Five Brothers Mortgage Company v. the McCue Mortgage Company
329888
| Mich. Ct. App. | Jan 10, 2017Background
- Five Brothers (Michigan corp.) sued The McCue Mortgage Co. (Connecticut corp.) for breach of a field services/inspection contract and repayment of funds, alleging unpaid invoices (~$230k) and a $75k reimbursement/loan.
- McCue moved for summary disposition under MCR 2.116(C)(1), arguing lack of personal jurisdiction: no offices, agents, or business in Michigan; contract negotiations/execution occurred out-of-state; communications were by phone/email.
- McCue submitted an unrefuted affidavit (Scierka) describing initial contact at a Texas conference, contract formation in Connecticut, and that McCue only does business in Connecticut.
- Five Brothers produced the contract (showing Five Brothers’ Michigan address), invoices, accounts receivable, a termination letter, and an accounting affidavit showing payments to/from a Michigan bank and ongoing performance under the contract for ~three years.
- The trial court denied McCue’s motion, finding limited long-arm jurisdiction under MCL 600.715(1) and that exercising jurisdiction comported with due process (relying in part on Salom Enterprises).
- The Court of Appeals reversed: it concluded Michigan’s long-arm statute could be met by the contract performance and payments, but the due-process factors (purposeful availment, causation, reasonableness) were not satisfied given McCue’s contacts and the locus of performance in Connecticut.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 600.715(1) (transaction of any business) supports jurisdiction | Contract performance, payments, communications with a Michigan company suffice | McCue had no Michigan business; contract formed/executed out-of-state; affidavit shows no Michigan contacts | Court: Contract, payments, and communications suffice to meet the statutory "transaction of any business" threshold |
| Whether plaintiff met prima facie burden to defeat (C)(1) motion | Contract and accounting documents attached to complaint establish jurisdictional facts | Scierka affidavit contradicted plaintiff’s pleadings; plaintiff lacked documentary proof of negotiation in Michigan | Court: Plaintiff produced unrefuted contract and accounting evidence showing some transaction; statutory prong satisfied (close call) |
| Whether McCue purposefully availed itself of Michigan (due process first prong) | Negotiation/contract with a Michigan company and payments to Michigan show purposeful availment | McCue did not solicit Michigan business; plaintiff solicited McCue at a Texas conference; conduct points to Connecticut, not Michigan | Court: No purposeful availment — plaintiff solicited business out-of-state; McCue’s contacts do not show deliberate Michigan targeting |
| Whether exercising jurisdiction is reasonable and related to the cause of action (due process prongs two & three) | Claim arises from unpaid performance to a Michigan company; Michigan has an interest in adjudicating suits by its entities | Nonpayment and performance occurred in Connecticut; litigation in Michigan would be burdensome and not clearly more efficient | Court: Cause did not arise from Michigan contacts and defendant’s burden and lack of substantial Michigan connection make jurisdiction unreasonable; trial court erred in denying dismissal |
Key Cases Cited
- Oberlies v. Searchmont Resort, Inc., 246 Mich. App. 424 (Mich. Ct. App. 2001) (interpreting "transaction of any business" broadly under Michigan's long-arm statute)
- Electrolines, Inc. v. Prudential Assurance Co., Ltd., 260 Mich. App. 144 (Mich. Ct. App. 2004) (distinguishing general and specific jurisdiction principles)
- Jeffrey v. Rapid Am. Corp., 448 Mich. 178 (Mich. 1995) (plaintiff bears burden of prima facie showing for jurisdiction under MCR 2.116(C)(1))
- International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (establishing minimum contacts/due process standard for jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and foreseeability in jurisdiction analysis)