City of Fraser v. Almeda University
314 Mich. App. 79
| Mich. Ct. App. | 2016Background
- Almeda University, a Nevis-incorporated online school, sold "life experience" degrees via its website for set fees and mailed diplomas to purchasers; some customers were Michigan residents, including 16 Fraser police officers (11 at issue).
- Fraser paid salary increases and educational reimbursements to officers who used Almeda degrees, totaling $143,848; it sued under the Authentic Credentials in Education Act (MCL 390.1601 et seq.) seeking statutory damages ($100,000 per employee) and other relief.
- Almeda moved to dismiss for lack of personal jurisdiction and other grounds; the trial court denied jurisdiction dismissal and granted Fraser summary disposition on liability for violations of MCL 390.1603, awarding damages for degrees issued after the Act’s effective date.
- On appeal, the court considered (1) personal jurisdiction over Almeda given its website transactions with Michigan residents, (2) whether MCL 390.1603 applies to credentials "issued in this state," (3) whether Fraser was damaged under MCL 390.1605, and (4) limitations and other defenses.
- The Court of Appeals affirmed jurisdiction and that Almeda issued false academic credentials in Michigan (construing "issue" to include distributing credentials by mail/electronically to Michigan residents), held Fraser was damaged, but limited recovery to degrees issued on or after Jan 31, 2007 (six-year statute of limitations).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction | Almeda purposefully availed itself of Michigan by accepting applications/payments and mailing diplomas to Michigan residents via its interactive website | No meaningful contacts with Michigan; activities occurred outside Michigan | Court: Jurisdiction proper — website interactions, payments, and diploma mailings established purposeful availment and substantial connection to Michigan |
| Applicability of MCL 390.1603 ("issue" in this state) | "Issue" includes distributing diplomas into Michigan by mail or electronically; statute covers false credentials affecting Michigan residents | "Issue" occurs where diploma is produced/awarded (Almeda’s location); statute shouldn’t reach conduct wholly outside Michigan | Court: "Issue in this state" includes distribution to Michigan residents; Almeda violated MCL 390.1603 |
| Damages under MCL 390.1605 and equitable defenses | Fraser was damaged by increased pay and reimbursements resulting from Almeda’s violations; unclean-hands/laches inapplicable | Fraser’s employees and Fraser’s own delay/acceptance caused the loss; laches and unclean-hands bar recovery | Court: Fraser proved damages from the Act; laches inapplicable (and Almeda barred from asserting unclean-hands because it violated the Act) |
| Statute of limitations | Damages arise from each issuance; trial court’s continuing-violation tolling saves claims | Degrees issued before Jan 31, 2007 are time-barred under six-year limitations | Court: Garg precludes continuing-violation tolling; only claims for degrees issued on or after Jan 31, 2007 survive |
Key Cases Cited
- Yoost v. Caspari, 295 Mich. App. 209 (Mich. Ct. App.) (standard for reviewing personal-jurisdiction and long-arm prima facie showing)
- Oberlies v. Searchmont Resort, Inc., 246 Mich. App. 424 (Mich. Ct. App.) (three-part minimum-contacts test for due process jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and foreseeability principles)
- Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883 (6th Cir.) (Zippo sliding-scale test for website contacts and purposeful availment)
- Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa.) (interactive website framework for jurisdiction)
- Garg v. Macomb County Community Mental Health Servs., 472 Mich. 263 (Mich.) (rejecting continuing-violations tolling for limitations)