Williams v. Clark Sand Co.

212 So.3d 804

Randy WILLIAMS, Gary Mathis, Larry James Mitchell, Rayford James Williams, Terry T. Roberts, Earnest Weathersby, Charles Gatlin, Ava C. Fox, Curtis Harville, Willie Ben Williams, Jr., Chester Gregory Hopson, Vincent Jerod Holloway, James A. Griggs, Demetrius R. Givens, Willie James Marshall, Curtis Lee Hill and Larry O'Neal Williams

v.CLARK SAND COMPANY, INC.

No. 2014–CA–00579–SCT.

Supreme Court of Mississippi.

Oct. 1, 2015.

Rehearing Denied Jan. 7, 2016.

David Neil McCarty, R. Allen Smith, Jr., Timothy W. Porter, Patrick Malouf, John T. Givens, attorneys for appellants.

Fred Krutz, III, Daniel J. Mulholland, Colleen S. Welch, Edwin S. Gault, Jr., attorneys for appellee.

EN BANC.

WALLER, Chief Justice, for the Court:

¶ 1. This is a latent-injury silicosis case filed against a Florida corporation that was dissolved. This appeal presents the questions of whether the Florida corporate-survival statute applies to a Mississippi plaintiff, or whether the discovery rule for latent injuries permits claims to be brought against the foreign corporation after dissolution.

¶ 2. At common law, when a corporation dissolved, it no longer existed, and it could not be sued. But because of the harshness of this rule, Florida, like most states, has adopted a corporate-survival statute that allows plaintiffs to bring suit against a Florida corporation for up to four years after dissolution. This rule applies to claims that were unknown to the corporation at the time of dissolution. Here, sixteen plaintiffs sued Clark Sand Company, Inc., a Florida corporation, more than four years after the corporation's dissolution. The circuit court judge therefore sustained Clark Sand's motion for summary judgment. Finding no error, we affirm.

FACTS AND PROCEDURAL HISTORY

¶ 3. On June 9, 2008, Clark Sand, a Florida corporation, filed its Articles of Dissolution and Notice of Corporate Dissolution. The Florida Secretary of State posted the notice of dissolution on its website. At that time, the claims of Randy Williams and the other sixteen plaintiffs in this suit were unknown to Clark Sand. More than four years later, in 2013, Williams sued Clark Sand in the Circuit Court of Jackson County.¹ In its answer to the complaint, Clark Sand argued the claims were barred under Florida's corporate-survival statute, Florida Statutes Section 607.1407. Subsequently, Clark Sand filed a motion for summary judgment on this ground, which the trial court sustained.

¶ 4. Williams now appeals, arguing the trial court erred in granting summary judgment for three reasons. First, Williams claims the Florida law is a statute of limitations, and under the principles of conflicts of law, the Mississippi statute of limitations and discovery rule should apply. Second, if the Court finds the Florida statute to be substantive and not procedural, Mississippi law still should apply because the "center of gravity" of the suit was in Mississippi. And last, Williams claims Clark Sand failed to follow Florida Statutes Section 607.1406 on a number of other occasions, which requires written notice to be sent to known claimants. Therefore Clark Sand should not be allowed to invoke Florida Statute Section 607.1407, which relates to unknown claimants. All plaintiffs in the instant matter are unknown claimants. We restate the issues as follows:

I. Whether the Florida corporate-dissolution survival statute is a statute of limitations.

II. Whether the center-of-gravity test applies in this case.

III. Whether Clark Sand's alleged failure to follow Florida law in regard to Section 607.1406 in prior suits affects the current case.

DISCUSSION

¶ 5. We review the grant of summary judgment de novo. MS Comp Choice, SIF v. Clark, Scott & Streetman, 981 So.2d 955, 959 (Miss.2008). "Summary judgment is proper ‘if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ " Clark Sand Co. v. Kelly, 60 So.3d 149, 154 (Miss.2011) (quoting Miss. R. Civ. P. 56(c) ).

I. Whether the Florida corporate-dissolution survival statute is a statute of limitations.

¶ 6. The first question before the Court is whether a corporate-survival statute is a statute of limitations. The answer is no. See Air Control Products, Inc. v. Perma–Stress, Inc., 189 So.2d 412, 414 (Fla. 1st Dist.Ct.App.1966) (finding predecessor to the statute at issue here was not a statute of limitations); Bahl v. Fernandina Contractors, Inc., 423 So.2d 964, 965 (Fla.Dist.Ct.App.1982) ; see also Keefe v. Glasford's Enters., Inc., 248 Neb. 64, 68, 532 N.W.2d 626, 629 (1995) (discussing the reasoning for why corporate-survival statutes are not statutes of limitations). This is important here because the statute's nature may raise a conflict-of-laws issue, which we discuss below. Here, the trial court found the survival statute was not a statute of limitations and determined that Florida law applied.

A. A dissolved corporation cannot be sued.

¶ 7. At common law, once a corporation was dissolved, it was dead in the eyes of the law and no claim could be maintained against it. Oklahoma Nat. Gas Co. v. State of Oklahoma, 273 U.S. 257, 259–60, 47 S.Ct. 391, 392, 71 L.Ed. 634 (1927) ; Theta Props. v. Ronci Realty Co., 814 A.2d 907, 910, 912 (R.I.2003) ("Raising the dead to sue them can prove as difficult with dissolved corporations as with other quondam life forms."). To soften this harsh rule, many states have adopted corporate-survival statutes. Theta Props., 814 A.2d at 912 ; see also, e.g., Miss.Code Ann. § 79–4–14.07 (Rev.2013) (allowing claims to be brought for three years); Ind.Code Ann. § 23–1–45–7 (allowing claims to be brought for two years). These statutes temporarily extend the life of a corporation for the limited purposes of winding up and allowing parties to bring any claims they may have against the corporation. See Theta Props., 814 A.2d at 912. But once this period ends, the corporation expires and no longer may be sued. Chicago Title & Trust Co. v. Forty–One Thirty–Six Wilcox Bldg. Corp., 302 U.S. 120, 129–30, 58 S.Ct. 125, 128, 82 L.Ed. 147 (1937) (providing that, once the prolongation period granted by a corporate survival statute ends, the corporation's powers are terminated "for all time and for all purposes"); Keefe, 532 N.W.2d at 629.

¶ 8. The Florida statute at issue here is Section 607.1407. This statute, which tracks the Model Business Corporation Act Section 14.07, is a corporate-survival statute and is similar to the statutes adopted in numerous other jurisdictions. See, e.g., Miss.Code Ann. § 79–4–14.07 (Rev.2013) (identical to the Florida statute, save the time frame to bring suit in Mississippi is three years instead of four); Ga.Code Ann. § 14–2–1407 ; Mich. Comp. Laws Ann. § 450.1842a ; Neb.Rev.Stat. § 21–20,157 ; Ind.Code Ann. § 23–1–45–7.

¶ 9. The question of whether a corporate-survival statute is a statute of limitations has been considered by a number of courts, all of which have concluded that corporate-survival statutes are not statutes of limitation. See, e.g., OXY USA Inc. v. Quintana Prod. Co., 79 So.3d 366, 382 (La.Ct.App.2011) ; Gomez v. Pasadena Health Care Mgmt., Inc., 246 S.W.3d 306, 315–13 (Tex.App.2008) ; Deere & Co. v. JPS Dev., Inc., 264 Ga.App. 672, 673, 592 S.E.2d 175, 177 (2003) ; Theta Props. v. Ronci Realty Co., 814 A.2d 907, 910, 912 (R.I.2003) ; Gilliam v. Hi–Temp Prods. Inc., 260 Mich.App. 98, 112, 677 N.W.2d 856, 867 (2003) ; State ex rel. Nat. Super Markets, Inc. v. Sweeney, 949 S.W.2d 289, 292 (Mo.Ct.App.1997) ; Keefe v. Glasford's Enters., Inc., 248 Neb. 64, 68, 532 N.W.2d 626, 629 (1995) ; Swindle v. Big River Broad. Corp., 905 S.W.2d 565, 568 (Tenn.Ct.App.1995) ; Smith v. Halliburton Co., 118 N.M. 179, 879 P.2d 1198, 1202–03 (1994) ; Indiana Nat'l Bank v. Churchman, 564 N.E.2d 340, 344 (Ind.Ct.App.1990) ; Davis v. St. Paul Fire & Marine Ins. Co., 727 F.Supp. 549, 551 (D.S.D.1989) ; Williams v. United States, 674 F.Supp. 334, 337 (N.D.Fla.1987) (finding a predecessor statute to Section 607.1407 a survival statute and not a statute of limitations); see also Gillespie Cmty. Unit Sch. Dist. No. 7 v. Union Pac. R. Co., 2012 WL 7009965 (Ill.App.(4th) April 13, 2012), 2012 IL App (4th) 110142–U, ¶ 85 (not published in N.E.2d) ; 19 C.J.S. Corporations § 953 (2007) (discussing distinction between a survival statute, which extends the time a suit may be brought, and a statute of limitations, which cuts off the time stale during which claims may be pursued). This includes Florida courts finding this statute's predecessor was not a statute of limitations. Bahl, 423 So.2d at 965 (finding predecessor statute was a "prolongation" statute that continued the corporation's existence); see also Air Control Prods., Inc. v. Perma–Stress, Inc., 189 So.2d 412, 414 (Fla. 1st Dist.Ct.App.1966) (finding the statute "continued as a body corporate" in order to satisfy its liabilities); Williams v. United States, 674 F.Supp. 334, 336–37 (N.D.Fla.1987) (same).

¶ 10. Nevertheless, Williams claims the Florida survival statute is indeed a statute of limitations. In support, Williams points to a Senate staff analysis, which refers to the statute as a statute of limitations. Fla. Staff Analysis, S.B. 2718, Apr. 16, 2004. Williams also cites dicta in a New York federal district court opinion that referred to the statute's predecessor as a statute of limitations. See Idylwoods Assocs. v. Mader Capital, Inc., 177 F.R.D. 136, 140 (W.D.N.Y.1997).

¶ 11. Clark Sand notes the Florida Senate Journal makes no reference to Section 607.1407 being a statute of limitations. Moreover, the Florida Supreme Court has held that a Senate staff analysis is but "one touchstone of the collective legislative will," and is "not determinative of final legislative intent." White v. State, 714 So.2d 440, 443 n. 5 (Fla.1998). Indeed, the language in the Senate staff...