Source: https://casetext.com/case/yoost-v-caspari-2
Timestamp: 2019-04-19 12:42:14+00:00

Document:
Smietanka, Buckleitner, Steffes & Gezon (by Anne Buckleitner), Grandville, and Jones Day (by June K. Ghezzi, Brian J. Murray, and Erin Shencopp) for Hank Asher. Burdick & Engeln, P.C. (by Carl R. Burdick), Saint Joseph, and Hughes, Socol, Piers, Resnick & Dym, Ltd. (by José J. Behar, Juliet Berger–White, and Matthew J. Piers), for Irwin C. Zalcberg.
Before: OWENS, P.J., and MARKEY and METER, JJ.
Counterdefendant Hank Asher appeals by leave granted the trial court's order denying his motion for summary dispositionunder MCR 2.116(C)(1). He asserts that the trial court erred by ruling it that had limited jurisdiction over him under Michigan's long-arm statute, MCL 600.705(2), on the basis that defendant/counterplaintiff Irwin C. Zalcberg (Zalcberg) made a prima facie showing that Asher conspired with plaintiff, Wally Yoost, to commit the tort of abuse of process in Michigan. We reverse and remand for entry of an order granting Asher summary disposition.
Wally Yoost and Hank Asher are both citizens and residents of Florida. Zalcberg and defendants Patricia Caspari and Ellen Frankle are all residents of Michigan. Zalcberg is the sole shareholder and officer of Zalcberg Holdings, Inc., an Illinois corporation; he is in the business of trading equities and options from his home. Zalcberg employed Yoost from the fall of 1999 until early 2005. Yoost contends he worked as a trader and also provided estate management services for Zalcberg's wife, Sari. Zalcberg describes Yoost's employment as that of personal trainer, intern, and personal assistant. During Yoost's employment, Yoost met Patricia Caspari. They became romantically involved and began living together in 2001, in Michigan Shores, Indiana. Caspari often visited Yoost at Zalcberg's residence and became acquainted with Zalcberg. Yoost became acquainted with Lawrence Frankle, Zalcberg's personal friend, business partner, and legal counsel. Yoost claims that he often sought legal advice from Frankle.
In 2002, Zalcberg and Sari loaned Yoost $67,000, secured by a note and mortgage executed October 29, 2002, to purchase a house on Fogarty Street in Michigan City, Indiana. Also on October 29, 2002, Caspari quitclaimed any interest in the Fogarty property to Yoost. Yoost asserts that Frankle drafted the quitclaim deed as a means of protecting Yoost's interest in the property while he cohabitated with Caspari. Yoost and Caspari subsequently resided in the house on Fogarty Street and began making improvements.
Yoost alleges that in 2003 he informed Zalcberg that he was dissatisfied with his employment. Yoost asserts that Zalcberg enticed his continued employment by releasing him from any further obligations on the Fogarty property note and mortgage. Yoost continued working for Zalcberg and stopped making payments on the note and mortgage.
In 2004, Yoost and Caspari moved to Galien, Michigan, where they lived together. They rented out the Fogarty property. Yoost worked for Zalcberg until March 2005. Zalcberg filed for a divorce from Sari, who was suffering from terminal cancer, in March 2005; the divorce was final on March 28, 2006. Zalcberg contends that Asher, his former brother-in-law, harbored ill will against him since he filed for the divorce from Sari. Yoost and Caspari's relationship also ended in December 2005. Yoost subsequently moved to Florida and worked for Asher. In August 2006, Zalcberg began foreclosure proceedings on the Fogarty property in Indiana. Yoost defended the foreclosure action by asserting his claim that Zalcberg had forgiven the debt. Yoost also asserted other defenses, including that Zalcberg had failed to fulfill his oral promise to share certain trading profits with Yoost. See Yoost v. Zalcberg, 925 N.E.2d 763 (Ind.App., 2010). Yoost also attempted to assert a claim for trading profits in a suit for an accounting filed in Illinois against Zalcberg Holdings. That case was dismissed shortly after the instant case was initiated on the basis of forum non conveniensbecause the claim for profits concerned conduct that had occurred in Michigan and Indiana and could be joined to the already pending litigation in Indiana to which Zalcberg, the sole shareholder of Zalcberg Holdings, was a party.
Yoost filed the instant lawsuit against Caspari on April 8, 2008, alleging that she had attempted to extort a 50 percent interest in the Fogarty property by threatening to report Yoost to the IRS for not paying taxes on his income while working for Zalcberg. The complaint also alleged intentional infliction of emotional distress. After the discovery of numerous e-mails between Caspari and Zalcberg that suggested that Zalcberg and Frankle had encouraged Caspari's actions, Yoost was permitted to file an amended complaint adding Zalcberg and Frankle as defendants. By stipulation of the parties, Yoost filed a second amended complaint that substituted Ellen Frankle as the personal representative of the estate of Lawrence Frankle.
On January 28, 2009, Zalcberg filed a counterclaim in this case against Yoost and Asher alleging abuse of process and conspiracy to commit abuse of process. Zalcberg's counterclaim alleged, in part, that “Yoost and Asher agreed to join together in the concerted actions of Asher paying for and, on information and belief, directing a series of false and fraudulent legal claims filed in Yoost's name and against Zalcberg in the Indiana litigation for ulterior purposes ... including punishing, humiliating and embarrassing Zalcberg, extorting from him large sums of business profits,” and interfering with “a proper mortgage foreclosure action.” Zalcberg also alleged that Asher and Yoost had filed other lawsuits in Yoost's name in Illinois and Michigan for similar purposes and to intimidate witnesses favorable to Zalcberg and obtain discovery unavailable in Indiana. In this case, Zalcberg alleges that “Asher and Yoost, in Yoost's name,” assert “false and fabricated claims and seek [ ] grossly overreaching and irrelevant discovery.” With respect to discovery in the instant case, Zalcberg alleges that the trial court “denied [Yoost's] request to hold Zalcberg in contempt and entered a protective order denying the request for production of Zalcberg's trading and other business records.” Zalcberg alleged that the abuse of process caused him “financial losses, loss of business opportunities, and the expense of defending against fraudulent claims and abusive discovery.” Last, the counterclaim alleges that the actions of Asher and Yoost amounted to a civil conspiracy, resulting in the damages just described.
On May 29, 2009, Asher moved for summary disposition of Zalcberg's counterclaim pursuant to MCR 2.116(C)(1), asserting that the trial court lacked personal jurisdiction over him because he was a resident of Florida and had neither engaged in any business in Michigan nor had any qualifying contacts with the state. Asher further argued that the trial court could not exercise limited personal jurisdiction over him under Michigan's long-arm statute, MCL 600.705 and that Michigan's exercising jurisdiction over him would violate due process.
[I]f the allegations in the complaint are true, there is no doubt that Asher caused an act to be done and consequences to occur in Michigan resulting in an action in tort, if those allegations are true that he is using this law suit for ulterior motives.
Here there is some documentary evidence ... to support the position of Zalcberg that the motion should not be granted. And that's the deposition testimony of Yoost regarding Asher's payment of legal fees under what I might describe as curious circumstances and ... Yoost's lack of recall as to whether he even read the complaint that was filed in this case. And I believe that ... this testimony, as well as the testimony of Yoost, that he did discuss the details of the Indiana case with Asher could support an inference that Yoost in this case is the puppet and Asher is the puppeteer.
Moreover, with regard to the affidavit that Asher filed, and while I'm finding that even in the face of that affidavit there would be sufficient evidence in this case to deny the motion based on what I had previously said, I also find that the affidavit is defective.... [MCR] 2.119(B) governs the form of the affidavit. And it must affirmatively show that if sworn as a witness ... the affiant can competently testify to the facts set forth, and it also ... has to be made on personal knowledge. And it does not aver that and it does not aver that he can confidently [sic] testify to the facts set forth therein. So I think technically it's deficient. But even if it weren't I would deny the motion on the basis of what I have previously said.
As far as the due process ... is concerned, the allegation and the factual support inferences drawn there from are sufficient to invoke the Michigan long arm statute as I have previously ruled for limited personal jurisdiction and also it would overcome any due process arguments.
On November 6, 2009, this Court granted Asher's application for leave to appeal, limited to the issues raised in the application, which were whether the trial court had erred in ruling it had limited personal jurisdiction over Asher under Michigan's long-arm statute and, if so, whether the requirements of due process were satisfied. This Court also granted Asher's motion for a stay of discovery pending resolution of this appeal.
This Court reviews de novo a trial judge's decision on a motion for summary disposition. Dalley v. Dykema Gossett PLLC, 287 Mich.App. 296, 304, 788 N.W.2d 679 (2010). The legal question of whether a court possesses personal jurisdiction over a party is also reviewed de novo. W.H. Froh, Inc. v. Domanski, 252 Mich.App. 220, 225, 651 N.W.2d 470 (2002). This case also presents the legal question of whether the exercise of personal jurisdiction over a nonresident such as Asher is consistent with the notions of fair play and substantial justice required by the Due Process Clause of the Fourteenth Amendment, which we likewise review de novo. Jeffrey v. Rapid American Corp., 448 Mich. 178, 184–186, 529 N.W.2d 644 (1995).
The parties disagree regarding the standard of review applicable to Asher's renewed motion for summary disposition. Zalcberg notes that the trial court properly treated the renewed motion as one for reconsideration, which is reviewed for an abuse of discretion. Woods v. SLB Property Mgt., LLC, 277 Mich.App. 622, 629, 750 N.W.2d 228 (2008). “An abuse of discretion occurs when the decision results in an outcome falling outside the principled range of outcomes.” Woodard v. Custer, 476 Mich. 545, 557, 719 N.W.2d 842 (2006). But Asher argues that because the court's jurisdiction is at issue, we must review the renewed motion de novo. Jeffrey, 448 Mich. at 184, 529 N.W.2d 644. We agree that our review of the trial court's ultimate determination that it possessed limited personal jurisdiction over Asher is de novo.
Ordinarily, a trial court has discretion on a motion for reconsideration to decline to consider new legal theories or evidence that could have been presented when the motion was initially decided. MCR 2.119(F)(3); Woods, 277 Mich.App. at 629–630, 750 N.W.2d 228. But the trial court also has the discretion to give a litigant a “second chance” even if the motion for reconsideration presents nothing new. Hill v. City of Warren, 276 Mich.App. 299, 306–307, 740 N.W.2d 706 (2007); In re Moukalled Estate, 269 Mich.App. 708, 714, 714 N.W.2d 400 (2006). In this case, the trial court initially found that Asher's affidavit was defective, but indicated that even if it were not, the court would still rule that it had limited personal jurisdiction. At the hearing on the renewed motion, the trial court again ruled that Asher's corrected affidavit was insufficient because Asher “merely rehashes what I ruled on before.” Likewise, the trial court considered but rejected Yoost's affidavit, not only because it was untimely, but also because the court determined that its substance merely attempted to contradict Yoost's deposition testimony. Because the trial court considered the affidavits in making its ruling, we include them in our review de novo of the trial court's ultimate determination that it possessed limited personal jurisdiction over Asher.
Moreover, the question presented is jurisdictional and of constitutional magnitude. “[A] court is continuallyobliged to question sua sponte its own jurisdiction over a person, the subject matter of an action, or the limits of the relief it may afford....” Yee v. Shiawassee Co. Bd. of Comm'rs, 251 Mich.App. 379, 399, 651 N.W.2d 756 (2002). “Before a court may obligate a party to comply with its orders, the court must have in personam jurisdiction over the party.” Oberlies v. Searchmont Resort, Inc., 246 Mich.App. 424, 427, 633 N.W.2d 408 (2001). In light of the importance of the issue, to the extent that the trial court failed to consider the affidavits of Asher and Yoost in rendering its jurisdictional ruling, MCR 2.116(G)(5)—even though they were filed with a motion for reconsideration—we conclude that the trial court abused its discretion.
Williams and Mozdy are both cited by our Supreme Court in Jeffrey, 448 Mich. at 184, 529 N.W.2d 644, when discussing the appropriate standard of review of jurisdictional issues.
When examining whether a Michigan court may exercise limited personal jurisdiction over a defendant, this Court employs a two-step analysis. Jeffrey, 448 Mich. at 184–185, 529 N.W.2d 644;Domanski, 252 Mich.App. at 226, 651 N.W.2d 470. “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.” Electrolines, Inc. v. Prudential Assurance Co., Ltd., 260 Mich.App. 144, 167, 677 N.W.2d 874 (2003) (citations omitted). Both prongs of this analysis must be satisfied for a Michigan court to properly exercise limited personal jurisdiction over a nonresident. See Green v. Wilson, 455 Mich. 342, 350–351, 565 N.W.2d 813 (1997) (Kelly, J.); id. at 361, 565 N.W.2d 813 (Mallett, C.J.). “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.” Id. at 348, 565 N.W.2d 813.
First, the defendant must have purposefully availed itself 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 defendant reasonable.
In the present case, we need not consider whether the exercise of limited personal jurisdiction over Asher comports with due process because we conclude that Zalcberg failed to establish a prima facie case against Asher that satisfied MCL 600.705. Consequently, the trial court erred by not granting Asher's motion for summary disposition under MCR 2.116(C)(1).
(2) The doing or causing an act to be done, or consequences to occur, in the state resulting in an action for tort.
The trial court's ruling that Zalcberg's counterclaim satisfied MCL 600.705(2) was based on two premises: (1) Zalcberg's counterclaim alleged a prima facie case that Yoost committed the tort of abuse of process in Michigan and (2) there was evidence to support an inference that Asher controlled this litigation through Yoost, i.e., in the trial court's words, that “Yoost in this case is the puppet and Asher is the puppeteer.” Our review de novo of the pleadings and evidence submitted by the parties convinces us that Zalcberg failed to establish a prima facie case that Asher committed the tort of abuse of process in Michigan. Moreover, Zalcberg failed to present evidence to establish a prima facie case that Asher directed, controlled, or conspired with Yoost regarding this litigation or its conduct.
Zalcberg failed to establish a prima facie case that Asher conspired with Yoost to do an act, or otherwise caused “an act to be done, or consequences to occur,” in Michigan resulting in an action for tort. MCL 600.705(2).
We note there is no civil action for conspiracy alone; there must be an underlying actionable tort. Earp v. Detroit, 16 Mich.App. 271, 275, 167 N.W.2d 841 (1969).
Under the “conspiracy theory” of jurisdiction, a conspirator not within the forum state may nevertheless be subject to the jurisdiction of the forum state on the basis of the acts a coconspirator committed there. Chrysler Corp. v. Fedders Corp., 643 F.2d 1229, 1236–1237 (C.A.6, 1981). The rationale for this rule is that when one member of a conspiracy “inflicts an actionable wrong in one jurisdiction, the other member should not be allowed to escape being sued there by hiding in another jurisdiction.” Stauffacher v. Bennett, 969 F.2d 455, 459 (C.A.7, 1992). But mere allegations that a conspiracy exists between the defendant and another over whom the court has jurisdiction are insufficient. Id. at 460;Chrysler Corp., 643 F.2d at 1236–1237. Rather, evidence or facts must support the allegations of conspiracy. Chrysler Corp., 643 F.2d at 1236–1237;Ecclesiastical Order of the Ism of Am, Inc. v. Chasin, 845 F.2d 113, 116 (C.A.6, 1988); Coronet Dev. Co. v. F.S.W., Inc., 3 Mich.App. 364, 369, 142 N.W.2d 499 (1966).
In this case, Asher in his affidavits denied Zalcberg's allegations of conspiring with Yoost and also denied directing this litigation. Yoost also averred that he “voluntarily brought the causes of action against Zalcberg and Caspari” and that “Asher did not tell me to start this lawsuit, and did not tell me to add Zalcberg as a defendant.” Because Zalcberg's allegations that Asher conspired by Yoost or directed this lawsuit were contradicted by evidence, Zalcberg was required to produce evidence to establish a prima facie case that Asher, in fact, conspired with Yoost or otherwise directed this litigation in order to meet his burden of establishing limited personal jurisdiction under MCL 600.705(2). Jeffrey, 448 Mich. at 184, 529 N.W.2d 644;Mozdy, 197 Mich.App. at 361, 494 N.W.2d 866.
Even if one paragraph of Yoost's affidavit attempted to contradict his deposition testimony, the remaining parts of the affidavit are not thereby invalidated. Further, remembering a fact at a later time does not contradict earlier lack of recall. It may, however, affect credibility.
A “prima facie case” is defined in Black's Law Dictionary (5th ed.) as “ ‘one that will entitle [a] party to recover if no evidence to contrary is offered by [the] opposite party.’ ” Dep't of Environmental Quality v. Worth Twp., 289 Mich.App. 414, 419, 808 N.W.2d 260 (2010). Similarly, our Supreme Court has defined a prima facie case as “ ‘[a] case made out by proper and sufficient testimony; one which is established by sufficient evidence, and can be overthrown only by rebutting evidence adduced on the other side.’ ” People v. Licavoli, 264 Mich. 643, 653, 250 N.W. 520 (1933) (citations omitted). “Prima facie evidence” is defined as “ ‘[e]vidence good and sufficient on its face ... to establish a given fact, or the group or chain of facts constituting the party's claim or defense, and which if not rebutted or contradicted, will remain sufficient.’ ” Worth Twp., 289 Mich.App. at 419, 808 N.W.2d 260, quoting Black's Law Dictionary (5th ed.).
While Asher and Yoost submitted affidavits contradicting Zalcberg's claims regarding Asher's directing this litigation, factual disputes must be resolved in Zalcberg's favor on Asher's motion for summary disposition under MCR 2.116(C)(1). Jeffrey, 448 Mich. at 184, 529 N.W.2d 644. Zalcberg need only present evidence sufficient to establish prima facie his jurisdictional claims “ ‘notwithstanding the contrary presentation by the moving party.’ ” Williams, 927 F.2d at 1131, quoting Behagen, 744 F.2d at 733. A party may establish a case with circumstantial evidence. Karbel v. Comerica Bank, 247 Mich.App. 90, 97, 635 N.W.2d 69 (2001). And a prima facie case may be established using reasonable inferences provided sufficient evidence is introduced to take the inferences out of the realm of conjecture. Berryman v. K Mart Corp., 193 Mich.App. 88, 92, 483 N.W.2d 642 (1992).
Here, multiple explanations exist for the facts the trial court relied on to assert jurisdiction. Evidence is simply lacking to establish “a logical sequence of cause and effect” to reach the conclusion that Asher controlled this litigation through Yoost to the extent that “Yoost in this case is the puppet and Asher is the puppeteer.” Rather, this conclusion is reached only through speculation and conjecture, which are insufficient to establish a prima facie case for limited personal jurisdiction over Asher. Jeffrey, 448 Mich. at 184, 529 N.W.2d 644; see Berryman, 193 Mich.App. at 92, 483 N.W.2d 642.
In the trial court, Zalcberg asserted that the exercise of limited personal jurisdiction over Asher was also proper under MCL 600.705(1) for actions “arising out of” the “transaction of any business within the state.” The trial court rejected this basis for asserting jurisdiction because “payment of the legal fees, which may ultimately go to lawyers in Michigan who represent Yoost, is not a sufficient tie to Michigan to cause the defendant Asher to submit himself to the jurisdiction of this state.” Zalcberg did not file a cross-appeal regarding the trial court's rejection of this basis for long-arm jurisdiction. When leave to appeal is granted, unless the Court directs otherwise, the appeal is limited to the issues raised in the application. MCR 7.205(D)(4); Detroit Free Press, Inc. v. Southfield, 269 Mich.App. 275, 290, 713 N.W.2d 28 (2005). Zalcberg, however, asserts that MCL 600.705(1) provides an alternative basis for affirming the trial court. See Middlebrooks v. Wayne Co., 446 Mich. 151, 166 n. 41, 521 N.W.2d 774 (1994). We conclude that the trial court correctly ruled that MCL 600.705(1) does not provide a basis for limited personal jurisdiction over Asher.
The word “any” within the statute has been interpreted to “include[ ] ‘each’ and ‘every.’ It comprehends ‘the slightest.’ ” Sifers v. Horen, 385 Mich. 195, 199 n. 2, 188 N.W.2d 623 (1971) (citations omitted). In Sifers, the Michigan plaintiff negotiated for the services of a Kentucky attorney, while the attorney was in Michigan, to bring a lawsuit in Kentucky. The plaintiff later sued the Kentucky attorney in Michigan for malpractice. The Sifers Court held that the negotiations in Michigan resulting in the defendant's retainer were within the meaning of the transaction of any business. Id. at 199, 188 N.W.2d 623.
In Alan B. McPheron, Inc. v. Koning, 125 Mich.App. 325, 336 N.W.2d 474 (1983), the defendant Michigan resident sent his agent to Oklahoma to sell an airplane. When the sales negotiations broke down, the agent tried to take the plane back to Michigan but was arrested. The defendant then hired the plaintiff, an Oklahoma attorney, to represent the defendant's agent. When the defendant failed to pay for all the legal services provided, the plaintiff obtained a default judgment against him in Oklahoma and sought to enforce the judgment in Michigan. Id., at 327–328, 336 N.W.2d 474. This Court held that because the defendant sought and contracted for the plaintiff's services to be performed in Oklahoma, “it is reasonable to conclude that he ought to have been prepared to travel to Oklahoma to challenge these services if he felt they were rendered improperly.” Id. at 331, 336 N.W.2d 474. This Court opined that the Oklahoma court had properly exercised jurisdiction over the defendant under its long-arm statute, which was similar to MCL 600.705(1), and that due process was also satisfied. Id. at 331–334, 336 N.W.2d 474.
Sifers and McPheron are the main cases on which Zalcberg relies for his alternative argument that the trial court's jurisdictional ruling should be affirmed under MCL 600.705(1). We find each case clearly distinguishable from the facts as established by the evidence submitted on Asher's motion for summary disposition. In each case, a resident of one state contracted with an attorney in another state for legal services. In each case, the subsequent legal action arose out of the contract for legal services and was by or against the attorney who had performed the legal services. In this case, there is no evidence that Asher contracted for the services of any attorney to represent Yoost in Michigan. Although Asher admits making payments on Yoost's legal fees outside Michigan, Asher avers that he did not contract for the services and did not control the litigation. Additionally, Zalcberg's counterclaim is not an action between the parties to the legal services contract as in Sifers and McPheron. Finally, for the reasons stated in part III(A) of this opinion, even if this litigationconstitutes the “transaction of any business within the state,” there was no prima facie evidence that Asher controlled or directed the litigation to permit the trial court to exercise limited personal jurisdiction over Asher under MCL 600.705(1). Consequently, we conclude the trial court correctly ruled that this subsection did not authorize it to exercise limited personal jurisdiction over Asher.
For these reasons, we conclude that the trial court erred by that ruling it could exercise limited personal jurisdiction over Asher under MCL 600.705(2). We also conclude that MCL 600.705(1) does not provide an alternative basis to affirm the trial court's jurisdictional ruling. Because Zalcberg did not establish a prima facie case for the exercise of limited personal jurisdiction over Asher under MCL 600.705, the trial court erred by not granting his motion for summary disposition under MCR 2.116(C)(1). Also, because Michigan's long-arm statute has not been satisfied, we need not consider whether the exercise of limited personal jurisdiction over Asher comports with the requirements of due process. See Jeffrey, 448 Mich. at 184–185, 529 N.W.2d 644;Oberlies, 246 Mich.App. at 427–428, 432, 633 N.W.2d 408. We therefore reverse and remand this matter for entry of an order granting Asher summary disposition. We do not retain jurisdiction. As the prevailing party, Asher may tax costs pursuant to MCR 7.219.
OWENS, P.J., and MARKEY and METER, JJ., concurred.

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