Rule 3.110 Stockholders' Liability Proceedings

(A) Scope of Rule. This rule applies to actions brought under MCL 600.2909.

(B) When Action May Be Brought. An action against stockholders in which it is claimed that they are individually liable for debts of a corporation may not be brought until:

(1) a judgment has been recovered against the corporation for the indebtedness;

(2) an execution on the judgment has been issued to the county in which the corporation has its principal office or carries on its business; and

(3) the execution has been returned unsatisfied in whole or in part.

(C) Order for List of Stockholders. When the conditions set out in subrule (B) are met, the plaintiff may apply to the court that entered the judgment to order a list of stockholders. The court shall enter an order to be served on the secretary or other proper officer of the corporation, requiring the officer, within the time provided in the order, to file a statement under oath listing the names and addresses of all persons who appear by the corporation books to have been, or who the officer has reason to believe were, stockholders when the debt accrued, and the amount of stock held by each of them.

(D) Commencement of Action; Complaint. An action against the stockholders to impose personal liability on them for the debt of the corporation may be commenced and carried on as other civil actions under these rules. The complaint must, among other things, state:

(1) that the plaintiff has obtained a judgment against the corporation and the amount;

(2) that execution has been issued and returned unsatisfied in whole or in part, and the amount remaining unpaid;

(3) that the persons named as defendants are the persons listed in the statement filed by the officer of the corporation under subrule (C);

(4) the amount of stock held by each defendant, or that the plaintiff could not, with reasonable diligence, ascertain the amounts;

(5) the consideration received by the corporation for the debt on which judgment was rendered;

(6) a request for judgment against the stockholders in favor of the plaintiff for the amount alleged to be due from the corporation.

(E) Judgment Against Corporation As Evidence. At the trial the judgment against the corporation and the amount remaining unpaid are prima facie evidence of the amount due to the plaintiff but are not evidence that the debt on which the judgment was rendered is one for which the defendants are personally liable.

(F) Entry of Judgment Against Defendant. If a defendant admits the facts set forth in the complaint or defaults by failing to answer, or if the issues are determined against the defendant, judgment may be entered against him or her for the amount of the judgment against the corporation remaining unpaid, on proof that the debt is one for which that defendant is personally liable as a stockholder.

(G) Order of Apportionment; Execution. After judgment has been entered against all or some of the defendants, the court may apportion among these defendants the sum for which they have been adjudged liable pro rata according to the stock held by each. If any defendant fails to pay the amount apportioned against that defendant within 21 days, execution may issue as in other civil actions.

(H) Reapportionment. If execution is returned unsatisfied in whole or in part against any of the defendants as to whom apportionment has been made, the court has the power and the duty on application by the plaintiff to reapportion the sum remaining uncollected on the basis of subrule (G) among the remaining defendants adjudged liable. Execution may issue for the collection of these amounts.

(I) Contribution Among Stockholders. A stockholder who has been compelled to pay more than his or her pro rata share of the debts of the corporation, according to the amount of stock held, is entitled to contribution from other stockholders who are also liable for the debt and who have not paid their portions.