“Member’ of an LLC under the Michigan Limited Liability Company Act (MLLCA); MCL 450.4501; Common law & statutory conversion; Proper notice & an opportunity to be heard; Fraud; Unjust enrichment; Safe Transportation, LLC (STL); Safe Transportation 4, LLC (ST4L)

The court concluded that the trial court did not err in granting summary disposition to defendants-Kevin and ST4L, and dismissing all the claims against them, and it affirmed “those decisions. But the trial court improperly dismissed the claims against [defendant-]STL because plaintiff was not provided adequate notice and an opportunity to be heard on the issue of whether summary disposition was warranted in” STL’s favor. Thus, the court vacated the dismissal of the claims against STL and remanded to the trial court for it to address them. Plaintiff argued, among other things, “that the trial court erred when it concluded that there was no genuine issue of material fact whether Kevin was a member of STL.” The court noted that “plaintiff could only potentially prove that Kevin was a member of STL under MCL 450.4501(1)(b)(ii), which states that a person is admitted as a member if ‘[t]he person’s status as a member is reflected in the records, tax filings, or other written statements of the limited liability company.’” The trial court record did “not contain any tax filings of STL, so the only possibility for plaintiff was to provide ‘records’ or ‘other written statements’ of STL. In an apparent attempt to comply with this requirement, plaintiff submitted the Bank Signature Card Document, which was on a Chase Bank letterhead and listed Kevin as a ‘member.’” But the court found that “plaintiff’s argument must fail because the Bank Signature Card Document is not a record or other written statement ‘of the limited liability company.’” Rather, plaintiff provided “a record or other written document of Chase Bank. While it contains information on it suggesting that Kevin was a member of STL, the statute requires the information to be on records or statements of the LLC itself. This is important because the presumptive intent of the Legislature in codifying the statutory subsection at issue, which is discerned from the use of the phrase ‘of the limited liability company,’ was to allow LLCs to identify their own members in records or written statements produced by the LLC.” The court found that this “goal would not be realized by allowing written statements or records of a bank to be used to establish membership in an LLC.” As a result, Kevin’s “membership could not be established under MCL 450.4501(1)(b)(ii).” Affirmed in part, vacated in part, and remanded.