Court Opinion

ID: 4115240
Source: CourtListenerOpinion
Date Created: 2017-01-12 08:09:22.424853+00
Date Added: 2024-06-11T14:37:22.390748
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

FIVE BROTHERS MORTGAGE COMPANY                                      UNPUBLISHED
SERVICES & SECURING, INC.,                                          January 10, 2017

               Plaintiff-Appellee,

v                                                                   No. 329888
                                                                    Macomb Circuit Court
THE MCCUE MORTGAGE COMPANY,                                         LC No. 2015-000340-CB

               Defendant-Appellant.

Before: BOONSTRA, P.J., and CAVANAGH and K. F. KELLY, JJ.

PER CURIAM.

       Defendant appeals by leave granted1 the trial court’s order denying defendant’s motion
for summary disposition under MCR 2.116(C)(1) (lack of personal jurisdiction). We reverse and
remand for entry of an order granting defendant’s motion.

                   I. PERTINENT FACTS AND PROCEDURAL HISTORY

        Plaintiff is a Michigan corporation with its registered office located in Macomb County.
Defendant is a Connecticut corporation that has no offices, employees, or agents in Michigan. In
its complaint, plaintiff asserted that “upon information and belief,” defendant “originates and/or
services loans in Macomb County, Michigan” and that the parties entered into a contract on
April 14, 2011, for plaintiff to “provide property preservation field services and inspections” for
properties that defendant was servicing or for which it was acting as a mortgagee. Plaintiff
alleged that it fully performed its duties under the contract, but that defendant had not paid
plaintiff $230,493.84 owed for services rendered, despite requests for payment. Plaintiff also
alleged that it had loaned defendant $75,177.04 to cover the principal balance owed on a HUD
property, for which defendant had not reimbursed plaintiff. Plaintiff alleged two breach of

1
  Five Brothers Mortgage Co v The McCue Mortgage Co, unpublished order of the Court of
Appeals, entered December 18, 2015 (Docket No. 329888, Event No. 21. This Court’s order
also granted the motions for immediate consideration, to waive the transcript production
requirement of MCR 7.209, and to stay further proceedings pending resolution of the appeal or
further order of this Court.

                                                -1-
contract claims, one for an account stated and one for money advanced, and requested money
judgments for the amounts owed, plus interests, costs, and attorney fees.

        In its first responsive pleading, defendant moved for summary disposition pursuant to
MCR 2.116(C)(1) (lack of personal jurisdiction), arguing that it was not subject to the personal
jurisdiction of the trial court. Defendant argued that it did not conduct business in the state of
Michigan and had not consented to jurisdiction in Michigan. Further, the negotiations for the
contract in question occurred in Texas and Connecticut, and defendant executed the contract in
Connecticut. Defendant further stated that it had no contacts with Michigan and denied that it
had ever originated or serviced any loans, or conducted any business, in the state. Defendant
contended that all of the properties for which plaintiff provided services to defendant, and which
could possibly be the basis for any dispute between plaintiff and defendant, were located in the
state of Connecticut. Defendant argued that there was no basis to establish long-arm jurisdiction
under Michigan’s long-arm statute, MCL 600.715, and that exercising personal jurisdiction
against it would violate the Due Process Clause of the Fourteenth Amendment because
defendant’s only contacts with Michigan were phone calls, letters, or emails with plaintiff that
were insufficient to establish the necessary minimum contacts with the state.

        In support of its motion, defendant submitted the affidavit of Katherine McCue Scierka,
defendant’s executive vice president, who attested that she first came into contact with plaintiff
at a Mortgage Bankers Association conference in Dallas, Texas, in February 2011. According to
Scierka, plaintiff was a vendor at the conference and was giving away an iPad through a raffle,
and she was selected as the winner of the giveaway. Consequently, plaintiff’s president, Joe
Badalamenti, flew to Connecticut to deliver the iPad to Scierka at her office. Scierka agreed to a
sales meeting regarding plaintiff’s services wherein plaintiff stated that it was a Federal Housing
Administration (FHA) compliant vendor in Connecticut, and defendant shortly thereafter hired
plaintiff to do property preservation work on properties. Scierka’s affidavit also stated that
defendant only originated and serviced loans in Connecticut.

        In its response to defendant’s motion, plaintiff replied that it was based in Michigan, but
provided inspection, preservation, and maintenance services for property throughout the United
States on which the mortgagor was delinquent or had defaulted. Plaintiff subcontracted all of the
work to independent contractors in the vicinity of the property and did not actually perform any
of the work itself. Plaintiff argued that it entered into a “Contract for Field Services and
Inspections” with defendant in April 2011. Although the contract was for one year, the parties
continued working under the agreement until May 2014 when defendant sent a letter to plaintiff
terminating the contract. Plaintiff maintained that, although it had provided services on
numerous properties for defendant, defendant failed to pay all that was owed under the contract.
In addition, plaintiff asserted that, at defendant’s request, it had loaned defendant additional
funds in July 2013 that had not been repaid. Plaintiff indicated that the loan was paid from its
bank account in Michigan, and that defendant had made payments to plaintiff in Michigan.

       Plaintiff argued that the trial court could exercise limited personal jurisdiction over
defendant because of its “transaction of any business within the state” under MCL 600.715(1).
According to plaintiff, the parties’ agreement was negotiated and executed through emails sent
back and forth between Michigan and Connecticut, and their contract called for plaintiff, a
Michigan company, to provide services to defendant on an ongoing basis, and for defendant to

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pay plaintiff in Michigan for those services. Plaintiff maintained that defendant contacted
plaintiff numerous times in Michigan, either through email or an Internet portal maintained by
plaintiff, regarding which properties were to be serviced, and that defendant sent to plaintiff, in
Michigan, monthly spreadsheets regarding the work.

        With its response plaintiff submitted a copy of the contract between the parties, the
May 14, 2014 letter from defendant to plaintiff terminating the contract, an affidavit of account
by plaintiff’s accounting department employee, Jeff Sandora, indicating the amounts owed to
plaintiff by defendant under the contract and the remaining balance on the loan, accounts
receivable reports, and documentation regarding the loan from plaintiff to defendant.

        In its reply brief, defendant argued that what plaintiff characterized as a “loan” was
covered by the parties’ contract, and thus was not a separate transaction. Further, in issuing a
check to defendant (for what plaintiff characterizes as a loan), plaintiff made reference to
“reimbursement” and was actually fulfilling its indemnification obligation under the party’s
contract. Defendant further argued that the mere issuance of a check by a Michigan corporation
does not suffice for a Michigan court to take jurisdiction over the recipient of that check.
According to defendant, the Sandora affidavit addressed only financial and accounting issues and
made no allegations that affected the personal jurisdiction analysis. By contrast, Scierka’s
affidavit was evidence of defendant’s non-availment of the Michigan market and had not been
refuted by plaintiff. Defendant further maintained that plaintiff’s allegations concerning the
contract’s negotiation and execution were not supported by any documentary evidence, such as
copies of the alleged emails, and thus did not refute Scierka’s testimony that the contract was
negotiated in Texas and Connecticut and executed in Connecticut. Furthermore, the parties’
contract, which was a standard form contract drafted by plaintiff, did not contain a forum clause.

        Following oral arguments,2 the trial court entered an opinion and order denying
defendant’s motion for summary disposition. The trial court noted this Court’s decision in
Oberlies v Searchmont Resort, Inc, 246 Mich. App. 424, 430; 633 NW2d 408 (2001), holding that
even the “slightest transaction” of business is enough to find that the state court has limited
personal jurisdiction over a nonresident corporation under MCL 600.715(1) and that “the only
real limitation placed on this long arm statute is the due process clause.” Without further
analysis, the trial court proceeded to address whether due process would be offended by the
court’s assertion of personal jurisdiction over defendant. Citing Salom Enterprises, LLC v TS
Trim Indus, Inc, 464 F Supp 2d 676 (ED Mich, 2006), the court noted that, “as in Salom,”
defendant negotiated with plaintiff, knowing that plaintiff was based in Michigan, as evidenced
by plaintiff’s address appearing in the first paragraph of the contract, and made payments to
plaintiff in Michigan. The court found that these actions were sufficient contacts to establish that
defendant “purposely availed itself of the privilege of conducting activities in Michigan.” The

2
  During oral arguments, defendant’s attorney revealed that defendant had sued plaintiff for
claims arising from the same contract in federal district court in Connecticut based on diversity.
In that suit, plaintiff apparently filed a counterclaim raising the identical claims alleged in the
instant case.

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court further found that plaintiff’s claims arose “from [d]efendant’s alleged failure to comply
with the terms of the contract it formed with a Michigan corporation, and pursuant to which it
performed for a prolonged period of time.” Finally, the court determined that the burden
imposed on defendant as a result of being forced to litigate in Michigan was “reasonable” and
that Michigan “has an interest in adjudicating the claims of the entities organized under its laws.”
Thus, the court found that exercising jurisdiction over defendant in this action was reasonable
and satisfied due process. Defendant’s motion for reconsideration was denied, and this appeal
followed.

                                  II. STANDARD OF REVIEW

        This Court reviews de novo a trial court’s decision on a motion for summary disposition.
Dalley v Dykema Gossett, PLLC, 287 Mich. App. 296, 304; 788 NW2d 679 (2010). When
reviewing a decision on a motion for summary disposition brought under MCR 2.116(C)(1), the
trial court and appellate courts consider the pleadings and documentary evidence submitted by
the parties in a light most favorable to the nonmoving party. MCR 2.116(G)(5); Yoost v Caspari,
295 Mich. App. 209, 221; 813 NW2d 783 (2012). In defending against a motion for summary
disposition under 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.’ ” Id., quoting Jeffrey v Rapid American Corp, 448
Mich. 178, 184; 529 NW2d 644 (1995). “The plaintiff’s complaint must be accepted as true
unless specifically contradicted by affidavits or other evidence submitted by the parties.” Yoost,
295 Mich. App. at 221. “[W]hen 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., citing MCR2.116(G)(6). “If the parties
present conflicting affidavits, all factual disputes are resolved in the plaintiff’s favor, and the
plaintiff’s prima facie showing is sufficient notwithstanding the contrary presentation by the
moving party.” Yoost, 295 Mich. App. at 222 (quotation and citations omitted).

        This Court’s review of jurisdictional issues is also de novo. In re Dorsey, 306 Mich. App.
571, 580; 858 NW2d 84 (2014), lv app held in abeyance ___ Mich ___; 872 NW2d 489 (2015).
Whether a court possesses personal jurisdiction over a party is a legal question, which is also
reviewed de novo. Yoost, 295 Mich. App. at 219. Likewise, whether the exercise of personal
jurisdiction over a nonresident is consistent with notions of fair play and substantial justice as
required by the Due Process Clause of the Fourteenth Amendment is subject to de novo review.
Id. To the extent the resolution of this appeal involves the interpretation of a statute, this Court’s
review is also de novo. Glenn v TPI Petroleum, Inc (After Remand), 305 Mich. App. 698, 702;
854 NW2d 509 (2014).

                                          III. ANALYSIS

                           A. MICHIGAN’S LONG ARM STATUTE

       Courts may have general or limited personal jurisdiction over a corporate defendant,
depending on the nature of the relationship between the corporation or its agent and the forum
state. “The exercise of general jurisdiction is possible when a defendant’s contacts with the
forum state are of such nature and quality as to enable a court to adjudicate an action against the

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defendant, even when the claim at issue does not arise out of the contacts with the forum state.”
Electrolines, Inc v Prudential Assurance Co, Ltd, 260 Mich. App. 144, 166; 677 NW2d 874
(2003). MCL 600.711 describes three relationships that “constitute a sufficient basis of
jurisdiction” such that courts of record can “exercise general personal jurisdiction over the
corporation” and are enabled to “render personal judgments against the corporation.” Those
relationships are: (1) incorporation under the laws of the state; (2) consent; and (3) the “carrying
on of a continuous and systematic part of its general business within the state.” It is undisputed
that none of these subsections describe defendant’s relationship with Michigan. Therefore, the
trial court could not exercise general personal jurisdiction over defendant.

        “When a defendant’s contacts with the forum state are insufficient to confer general
jurisdiction, jurisdiction may be based on the defendant’s specific acts or contacts with the forum
state.” Electrolines, 260 Mich. App. at 166. A state court may exercise limited personal
jurisdiction over an out-of-state corporation if two requirements are established. Jeffrey, 448
Mich. at 186. First, the corporate defendant must come within the described relationships in the
state’s long-arm statute, MCL 600.715. Id. at 185. “Long-arm statutes establish the nature,
character, and types of contacts that must exist for purposes of exercising personal jurisdiction.”
Yoost, 295 Mich. App. at 222 (quotation and citation omitted). Next, the court must determine
that the exercise of limited personal jurisdiction over the defendant does not violate the Due
Process Clause of the Fourteenth Amendment. Starbrite Distrib, Inc v Excelda Mfg Co, 454
Mich. 302, 304; 562 NW2d 640 (1997). The due process analysis “restricts permissible long-arm
jurisdiction by defining the quality of contacts necessary to justify personal jurisdiction under the
constitution.” Yoost, 295 Mich. App. at 322-323 (quotation and citation omitted). “Both prongs
of this analysis must be satisfied for a Michigan court to properly exercise limited personal
jurisdiction over a nonresident.” Id. at 322.

       The trial court found that it had limited personal jurisdiction under MCL 600.715(1),
which provides in relevant part:

               The existence of any of the following relationships between a corporation
       or its agent and the state shall constitute a sufficient basis of jurisdiction to enable
       the courts of record of this state to exercise limited personal jurisdiction over such
       corporation and to enable such courts to render personal judgments against such
       corporation arising out of the act or acts which create any of the following
       relationships:

               (1) The transaction of any business within the state.

In Oberlies, 246 Mich. App. at 430, this Court noted that the phrase “transaction of any business”
is not defined in the long-arm statute, and it is therefore proper to rely on dictionary definitions
to determine its meaning. The Oberlies Court further stated:

       “Transact” is defined as “to carry on or conduct (business, negotiations, etc.) to a
       conclusion or settlement.” Random House Webster’s College Dictionary (1997).
       “Business” is defined as “an occupation, profession, or trade . . . the purchase and
       sale of goods in an attempt to make a profit.” Id. Our Legislature’s use of the
       word “any” to define the amount of business that must be transacted establishes

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       that even the slightest transaction is sufficient to bring a corporation within
       Michigan’s long-arm jurisdiction. . . . The only real limitation placed on this
       [long arm] statute is the due process clause. [Quotations and citation omitted.]

         Defendant argues that plaintiff did not come forward with any admissible evidence to
refute the Scierka affidavit, and thus did not establish a prima facie case for the exercise of
personal jurisdiction. The trial court did not address the quantum of evidence sufficient to
establish a prima facie case under the statute, noting instead that this Court had stated in Oberlies
that “the only real limitation placed on this long arm statute is the due process clause.” Thus,
without addressing the evidence in this case with regard to whether it was sufficient to establish
limited jurisdiction under MCL 600.715(1), the court proceeded to consider whether the
evidence was sufficient to withstand the due process analysis. Defendant argues this was
erroneous and that plaintiff’s failure to come forward with any documentary evidence to support
its jurisdictional allegation that defendant originated or serviced mortgage loans in Michigan,
and to defeat the Scierka affidavit’s attestation that defendant did not transact business in
Michigan, should have resulted in the trial court’s granting of its motion. See Glenn, 305 Mich
App at 704-705 (“[The defendant] came forward with documentary evidence to dispute
plaintiffs’ allegations, but the trial court incorrectly continued to construe the allegations in
plaintiffs’ pleadings as true.”)

        However, defendant’s argument ignores the second jurisdictional allegation made by
plaintiff, i.e. that the parties entered into a contract on April 14, 2011, for plaintiff to provide
field services and inspections to defendant on properties it serviced. Plaintiff alleged that it had
performed under the contract, but that defendant had failed to make all of the payments that were
due. Plaintiff further alleged the existence of a loan from plaintiff to defendant that had not been
repaid. Attached to the complaint was a copy of the contract, which contained in the first
paragraph plaintiff’s address in Warren, Michigan, and an affidavit from its employee, Sandora,
that plaintiff was owed the sums alleged in the complaint. In its motion for summary disposition,
defendant did not deny the existence of this contract or the money owed, and it therefore
constituted unrefuted evidence of the transaction of some business between the parties.
Defendant also acknowledged that, pursuant to the performance of the contract, it had
communications with plaintiff that included telephone calls, letters, or emails directed to
Michigan. In its response to defendant’s motion, plaintiff noted that the original one-year
contract had continued through ongoing performance for approximately three years. During that
time, the parties had entered into an additional transaction, characterized by plaintiff as a loan
and by defendant as performance under the original contract, that involved plaintiff sending a
check, drawn on its Michigan bank account, and emails from Michigan to defendant in
Connecticut. Plaintiff expected payment on the original contract and on the loan to be made to it
in Michigan.

        Although it is a close question whether the evidence was sufficient to satisfy the statutory
standard of “[t]he transaction of any business within the state,” this Court has said that “the only
real limitation placed on this long arm statute is the due process clause.” Oberlies, 248 Mich
App at 430. In Aaronson v Lindsay & Hauer Int’l, Ltd, 235 Mich. App. 259, 263; 597 NW2d 227
(1999), this Court considered the exercise of limited personal jurisdiction under
MCL 600.715(1), and noted:

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       In Sifers v Horen, 385 Mich. 195; 188 NW2d 623 (1971), the Michigan Supreme
       Court observed that as used in subsection 1 of the long-arm statute, the term
       “‘any’ means just what it says. It includes ‘each’ and ‘every’ [business
       transaction].” Id. at 199, n 2. “Thus,” this Court has noted, “the Supreme Court
       interpreted [the long-arm statute] to its full potential.” Kiefer v May, 46 Mich
       App 566, 571; 208 NW2d 539 (1973).

“[T]he breadth of the reach afforded by the long-arm statute is extended ‘to the farthest limits
permitted by due process,’ Sifers, 385 Mich. at 199.” Aaronson, 235 Mich. App. at 263, n 1.
Therefore, we conclude that defendant’s performance under the contract, and its communication
with and submission of payments to plaintiff in Michigan, is sufficient to satisfy
MCL 600.715(1). We thus proceed to the second step of the analysis

                                       B. DUE PROCESS

        Concerning due process, an out-of-state defendant must “have certain minimum contacts
with [the forum state] such that the maintenance of the suit does not offend traditional notions of
fair play and substantial justice” in order to subject the defendant to personal jurisdiction. Int’l
Shoe Co v Washington, 326 U.S. 310, 316; 66 S. Ct. 154; 90 L. Ed. 95 (1945) (citation and quotation
marks omitted). In Jeffrey, 448 Mich. at 185-186, this Court observed:

       The requirement of minimum contacts serves two purposes: (1) it protects a
       defendant from litigating in distant or inconvenient forums, and (2) it ensures that
       a state does not extend its judicial power beyond the limits imposed on all states
       by our federal system of government. Of the two, however, the overriding
       purpose of due process is to protect the individual liberty interests encompassed
       within its scope as opposed to furthering concepts of federalism. Nevertheless,
       both purposes work in tandem to give our legal system a degree of predictability
       that provides potential defendants with the opportunity to structure their affairs so
       as to provide some assurance regarding where they may be haled into court.
       [Citations omitted.]

“Because personal jurisdiction primarily depends on ‘reasonableness’ and ‘fairness,’ each case
must turn on its own merits.” W H Froh, Inc v Domanski, 252 Mich. App. 220, 228; 651 NW2d
470 (2002), quoting Jeffrey, 448 Mich. at 186. “When undertaking a due process analysis case by
case, a court should examine the defendant’s own conduct and connection with the forum to
determine whether the defendant should reasonably anticipate being haled into court there.” Id.
at 230.

        This Court has established a three-part test to be used in determining if the exercise of
limited personal jurisdiction comports with the Due Process Clause.

               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

                                                -7-
       connected with Michigan to make the exercise of jurisdiction over the defendant
       reasonable. [Mozdy v Lopez, 197 Mich. App. 356, 359; 494 NW2d 866 (1992).]

        The first prong of the due process analysis entails the defendant “reaching beyond his
own state” and “purposefully availing himself of the privilege of exploiting the other state’s
business opportunities.” W H Froh, 252 Mich. App. at 231. The United States Supreme Court
has stated that “purposeful availment” may be found if the defendant’s contacts with a
jurisdiction “proximately result from actions by the defendant himself that create a substantial
connection with the forum state.” Burger King Corp v Rudzewicz, 471 U.S. 462, 475; 105 S. Ct.
2174; 85 L. Ed. 2d 528 (1985) (emphasis in original; quotation and citation omitted). Stated
another way, “[p]urposeful availment means something akin to either a deliberate undertaking to
do or cause an act or thing to be done in Michigan or conduct that properly can be regarded as a
prime generating cause of resulting effects in Michigan.” W H Froh, 252 Mich. App. at 231
(quotation and citation omitted). “Something more than a passive availment of Michigan
opportunities must exist that gives the defendant reason to foresee being haled before a Michigan
court.” Id. However, the defendant “need not have been physically present in a state for limited
personal jurisdiction to exist in that state.” Id.

        In this case, defendant did not reach out to Michigan for the possibility of doing business
there. Scierka stated in an unrefuted affidavit that she first came into contact with plaintiff at a
Mortgage Bankers Association conference in Dallas, Texas, in 2011. According to Scierka,
plaintiff was a vendor at the conference and was raffling away an iPad, and she was selected as
the winner of the giveaway. Thereafter, plaintiff’s president flew to Scierka’s office in
Connecticut to deliver the iPad and to conduct a sales meeting that resulted in defendant hiring
plaintiff. Thereafter, the parties communicated by mail, email, and telephone, and through an
online portal, and plaintiff performed work (or had others perform work for it) in Connecticut
that defendant had assigned to plaintiff. From the record, it is clear that plaintiff’s representative
went to the business conference in Texas and held the IPad raffle in order to establish new
contacts in other states. Plaintiff’s president went to Connecticut to personally deliver the prize
and pitch plaintiff’s services to defendant. Therefore, it cannot be said that defendant reached
out to Michigan to take advantage of business opportunities here. Rather, it was plaintiff that
reached out to Connecticut to take advantage of business opportunities there.

         Defendant further argues that the primary authority on which the trial court relied to find
purposeful availment is non-binding and factually distinguishable. We agree. In its due process
analysis, the trial court relied extensively on Salom Enterprises, LLC v TS Trim Indus, Inc, 464 F
Supp 2d 676 (ED Mich, 2006). In that case, the plaintiff was a Texas limited liability company
that conducted most of its operations in Texas and Mexico, was in the process of winding up its
affairs, had begun to conduct business in Michigan, and had registered in Michigan when the
lawsuit started. The defendant was an Ohio corporation that was not registered in Michigan but
had conducted business with a Michigan company in the past. The case was brought in federal
district court in Michigan based on diversity jurisdiction, and the defendant moved to dismiss
based in part on lack of personal jurisdiction. The district court found that the defendant’s
business activities in Michigan—which appeared limited to guaranteeing the plaintiff’s account
with a leather supplier, wiring payments to the plaintiff’s bank account in Michigan, and calling
the plaintiff’s representatives in Michigan to negotiate an inventory purchase agreement—
satisfied MCL 600.715(1). Id. at 683-684. Further, the district court held that the three prongs
                                                 -8-
of the due process analysis were met by evidence that the defendant negotiated and contracted
with a plaintiff corporation that it knew was in Michigan, and that it knew it would be required to
pay money to the plaintiff in Michigan. Id. at 684-685. The district court also found that
Michigan had a particular interest in the litigation because the plaintiff was winding up its affairs
in the state. Id. at 687.

        In making the due process analysis in the present case, the trial court stated that, “as in
Salom,” defendant negotiated with plaintiff, knowing that plaintiff was headquartered in
Michigan because plaintiff’s address appeared in bold in the first paragraph of their agreement.
Further, defendant knew that it would be obligated to send payments to plaintiff in Michigan and
had made numerous payments to plaintiff. The trial court stated that these contacts were
sufficient to establish that defendant “purposefully availed itself of the privilege of conducting
activities in Michigan.”

         Salom is factually distinguishable.3 Unlike the present case, the defendant in Salom
sought out the plaintiff to work on a project, and the defendant had also guaranteed that the
plaintiff would purchase materials from another Michigan company. Id. at 685, 689. The
defendant in Salom thus, by its active conduct, and unlike defendant here, sought the privilege of
doing business in Michigan. Because the trial court relied on Salom, it placed too much
emphasis on defendant having negotiated an agreement and having placed orders with plaintiff
knowing that plaintiff was located in Michigan, and in finding purposeful availment based on
these facts alone. Given our conclusion that plaintiff pursued a business opportunity with
defendant in Texas and Connecticut, rather than defendant pursuing opportunities in Michigan,
the trial court’s reliance was misplaced.

        The second factor in the due process analysis is whether the cause of action arose from
the defendant’s business activities in the state. Oberlies, 246 Mich. App. at 434. Plaintiff’s cause
of action arose from defendant’s alleged failure to pay monies owed to plaintiff. Defendant’s
failure to pay occurred in Connecticut, where defendant is located and conducts all of its
business, rather than Michigan, where plaintiff was awaiting payment. “When undertaking a due
process analysis case by case, a court should examine the defendant’s own conduct and
connection with the forum to determine whether the defendant should reasonably anticipate
being haled into court there.” W H Froh, 252 Mich. App. at 230 (emphasis added). Again, this
case is distinguishable from Salom, where the district court found that the cause of action for
nonpayment was “made possible by the resulting agreement” that had arisen out of defendant’s
purposeful availment of the privilege of conducting business in Michigan, and was tied in with
the overall issue of the winding-up of a Michigan corporation and the payment of Michigan
creditors. Salom, 464 F Supp 2d at 687. Therefore, this factor also was not met.

       The third due process factor is whether the defendant’s business activities were
“substantially connected with Michigan to make the exercise of jurisdiction over the defendant

3
 Salom, as the decision of a lower federal court, is not binding on this Court, although it may be
persuasive. See Abela v Gen Motors Corp, 469 Mich. 603; 677 NW2d 325 (2004).

                                                -9-
reasonable.” W H Froh, 252 Mich. App. at 228 (quotation omitted). When considering whether
jurisdiction is reasonable, it is the burden on the defendant that is primary. W H Froh, 252 Mich
App at 232. As a Connecticut corporation with no operations in Michigan, the burden on
defendant of litigating in Michigan is great. The court may also consider “the forum State’s
interest in adjudicating the dispute” and “the interstate judicial system’s interest in obtaining the
most efficient resolution of controversies.” Id. at 232-233 (quotation omitted). None of
defendant’s alleged actions were substantially connected with the state of Michigan so as to
make the exercise of jurisdiction there reasonable. Although plaintiff argues that the contract
was formed and executed in Michigan, and the agreement is a boilerplate contract prepared by
plaintiff, and the parties apparently each signed the contract in their home states and emailed
their signatures to each other. The contract is silent on choice of law or forum. As the drafter,
plaintiff could certainly have attempted to control those choices in the agreement, but it did not
do so. Nothing in the record indicates that Michigan is overall a more convenient forum for the
parties than Connecticut would be. Further, Michigan lacks the interest cited in Salom, 464 F
Supp 2d at 687, regarding entities winding up their affairs and paying Michigan creditors.4 We
conclude that this factor was also not met.

                                       IV. CONCLUSION

        The trial court erred by denying defendant’s motion for summary disposition based on
lack of personal jurisdiction. We therefore reverse the trial court’s order and remand for entry of
an order granting defendant’s motion for summary disposition under MCR 2.116(C)(1).

       Reversed and remanded. We do not retain jurisdiction.

                                                              /s/ Mark T. Boonstra
                                                              /s/ Mark J. Cavanagh
                                                              /s/ Kirsten Frank Kelly

4
  Were we to find the exercise of personal jurisdiction appropriate simply because Michigan “has
an interest in adjudicating the claims of the entities organized under its laws,” we would
effectively replace the existing due process analysis with a sanctioning of jurisdiction whenever
a Michigan plaintiff brings suit in Michigan.

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