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A Better Partnership
April 14, 2015

COA concludes that member oppression claim was timely as relevant statute operated as statute of limitations and not statute of repose

In Frank v. Linkner, No . 318751, the Court of Appeals considered the timeliness of a member oppression claim arising out of the sale of a business whereby plaintiffs claim they were improperly denied participation in the proceeds of the sale.  The trial court concluded the action was time barred because the relevant statute, MCL 450.4515, acted as a three-year statute of repose, and the alleged wrongful acts, which allegedly divested the plaintiffs of their ability to participate in the distribution of proceeds in a subsequent sale, occurred more than three years before the suit was filed.  The Court of Appeals disagreed, looking at the plain text of the statute to conclude that it was, in fact, a statute of limitations and that the three-year period did not begin to run until the plaintiffs' claims accrued.  In this case, the claims did not accrue until the plaintiffs suffered damages, and the damages in this case were the inability to share in the proceeds from the sale of the business.  Thus, the limitations period commenced in conjunction with the sale of the business, which was within three years of the filing of the lawsuit.  The Court of Appeals reversed and remanded the case for further proceedings.

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