LePine v. Rosenbaum
2:19-cv-12577
E.D. Mich.Jun 1, 2020Background:
- In 1994 SWR Corporation executed a promissory note to Jessica LePine for $30,000 with 15% annual interest; SWR later became defunct and its assets were transferred to Oregon entities controlled by Paul and Maureen Rosenbaum.
- Between 1996 and 2013 LePine received payments totalling $29,000; the last check she alleges was dated July 1, 2013.
- On March 12, 2014 LePine emailed Paul Rosenbaum about unpaid interest; he replied by email, "I will send you a check soon."
- LePine filed suit on September 3, 2019 alleging breach of contract, successor liability, veil-piercing (Count III), and exemplary damages (Count IV) against Paul and Maureen Rosenbaum and the Oregon corporate entities.
- Defendants moved to dismiss based on the statute of limitations, lack of personal jurisdiction over Maureen Rosenbaum, and failure to state claims for Counts III and IV.
- The court held the March 12, 2014 email revived the limitations period under MCL § 600.5866, denied dismissal on limitations and Counts III & IV, but dismissed Maureen Rosenbaum for lack of personal jurisdiction.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the action is time-barred or revived by a written acknowledgment (MCL §600.5866) | Rosenbaum's March 12, 2014 email is a written, unqualified acknowledgment promising payment and thus revives the claim | The email is ambiguous/conditional and not an unqualified admission of a present subsisting debt | Court: Email "I will send you a check soon" is a sufficient unqualified acknowledgment; limitations revived and claim timely filed |
| Whether the court has personal jurisdiction over Maureen Rosenbaum (general & specific) | Plaintiff contends Ms. Rosenbaum has ties via corporate role and the product manufactured in Michigan | Defendants argue Ms. Rosenbaum lacks sufficient contacts with Michigan; she is domiciled in Oregon and did not purposefully avail herself of Michigan | Court: No general jurisdiction; no specific jurisdiction shown as to Ms. Rosenbaum individually — she is dismissed |
| Whether Count III (veil-piercing) states a claim | LePine alleges the Rosenbaums treated corporate form as an instrumentality, transferred assets, concealed dissolution, ignored corporate formalities and caused her inability to recover from the corporation | Defendants contend LePine fails to plead facts meeting the elements (control, misuse, causal injury) to pierce the veil | Court: Allegations suffice at pleading stage to plausibly allege instrumentality, misuse (fraud/misrepresentation), and unjust loss — Count III survives |
| Whether Count IV (exemplary damages) states a claim | LePine alleges tortious conduct (fraud/misrepresentation; alleged sexual harassment) supporting exemplary damages independent of breach | Defendants argue no contractual contemplation of exemplary damages and facts insufficient for tort supporting punitive relief | Court: Plaintiff pleaded tortious conduct separate from breach; exemplary damages claim survives (sexual-harassment allegations found conclusory and the court addressed only fraud-related tort) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard — legal conclusions not entitled to factual presumption)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for Rule 8)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and minimum contacts analysis)
- Walden v. Fiore, 571 U.S. 277 (U.S. 2014) (contacts must be with the forum state, not merely with forum residents)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (U.S. 2011) (limits of general jurisdiction and domicile as paradigm forum)
- Theunissen v. Matthews, 935 F.2d 1454 (6th Cir. 1991) (prima facie showing standard for 12(b)(2) on affidavits)
- Serras v. First Tennessee Bank Nat'l Ass'n, 875 F.2d 1212 (6th Cir. 1989) (methods for resolving personal jurisdiction motions)
- Conn v. Zakharov, 667 F.3d 705 (6th Cir. 2012) (three-prong test for specific jurisdiction)
- Servo Kinetics, Inc. v. Tokyo Precision Instruments Co., 475 F.3d 783 (6th Cir. 2007) (veil-piercing is fact-intensive; equitable remedy)
- Adams v. City of Detroit, 591 N.W.2d 67 (Mich. Ct. App. 1998) (interpretation of MCL § 600.5866 requiring unqualified, direct admission of present debt)