155 So. 3d 744
Miss.2014Background
- Columbus Cheer Company (CCC) contracted to rent school facilities from Columbus Municipal School District (CMSD); CMSD later refused to honor the contract and CCC sued in Lowndes County Circuit Court.
- CCC’s complaint identified CCC as a "profit corporation" and sought relief in that name; CCC had been administratively dissolved on December 6, 2010.
- Defendants moved to dismiss or for summary judgment, arguing an administratively dissolved corporation may not maintain suit and thus CCC lacked standing and capacity to sue.
- CCC argued on appeal it was actually an unincorporated business/sole proprietorship and that its shareholders could sue individually; CCC also sought to amend its complaint after defendants’ motion.
- The trial court granted summary judgment for defendants; the Mississippi Supreme Court reviewed de novo and affirmed, holding an administratively dissolved corporation cannot maintain an action and shareholders cannot sue in their own names for corporate claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an administratively dissolved corporation may maintain suit | CCC claimed it was effectively an unincorporated business and thus could proceed | Defendants: § 79-4-14.21(f) bars administratively dissolved corporations from maintaining actions until reinstated | Held: No — administratively dissolved corporations may not maintain actions until reinstated |
| Whether shareholders may bring the corporation's claim in their own names | CCC (via owners) sought to proceed/amend complaint to sue individually or as sole proprietors | Defendants: corporate claim belongs to the corporation, not shareholders; shareholders lack standing to bring corporate claims | Held: No — shareholders cannot bring corporate contract claims in their individual names |
Key Cases Cited
- Galen Medical Associates, Inc. v. United States, 74 Fed. Cl. 377 (Fed. Cl. 2006) (administrative dissolution under Mississippi law bars contracting and maintaining suit where actions are not part of winding up)
- 4H Construction Corp. v. Superior Boat Works, Inc., 659 F. Supp. 2d 774 (N.D. Miss. 2009) (president and shareholders of an administratively dissolved corporation may not sue on corporate contracts)
- Bruno v. Southeastern Services Inc., 385 So. 2d 620 (Miss. 1980) (stockholder cannot maintain suit in own name for injuries to corporation; rights are derivative)
- Lee v. Golden Triangle Planning & Dev. Dist., 797 So. 2d 845 (Miss. 2001) (summary judgment reviewed de novo)
