City of Fraser v. Almeda University , 314 Mich. App. 79 ( 2016 )

STATE OF MICHIGAN
COURT OF APPEALS
CITY OF FRASER, FOR PUBLICATION
January 14, 2016
Plaintiff-Appellee, 9:00 a.m.
v No. 323499
Macomb Circuit Court
ALMEDA UNIVERSITY, LC No. 2013-000449-CZ
Defendant-Appellant/Third-Party
Plaintiff,
v
JOHN DOES 1-99,
Third-Party Defendants.
Before: MURRAY, P.J., and METER and RIORDAN, JJ.
RIORDAN, J.
Defendant Almeda University appeals as of right the trial court’s order granting plaintiff
City of Fraser’s motion for summary disposition. We affirm in part, reverse in part, and remand
for further proceedings.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case involves the Michigan Authentic Credentials in Education Act (hereinafter “the
Act”), MCL 390.1601 et seq. Defendant is an online university, incorporated in the Caribbean
Island of Nevis, that offers “Life Experiences Degrees” to prospective “students.” All
interactions with those students take place through defendant’s website.
To obtain a degree, an applicant submits an electronic application and a résumé outlining
the applicant’s “verifiable professional and educational achievements.” If defendant determines
that an applicant is eligible to receive the requested degree, the student is required to make an
online credit card payment of $499 for a bachelor’s degree, $795 for a master’s degree, or $1,495
for a doctorate degree. Once the applicant pays the online fee, defendant mails the desired
degree directly to the applicant’s home. In addition to providing degrees, defendant offers
assistance with résumés, job applications, and interviews and markets promotional apparel
bearing defendant’s name for purchase.
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On its website, defendant states that it has “over 26,000 online students in over 7,000
cities worldwide.” It is undisputed that some of those students are Michigan residents. At one
time, defendant highlighted on its website the success of two Michigan residents who were
awarded degrees from defendant.
Plaintiff is a municipality located in Macomb County. Between 2004 and 2009, 16 of its
employees, all police officers, obtained degrees from defendant. None of the employees were
required to complete any classes, coursework, research, or exams to receive the degrees. At
issue in this case are degrees issued to 11 of plaintiff’s employees between June 6, 2003, and
March 5, 2009. After obtaining these degrees from defendant, the 11 employees used the
degrees to increase their salaries between $1,000 and $3,000 per year, depending upon the type
of degree purchased. Along with increasing those employees’ compensation, plaintiff
reimbursed 11 of them with educational allowances. Overall, plaintiff paid a total of $143,848 to
the employees for the purchase of Almeda degrees.
On January 31, 2013, plaintiff filed a one-count complaint against defendant, alleging
that defendant violated the Act, MCL 390.1601 et seq., by holding itself out as an institution
authorized to award academic degrees. Plaintiff sought more than $1 million in damages,
$100,000 for each of plaintiff’s employees who used their degrees for salary increases and
tuition reimbursement.
Defendant moved for summary disposition pursuant to MCR 2.116(C)(1) (court lacks
jurisdiction over the party), (5) (party asserting claim lacks legal capacity to sue), and (8) (failure
to state a claim). Most relevant to this appeal, defendant argued that the trial court did not have
personal jurisdiction over defendant. The trial court disagreed and denied defendant’s motion.
Plaintiff subsequently filed its own motion for summary disposition pursuant to MCR
2.116(C)(10), contending that defendant’s admissions that it lacked accreditation under state or
federal law entitled plaintiff to an order of liability against defendant and damages in plaintiff’s
favor. In its response, defendant denied liability on the basis that (1) the Act requires that
degrees be issued or manufactured in Michigan to prove liability because Michigan cannot
control behavior that lawfully occurs outside of the state, and (2) since the degrees were only
mailed to Michigan residents, defendant did not violate the Act. Defendant also asserted that
plaintiff was not damaged by defendant’s conduct, but by its own employees who used the
degrees to obtain additional pay and tuition reimbursement. Finally, defendant asserted that
plaintiff waived its right to sue defendant under the Act because plaintiff, which had known
about the situation since at least 2007, inexplicably waited until 2013 to file the action and
continued to accept defendant’s degrees from its employees, and increase the pay of its
employees, even after it discovered the details of the way the degrees were earned and learned of
defendant’s lack of accreditation.
The trial court ruled in plaintiff’s favor and awarded it $600,000 ($100,000 each for the
six degrees issued by defendant after the Act took effect in 2005).
II. GENERAL STANDARDS OF REVIEW
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We review a trial court’s decision regarding a motion for summary disposition de novo.
Yoost v Caspari, 295 Mich. App. 209, 219; 813 NW2d 783 (2012). Defendant’s first claim on
appeal arises from the trial court’s denial of its motion for summary disposition under MCR
2.116(C)(1). “When reviewing a trial court’s decision on a motion for summary disposition
brought under MCR 2.116(C)(1), the trial court and this Court consider the pleadings and
documentary evidence submitted by the parties in a light most favorable to the nonmoving
party.” Yoost, 295 Mich. App. at 219.
The rest of the issues raised on appeal arise from the trial court’s grant of summary
disposition in favor of plaintiff under MCR 2.116(C)(10). When reviewing a motion for
summary disposition pursuant to MCR 2.116(C)(10), this Court may only consider, in the light
most favorable to the party opposing the motion, the evidence that was before the trial court,
which consists of “the ‘affidavits, together with the pleadings, depositions, admissions, and
documentary evidence then filed in the action or submitted by the parties.’ ” Calhoun Co v Blue
Cross Blue Shield Michigan, 297 Mich. App. 1, 11-12; 824 NW2d 202 (2012), quoting MCR
2.116(G)(5). Under MCR 2.116(C)(10), “[s]ummary disposition is appropriate if there is no
genuine issue regarding any material fact and the moving party is entitled to judgment as a
matter of law.” Latham v Barton Malow Co, 480 Mich. 105, 111; 746 NW2d 868 (2008). “There
is a genuine issue of material fact when reasonable minds could differ on an issue after viewing
the record in the light most favorable to the nonmoving party.” Allison v AEW Capital Mgt,
LLP, 481 Mich. 419, 425; 751 NW2d 8 (2008).
III. PERSONAL JURISDICTION
Defendant first argues that the trial court erred in denying its motion for summary
disposition on the ground that the court lacked personal jurisdiction over defendant. We
disagree.
A. STANDARD OF REVIEW
We review de novo, as a question of law, “whether a court possesses personal jurisdiction
over a party.” Yoost, 295 Mich. App. at 219. We also review de novo whether an exercise of
jurisdiction over defendant, a non-resident corporation, is consistent with the notions of fair play
and substantial justice under the Due Process Clause of the Fourteenth Amendment. Id.
Under a motion for summary disposition pursuant to MCR 2.116(C)(1),
[t]he plaintiff bears the burden of establishing jurisdiction over the defendant, but
need only make a prima facie showing of jurisdiction to defeat a motion for
summary disposition. The plaintiff’s complaint must be accepted as true unless
specifically contradicted by affidavits or other evidence submitted by the parties.
Thus, when allegations in the pleadings are contradicted by documentary
evidence, the plaintiff may not rest on mere allegations but must produce
admissible evidence of his or her prima facie case establishing jurisdiction. [Id. at
221-222 (quotation marks and citations omitted).]
B. ANALYSIS
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In Yoost, 295 Mich. App. at 222-223, we summarized the proper analysis for determining
whether a trial court has properly exercised personal jurisdiction over a defendant:
When examining whether a Michigan court may exercise limited personal
jurisdiction over a defendant, this Court employs a two-step analysis. First, this
Court ascertains whether jurisdiction is authorized by Michigan’s long-arm
statute. Second, this Court determines if the exercise of jurisdiction is consistent
with the requirements of the Due Process Clause of the Fourteenth Amendment.
Both prongs of this analysis must be satisfied for a Michigan court to properly
exercise limited personal jurisdiction over a nonresident. Long-arm statutes
establish the nature, character, and types of contacts that must exist for purposes
of exercising personal jurisdiction. Due process, on the other hand, restricts
permissible long-arm jurisdiction by defining the quality of contacts necessary to
justify personal jurisdiction under the constitution. [Quotation marks and
citations omitted.]
Defendant challenges the trial court’s exercise of personal jurisdiction. It argues that the
court erred in exercising personal jurisdiction under Michigan’s long-arm statute, MCL 600.715,
because such an exercise was not consistent with constitutional due process.1 In essence,
defendant effectively concedes that, under the first step of the analysis, the trial court properly
concluded that it could exercise limited personal jurisdiction over defendant under Michigan’s
long-arm statute. Accordingly, we focus our analysis on whether the trial court’s exercise of
jurisdiction over defendant comported with due process.
“The ‘constitutional touchstone’ of a due process analysis with respect to personal
jurisdiction is whether the defendant purposely established the minimum contacts with the forum
state necessary to make the exercise of jurisdiction over the defendant fair and reasonable.”
Oberlies v Searchmont Resort, Inc, 246 Mich. App. 424, 433; 633 NW2d 408 (2001) (citations
omitted).
Courts employ a three-part test to determine whether a defendant has minimum
contacts with Michigan to the extent that limited personal jurisdiction may be
exercised in accordance with due process.
First, the defendant must have purposefully availed himself of the
privilege of conducting activities in Michigan, thus invoking the
benefits and protections of this state’s laws. Second, the cause of
action must arise from the defendant’s activities in the state.
Third, the defendant’s activities must be substantially connected
with Michigan to make the exercise of jurisdiction over the
1
Defendant states that the trial court concluded that it had limited personal jurisdiction over
defendant under MCL 600.715(1). However, the trial court expressly found that it could
exercise limited personal jurisdiction over defendant pursuant to MCL 600.715(5).
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defendant reasonable. [Id. (quotation marks and citations
omitted).]
The record shows that the first prong of the test was met in this case. “ ‘[P]urposeful
availment’ is something akin either to a deliberate undertaking to do or cause an act or thing to
be done in Michigan or conduct which can be properly regarded as a prime generating cause of
the effects resulting in Michigan, something more than a passive availment of Michigan
opportunities.” Id. at 434 (quotation marks and citation omitted). Similarly, when a party
“reach[es] out beyond one state and create[s] continuing relationships and obligations with
citizens of another state,” the party has “availed [it]self of the privilege of conducting business
there.” Burger King Corp v Rudzewicz, 471 U.S. 462, 473-476; 105 S. Ct. 2174; 85 L. Ed. 2d 528
(1985).
By accepting applications and payments from plaintiff’s employees through its website,
even after learning that they lived in Michigan—and subsequently continuing to transact
business with those employees in Michigan by awarding them degrees, mailing diplomas to
Michigan addresses, and offering additional alumni products and services—defendant
“purposefully availed itself of the privilege of conducting activities in Michigan.” Yoost, 295
Mich. App. at 223 (quotation marks and citation omitted). As such, the record shows that
defendant engaged Michigan customers in a regular and continuing manner. Moreover,
defendant highlighted the personal success stories of Michigan residents on its website after they
purchased degrees from defendant, thereby advertising the availability, and benefits, of its
degrees for Michigan residents.
We find Neogen Corp v Neo Gen Screening, Inc, 282 F3d 883 (CA 6, 2002), instructive
in this case. In Neogen Corp, the Sixth Circuit Court of Appeals relied on Zippo Mfg Co v Zippo
Dot Com, Inc., 952 F Supp 1119, 1124 (WD Pa, 1997), in determining whether a company
purposefully availed itself of a state through its website, and provided the following summary of
the relevant inquiry:
A defendant purposefully avails itself of the privilege of acting in a state through
its website if the website is interactive to a degree that reveals specifically
intended interaction with residents of the state. Zippo Mfg. Co. v. Zippo Dot Com,
Inc., 952 F. Supp. 1119, 1124 (W.D.Pa. 1997) (using a “sliding scale” of
interactivity to identify Internet activity that constitutes purposeful availment). In
Zippo, the district court held that the defendant manifested its purposeful
availment of the privilege of acting in Pennsylvania when it “repeatedly and
consciously chose to process Pennsylvania residents’ applications and to assign
them passwords,” knowing that the result of these Internet contacts would be to
perform services for Pennsylvania customers in part through the transmission of
electronic messages to Pennsylvania. Id. at 1126. Such intentional interaction
with the residents of a forum state, the Zippo court concluded, is evidence of a
conscious choice to transact business with inhabitants of a forum state in a way
that the passive posting of information accessible from anywhere in the world is
not. Id. [Neogen Corp, 282 F3d at 890.]
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The Sixth Circuit found that it was not clear that the website at issue in Neogen Corp necessarily
provided a basis for jurisdiction because it “consist[ed] primarily of passively posted
information.” Id. at 890. Nevertheless, it found that the company’s 14 annual business
transactions with Michigan customers constituted a “purposeful availment.” Id. at 891-892.
Most notably, the court reasoned:
Although customers from Michigan contacted NGS, and not the other way
around, NGS could not mail test results to and accept payment from customers
with Michigan addresses without intentionally choosing to conduct business in
Michigan. This establishes that NGS chose to contract with customers from
Michigan. Additionally, a part of NGS’s service is the packaging of the results of
the tests that it performs. When NGS mails these test results to its Michigan
customers, or sends them a password to be used interactively on its website, NGS
reaches out to Michigan to perform its services there. Neogen has therefore
alleged facts which, when viewed in the light most favorable to Neogen, support a
finding that NGS purposefully availed itself of the privilege of doing business in
Michigan. [Id. at 892.]
Here, defendant’s conduct through its website was more similar to the company in Zippo
than in Neogen Corp. Further, as in Neogen, we conclude that defendant could not mail
diplomas to, and accept payments from, students “with Michigan addresses without intentionally
choosing to conduct business in Michigan.” Id. at 892. Thus, it is clear that defendant’s conduct
constituted more than “merely ‘random,’ ‘fortuitous,’ or ‘attenuated’ ” contacts with Michigan.
Oberlies, 246 Mich. App. at 434, quoting Burger King, 471 U.S. at 475.
Second, contrary to defendant’s claims on appeal, it is evident that the cause of action,
i.e., the issuance of fraudulent academic credentials in violation of MCL 390.1604, arose directly
from defendant’s activities in Michigan, i.e., conducting an academic program and issuing
diplomas for a price to Michigan residents. We reject defendant’s argument that “there is a
complete lack of privity between [defendant] and [plaintiff],” as privity is not a requirement to
exercise personal jurisdiction under Michigan law. Likewise, given defendant’s clear conduct in
this case, we reject defendant’s claim that jurisdiction is improper based on the ways in which
the actions of plaintiff’s employees or the terms of its union contracts may have injured plaintiff.
Finally, under the third prong of the test, “defendant’s activities must be substantially
connected with Michigan to make the exercise of jurisdiction over the defendant reasonable.”
Oberlies, 246 Mich. App. at 433 (quotation marks and citation omitted). We reject defendant’s
claim that it was impossible for defendant to foresee liability in Michigan for its conduct. Again,
the record clearly indicates that defendant established multiple business relationships with
Michigan residents and issued diplomas to customers in Michigan after accepting the customers’
applications and fees. Especially given that defendant’s business is conducted entirely online,
and defendant does not have an actual campus, it is sensible that it should be subject to
jurisdiction in the states—including Michigan—where it conducts its business. Therefore, we
conclude that the trial court’s exercise of jurisdiction over defendant was reasonable.
IV. APPLICABILITY OF MCL 390.1603
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Defendant next argues that the trial court improperly concluded that MCL 390.1603
applied to defendant. We disagree.
A. STANDARD OF REVIEW
As stated supra, this Court reviews a trial court’s grant or denial of summary disposition
de novo. Moraccini v Sterling Hts, 296 Mich. App. 387, 391; 822 NW2d 799 (2012).
“Matters of statutory interpretation are questions of law, which we review under a de
novo standard of review.” Shorecrest Lanes & Lounge, Inc v Liquor Control Comm’n, 252 Mich
App 456, 460; 652 NW2d 493 (2002). We restated the following principles of statutory
interpretation in Book-Gilbert v Greenleaf, 302 Mich. App. 538, 541-542; 840 NW2d 743 (2013):
The judiciary’s objective when interpreting a statute is to discern and give effect
to the intent of the Legislature. First, the court examines the most reliable
evidence of the Legislature’s intent, the language of the statute itself. When
construing statutory language, [the court] must read the statute as a whole and in
its grammatical context, giving each and every word its plain and ordinary
meaning unless otherwise defined. Effect must be given to every word, phrase,
and clause in a statute, and the court must avoid a construction that would render
part of the statute surplusage or nugatory. If the language of a statute is clear and
unambiguous, the statute must be enforced as written and no further judicial
construction is permitted. . . . The courts may not read into the statute a
requirement that the Legislature has seen fit to omit. When the Legislature fails
to address a concern in the statute with a specific provision, the courts cannot
insert a provision simply because it would have been wise of the Legislature to do
so to effect the statute’s purpose. . . . [Quotation marks and citations omitted.]
Additionally,
[w]e may not speculate regarding the probable intent of the Legislature beyond
the words expressed in the statute. When reasonable minds may differ with
regard to the meaning of a statute, the courts must look to the object of the statute,
the harm it is designed to remedy, and apply a reasonable construction that best
accomplishes the purpose of the statute. [Oberlies, 246 Mich. App. at 429-430
(citations omitted).]
B. ANALYSIS
MCL 390.1603 provides: “A person shall not knowingly issue or manufacture a false
academic credential in this state.” Defendant Almeda University conceded in the trial court that
any academic credential issued or manufactured by it qualifies as a “false academic credential”
under Michigan law. Both parties also agree that defendant does not “manufacture” false
academic credentials in Michigan. Accordingly, defendant’s only argument on appeal is that the
statute is not applicable to its conduct because it did not “issue” false academic credentials “in
this state.” In particular, defendant asserts that the statute only applies to false academic
credentials that originate in Michigan. We reject defendant’s claim.
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The term “issue” in MCL 390.1603 is not defined by the Act. “When the Legislature has
not defined a statute’s terms, we may consider dictionary definitions to aid our interpretation.”
Autodie, LLC v City of Grand Rapids, 305 Mich. App. 423, 434; 852 NW2d 650 (2014). We find
the following definitions of “issue” in Merriam-Webster’s Collegiate Dictionary (2014) relevant
here: “to appear or become available through being officially put forth or distributed,” “to cause
to come forth: DISCHARGE, EMIT,” “to put forth or distribute usu. officially,” and “to send out
for sale or circulation: PUBLISH.” Similarly, Black’s Law Dictionary (10th ed) defines “issue”
as “1. To accrue 2. To be put forth officially 3. To send out or distribute officially .”
In light of these definitions, “issue” and “in this state” for purposes of MCL 390.1603
means to put forth or distribute officially in Michigan, such that a false academic credential is
“issued” in Michigan if it is distributed to or provided by mail or electronically to an individual
in the state of Michigan. This definition of “issue” is consistent with the Act’s preamble, which
describes that the purpose of the statute as being “to prohibit the issuance or manufacture of false
academic credentials; and to provide remedies” for such issuance.2 See Oberlies, 246 Mich. App.
at 429-430.
“The resolution of an ambiguity or vagueness that achieves a statute’s purpose should be
favored over the resolution that frustrates its purpose.”3 Scalia & Garner, Reading Law: The
Interpretation of Legal Texts (St. Paul: Thomson/West, 2012), p 56. However, the purpose (1)
must be discerned from the text of the statute itself, not from an external source, such as
legislative history; (2) must be defined in a precise manner, not in a way that allows one to
“smuggle[] in” a given interpretation; (3) must be delineated as concretely as possible, not in an
abstract manner; and (4) may not be used to contradict or supplement the statutory text, except in
the rare circumstance of a glaring scrivener’s error. Id. at 56-57. See also Frost-Pack Distrib Co
2
The preamble states in full: “AN ACT to prohibit the issuance or manufacture of false
academic credentials; and to provide remedies.” See King v Ford Motor Credit Co, 257 Mich
App 303, 311-312; 668 NW2d 357 (2003) (“A preamble is not to be considered authority for
construing an act, but it is useful for interpreting statutory purpose and scope.”).
3
Judge Murray correctly points out that the majority and the partial concurrence/dissent agree on
the most relevant definition of the term “issue.” However, like the parties, we apparently
disagree on the meaning of “issue” given its modification by the phrase “in this state” in MCL
390.1603. A statutory provision is ambiguous if “it is equally susceptible to more than a single
meaning.” Fluor Enterprises, Inc. v. Dep’t of Treasury, 477 Mich. 170, 177 n 3; 730 NW2d 722
(2007) (quotation marks and emphasis omitted), citing Lansing Mayor v Pub Service Comm, 470
Mich. 154, 166; 680 NW2d 840 (2004); see also Alvan Motor Freight, Inc v Dep’t of Treasury,
281 Mich. App. 35, 39-40; 761 NW2d 269 (2008) (“A provision in a statute is ambiguous only if
it irreconcilably conflicts with another provision, or when it is equally susceptible to more than a
single meaning.” [Quotation marks omitted.]).
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v City of Grand Rapids, 399 Mich. 664, 682-683; 252 NW2d 747 (1977); Oberlies, 246 Mich
App at 429-430.
As such, we find that narrowly construing the word “issue” in the manner advocated by
defendant would thwart the purpose of the statute, which clearly seeks to address the problem of
all false academic credentials that affect the state of Michigan and its residents, not just the
academic credentials that are produced and physically sent out from a location in Michigan.
Defendant has misinterpreted the plain meaning of “issue,” in conjunction with “in this state,”
due to its reliance on statutes and court rules that are unrelated to the Act and the circumstances
of this case. See Book-Gilbert, 302 Mich. App. at 541-542.
Additionally, we are unpersuaded by defendant’s citation of other states’ statutes that
regulate similar conduct but include language that is distinct from that in MCL 390.1603 because
these statutes are inapposite and simply inapplicable in this case. However, we do note that the
statute cited by defendant with the language most similar to MCL 390.1603—Washington’s
RCW 9A.60.070—defines “issuing” in a manner that encompasses our construction of “issue” in
this case. In relevant part, that statute provides:
(1) A person is guilty of issuing a false academic credential if the person
knowingly:
(a) Grants or awards a false academic credential or offers to grant or award a false
academic credential in violation of this section;
(b) Represents that a credit earned or granted by the person in violation of this
section can be applied toward a credential offered by another person;
(c) Grants or offers to grant a credit for which a representation as described in (b)
of this subsection is made; or
(d) Solicits another person to seek a credential or to earn a credit the person
knows is offered in violation of this section. [RCW 9A.60.070(1).]
Furthermore, defendant relies on the legislative analysis of the bill before it was signed
into law, see House Legislative Analysis, HB 136, June 15, 2005, in order to argue that “[t]he
purpose of [MCL 390.1603] is to prohibit the formation of ‘diploma mills’ in the State of
Michigan.” “[L]egislative analyses are of very little value in reading a statute, [but] they have
some value to courts as casting light on the reasons that the Legislature may have had and the
meaning they intended for an act.” Cheboygan Sportsman Club v Cheboygan Co Prosecuting
Attorney, 307 Mich. App. 71, 81; 858 NW2d 751 (2014). However, “the language of the statute is
the best source for determining legislative intent.” Neal v Wilkes, 470 Mich. 661, 665; 685
NW2d 648 (2004).
While we look only to the language of a statute to determine legislative intent, it is
noteworthy that, contrary to defendant’s portrayal, the legislative analysis of the statute at issue
clearly indicates that the purpose of the Act is to prevent the existence and use of false academic
credentials in the state of Michigan. The analysis states that false academic credentials tend to
mislead the general public, jeopardize employers or other individuals who may rely on an
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individual’s false credentials, and may threaten the viability of legitimate distance learning
institutions. See House Legislative Analysis, HB 136, June 15, 2005. Moreover, contrary to
defendant’s contention, the analysis specifically references the lack of federal regulation and
leniency of other states’ laws that allow diploma mills to flourish, and it emphasizes the
proliferation of substandard or fraudulent institutions with the rise of the Internet. This supports
the conclusion that the bill was intended to address the effects in Michigan of false academic
credentials that are prepared by institutions outside of Michigan and issued in this state.
Thus, we agree with the trial court that defendant issued fraudulent educational
credentials in Michigan and violated MCL 390.1603 when it distributed false academic
credentials by mail to individuals in Michigan.
V. APPLICABILITY OF MCL 390.1605
Defendant next argues that the trial court erred in finding that plaintiff suffered damages
as a result of defendant’s actions. We disagree.
A. DAMAGE REQUIREMENT
MCL 390.1605 provides: “A person damaged by a violation of this act may bring a civil
action and may recover costs, reasonable attorney fees, and the greater of either the person’s
actual damages or $100,000.00.” As discussed supra, defendant’s conduct constituted the
issuance of false academic credentials under the Act. Likewise, plaintiff demonstrated that it
was damaged by defendant’s acts because it paid for fraudulent academic credentials and, based
upon those credentials, increased employee salaries.
Although defendant is correct that plaintiff’s employees are also a cause of plaintiff’s
loss, defendant points to no requirement under Michigan law that defendant must be the sole
cause of plaintiff’s loss in order for plaintiff to recover under the Act. Instead, the plain
language of the statute requires only that the plaintiff be “damaged by a violation of this act.”
Cf. Bobbitt v Academy of Court Reporting, Inc, 252 FRD 327, 341 (ED Mich, 2008) (concluding
that proof of reliance was not required to prove a claim of MCL 390.1603 because such an
element was not apparent from the text of the statute); see also Michigan Non-Standard Jury
Instructions Civil § 18:2. “[C]ourts may not read into the statute a requirement that the
Legislature has seen fit to omit. When the Legislature fails to address a concern in the statute
with a specific provision, the courts cannot insert a provision simply because it would have been
wise of the Legislature to do so to effect the statute’s purpose.” Book-Gilbert, 302 Mich. App. at
542 (quotation marks and citations omitted). Moreover, an individual’s act in using a false
academic credential to gain a promotion is governed by a separate statutory provision, i.e., MCL
390.1604, and there is no indication that both provisions cannot function harmoniously or cannot
both apply to a given situation. As such, we find no basis for concluding that other actors’ role
in damaging plaintiff precludes a finding of liability in this case.
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Accordingly, we reject defendant’s claim that the trial court erred in concluding that
plaintiff was damaged by defendant’s violation of the Act.4
B. UNCLEAN HANDS
Defendant also asserts that the trial court erroneously applied the doctrine of unclean
hands. In particular, it argues that it was entitled to assert that plaintiff waived its right to
damages because it knowingly accepted the fraudulent degrees from its employees and,
therefore, acted with unclean hands. We disagree.
One seeking the protection of an equitable defense must do so with clean hands, and “a
party who has acted in violation of the law is not before a court of equity with clean hands.”
Attorney Gen v PowerPick Club, 287 Mich. App. 13, 52; 783 NW2d 515 (2010) (quotation marks
and citation omitted). Here, defendant acted in violation of MCL 390.1603. Accordingly,
defendant was barred from raising an equitable defense against plaintiff because “[a] defendant
with unclean hands may not defend on the ground that the plaintiff has unclean hands as well.”
Id. at 53.
VI. STATUTE OF LIMITATIONS
Defendant next argues that plaintiff’s claim is barred by the statute of limitations and
doctrine of laches. We agree that the statute of limitations bars all but one of plaintiff’s claims.
A. STANDARD OF REVIEW
We “review de novo the question whether a claim is barred by the statute of limitations
and the issue of the proper interpretation and applicability of the limitations periods.” Stephens v
Worden Ins Agency, LLC, 307 Mich. App. 220, 227; 859 NW2d 723 (2014). Likewise, we review
de novo a trial court’s decision regarding whether to apply an equitable doctrine, such as laches.
Knight v Northpointe Bank, 300 Mich. App. 109, 113; 832 NW2d 439 (2013).
B. ANALYSIS
The Act does not contain its own statute of limitations. Therefore, plaintiff’s claims are
subject to the six-year statute of limitations found in MCL 600.5813. See Attorney General v
Harkins, 257 Mich. App. 564, 569; 669 NW2d 296 (2003).
4
We decline to address the additional issue raised by defendant regarding whether the trial court
erroneously granted summary disposition before discovery was completed because this issue was
not raised in the statement of questions presented. See MCR 7.212(C)(5) (requiring an appellant
to provide a concise statement of questions involved in the appeal); Bouverette v Westinghouse
Electric Corp, 245 Mich. App. 391, 404; 628 NW2d 86 (2001) (“Independent issues not raised in
the statement of questions presented are not properly presented for appellate review.”).
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Defendant contends that all of the violations of the Act except for one fall outside the
applicable six-year statute of limitation. Plaintiff filed its complaint on January 31, 2013. Thus,
to fall within the limitations period, the degrees in question must have been issued no earlier than
January 31, 2007. Plaintiff appears to concede that only one of the 11 degrees in question was
issued on or after January 31, 2007. The trial court, however, applied the “continuing violations
doctrine” to plaintiff’s claims, concluding that each of the 11 claims continued to accrue until
2009 when defendant issued the last degree to one of plaintiff’s employees. The trial court’s
application of the continuing violations doctrine was in error.
Under the doctrine, “[w]here a defendant’s wrongful acts are of a continuing nature, the
period of limitation will not run until the wrong is abated; therefore, a separate cause of action
can accrue each day that defendant’s tortious conduct continues.” Harkins, 257 Mich. App. at 572
(quotation marks and citation omitted; alteration in original). However, the Michigan Supreme
Court has held that the continuing violations doctrine is contrary to Michigan law and “has no
continued place in the jurisprudence of this state.” Garg v Macomb Co Community Mental
Health Servs, 472 Mich. 263, 284, 290; 696 NW2d 646 (2005). While Garg was a discrimination
case involving a three-year statute of limitations, “[t]he holding of Garg does not appear limited
to discrimination cases; rather, the Court applied the plain text of the limitations and accrual
statutes” in this state. Terlecki v Stewart, 278 Mich. App. 644, 655; 754 NW2d 899 (2008).
Thus, only one of plaintiff’s claims, that which occurred after January 31, 2007, is
allowed under the statute of limitations and the trial court erred in holding otherwise.
However, contrary to defendant’s position, the doctrine of laches does not bar this claim.
“The doctrine of laches is triggered by the plaintiff’s failure to do something that should have
been done under the circumstances or failure to claim or enforce a right at the proper time.”
PowerPick Club, 287 Mich. App. at 51. But, the doctrine only is “applicable in cases in which
there is an unexcused or unexplained delay in commencing an action and a corresponding change
of material condition that results in prejudice to a party.” Pub Health Dep’t v Rivergate Manor,
452 Mich. 495, 507; 550 NW2d 515 (1996); see also Tenneco Inc v Amerisure Mut Ins Co, 281
Mich. App. 429, 457; 761 NW2d 846 (2008) (“For laches to apply, inexcusable delay in bringing
suit must have resulted in prejudice.”). “The defendant has the burden of proving that the
plaintiff’s lack of due diligence resulted in some prejudice to the defendant.” Twp of Yankee
Springs v Fox, 264 Mich. App. 604, 612; 692 NW2d 728 (2004). The Michigan Supreme Court
previously stated that when a party files their claim within the relevant period of limitation, “any
delay in the filing of the complaint was presumptively reasonable, and the doctrine of laches is
simply inapplicable.” Michigan Ed Employees Mut Ins Co v Morris, 460 Mich. 180, 200; 596
NW2d 142 (1999). However, this Court has held that courts may apply the doctrine of laches to
bar actions at law, even when the statute of limitations established by the Legislature has not
expired. Tenneco, 281 Mich. App. at 457.
Here, defendant is not entitled to assert the equitable defense of laches because it came
before the trial court with unclean hands. PowerPick Club, 287 Mich. App. at 50-52.
Furthermore, defendant proffered no evidence in the trial court demonstrating prejudice related
to the filing of plaintiff’s remaining claim. See Rivergate Manor, 452 Mich. at 507. Defendant
argues that it was prejudiced because plaintiff was in the best position to inform defendant that
its degrees constituted false academic credentials under the Act after it was passed in 2005.
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Accordingly, defendant asserts that plaintiff’s failure to bring the issue to its attention and
continued acceptance of its degrees prevented defendant from taking action to prevent its alleged
violations of MCL 390.1603. However, defendant has cited no authority indicating that plaintiff
had an obligation to inform defendant that its conduct was illegal, and defendant’s arguments do
not demonstrate that plaintiff’s delay caused “a corresponding change of material condition that
result[ed] in prejudice to [defendant].” Rivergate Manor, 452 Mich. at 507 (emphasis added); see
also Twp of Yankee Springs, 264 Mich. App. at 612. Plaintiff’s delay in filing the claim in no way
prevented defendant from ceasing its illegal conduct or otherwise realizing that its issuance of
diplomas in Michigan violated the Act.
Thus, the trial court properly concluded that the doctrine of laches does not bar plaintiff’s
claim in this case.
VII. DORMANT COMMERCE CLAUSE
Defendant also asserts that MCL 390.1603, as applied, constitutes a violation of the
dormant Commerce Clause.5 Because defendant failed to raise this issue in the trial court, it is
not preserved for appeal. Ligon v City of Detroit, 276 Mich. App. 120, 129; 739 NW2d 900
(2007). Accordingly, we could decline to review this issue. See id.; Gilson v Dep’t of Treasury,
215 Mich. App. 43, 52; 544 NW2d 673 (1996) (declining to review the plaintiffs’ unpreserved
dormant Commerce Clause claim).
Nonetheless, defendant’s argument has no merit. Contrary to its speculative
hypotheticals, we find no basis for defendant’s conclusion that the statute “directly controls
commerce occurring wholly outside the boundaries of a State [and] exceeds the inherent limits of
the enacting State’s authority.” Am Beverage Ass'n v Snyder, 735 F3d 362, 373 (CA, 6)
(quotation marks omitted), quoting Healy v Beer Inst, Inc, 491 U.S. 324, 336; 109 S. Ct. 2491; 105
L. Ed. 2d 275 (1989). Additionally, under the relevant two-part inquiry, defendant does not
assert, and we discern no indication, that the statute “facially discriminates against interstate
commerce.” Wheeler v Charter Twp of Shelby, 265 Mich. App. 657, 668; 697 NW2d 180 (2005).
Finally, despite defendant’s tenuous speculation, we conclude that the statute “merely regulates
evenhandedly with only incidental effects upon interstate commerce,” and that there is no
indication that “the burden imposed on interstate commerce is clearly excessive in relation to the
putative local benefit.” Id. at 669 (quotation marks and citations omitted).
VIII. CONCLUSION
Defendant has failed to establish that the trial court’s exercise of jurisdiction was
erroneous. Additionally, the trial court properly concluded that defendant’s conduct constituted
5
The United States Constitution grants Congress the power to regulate commerce with foreign
nations and among the states. US Const, art III, § 8, cl 3. The dormant Commerce Clause is an
extension of the Commerce Clause, and it “prohibits state laws that discriminate against or
unduly burden interstate commerce.” Nat’l Wine & Spirits, Inc v State, 477 Mich. 1088, 1089;
729 NW2d 234 (2007) (MARKMAN, J., concurring).
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the issuance of false academic credentials in violation of the Act. However, the trial court erred
in holding defendant liable for the issuance of false academic credentials prior to January 31,
2007. Finally, we reject defendant’s argument that the Act violates the dormant Commerce
Clause.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion concerning the damages owed to plaintiff. We do not retain jurisdiction.
/s/ Michael J. Riordan
/s/ Patrick M. Meter
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