure to do so'". Esquire Products, supra at 113-114, quoting Commissioner's
Comment, 1972 Amendments to NJ Rev Stats § 14A:12-13. We do not agree with Judge
Tahvonen's distinguishing latent or hidden claims from contingent claims. Instead, we agree that
Judge Colombo correctly read and applied subsection 842a(3)(c) to conclude that plaintiffs'
claims were contingent because they were dependent on a future event or they were "based on an
event occurring after the effective date of dissolution." The contingency or the event was the
manifestation of an asbestos-related illness. In re Estate of Jeffers, 272 Mich 127, 136; 261 NW
271 (1935).
Moreover, § 842a is not a statute of limitations; it is part of a legislative scheme intended
to avoid the consequences of corporate dissolution at common law. "Statutes relating to the time
for bringing an action against a dissolved corporation are not statutes of limitation, but rather
corporate survival statutes." Missouri ex rel Nat'l Super Markets, Inc v Dowd, 1 SW3d 595, 598
(Mo App, 1999) (applying the six-month period of MCL 450.1841a for filing claims against a
dissolved Michigan corporation to bar a Missouri worker's compensation claim). At common
law, upon dissolution of a corporation, "there is no one to serve, because, in law, a dissolved
corporation is a dead person, so much so that, in the absence of statute and revival, even pending
actions by or against it would abate." US Truck Co v Pennsylvania Surety Corp, 259 Mich 422,
426; 243 NW 311 (1932). Thus, an action brought against a corporation that then dissolves
would, as a matter of law, be abated in the absence of MCL 450.1834(f), which provides, "An
action brought against the corporation before its dissolution does not abate because of the
dissolution." Esquire Products, supra at 110-111. So-called "survival statutes" extend the life
of a corporation after dissolution to permit actions by or against the dissolved corporation for a
specified period. Id. at 110, 112 n 3; Blankenship v Demmler Mfg Co, 89 Ill App 3d 569, 574;
411 NE2d 1153 (1980). Or they may be statutes of repose that extinguish untimely causes of
actions before they accrue. See, e.g., O'Brien v Hazelet & Erdal, 410 Mich 1, 15; 299 NW2d
336 (1980), and Abbott, supra at 200, both applying MCL 600.5839(1).
Under the BCA, subject to § 833, or as otherwise provided by court order, a dissolved
corporation may sue or be sued in its own name and may carry on business as if not dissolved.
MCL 450.1834; Freeman, supra at 96. But § 833 limits a dissolved corporation's activities to
winding up its business affairs and liquidating its assets. Reading §§ 833, 834, 841a, 842a, and
851 of the BCA together, it becomes clear that the Legislature has provided for the orderly
winding up of corporate affairs, including the liquidation and distribution of assets, and which
may include court supervision, particularly when the liabilities of the corporation exceed its
assets. Freeman, supra at 100. This Court has held that "the primary purpose of the provisions
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relating to dissolution is to protect the rights of all creditors by providing for the payment of
debts 'ratably', and to prevent individual creditors from procuring a preferment by pursuing
independent action to the detriment of other creditors." Esquire Products, supra at 112. Thus, §
851 of the BCA "manifests an intent to repose considerable discretion in the court to control the
determination of claims by creditors." Esquire Products, supra at 115. Section 842a is not a
statute of limitations. Subsection 842a provides "the exclusive remedy for creditors who have no
claims [against a dissolving corporation] pending at the time of dissolution." Esquire Products,
supra at 113 (interpreting § 842, the predecessor of § 842a). A claim against the dissolved
corporation, whether existing or contingent, is barred if not timely filed. Sections 841a and
842a; Esquire Products, supra at 113. The "Legislature has created a process whereby a
dissolved corporation can bar future claims, thus cutting off the possibility that the corporation's
potential liability could never be completely resolved." Freeman, supra at 96.
We also reject the reasoning that § 842a is not intended to bar latent claims or claims that
could not reasonably be brought within one year of notice of corporate dissolution. The
unambiguous language of the statute rebuts such an interpretation. Subsection 842a(3)(c) plainly
bars claims that are "contingent or based on an event occurring after the effective date of
dissolution." Moreover, the intent of the Legislature to bar claims that are both unknown and
that arise after the dissolution of the corporation is shown by subsection 842a(3)(a), which bars a
claim by a "claimant who did not receive written notice under section 841a."5
Furthermore, the argument that it is patently or inherently unfair to bar plaintiffs' claims
must be rejected in light of the plain words of the statute. Neither this Court nor the circuit
courts may interpret or apply § 842a using a personal view of the fairness or wisdom of the
Legislature's policy decision. Courts must enforce the statute as written. Smith, supra at 430;
Muskegon Area Rental Ass'n v Muskegon, 465 Mich 456, 467; 636 NW2d 751 (2001) ("it is not
for the courts to substitute their judgment for that of legislative bodies on such questions of
economic and social policy"). Accordingly, we hold that the plain language of § 842a, as
applied to the undisputed facts of these consolidated appeals, bars plaintiffs' claims unless an
exception is found elsewhere in the BCA.
We also hold that § 855a does not preclude Hi-Temp from asserting the bar of § 842a.
Section 855a of the BCA provides that before distributing its assets to shareholders, a dissolving
corporation shall "make provision for its debts, obligations, and liabilities." MCL 450.1855a.
Moreover, a dissolving corporation must make a "reasonable estimate" and provide for "those
debts, obligations, and liabilities anticipated to arise after the effective date of dissolution." Id.
5
Section 841a bars existing claims against a dissolving corporation upon written notice and
failure to commence a proceeding to enforce the claim within ninety days. An "existing claim"
is defined as "any claim or right against the corporation, liquidated or unliquidated," but does not
include "a contingent liability or a claim based on an event occurring after the effective date of
dissolution." MCL 450.1841a(4). Although not necessary to decide these cases, we reject HiTemp's argument that the "good cause" exception in subsection 851(2) is limited to creditors
existing at the time of corporate dissolution.
-14-
Although the failure to comply with § 855a may give rise to liability, Travelers Ins Co v Jacob C
Mol, Inc, 898 F Supp 528, 531 (WD Mich, 1995), the statute also specifically provides that a
dissolving corporation need not provide "for any debt, obligation, or liability that is or is
reasonably anticipated to be barred under section 841a or 842a." MCL 450.1855a. Again,
applying the plain language of § 855a, Hi-Temp is not estopped from asserting the bar of § 842a.
Plaintiffs, in essence, concede that but for § 851, § 842a would time-bar their claims.
Plaintiffs argue that Hi-Temp's products-liability insurance policy is an undistributed asset, and
that they have good cause for not timely filing their claims because asbestos-related diseases had
not become manifest before the time provided in § 842a expired. Even if we assume that
plaintiffs have "good cause" for not filing their claims earlier, we disagree that Hi-Temp's
liability insurance policy is an undistributed asset within the meaning of § 851.
MCL 450.1851(2) provides:
For good cause shown, and so long as a corporation has not made
complete distribution of its assets, the court may permit a creditor who has not
delivered his or her claim or commenced a proceeding to enforce his or her claim
within the time limits provided in sections 841a and 842a to file the claim or to
commence a proceeding within the time as the court directs. [Emphasis
supplied.]
To invoke the discretion of the court under subsection 851(2) three criteria must be
fulfilled: (1) the period to submit claims pursuant to §§ 841a and 842a must have expired; (2)
the claimant must have had good cause for not timely asserting the claim; and (3) the corporation
must have not completely wound up its affairs by completely distributing its assets. Here,
criterion one applies because no one disputes, so we assume, that plaintiffs had "good cause" for
not timely asserting their claims because no claim accrued until asbestos-related disease
manifested itself. But subsection 851(2) cannot apply unless a liability insurance policy HiTemp held during its corporate lifetime is an asset the corporation failed to distribute in winding
up its affairs after dissolution.
Under the BCA, subsection 851(2) applies only where the dissolved corporation "has not
made complete distribution of its assets . . . ." Because the BCA does not define "asset" to either
include or exclude third-party liability insurance, we find that an ambiguity exists permitting
judicial construction of the statute. "Only where the statutory language is ambiguous may a
court properly go beyond the words of the statute to ascertain legislative intent." Sun Valley
Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999). Further, when interpreting a
statute, a court must consider both the plain meaning of the critical word or phrase and also "'its
placement and purpose in the statutory scheme.'" Id. at 237, quoting Bailey v United States, 516
US 137, 145; 116 S Ct 501; 133 L Ed 2d 472 (1995). Here, subsection 851(2) must be read
together with §§ 833, 834, 841a, 842a, and subsection 851(1) of the BCA, which provide for the
orderly winding up of corporate affairs, including the liquidation and distribution of assets.
MCL 450.1106(4) defines "distribution" for purposes of the BCA as follows:
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"Distribution" means a direct or indirect transfer of money or other
property, except the corporation's shares, or the incurrence of indebtedness by the
corporation to or for the benefit of its shareholders in respect to the corporation's
shares. A distribution may be in the form of a dividend, a purchase, redemption or
other acquisition of shares, an issuance of indebtedness, or any other declaration
or payment to or for the benefit of the shareholders. [Emphasis supplied.]
We recognize that case law exists that suggests an indemnity insurance policy is an asset
of a viable corporation. But that is not the case before us. We cannot locate any authority for
the proposition that an expired6 third-party liability policy is property that Hi-Temp could
transfer in the process of liquidating its assets. Nor is there any support for the contention that
an insurance policy remained an asset of the corporation after existing claims were satisfied
during liquidation and the deadline for filing future claims had expired.
Indeed, the contracts of insurance existed to provide indemnification to Hi-Temp in the
event it was found liable for a tort claim. See Samuels v Acme Market, 845 F Supp 292, 294 (ED
Pa, 1994). That is, their only value is the protection they provided from tort liability judgments.
We cannot accept plaintiffs' contention that an asset is simply something that the corporation
owns or has. In fact, the definition of the word "asset" is "[a] useful or valuable quality or
thing." The American Heritage Dictionary of the English Language (1981). If there have been
no tort claims triggering claims for defense or indemnification by Hi-Temp, or the deadline for
the filing of any claims covered by the policies has expired, the policies are of no value. They
cannot be "distributed." They are no longer assets of the corporation. Accordingly, we conclude
that an expired third-party liability insurance policy is not an asset that would permit the
conclusion that a dissolved corporation "has not made complete distribution of its assets" within
the meaning of subsection 851(2).
The cases on which plaintiffs rely to reach the opposite conclusion are inapposite because
they do not interpret Michigan's BCA. Plaintiffs rely heavily on Williams v Grossman, supra, to
argue that subsection 851(2) applies. The Williams decision has surface appeal when coupled
with the analogy that a dissolved corporation is "dead," and because the plaintiff in Williams was
permitted to reopen the closed estate of the decedent to pursue tort recovery against the
decedent's automobile liability policy. But on closer examination, the analogy fails because the
estate in Williams was not reopened on the basis that an insurance policy was deemed an
undistributed asset of the estate.
In Williams, the plaintiff was a passenger in the decedent's vehicle but failed to file a
negligence action against the decedent's personal representative before an estate had been
opened and then closed. Williams, supra at 76, 81. All assets of the estate had been distributed.
6
The liability policies were issued annually, so even though they were occurrence policies, each
would have had coverage dates for purposes of identification, billing, and so forth. Our use of
the term "expired" is thus used in this context to reflect coverage dates set forth on the
declaration sheet of each year's policy.
-16-
Id. at 79. The plaintiff nevertheless filed an action against the decedent's personal representative,
which the trial court dismissed because, under In re Curzenski Estate, 384 Mich 334; 183 NW2d
220 (1971), an action could not be maintained "directly against the personal representative of an
estate after it has been closed." Williams, supra at 77. Our Supreme Court in Williams overruled
Curzenski, supra, and held that the estate could be reopened on the basis that the administration
of the estate was incomplete, not because the decedent's liability insurance was an undistributed
asset. Our Supreme Court concluded that the plaintiff was not required to file her negligence
claim in the probate court, so the plaintiff 's claim was not thereby barred. Williams, supra at 7778. Because the plaintiff failed to file a claim in the probate court, however, she could not
recover from distributed estate assets. The plaintiff was limited to recovering any damages
awarded from other sources that might be available to the personal representative, including any
liability insurance the decedent may have had, or from the Motor Vehicle Accident Claims Fund
(MVACF) if the decedent was uninsured. The Court opined:
Although the probate of an estate has been completed and the estate
closed, where a person has an action which by statute may be commenced directly
against the personal representative of the decedent without first filing a claim
against his probate estate, the administration of the estate is "incomplete" within
the meaning of the statute and upon petition the estate may be reopened to
provide a suable person so that the action can be commenced. Because the person
having the right of action has not filed a claim in the probate proceeding (or,
before it was closed, notice of suit pending), recovery of money damages is
limited to sources other than assets of the probate estate theretofore distributed,
e.g., to sources such as the estate's right of indemnification from an insurer or the
obligation of the Motor Vehicle Accident Claims Fund to compensate victims of
uninsured drivers. [Id. at 77-78 (emphasis supplied).]
To be sure, the Williams Court opined that "a decedent's right to be indemnified under a
policy of insurance may be deemed an asset" for the purpose of having an asset with some value
to probate. Williams, supra at 85. And the Court wrote, "It does not appear that there is any
legislative purpose to relieve fortuitously a decedent's insurer of its contractual obligations or the
MVACF of its statutory obligations." Id. at 87. But the Court's holding hinges on the fact that
the plaintiff 's claim was not barred by the probate court's claims procedure or the applicable
statute of limitations. The Court noted that the applicable part of the Probate Code, MCL
704.56, "permits reopening an estate for the purpose of administering 'after discovered assets or
to complete the administration of the same in case said estate was closed without being fully
administered . . . .'" Williams, supra at 81 (emphasis in the original). And the Court framed the
issue presented as follows: "The question before us does not concern the time or procedure for
filing claims against the probate estate but, rather, the means of providing a suable defendant for
an action which the statute authorizes to be commenced directly against the decedent's personal
representative." Id. at 84. In that regard, the Williams Court concluded, "the administration of a
decedent's estate is 'incomplete', within the meaning of the statute, to the extent a person may yet
commence an action against the decedent's personal representative under the statute." Id. at 88.
Hence, the Williams Court's decision has nothing to do with whether the decedent was insured.
-17-
In contrast to Williams, the plain language of § 842a specifically bars plaintiffs' claims.
Moreover, barring plaintiffs' claims furthers the Legislature's purpose, as indicated by the
statutory language, of putting to rest all late-arising claims against a dissolved corporation and
bringing finality to corporate dissolution. The Legislature "has created a process whereby a
dissolved corporation can bar future claims, thus cutting off the possibility that the corporation's
potential liability could never be completely resolved." Freeman, supra at 96. In sum, Williams
differs from the present cases because it: (1) did not interpret the BCA, (2) did not find liability
insurance to be a distributable asset, and (3) did not address a statutory prohibition to the
plaintiff 's claim. For the same reasons, plaintiffs' reliance on cases from other jurisdictions7 is
misplaced because those cases address tort claims against decedents' estates.
Plaintiffs' reliance on Nat'l Union, supra, to conclude that Hi-Temp's insurance policy
was an "undistributed asset" for purposes of subsection 851(2) is also misplaced. Clearly, the
first-party claim of the Resolution Trust Corporation (RTC) for $152 million in losses
attributable to fraudulent conduct of bank employees was an asset of the insolvent bank the RTC
was administering. So, Nat'l Union is distinguished from the cases at bar because it (1)
interpreted federal law, (2) concerned claims and counterclaims of the insured through its
successor, the RTC, during the period of winding up the affairs of the insolvent bank, (3)
addressed a first-party claim of the insured through its successor, the RTC, for acts and
occurrences occurring before insolvency, and (4) represented a substantial value to the insolvent
bank (and its creditors). It must be assumed that because the RTC's claims under the insurance
policies in Nat'l Union had a potential value of $152 million that the claims could have been sold
or transferred. In contrast, no legal authority or factual support has been brought to this Court's
attention that Hi-Temp could have sold or transferred for consideration its expired third-party
liability insurance policies during its liquidation.
For much the same reasons, Samuels, supra, is distinguishable. Samuels also addressed
federal court jurisdiction of a third-party tort claim asserted against an insolvent financial
institution when the Resolution Trust Corporation was appointed the receiver.
Further, plaintiffs' reliance on cases interpreting business corporation laws of other states
is also unavailing. Plaintiffs rely on Penasquitos, Inc v Superior Court of San Diego Co, 53 Cal
3d 1180; 812 P2d 154; 283 Cal Rptr 135 (1991), Hood Bros Partners, LP v USCO Distribution
Services, Inc, 140 F3d 1386 (CA 11, 1998), and Gossman v Greatland Directional Drilling, Inc,
973 P2d 93 (Alas, 1999). But Penasquitos, Hood Bros, and Gossman each interprets a statutory
scheme different from that adopted by Michigan. Unlike Michigan, California, New Jersey, and
Alaska have not followed the Model Business Corporation Act (1984) by establishing time limits
for claims against a dissolved corporation. Section 14.06 of the 1984 MBCA, like § 841a of
Michigan's BCA, provides, upon proper notice, a time-bar for known or existing claims of a
dissolving corporation. Section 14.07 of the 1984 MBCA, like § 842a of Michigan's BCA,
7
Moultis v Degen, 279 SC 1; 301 SE2d 554 (1983), In re Miles Estate, 262 NC 647; 138 SE2d
487 (1964), and Belancsik v Overlake Mem Hosp, 80 Wash 2d 111; 492 P2d 219 (1971).
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provides, upon proper notice, a time-bar for future or contingent claims. The California Supreme
Court noted that, unlike the MBCA, "our statutes permit the corporate existence to continue
indefinitely for the purpose of [post dissolution] actions." Penasquitos, supra, 53 Cal 3d 1190.
Moreover, the Penasquitos court discussed liability insurance as a source of recovery by
postdissolution claimants separate from undistributed assets or later-discovered assets of a
dissolved corporation. Id. at 1191-1192. Similarly, the Eleventh Circuit Court of Appeals
applied New Jersey law that did not time-bar postdissolution claims. Hood Brothers, supra, 140
F3d 1390-1391. Likewise, Alaska specifically repealed its two-year time-bar for claims after
corporate dissolution and replaced it with a statutory scheme identical to that of California.
Gossman, supra, 973 P2d 95, 97. The court noted that Alaska had chosen not to adopt § 14.06
or § 14.07 of the MBCA (1984). Gossman, supra at 98-99. Thus, the Gossman court concluded
the "Alaska Legislature intended to allow suits against dissolved corporations for an indefinite
time." Id. at 99.
In contrast, although of limited help in interpreting Michigan law, appellate decisions in
other jurisdictions interpreting statutes similar to Michigan's BCA have analyzed the issue
similarly to this Court. In Blankenship, supra, the plaintiff filed a strict-liability tort action after
injuring her hand in a machine manufactured by Demmler Manufacturing. Demmler moved to
dismiss because the suit had not been brought within two years of its corporate dissolution as
required by Illinois law. Id. at 570, 573. The Blankenship court agreed, finding that the Illinois
legislature intended to "to establish a definite point in time when a corporation ceases to exist."
Id. at 574. The court also rejected the plaintiff 's argument that an insurance policy might be an
undistributed asset, concluding that because no cause of action could be brought more than two
years after dissolution of the corporation, the existence of an insurance policy was irrelevant. Id.
See also Podvin v Jamar Co, 655 NW2d 645 (Minn App, 2003), holding that under Minnesota
law the plaintiff 's asbestos claim that was not filed against the dissolved corporate defendants
within the period prescribed by statute was barred, Durham Clinic, PA v Barrett, 107 SW3d 761
(Tex App, 2003), holding under Texas law that a malpractice suit filed more than three years
after dissolution of a professional association was barred, and Lovold Co v Galyan's
Brownsburg, Inc, 764 NE2d 281, 285 (Ind App, 2002), applying Indiana's "survival statute,"
which showed "a legislative policy to place a definite termination upon corporate existence with
respect to dissolution," to bar an untimely suit for environmental cleanup costs.
In addition plaintiffs cite inapposite cases8 discussing when a successor to corporate
assets may also succeed to the corporation's liabilities, a legal question not relevant to the
question presented in these consolidated appeals.
Finally, plaintiffs' policy arguments9 are also unpersuasive because they are not based on
the plain language of the statute or a reasonable construction of the ambiguity alleged in the
8
City of Richmond v Madison Mgt Group, Inc, 918 F2d 438 (CA 4, 1990), and Simmers v
American Cyanamid Corp, 394 Pa Super 464; 576 A2d 376 (1990).
-19-
word "asset." It is the Legislature's prerogative to adopt policy, not this Court's. Hanson v
Mecosta Co Rd Comm'rs, 465 Mich 492, 501-502; 638 NW2d 396 (2002). The "judicial task is
to give meaning to the intent of the Legislature, as expressed in the statutory text." Id. at 501 n
7.
IV. Conclusion
The plain language of § 842a, as applied to the undisputed facts in these consolidated
appeals, bars plaintiffs' claims against Hi-Temp. Because Hi-Temp properly published notice of
its dissolution, plaintiffs were required by subsection 842a(3) to file their claims within one year
of the publication of notice of dissolution. Although a liability insurance policy is an asset to a
viable corporation and to a corporation in the process of winding up its affairs after dissolution,
it is not an asset of a dissolved corporation that has distributed all assets capable of distribution
where the period permitted for filing claims has expired. Accordingly, subsection 851(2)
provides no relief from the bar of § 842a, even if plaintiffs had "good cause" for not timely filing
their claims. Finally, Hi-Temp is not estopped to assert the bar of § 842a because § 855a plainly
states that a dissolved corporation need not provide for future contingent claims that will
reasonably be barred by either § 841a or § 842a. We reverse and remand for further proceedings
consistent with this opinion. We do not retain jurisdiction.
/s/ Jane E. Markey
/s/ William C. Whitbeck
/s/ Mark J. Cavanagh
(…continued)
9
Plaintiffs argue that this Court should interpret the statutes at issue to preclude collusion
between corporations and their insurers and ensure that parties injured by defective products are
compensated.
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