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STATE OF MICHIGAN
COURT OF APPEALS


CHARLOTTE KUMLER, THOMAS SMITH and JANINE SMITH, Plaintiffs-Appellants, v GOLDEN LOTUS, INC., JOSEPH R. RAYMER, MARK GERHARDSTEIN, GARY SAKS, ROBERT KORB, BARBARA BRINER, RONALD W. POWERS, BRIJ CHHABRA, BRUCE CAMPBELL and DENNIS BOWMAN, Defendants-Appellees.

UNPUBLISHED March 13, 1998

No. 198379 Otsego Circuit Court LC No. 96-006622-CZ

Before: Corrigan, C.J., and Doctoroff and Fitzgerald, JJ. PER CURIAM. In this dispute over the operation of a yoga retreat, plaintiffs appeal by right from the orders granting summary disposition for defendants on two counts of plaintiffs' complaint and dismissing the remaining two counts. We affirm. Plaintiffs are former and current members of defendant Golden Lotus, Inc. (GLI), a nonprofit corporation that has operated a yoga retreat ranch in Otsego County since 1969. Plaintiffs became dissatisfied with the decisions of the GLI board of trustees and in 1996 requested GLI membership lists and other documents to facilitate the election of a new board of trustees by all retreat members. Defendants allegedly terminated plaintiff Kumler's membership in response to the request. Plaintiffs thereafter commenced this action to (1) enjoin defendants from discharging any members, (2) set aside the termination of plaintiff Kumler's membership as ultra vires, (3) obtain GLI minutes, financial records and membership lists, and (4) compel an election of a new GLI board of trustees in which all GLI members would vote. In ruling on defendants' motion for a protective order, however, the trial court held that GLI was a nonstock, nonprofit directorship corporation, not a membership corporation. The trial court subsequently granted defendants' motions for summary disposition and dismissed all counts of the complaint.

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Plaintiffs first argue that the trial court erred in sua sponte granting summary disposition for defendants, without notice and opportunity to be heard, by concluding as a matter of law that GLI was a directorship corporation. We disagree. This Court generally reviews the trial court's rulings regarding discovery matters for an abuse of discretion. Dorris v Detroit Osteopathic Hosp Corp, 220 Mich App 248, 250; 559 NW2d 76 (1996). Here, plaintiffs mischaracterize the trial court's determination that GLI was a directorship corporation as a grant of summary disposition. The trial court properly considered the potentially dispositive issue whether GLI operated as a membership or directorship corporation during discovery proceedings because the determination was necessary to resolve defendants' motion for a protective order. Plaintiffs, in fact, conceded during argument in the lower court that the trial court had to determine GLI's corporate status in order to decide the motion. Whatever debilitating effect the trial court's determination had on plaintiffs' claims arose incidentally from the court's grant of a protective order, not from a grant of summary disposition. Plaintiffs next contend that the trial court erred in concluding as a matter of law that GLI operated as a directorship corporation because GLI bylaws grant all members voting rights regarding corporate matters. We disagree. The question presented involves the construction of the GLI articles of incorporation, which, along with bylaws1 and applicable statutes, govern the regulation and management of the corporation. MCL 450.1231; MSA 21.200(231); 7A Fletcher, Cyclopedia Corporations,

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Michigan Law