Lee (House of R.E.A.P.) v. Secretary of State ( 2023 )

275
Submitted April 1, 2022, reversed and remanded February 15, 2023
Stephen LEE (HOUSE OF R.E.A.P.),
Petitioner-Appellant,
v.
SECRETARY OF STATE,
Respondent-Respondent.
Marion County Circuit Court
20CV32675; A175349
526 P3d 775
In this case, petitioner sought judicial review of a Secretary of State deci-
sion that denied reinstatement to The House of R.E.A.P., an administratively
dissolved corporation sole for which petitioner was the sole director and incorpo-
rator. Relying on ORS 65.067(5), which prohibits the formation or incorporation
of new corporations sole after 2015 while permitting preexisting corporations
sole to “continue to operate,” the secretary contended that she was prohibited
from reinstating petitioner’s dissolved corporation sole. The circuit court agreed
and dismissed the petition. Petitioner appeals from that judgment of dismissal,
contending that the circuit court erred in applying ORS 65.067(5) to prohibit the
corporation sole’s reinstatement. In addition to defending the trial court’s ruling
on the merits, the secretary argues that we should dismiss this appeal because
petitioner is a pro se litigant appearing on behalf of a corporation in violation of
ORS 9.320. Held: First, the Court of Appeals concluded that petitioner had indi-
vidual standing under the APA to seek judicial review of the secretary’s action
and was a “natural person” who, pursuant to ORS 9.320, was permitted to pros-
ecute his case “in person.” On the merits, the court concluded that ORS 65.067
does not prohibit the reinstatement of an administratively dissolved corporation
sole. Thus, the trial court erred in granting the secretary’s motion to dismiss the
petition.
Reversed and remanded.
Mary Mertens James, Judge.
Stephen Lee filed the briefs pro se.
Ellen F. Rosenblum, Attorney General, Benjamin Gutman,
Solicitor General, and Christopher Page, Assistant Attorney
General, filed the brief for respondent.
Before Shorr, Presiding Judge, and Mooney, Judge, and
Pagán, Judge.
SHORR, P. J.
Reversed and remanded.
276 Lee (House of R.E.A.P.) v. Secretary of State
SHORR, P. J.
This case reaches us after petitioner sought judi-
cial review of a Secretary of State decision that denied rein-
statement to The House of R.E.A.P., an administratively
dissolved corporation sole for which petitioner was the sole
director and incorporator.1 Relying on ORS 65.067(5), which
prohibits the formation or incorporation of new corporations
sole after 2015 while permitting preexisting corporations
sole to “continue to operate,” the secretary contended that
she was prohibited from reinstating petitioner’s dissolved
corporation sole. The circuit court agreed and dismissed the
petition. Petitioner appeals from that judgment of dismissal,
contending that the circuit court legally erred in applying
ORS 65.067(5) to prohibit the corporation sole’s reinstate-
ment. For the reasons that follow, we reverse.
Because this matter was dismissed at the pleading
stage, we take the pertinent facts from the petition for judi-
cial review and consider those facts, as well as all reason-
able inferences that may be drawn from them, as true. Pete’s
Mountain Homeowners v. Ore. Water Resources, 236 Or App
507, 510, 238 P3d 395 (2010). In December 2014, petitioner
incorporated The House of R.E.A.P., a church, as a corpo-
ration sole pursuant to ORS 65.067 (2013), amended by Or
Laws 2015, ch 278, § 1. In 2015, petitioner failed to file the
corporation’s required annual report with the Secretary of
State, and in February 2016, the secretary administratively
dissolved The House of R.E.A.P. pursuant to ORS 65.651.
Several years later in July 2020, petitioner sought
to reinstate The House of R.E.A.P. with the Secretary of
State and, on the corporation’s behalf, mailed an application
for reinstatement and related fees to the secretary. The fol-
lowing month, the secretary denied the reinstatement appli-
cation, asserting that, “[e]ffective June 8, 2015, Oregon law
now prevents the filing of new or reinstating corporations
sole filings.” Petitioner sought judicial review of the secre-
tary’s denial in the circuit court, arguing that the 2015 law
that the secretary had relied on did not bar the reinstate-
ment of administratively dissolved corporations sole and
1
As we discuss further below, a corporation sole is a relatively uncommon
type of nonprofit religious corporation recognized by ORS 65.067.
Cite as 324 Or App 275 (2023) 277
that The House of R.E.A.P. had met the requirements for
reinstatement under ORS 65.654.
The secretary moved under ORCP 21 A to dismiss
the petition for failure to state a claim, arguing that “Oregon
law expressly prohibits the Secretary of State from reinstat-
ing corporation soles.” Following a hearing, the circuit court
granted the secretary’s motion and entered a judgment dis-
missing the petition. Petitioner timely appealed.
Before we turn to the merits of petitioner’s argu-
ment that the 2015 amendments to ORS 65.067 do not pro-
hibit reinstatement following administrative dissolution,
we must address the secretary’s renewed argument that we
should dismiss this appeal because petitioner is a pro se lit-
igant appearing on behalf of a corporation in violation of
ORS 9.320. See ORS 9.320 (although a party may generally
prosecute or defend an action “in person,” a party that is
“not a natural person” must appear “by attorney in all cases,
unless otherwise specifically provided by law”); see also
Oregon Peaceworks Green, PAC v. Sec. of State, 311 Or 267,
271, 810 P2d 836 (1991) (only persons licensed to practice
law may represent corporations and other entities in court).
The Appellate Commissioner denied the secretary’s earlier
motion to dismiss the appeal, concluding that, although peti-
tioner’s “ultimate aim on appeal may be to obtain a determi-
nation that his corporation sole should have been reinstated
by respondent, at this point, there is no corporation; appel-
lant cannot purport to represent a corporation that does not
exist at this time.”
The secretary now renews her argument that
“there are no causes of action or claims of error in this pro-
ceeding pertaining to [petitioner] as an individual” and
that petitioner is “pursuing this action on behalf of the cor-
poration and seeking relief for it.” In the secretary’s view,
the Appellate Commissioner’s decision was flawed in part
because petitioner’s corporation sole does continue to exist,
albeit in a more limited form, after dissolution. See ORS
65.651(3) (an administratively dissolved corporation “con-
tinues the corporation’s corporate existence” but may only
carry on activities “necessary or appropriate to wind up and
liquidate the corporation’s affairs”).
278 Lee (House of R.E.A.P.) v. Secretary of State
In response, petitioner denies that he is appearing
on behalf of The House of R.E.A.P. Instead, he contends that
“he was adversely affected and/or is personally aggrieved by
the [circuit] court’s dismissal order,” giving him “standing to
bring this appeal in his own name.” See ORS 183.480(1) (“any
person adversely affected or aggrieved by an order * * * is
entitled to judicial review of a final order”). Petitioner claims
as personal injuries his payment of the $300 reinstatement
fee and his inability to “carry out [his] ministerial duties,
earn a living through the corporation, and accomplish [his]
life’s goals.”
We find it helpful to begin our analysis from the
fact that Lee alone, in his personal capacity, sought judicial
review of the secretary’s denial of the House of R.E.A.P.’s
reinstatement application. The House of R.E.A.P. corpora-
tion was not joined to that judicial review action or other-
wise made a party to it. The secretary did not challenge
petitioner’s standing in the circuit court and does not do so
on appeal either; the secretary’s argument is cabined to ORS
9.320 alone. However, as noted above, petitioner’s opposition
to the secretary’s motion to dismiss this appeal relied on his
asserted standing to bring this action himself. Because we
have an “independent obligation to consider jurisdictional
issues, including standing,” even where the circuit court
did not decide the issue and the parties have failed to fully
explore it, Concienne v. Asante, 299 Or App 490, 501, 450
P3d 533 (2019), rev den, 366 Or 135 (2020) (internal quo-
tation marks omitted), we begin by considering petitioner’s
standing.
We therefore turn to our analysis of standing before
we return to whether Lee may appear to represent himself
pro se in this action. The Administrative Procedures Act
(APA) provides the means by which a person may seek judi-
cial review of actions of the Secretary of State. As relevant
here, ORS 183.480(1) provides that “any person adversely
affected or aggrieved by an order or any party to an agency
proceeding is entitled to judicial review of a final order,
whether such order is affirmative or negative in form.” See
also ORS 183.310(6)(b) (as relevant here, a final order is a
“final agency action expressed in writing [that] preclude[s]
further agency consideration of the subject matter of the
Cite as 324 Or App 275 (2023) 279
statement or declaration”). We have explained that a person
seeking to demonstrate that they were adversely affected
or aggrieved by a final agency order must establish one
or more of the following factors: (1) that they “suffered an
injury to a substantial interest resulting directly” from the
challenged order, (2) that they seek “to further an interest
that the legislature expressly wished to have considered,”
or (3) that they have “such a personal stake in the outcome
of the controversy as to assure concrete adverseness to the
proceeding.” McNichols v. Dept. of Fish and Wildlife, 308 Or
App 369, 372, 482 P3d 208 (2021) (citing People for Ethical
Treatment v. Inst. Animal Care, 312 Or 95, 101-02, 817 P2d
1299 (1991), abrogation on other grounds recognized by
Couey v. Atkins, 357 Or 460, 515, 355 P3d 866 (2015)). “The
legislature has not granted standing under ORS 183.480(1)
to those persons who merely are dissatisfied with the
agency’s order, or who have only an abstract interest * * * in
the question presented, or who are mere bystanders.” People
for Ethical Treatment, 312 Or at 102 (internal quotation
marks and citations omitted).
Here, Lee explained in his petition that he was “the
sole incorporator and overseer” of The House of R.E.A.P. and
had founded the church as its minister in 2014. On appeal,
Lee has further asserted that his role in the church consti-
tutes his profession and that the secretary’s action prevents
him from continuing that vocation. Accepting those asser-
tions as part of our independent obligation to assess stand-
ing, we conclude that petitioner has sufficiently established
that he has a personal stake in whether his church is per-
mitted to resume operations in its organized form, and thus
was adversely affected or aggrieved by the secretary’s action.
As a result, petitioner has standing under the APA to seek
judicial review. Petitioner also has the right to appeal the
circuit court’s judgment to our court. See ORS 183.500 (“Any
party to the proceedings before the circuit court may appeal
from the judgment of that court to the Court of Appeals.”).
On first blush, it may seem that The House of
R.E.A.P. should be the “real party in interest.” Indeed, in
other contexts, we have said that “a party who is not the
‘real party in interest’ to a claim necessarily lacks stand-
ing.” Concienne, 299 Or App at 498. However, the source of
280 Lee (House of R.E.A.P.) v. Secretary of State
law that determines those issues “is the statute that confers
standing in the particular proceeding that the party has
initiated.” Kellas v. Dept. of Corrections, 341 Or 471, 477, 145
P3d 139 (2006). Here, that source of law is ORS 183.480(1),
which confers standing to “any person adversely affected
or aggrieved by an order” without concern to whether that
person is the “real party in interest.” See also ORCP 26 A
(although “[e]very action shall be prosecuted in the name
of the real party in interest[,] * * * a party authorized by
statute may sue in that party’s own name without joining
the party for whose benefit the action is brought” (emphasis
added)).
We return to the issue presented by ORS 9.320. As
relevant here, ORS 9.320 provides that “[a]ny action, suit, or
proceeding may be prosecuted or defended by a party in per-
son, or by attorney, except that the state or a party that is
not a natural person appears by attorney in all cases, unless
otherwise specifically provided by law.” In other words,
although an individual person may represent themselves
in an action pro se, only licensed attorneys may represent
entities—such as corporations—in court. Oregon Peaceworks
Green, PAC, 311 Or at 270-71.
Thus, although petitioner may represent himself
on appeal, he may not represent The House of R.E.A.P. But
again, The House of R.E.A.P. is not a party to this appeal and
was not a party to the review proceeding in the court below.
Lee alone is the appellant before us. That fact is important,
because ORS 9.320 addresses requirements placed on par-
ties. See ORS 9.320 (“Any action, suit, or proceeding may be
prosecuted or defended by a party in person, or by attorney,
except that the state or a party that is not a natural person
appears by attorney in all cases, unless otherwise specifi-
cally provided by law.” (Emphasis added.)). Lee is a “natural
person” who, pursuant to ORS 9.320, may prosecute his case
“in person.”
The case law applying ORS 9.320 illustrates its
proper application. In Oregon Peaceworks Green, PAC, an
unincorporated political action committee sought judicial
review of a fine imposed on it by the Secretary of State. 311
Cite as 324 Or App 275 (2023) 281
Or at 269. However, the committee’s petitions for judicial
review were signed by its treasurer, who was not an attor-
ney and also not a party to the action. Id. Thus,
“[t]he Secretary of State moved the Court of Appeals to
strike the petitions for judicial review on the ground that
they were ‘prepared, signed and filed by a person who is
not and was not then an active member of the Oregon State
Bar, and who is not herself a party to this proceeding, and
[who] therefore lacked authority to take such action on her
own behalf or on behalf of Oregon Peaceworks Green PAC.’ ”
Id. at 269-70. Similarly, in Marguerite E. Wright Trust v.
Dept. of Rev., 297 Or 533, 535, 685 P2d 418 (1984), a trust
appealed the dismissal of its complaint against certain tax
authorities. There, the complaint had been signed by the
trust’s trustee, Robert J. Wright, an individual who was,
again, not an attorney and not a party to the complaint.
Id. That later point was particularly salient to the court’s
analysis:
“Robert J. Wright is not a party to this lawsuit. The suit was
not brought by Robert J. Wright in his own name against
the Department of Revenue nor by Robert J. Wright, trustee
on behalf of the Marguerite E. Wright Trust. The named
plaintiff was the Marguerite E. Wright Trust.”
Id. at 538.
Thus, in both cases, the party seeking redress in
the court was an entity, and in both cases, individuals who
were neither attorneys nor parties themselves signed and
submitted legal filings for those entities. As a result, both
cases elicited the same result: ORS 9.320 prohibited the non-
party, nonattorney individuals from purporting to represent
the entities pro se. Oregon Peaceworks Green, PAC, 311 Or at
269; Marguerite E. Wright Trust, 297 Or at 536-37. Our court
has applied ORS 9.320 similarly, dismissing an appeal that
was filed on behalf of trust and corporation defendants by
individuals who were not attorneys. See Hansen v. Bennett,
162 Or App 380, 383 n 4, 986 P2d 633, rev den, 329 Or 553(1999).
The above cases applied ORS 9.320 in a manner
consistent with the text of the statute—requiring that “a
282 Lee (House of R.E.A.P.) v. Secretary of State
party that is not a natural person appears by attorney in all
cases.” In the instant case, however, the only petitioner is
Lee, and ORS 9.320 explicitly permits him to prosecute his
case “in person.”
With that said, the secretary appears to advance
the more nuanced argument that the substance of petitioner’s
arguments are arguments made on behalf of the dissolved
corporation sole. To the extent that the secretary advances
that argument, we disagree that ORS 9.320 would bar peti-
tioner’s self-representation for that reason. Although Lee’s
interests and the corporation’s interests in this matter are
closely aligned—if not indistinguishable at times—ORS
9.320 only specifies requirements placed on parties, and
explicitly permits individuals such as petitioner to proceed
“in person.”
Finally, we briefly acknowledge the Appellate
Commissioner’s conclusion, in denying the secretary’s motion
to dismiss the appeal, that, “[i]n the absence of reinstate-
ment, there is no corporation on behalf of which appellant
could purport to appear.” The secretary correctly notes
that, pursuant to ORS 65.651(3), “[a] corporation admin-
istratively dissolved continues the corporation’s corporate
existence but may not carry on any activities except those
necessary or appropriate to wind up and liquidate the cor-
poration’s affairs * * * and notify the corporation’s claimants
* * *.” Further, under ORS 65.637, a dissolved corporation
may continue to sue and be sued. See ORS 65.637(2)(d)-(e)
(dissolution does not “[p]revent commencement of a proceed-
ing by or against the corporation in the corporation’s corpo-
rate name” or “[a]bate or suspend a proceeding pending by
or against the corporation”). Nevertheless, even assuming
that The House of R.E.A.P. as a corporate entity continues
to exist in some form (which we need not decide for our pur-
poses), that continued existence does not change or affect
our analysis of Lee’s individual standing under the APA
to seek judicial review of the secretary’s action, or change
our understanding of ORS 9.320 as permitting individuals
to engage in self-representation. Thus, we reject the secre-
tary’s renewed argument for dismissal and proceed to the
merits of petitioner’s assignment of error.
Cite as 324 Or App 275 (2023) 283
As explained earlier, petitioner assigns error to the
circuit court’s grant of the secretary’s motion to dismiss.
That ruling was based on the court’s legal conclusion, on
judicial review, that ORS 65.067(5) prohibited the reinstate-
ment of administratively dissolved corporations sole. Our
standard of review echoes that of the circuit court—whereas
the circuit court reviewed the secretary’s decision to deter-
mine whether the agency “erroneously interpreted a provi-
sion of law,” ORS 183.484(5)(a), we review the circuit court
judgment to determine whether it correctly assessed the
agency’s decision under that standard. Kaser v. PERS, 317
Or App 498, 499, 506 P3d 1134, rev den, 370 Or 214 (2022).
Thus, as a practical matter, we review—as the circuit court
did—to determine whether the secretary erred in constru-
ing ORS 65.067.
Petitioner contends that the 2015 amendments to
ORS 65.067 only prohibit the formation and incorporation
of new corporations sole and do not prohibit the reinstate-
ment of administratively dissolved corporations sole. The
secretary, in turn, points to the “grandfathering provision”
of the 2015 amendments, which permits existing corpora-
tions sole to “continue to operate”; in the secretary’s view, an
administratively dissolved corporation sole no longer contin-
ues to operate and thus is ineligible for reinstatement. The
parties’ dispute as to the meaning of ORS 65.067 presents
a question of statutory interpretation, and thus we turn to
our familiar methodology for determining the legislature’s
intent. See State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042
(2009) (explaining that we first examine the text and con-
text, as well as any legislative history that we deem useful
to our analysis, and that if the legislature’s intent remains
unclear after considering those sources, we may resort to
general maxims of statutory construction).
A corporation sole differs from other nonprofit reli-
gious corporations “only in that the corporation sole does
not have a board of directors, does not need to have offi-
cers and is managed by a single director who is the individ-
ual who constitutes the corporation and is the corporation
sole’s incorporator or the successor of the incorporator.” ORS
65.067(1). Thus, where a corporation sole has no officers, the
284 Lee (House of R.E.A.P.) v. Secretary of State
director may perform those acts normally reserved to corpo-
rate officers. See ORS 65.067(3).
In 2015, the legislature passed Senate Bill (SB) 77
(2015), see Oregon Laws 2015, chapter 278, which substan-
tially curtailed corporations sole as a corporate form. The
most sweeping aspect of the legislation was the creation of
ORS 65.067(5), which states:
“A corporation sole may not be formed or incorporated in
this state on or after June 8, 2015. A corporation sole that
exists before June 8, 2015, may continue to operate as a
corporation sole, subject to the provisions of this chapter.”
The legislation also amended ORS 65.067(3). Before the
amendments, that provision stated, in part, that “[a]ll of
the provisions of ORS 65.044 to 65.067 apply to a corpora-
tion sole,” specifically referencing a handful of statutes con-
cerning the incorporation of nonprofit corporations. ORS
65.067(3) (2013). The 2015 amendments changed that text
to read, “[e]xcept to the extent that a provision of this chap-
ter is not applicable to a corporation sole’s form of organiza-
tion, all of the provisions of this chapter apply to a corpora-
tion sole.” ORS 65.067(3). Thus, the 2015 amendments did
three main things: (1) they prohibited the “form[ation] or
incorpora[tion]” of new corporations sole after June 8, 2015;
(2) they permitted existing corporations sole to “continue to
operate,” subject to the provisions of ORS chapter 65; and
(3) they made corporations sole explicitly subject to all of
the provisions in ORS chapter 65 that are “applicable to a
corporation sole’s form of organization.”
The parties appear to agree, or at least do not dis-
pute on appeal, that the first part of ORS 65.067(5) specify-
ing that “[a] corporation sole may not be formed or incorpo-
rated in this state on or after June 8, 2015” does not address
or curtail the reinstatement of administratively dissolved
corporations sole. Incorporation, dissolution, and reinstate-
ment are all distinct concepts under ORS chapter 65, and
we readily conclude that the above text merely does what it
says it does: prevents the formation or incorporation of new
corporations sole. Thus, we turn to the other two major tex-
tual amendments.
Cite as 324 Or App 275 (2023) 285
ORS 65.067(5) goes on to say that “[a] corporation
sole that exists before June 8, 2015, may continue to oper-
ate as a corporation sole, subject to the provisions of this
chapter.” In the secretary’s view, “continue to operate” is the
important operative text. And indeed, we agree with the
secretary’s understanding of that term. Although “continue
to operate” is not defined in the chapter, it is a phrase of
common usage. The verb “continue,” as used here, means
“to be steadfast or constant in a course of activity : keep
up or maintain esp. without interruption a particular con-
dition, course, or series of actions.” Webster’s Third New Int’l
Dictionary 493 (unabridged ed 2002). “Operate,” as relevant
here, is defined as “to cause to function usu. by direct per-
sonal effort : WORK” or “to manage and put or keep in oper-
ation whether with personal effort or not.” Id. at 1581. Used
together in the phrase “continue to operate,” we understand
the legislature to have referred to keeping up regular corpo-
rate work and activities without any interruption.
However, although we agree with the secretary’s
interpretation of “continue to operate,” we do not assign the
same meaning to the sentence as a whole or the wider pro-
vision. The secretary posits that, in specifying that a cor-
poration sole existing before the effective date of the stat-
ute “may continue to operate as a corporation sole, subject
to the provisions of this chapter,” the legislature intended
that such corporations sole “could continue as ongoing con-
cerns if they remained actively operating.” Further, because
ORS 65.651(3) specifies that an administratively dissolved
corporation “may not carry on any activities except those
necessary or appropriate to wind up and liquidate the cor-
poration’s affairs,” the secretary contends that an adminis-
tratively dissolved corporation cannot “continue to operate”
and is therefore ineligible for the grandfathering provision
of ORS 65.067(5).
The problem with the secretary’s interpretation is
that it reads too much into the text, and in doing so, loses
step with the plain language of ORS 67.067(5). On its face,
the provision prevents the formation or incorporation of new
corporations sole but specifies that previously existing ones
“may continue to operate,” subject to the other provisions of
286 Lee (House of R.E.A.P.) v. Secretary of State
the chapter. In simple terms, it prohibits newly created corpo-
rations sole but permits existing ones to remain active. See,
e.g., Dement Ranch v. Curry County Board of Commissioners,
306 Or App 315, 322, 474 P3d 435 (2020) (applying our usual
understanding of “may” as a “permissive term”). Specifying
that existing corporations sole “may continue to operate”
merely distinguishes that group of corporations sole—those
existing before the statute’s effective date—from those that
have yet to be formed or incorporated; while new corpora-
tions sole are prohibited, ones existing before the statute’s
effective date are left alone, subject to the rest of ORS chap-
ter 65.
Further, specifying that existing corporations sole
may continue to operate “subject to the provisions of this
chapter” clarifies that an existing corporation sole’s continu-
ing operations are subject to, or regulated by, the chapter’s
various requirements, standards of conduct, procedures,
and other provisions. Those provisions include the right
of an administratively dissolved corporation sole to seek
reinstatement within five years of dissolution. ORS 65.654.
Thus, we disagree with the secretary’s contention that ORS
65.067(5) requires existing corporations sole to “continue to
operate” by timely maintaining annual registration require-
ments to avoid permanent dissolution.
That brings us to the final relevant aspect of the
2015 amendments: ORS 65.067(3). Before the amendments,
that provision stated, in part, that “[a]ll of the provisions of
ORS 65.044 to 65.067 apply to a corporation sole,” specifi-
cally referencing a handful of statutes concerning the incor-
poration of nonprofit corporations. ORS 65.067(3) (2013).
Following the 2015 amendments, that text was changed to
read, “[e]xcept to the extent that a provision of this chapter
is not applicable to a corporation sole’s form of organization,
all of the provisions of this chapter apply to a corporation
sole.” ORS 65.067(3). Thus, the legislature made corpora-
tions sole subject to the entirety of the nonprofit corporation
chapter—covering topics from articles of incorporation to
dissolution and reinstatement—at least where the various
provisions are applicable to a corporation that lacks a board
of directors and is managed by a single director.
Cite as 324 Or App 275 (2023) 287
Although the secretary presents the ORS 65.067(3)
amendment as a housekeeping measure, that framing mini-
mizes its relevance. The legislature explicitly made all appli-
cable provisions of ORS chapter 65, including the statute
outlining the process for reinstatement following adminis-
trative dissolution, ORS 65.654, applicable to corporations
sole. Indeed, corporations sole must file annual reports and
may be administratively dissolved if they do not. See ORS
65.787 (explaining annual report requirement); ORS 65.647
(explaining that the secretary may commence an admin-
istrative dissolution proceeding if a corporation does not
timely deliver its annual report). But a corporation sole may
nevertheless take advantage of the reinstatement procedure
outlined in ORS 65.654, and the secretary “shall reinstate
the corporation” if the reinstatement application meets the
delineated requirements. ORS 65.654(2).
In granting the secretary’s motion to dismiss the
petition, the circuit court seems to have been particularly
persuaded by certain legislative history, which the secretary
also presses. SB 77 was introduced at the request of the sec-
retary, who intended for it to “limit the future use of a cor-
poration sole as a tax-evasion scheme in Oregon.” Exhibit 6,
Senate Committee on Business and Transportation, SB 77,
Feb 2, 2015 (accompanying statement of Director Peter
Threlkel). Peter Threlkel, the Director of the Corporation
Division for the Secretary of State’s office, told legislators
that, “[o]f the 270 active corporation soles registered with
the * * * Division[,] 175 (65%) have been filed in the last
two years by tax scheme promoters as tax avoidance pack-
ages costing victims hundreds or thousands of dollars.” Id.;
Exhibit 8, House Committee on Business and Labor, SB 77,
Apr 22, 2015 (accompanying statement of Peter Threlkel).
Threlkel claimed that the bill would “limit the future pro-
motion of these frivolous tax avoidance schemes by prevent-
ing the formation of new corporation soles after the effective
date, and grandfathers in existing corporation soles who
may continue to operate as long as they maintain annual
registration requirements.” Exhibit 8, House Committee
on Business and Labor, SB 77, Apr 22, 2015 (accompanying
statement of Peter Threlkel). Threlkel summarized: The bill
would allow existing corporations sole to continue operating,
288 Lee (House of R.E.A.P.) v. Secretary of State
“but as they fail to renew, then they would eventually drop
off and would go away but we would stop new filings from
coming in.” Audio Recording, House Committee on Business
and Labor, SB 77, Apr 22, 2015, at 42:32 (comments of Peter
Threlkel), https://olis.oregonlegislature.gov (accessed Feb 7,
2023). Staff summaries prepared for the committees
explained that the measure “[g]randfathers existing cor-
poration[s] sole, contingent upon renewing registration.”
Staff Measure Summary, Senate Committee on Business
and Transportation, SB 77, Feb 2, 2015; Staff Measure
Summary, House Committee on Business and Labor, SB 77,
May 18, 2015. Discussion among legislators was limited to
the mechanics of the tax scam itself and concerns that a ban
on new corporations sole was ill-tailored towards the tax
evasion problem and could harm legitimate churches. See
generally Audio Recording, Senate Committee on Business
and Transportation, SB 77, Feb 2, 2015, at 31:45, https://
olis.oregonlegislature.gov (accessed Feb 7, 2023); Audio
Recording, House Committee on Business and Labor, SB 77,
Apr 22, 2015, at 42:48, https://olis.oregonlegislature.gov
(accessed Feb 7, 2023). Neither Threlkel nor the individual
legislators addressed the amendment to ORS 65.067(3), the
ramifications of administrative dissolution, or whether cor-
porations sole would be eligible for reinstatement following
dissolution.
We do not agree with the secretary that the above
legislative history compels the conclusion that an adminis-
tratively dissolved corporation sole “cease[s] to qualify for
the protection of the grandfathering provision.” We acknowl-
edge that the secretary, who requested the legislation,
evidently intended for existing corporations sole to retain
their status with the state only if they “maintain annual
registration requirements,” and expected that “as they fail
to renew * * * they would eventually drop off and would go
away.” However, those statements reflect the understand-
ing of the Secretary of State’s office, not the legislators. See
DCBS v. Muliro, 359 Or 736, 753, 380 P3d 270 (2016) (cau-
tioning of the risk of misconstruction from relying on the
“cherry-picked quotations” of nonlegislator witnesses). And,
regardless, the idea that existing corporations sole would
eventually “drop off and * * * go away” after failing to make
Cite as 324 Or App 275 (2023) 289
annual filings is not mutually exclusive with our interpre-
tation that all of the provisions of ORS chapter 65 apply to
corporations sole, including the provisions in ORS 65.654
providing a procedure for obtaining reinstatement during
a five-year period following administrative dissolution.
Reinstatement was simply never mentioned in any of the
legislative materials surrounding SB 77, and absent some
indication that the legislature intended for corporations sole
to be prohibited from the reinstatement process, the sec-
retary’s reading is inconsistent with the directive in ORS
65.067(3) that “all of the provisions of this chapter apply to a
corporation sole.” See Gaines, 346 Or at 173 (explaining that
“[w]hen the text of a statute is truly capable of having only
one meaning, no weight can be given to legislative history
that suggests—or even confirms—that legislators intended
something different”).
As written, ORS 65.067 does not prohibit the rein-
statement of an administratively dissolved corporation
sole. Thus, the trial court erred in granting the secretary’s
motion to dismiss the petition.
Reversed and remanded.