United States District Court, E.D. Michigan, Southern Division
OPINION & ORDER GRANTING DEFENDANTS' MOTION
FOR SUMMARY JUDGMENT
F. Cox United States District Court Judge
Margaret Cone filed suit against three Defendants (Mark
Tessler, Sherman Jackson, and David Howell) in this action,
based upon diversity jurisdiction. Cone asserts breach of
contract, unjust enrichment, and fraudulent misrepresentation
claims. Those claims stem from an alleged agreement with
Defendants to host an educational program at the University
of Michigan. This is now the third lawsuit that has been
filed against these three Defendants stemming from that
matter is currently before the Court on Defendants'
Renewed Motion for Summary Judgment. The motion has been
fully briefed by the parties and the Court concludes that
oral argument would not aid the decisional process. The Court
therefore orders that the motion shall be decided without
oral argument. For the reasons set forth below, the Court
shall GRANT the motion because all of Cone's claims are
barred by the applicable statutes of limitation. In addition,
while the Court need not reach any other challenges, the
Court also concludes that other challenges to Plaintiff's
claims have merit.
named Plaintiff in this action is Margaret Cone
(“Cone”), a licensed attorney in Michigan. After
terminating her counsel, since June of 2018, Cone has been
proceeding in this case pro se.
World Leadership Program Institute (“the
Institute”) is a District of Columbia corporation that
was formed by Cone on October 10, 2010. (ECF No. 130 at
now the third civil action that has been filed against
Defendants Mark Tessler (“Tessler”), Sherman
Jackson (“Jackson”), and David Howell
(“Howell”) that relates to an alleged agreement
with Defendants to host an educational program at the
University of Michigan.
Case Number 14-13852, Filed By The Institute Alone
October 6, 2014, the Institute alone filed suit in the United
States District Court for the Eastern District of Michigan,
based on federal-question jurisdiction. That suit was filed
against the three Defendants in this case (Tessler, Jackson,
and Howell), along with the Board of Regents of the
University of Michigan, and the Center for Political Studies,
Institute of Social Research. That case, Case Number
14-13852, was assigned to the Honorable Stephen J. Murphy.
complaint included the following counts: 1) Breach of
Contract, asserted against the University of Michigan,
Tessler, and Jackson (but not Howell); 2) Fraud and
Misrepresentation asserted against all Defendants; 3) Unjust
Enrichment and Promissory Estoppel, asserted against the
University of Michigan, Tessler, and Jackson (but not
Howell); and 4) a § 1983 claim for unlawful deprivation
Opinion & Order issued on April 28, 2015, Judge Murphy
dismissed the § 1983 claim as barred by the applicable
statute of limitations. Having dismissed the only federal
claim in the action, Judge Murphy declined to exercise
supplemental jurisdiction over the remaining state-law claims
and dismissed those claims without prejudice.
2015 State-Court Case Filed By The Institute Alone
30, 2015, acting through counsel, the Institute alone filed a
lawsuit in state court against Defendants Mark Tessler,
Sherman Jackson, Nancy Burns, and David Howell. Cone was not
named as a plaintiff in the action.
complaint, the Institute asserted four counts against
Defendants: 1) breach of contract; 2) Fraud and
Misrepresentation; 3) unjust enrichment; and 4) promissory
estoppel. (See state-court complaint, ECF No. 54-3).
All of those claims centered on an alleged agreement
Defendants had with the Institute to host an educational
program at the University of Michigan.
the Defendants in that action filed motions for summary
disposition. In those motions, the parties asserted that the
claims against them should be dismissed for several reasons,
including that the sole named plaintiff in the action (the
Institute) had no standing to bring the claims in the
complaint because it did not even exist at the time of the
alleged events that form the basis of the claims. The trial
court ultimately agreed with Defendants on the standing issue
and declined to consider any of the Defendants' other
arguments in their motions.
response to the motion, the Institute did not seek leave to
file an amended complaint. Rather, the Institute filed
responses opposing those motions, affirmatively asserting
that it is the proper party to the suit. (ECF No. 60-3).
trial court heard oral argument on the motions. (ECF No.
60-4). During oral argument, the Institute's Counsel
acknowledged on the record that Margaret Cone is a licensed
Michigan attorney and that she set up and managed both the
Institute and another entity called East West Learning
Initiative, Inc. (Id. at Pg ID 1644-45).
hearing, Defense Counsel argued that the Institute
“doesn't have standing to bring this case because
the [named] plaintiff did not exist at the time of any of the
alleged actions.” (Id. at Pg ID 1641). The
trial court ultimately agreed with Defendants on the standing
issue and declined to consider any of the Defendants'
other arguments in their motions. (ECF No. 60-4 at Pg ID
Order issued on November 4, 2015, the trial court granted
Defendants' motions for summary disposition, “for
the reasons stated on the record, ” and dismissed the
claims against Defendants with prejudice. In
addition, the trial court ordered the Institute to pay
Defendants $5, 000.00 “in sanctions for filing a
frivolous case.” (ECF No. 54-4).
the Institute filed a Motion for Reconsideration. (ECF No.
54-5). That motion asked the Court to reverse the sanction
award and allow Plaintiff to file an amended complaint in
order to name a different plaintiff. The trial court denied
that motion and the Institute appealed.
Cone Files This Third Case On April 8, 2016.
April 8, 2016, acting through counsel, Cone filed this action
against Tessler, Jackson, and Howell, based on diversity
jurisdiction. No. other Defendants, such as the University of
Michigan, are named as Defendants in this action.
First Amended Complaint is the operative complaint in this
action. It asserts claims against three Defendants: 1)
Tessler; 2) Jackson; and 3) Howell.
asserted the following three claims against Defendants: 1)
Breach of Contract (Count I); 2) Fraudulent Misrepresentation
(Count II); and 3) Promissory Estoppel and Unjust Enrichment
Court's September 21, 2016 Rulings On Defendants'
Motions to Dismiss
of 2016, each of the three Defendants filed their own
separate Motion to Dismiss, brought under Fed.R.Civ.P.
12(b)(6). (ECF Nos. 6/7,  8, and 9).
Opinion & Order issued on September 21, 2016, this Court
ruled on the motions to dismiss. In it, this Court noted that
the motions were “complicated by the fact that: 1) the
three defendants each filed a separate motion, even though
they were raising the same or very similar challenges; 2)
Cone filed a First Amended Complaint, including additional
allegations, after Defendants had filed their motions; and 3)
both sides ma[d]e references to Cone's original complaint
rather than the First Amended Complaint.” (ECF No. 25
at Pg ID 671). Based upon what was presented, the Court
granted the motion to the extent that it dismissed the breach
of contract and promissory estoppel/unjust enrichment claims
against Defendant Howell as untimely. It denied the motion in
all other respects, concluding that Defendants other statute
of limitations challenges appeared to lack merit. The Court
also declined to consider some arguments made for the first
time in Defendants' reply briefs - such as whether
Cone's claims are barred by res judicata.
February 9, 2017, The Michigan Court Of Appeals Affirmed The
February 9, 2017, the Michigan Court of Appeals affirmed the
trial court's rulings in the State-Court Case, including
the sanction award, in an unpublished opinion. (ECF No.
54-6). In doing so, the appellate court found that “the
Institute had no reasonable basis to believe that it
was the aggrieved party in this lawsuit. It did not
exist until after the actions leading to the suit occurred.
Nevertheless, the Institute both asserted that it was the
proper party and that it was a successor entity without any
evidence to support its positions. Because Cone founded and
represented both entities, the Institute knew or should have
known which entities existed at which times during this
dispute.” (Id.) (emphasis added).
Court Denied Defendants' Motion For Judgment On The
Pleadings, Ruling That Cone's Claims In This Action Are
Not Barred By Res Judicata.
filed a Motion for Judgment on the Pleadings in this case,
asking this Court to rule that Cone's claims in this
action are barred by res judicata, based on the dismissal
with prejudice in the State-Court Case. In opposing that
motion, Cone argued that Defendants could not establish res
judicata because: 1) a dismissal for lack of standing is not
a determination on the merits for purposes of res judicata;
and 2) Defendants cannot establish that the Institute was in
privity with Plaintiff for purposes of res judicata. (ECF No.
60 at PageID.1540) (“Even if Defendants could show a
determination on the merits, they could not properly
demonstrate that the [Institute] was in privity for purposes
of res judicata with Margaret Cone. They privity test fails
because the [Institute] did not exist and did not have
standing to assert the claims. As a result, Margaret
Cone's claims and interests were not and could not be
represented by the [Institute].”); (see also
ECF No. 60 at PageID.1547) (“The [Institute] cannot,
and does not, contend that it represented the same legal
right - in fact the opposite is true. Margaret Cone's
role with the [Institute] does not render her, and all her
claims including those that predated the [Institute]'s
existence, in privity with the [Institute] and its
Opinion & Order issued on August 28, 2018, this Court
denied Defendants' motion, ruling that the claims in this
action are not barred by res judicata by virtue of rulings in
the State-Court Case.
Renewed Motion For Summary Judgment Is Now Before The
following the close of discovery, the matter is before the
Court on Defendants' Renewed Motion for Summary Judgment.
This motion seeks summary judgment as to all remaining
judgment will be granted where there exists no genuine issue
of material fact. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). No. genuine issue of material fact
exists where “the record taken as a whole could not
lead a rational trier of fact to find for the non-moving
party.” Matsushita Elect. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). “The
mere existence of a scintilla of evidence in support of the
[non-moving party]'s position will be insufficient; there
must be evidence on which the jury could reasonably find for
the plaintiff.” Anderson, 477 U.S. at 252. The
Court “must view the evidence, all facts, and any
inferences that may be drawn from the facts in the light most
favorable to the non-moving party.” Skousen v.
Brighton High Sch., 305 F.3d 520, 526 (6th Cir. 2002).
action is in federal court based upon diversity jurisdiction
and the parties agree that Michigan law applies to Cone's
claims in this action.
All Of Cone's Claims In This Action Are Barred The
Applicable Statutes of Limitation.
this Court's jurisdiction is based on diversity of
citizenship, Michigan's statutes of limitations apply to
Cone's claims in this action. Blaha v. A.H. Robins
& Co., 708 F.2d 238, 239 (6th Cir. 1983);
Martello v. Santana, 713 F.3d 309, 314 (6th Cir.
correctly note that a six-year statute of limitations applies
to each of Cone's claims in this action.
Comp. Laws § 600.5807(8) “provides for a six-year
limitations period for breach of contract” claims,
starting from the date the claim “accrued.”
“Breach of contract claims accrue ‘at the time of
the asserted breach of contract.'” Garden City
Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1133 (6th
Cir. 1995) (citations omitted).
six-year statute of limitations also applies to Cone's
promissory estoppel / unjust enrichment count. Id.;
Huhtala v. Travelers Ins. Co., 401 Mich. 118 (1977);
Mich. Comp. Laws § 600.5815.
limitations period for fraudulent misrepresentation claims is
also six years. Mich. Comp. Laws § 600.5813; Boyle
v. General Motors Corp., 468 Mich. 226, 230 (2003);
Shaya v. Countrywide Home Loans, Inc., 489 Fed.Appx.
815, 818 (6th Cir. 2012). A fraud claim accrues “at the
time the wrong upon which the claim is based was done
regardless of the time when damage results.” Mich.
Comp. Laws § 600.5827. Thus, Michigan has rejected a
discovery rule for fraud claims. Boyle, 468 Mich. at
in response to Defendants' motion, Cone does not dispute
that a six-year statute of limitations applies to each of the
claims she asserts in this action. Cone also does not dispute
that each of her claims accrued more than six years before
she filed this case on April 8, 2016.
Cone asserts that her claims are not barred by the applicable
statutes of limitation because the limitations periods were
tolled by virtue of the Institute's prior federal action.
Cone further asserts that the law-of-case doctrine precludes
this Court from reconsidering its prior rulings on the
statute of limitations issues.
The Law-Of-The-Case Doctrine Does Not Preclude This Court
From Reconsidering The Statute-Of-Limitations
district court's application of the law of the case
doctrine to that court's own rulings is reviewed for
abuse of discretion because it is a ‘discretionary
tool' meant to promote judicial efficiency and not a
limit on the court's power.” Ominex Energy,
Inc. v. Blohm, 374 Fed.Appx. 643, 651 (6th Cir. 2010)
(citing United States v. Todd, 920 F.2d 399, 403
(6th Cir. 1990)). That is, the law-of-the-case doctrine
“as applied to the effect of previous orders on the
later action of the court rendering them in the same case,
merely expresse[s] the practice of courts generally to refuse
to reopen what has been decided, not a limit to their
power” to do so. In re Kenneth Allen Knight
Trust, 303 F.3d 671, 677 (6th Cir. 2002). A district
court can reconsider its own prior ruling when there is a
“cogent reason” to do so, such as the
presentation of new evidence or if the court concludes the
prior decision was in error based upon its understanding of
the issues as the case develops. Ominex Energy, Inc.,
the Court previously rejected some of Defendants' statute
of limitations arguments at the motion-to-dismiss phase,
concluding that “the statute of limitations challenges
appear to lack merit.” (ECF No. 25 at
PageID.672) (emphasis added). The Court concluded that the
prior federal action appeared to toll the statutes ...