Margaret Cone v. Mark Tessler

• Court: Court of Appeals for the Sixth Circuit
• Decided: February 3, 2020
• Docket: 19-1397
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 20a0077n.06

Case No. 19-1397

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED Feb 03, 2020 MARGARET CONE, ) DEBORAH S. HUNT, Clerk ) Plaintiff-Appellant, ) ) ON APPEAL FROM THE UNITED v. ) STATES DISTRICT COURT FOR ) THE EASTERN DISTRICT OF MARK TESSLER, SHERMAN JACKSON, ) MICHIGAN and DAVID HOWELL, ) ) Defendants-Appellees. ) )

BEFORE: SILER, GIBBONS, and THAPAR, Circuit Judges.

SILER, Circuit Judge. Plaintiff Margaret Cone appeals the district court’s determination

that her fraudulent misrepresentation and promissory estoppel claims were time-barred by

Michigan’s statutes of limitations. This dispute originated from an agreement between Cone and

Defendants to host a program at the University of Michigan for Islamic scholars from al-Azhar

University. Cone alleges that Defendants misled her regarding their ability to administer the

program, did little work to prepare for the program, and then pilfered hundreds of thousands of

dollars in fees for work they did not perform after withdrawing from the program. Nevertheless,

the district court dismissed her case after finding that the claims accrued outside of the six-year

limitations period. We affirm. Case No. 19-1397, Cone v. Tessler et al.

I.

This case arises out of Cone’s attempt to create the World Leadership Program (WLP)

through a partnership with al-Azhar University and the University of Michigan (UM). In the

program, Islamic scholars would be trained in English and then come to the United States for a

summer to experience the culture and interact with U.S. scholars. After securing the participation

of al-Azhar University, Cone sought a commitment from UM. In December 2008, Defendants

Mark Tessler and Sherman Jackson, each a professor at UM, agreed that the university would

partner with the program, with Jackson serving as executive coordinator. Further, the parties

agreed that UM would not administer the program, obtain the funding, or provide housing,

facilities, or food. However, months later, Cone changed course and requested that UM administer

the WLP; Tessler agreed to her request.

In September 2009, Cone obtained a commitment from the United Arab Emirates (UAE)

to fund the program. Subsequently, the UAE sent a letter to Tessler approving the budget set by

Cone and making its contribution of $2,033,590 contingent upon the money’s being spent in

accordance with the budget, allowing for reasonable adjustments as needed by Jackson. In October

2009, Tessler accepted the terms. In December 2009, Tessler and Jackson sent a letter with wiring

instructions to a UM account, per the UAE’s request. The UM account belonged to the Center of

Political Studies (CPS) and listed Defendant David Howell, the assistant director of CPS, on the

account. Later that month, Jackson and Tessler sent a letter to al-Azhar University explaining their

and UM’s role in the WLP. In February 2010, the UAE sent a letter to Tessler noting that it had

wired the $2,033,590 to the UM bank account it was given. But this partnership did not last long.

By the end of April 2010, Tessler, Jackson, and UM had all withdrawn from the WLP.

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According to Cone, the relationship deteriorated due to misrepresentations and self-dealing

on the parts of Tessler, Jackson, and Howell. Specifically, Cone asserts that Defendants promised

her that they would host the WLP in the UM International Institute, would abide by the budget she

created, and Jackson would provide curriculum, faculty, and course materials as lead professor for

the program. Instead, Jackson demanded a $500,000 payment that was not in the original budget

for UM to administer the program and then did little actual work to prepare for the program.

Further, Cone alleges Jackson misled her about his ability to take part in the program because he

was committed to be overseas when he was supposed to be leading the WLP at UM. Additionally,

she notes that he convinced her to move the program to CPS based on misrepresentations about

the International Institute’s capability of hosting such a program.1

With regard to Howell, Cone contends that he promised to accept the funds on behalf of

the International Institute and adhere to the agreed-upon budget, but instead had the funds

deposited in the CPS account and allocated hundreds of thousands of dollars in fees to Defendants

in violation of the approved budget. As for Tessler, Cone states that he was on an undisclosed

sabbatical leave beginning in January 2010 and, under UM policy, was unable to accept the

assignment he did with the WLP. Basically, Cone argues that Tessler, Howell, and Jackson did

little to prepare for the WLP, misled her on their willingness to adhere to the budget and availability

for administering the program, and then plundered hundreds of thousands of dollars from the

1 Cone avers that she later learned that CPS was a self-funded and self-administered research center that only had loose associations with UM and was under the administrative control of Howell and Tessler.

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funding for themselves and CPS.2 Ultimately, due to the myriad of issues and the withdrawal of

Defendants and UM, Cone was forced to move the program to Georgetown University.

On April 8, 2016, Cone filed suit in the United States District Court for the Eastern District

of Michigan, asserting claims for breach of contract, fraudulent misrepresentation, promissory

estoppel, and unjust enrichment. After Defendants filed motions to dismiss because Cone’s claims

were time-barred, the district court ruled that her claims were not barred by the statutes of

limitations because a prior federal lawsuit brought by Cone’s corporation, World Leadership

Program Institute (WLPI),3 in 2014 tolled the limitations period.4 Subsequently, Defendants

asserted again in their motion for summary judgment that the relevant Michigan statutes of

limitations barred Cone’s claims. In her response, Cone argued that the WLPI federal lawsuit

tolled the limitations period and that the district court could not reconsider its previous decision

because of the law-of-the-case doctrine.5 On April 8, 2019, the district court granted Defendants’

motion for summary judgment. With regard to the statute-of-limitations issue, the court ruled that

Cone’s claims were not tolled, and thus were time-barred, because WLPI lacked standing to bring

2 Defendants did eventually refund the UAE, but Cone claims the payment fell short of the initial grant by hundreds of thousands of dollars. 3 Originally, Cone created East West Learning Initiative, Inc. to manage the WLP in December 2008. Subsequently, Cone created WLPI in October 2010 to take over management of the WLP. 4 In October 2014, WLPI sued Tessler, Jackson, Howell, and others in the Eastern District of Michigan asserting various state-law claims and a 42 U.S.C. § 1983 claim. That court dismissed the lawsuit, which was based on federal-question jurisdiction, after determining that the statute of limitations had run on the § 1983 claim and declining to exercise supplemental jurisdiction over the state-law claims. WLPI then filed a lawsuit in a state court in Michigan against Defendants and one other person alleging the same claims Cone does now. Eventually, after protracted litigation, both Michigan trial and appellate courts ruled that WLPI lacked standing to sue because it did not exist at the time the alleged events that formed the basis of the claim happened. Cone was not named as a plaintiff in either of those two lawsuits. 5 Cone did not raise either issue on appeal. -4- Case No. 19-1397, Cone v. Tessler et al.

the previous lawsuit and that the law-of-the-case doctrine did not prevent it from reconsidering its

ruling from a different stage in the litigation. In the alternative, the district court dismissed Cone’s

breach of contract and unjust enrichment claims on the merits.6 After the district court entered

judgment in favor of Defendants, Cone filed a timely appeal to this court.

II.

We review a district court’s grant of summary judgment de novo. Miller v. Maddox,

866 F.3d 386, 389 (6th Cir. 2017). “[S]ummary judgment is warranted only if ‘there is no genuine

issue as to any material fact’ and ‘the movant is entitled to judgment as a matter of law.’” Franklin

Am. Mortg. Co. v. Univ. Nat’l Bank of Lawrence, 910 F.3d 270, 275 (6th Cir. 2018) (quoting Fed.

R. Civ. P. 56(a)).

III.

On appeal, Cone challenges the district court’s dismissal of her fraudulent

misrepresentation and promissory estoppel claims as time-barred under Michigan’s statutes of

limitations. Under Michigan law, the statute of limitations for a fraudulent misrepresentation claim

is six years. Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1135 (6th Cir. 1995).

See also Mich. Comp. Laws § 600.5813. The statute of limitations for promissory estoppel claims

is also six years in Michigan. Garden City Osteopathic Hosp., 55 F.3d at 1131 (citing Huhtala v.

Travelers Ins. Co., 257 N.W.2d 640, 644 (Mich. 1977)). See also Mich. Comp. Laws

§ 600.5807(9). Additionally, a claim accrues on the date in which the plaintiff was harmed by the

defendant’s actions, not the date on which the defendant’s conduct occurred. See Mich. Comp.

6 Cone does not challenge the dismissal of her claims for breach of contract and unjust enrichment. -5- Case No. 19-1397, Cone v. Tessler et al.

Laws § 600.5827. Because Cone filed her lawsuit on April 8, 2016, her claims must have accrued

on or after April 8, 2010. The district court determined that they accrued prior to April 8, 2010.

Before us, Cone makes two arguments: (1) the district court failed to determine whether

any of her causes of action could have accrued within the limitations period; and (2) the continuing-

violations doctrine applies because some violations occurred after April 8, 2010. However, as a

threshold issue, we must consider whether Cone forfeited these arguments by not presenting them

to the district court. Cone claims that she did raise the issue before the district court and cites to a

couple of passages from her response. However, neither of these passages was in the part of her

response that discussed the statute-of-limitations issue nor did it explicitly invoke either of the

arguments she now raises. These vague references were not sufficient to squarely present the

issues to the trial court. See O’Bryan v. Holy See, 556 F.3d 361, 375 (6th Cir. 2009). Therefore,

we must next determine whether we should consider arguments not raised before the district court.

Generally, an argument not raised before the district court is forfeited on appeal. Scottsdale

Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008). There are two main policies that justify

this general rule: (1) “the rule eases appellate review by having the district court first consider the

issue”; and (2) “the rule ensures fairness to litigants by preventing surprise issues from appearing

on appeal.” Id. (quoting Foster v. Barilow, 6 F.3d 405, 409 (6th Cir. 1993)) (internal quotation

marks omitted). However, we have deviated from this general rule on occasion in exceptional

cases, particular circumstances, or when the rule would produce a plain miscarriage of justice.

Foster, 6 F.3d at 407 (quoting Pinney Dock and Transp. Co. v. Penn Central Corp., 838 F.2d 1445,

1461 (6th Cir. 1988)). In past cases, we have used the following factors to aid in determining

whether to consider a forfeited claim:

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(1) whether the issue newly raised on appeal is a question of law, or whether it requires or necessitates a determination of facts; (2) whether the proper resolution of the new issue is clear and beyond doubt; (3) whether failure to take up the issue for the first time on appeal will result in a miscarriage of justice or a denial of substantial justice; and (4) the parties’ right under our judicial system to have the issues in their suit considered by both a district judge and an appellate court.

Hayward v. Cleveland Clinic Found., 759 F.3d 601, 615 (6th Cir. 2014) (quoting Friendly Farms

v. Reliance Ins. Co., 79 F.3d 541, 545 (6th Cir. 1996)). Nevertheless, we are not compelled to

hear, nor should we hear, “an issue not presented to the district court unless reaching that issue

serves an over-arching purpose beyond that of arriving at the correct result in an individual case.”

Foster, 6 F.3d at 408. “The matter of what questions may be taken up and resolved for the first

time on appeal is one left primarily to the discretion of the courts of appeals, to be exercised on

the facts of individual cases.” Singleton v. Wulff, 428 U.S. 106, 121 (1976).

In applying the factors, it is clear that factors one, two, and four do not support considering

the issues raised by Cone. Her issues do not raise pure questions of law; rather, they require that

we determine whether there was conduct that fell within the limitations period that would either

rise to the level of a distinct cause of action or constitute a continuing violation. Further, it is not

clear and beyond doubt that the proper resolution of the questions presented would result in Cone’s

prevailing. Although Cone argues that failing to consider the issues she now raises would result

in a miscarriage of justice, “an oversight on the part of . . . counsel is not alone a justification for

departing from our usual procedure of non-review of issues not raised below, since such an

exception to the rule would effectively eviscerate the rule.” United States v. Means, 133 F.3d 444,

448 (6th Cir. 1998). Accordingly, we decline to consider the issues Cone failed to raise before the

district court.

AFFIRMED.

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