Dissolved Company Failed to Meet Notice Requirements of Statute of Repose

Defendant Grover S. Wormer Company, individually and as successor-in-interest to Wright-Austin Company, brought a motion to dismiss the asbestos litigation filed on behalf of Frank D’Amico in the Superior Court of Rhode Island, Providence.  Wormer originally brought its motion under Super. R. Civ. P 12(b)(6) and contended that the plaintiff’s claims for liability are barred under Michigan’s Business Corporation Act Chapter 8 (the BCA), which governs the dissolution of corporations and provides a Statute of Repose to bar continued liability.  The plaintiff did not contest the applicability of the BCA, however, the plaintiff contended that Wormer did not provide sufficient discovery for the court to resolve the applicability of the Statute of Repose.

The defendant was incorporated in the State of Michigan, with its principal place of business in Michigan during the years of its incorporation. The defendant manufactured certain “steam, water compressed air and gas traps” which were used in catapult systems.  On May 15, 1997, a Certificate of Amendment to the Articles of Incorporation changed the company’s name to “Grover S. Wormer Company.” On January 28, 2008, Wormer was dissolved “in accordance with the Michigan Corporation Code.”  The defendant maintained that the plaintiff’s claims should be dismissed because a Michigan statute of repose bars suits against dissolved companies that are filed more than one year after dissolution.

The plaintiff countered that this motion should be converted to a summary judgment motion since the defendant relies on documents outside the complaint, namely, the affidavit of Christiansen von Wormer detailing the company’s dissolution in 2008. The plaintiff argued that summary judgment is premature at this stage since she has not had sufficient opportunity to conduct discovery on the case and that the defendant has documents necessary to oppose this Motion in its sole custody and control.

Rhode Island’s Superior Court Rule of Civil Procedure 12(b) states that when “matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.  The court treated Wormer’s motion as one for summary judgment because both the defendant and plaintiff referenced the content of an affidavit in support of their arguments.  Pursuant to Super. R. Civ. P. 56(c), “[s]ummary judgment is appropriate when, viewing the facts and all reasonable inferences therefrom in the light most favorable to the nonmoving party, the court determines that there are no issues of material fact in dispute, and the moving party is entitled to judgment as a matter of law.”  (Citation omitted)

The plaintiff argued that under the Michigan BCA, in order for the statute of repose to apply and bar all claims, a corporation must dissolve and then provide proper notice to all potential claimants.  After proper notice is made and the required time period has elapsed, only then can the statute of repose apply.  As stated in the statute of repose itself, the Michigan statute of repose will only apply to bar claims if required procedures are followed, including notice to interested parties and potential claimants.  The affidavit provided by the defendant in support of its motion did not contain any details on how the corporation was dissolved or whether the corporation provided any notice at all to current or potential claimants.  As such, the court found the defendant failed to establish an absence of genuine issues of material fact in respect to the applicability of Michigan’s Statute of Repose and compliance with notice requirements and denied Wormer’s motion for summary judgment.

Read the full decision here.