Justices Decline To Hear MSU Appeal Involving Law Professors’ Employment Contracts
The Michigan Supreme Court will not hear the case of two law professors who sued Michigan State University, claiming the school breached their employment contracts and fraudulently concealed a transfer agreement it had negotiated with the Detroit College of Law.
As a result, the high court let stand the Michigan Court of Appeals decision in the case. In January 2025, the Court of Appeals had affirmed the Michigan Court of Claims denial of summary disposition for the defendant, Michigan State University (MSU), thereby allowing the plaintiffs’ claim to move forward.
The plaintiffs in McCormick v Michigan State University (Docket No. 168334) were married and served as tenured faculty members at the Detroit College of Law (DCL) before DCL completely merged with the defendant in 2020. In 2013, the plaintiffs negotiated terms under which Robert McCormick would retire and Amy McCormick would continue as a professor emeritus. On December 31, 2019, the defendant terminated all DCL employees and offered to hire them as MSU employees the next day. Amy declined the defendant’s offer.
During ongoing litigation over their employment contracts, the plaintiffs discovered that DCL and the defendant had entered into a memorandum of understanding regarding the schools’ integration. In addition to the schools agreeing that all DCL employees would be terminated and be offered employment with the defendant, they had entered into an asset purchase agreement. The agreement provided that DCL would “sell, assign, transfer, convey, and deliver all of its assets to MSU, and MSU would ‘assume and agree to pay, perform and discharge’ all of the DCL’s liabilities and obligations.”
The plaintiffs sued the defendant in the Court of Claims in September 2022, alleging the defendant fraudulently concealed the transfer agreement by not notifying them of its existence until May 2022. They argued the fraudulent-concealment exception (MCL 600.5855) to the general notice provisions of the Court of Claims Act (MCL 600.6401 et seq.) applied and provided them two years after the discovery of the transfer agreement to initiate their lawsuit. The defendant, however, argued this tolling provision did not apply and the plaintiffs’ claims were untimely filed, among other things.
The Court of Claims initially found the plaintiffs’ complaint did not support a claim for fraudulent concealment. But the Court of Claims allowed the plaintiffs to amend their complaint. In that amended complaint, the plaintiffs asserted:
Amy communicated with DCL representatives about the 2013 agreements and the potential impact the schools’ integration would have on those agreements.
Amy communicated with the defendant’s legal staff, and that DCL and the defendant made “affirmative misrepresentations” that DCL was the only entity that could be liable for the plaintiffs’ contract-based claim.
They relied on these statements to pursue a legal claim only against DCL.
Thereafter, the Court of Claims held the plaintiffs’ amended complaint supported a claim for fraudulent concealment, which tolled the statutory notice provision in MCL 600.6431. As a result, the Court of Claims denied the defendant’s motion for summary disposition and subsequently denied the defendant’s motion for reconsideration. The defendant appealed.
The Michigan Court of Appeals affirmed in a 2-1 unpublished opinion (Docket No. 367598). “Accepting the [plaintiffs’] allegations as true, a genuine issue of material fact exists regarding whether MSU’s representatives fraudulently misrepresented its liability for DCL’s contractual obligations and whether the [the plaintiffs] relied on those misrepresentations when filing their claim against MSU more than one year after the claim accrued,” the majority said. “Accordingly, the Court of Claims did not err by denying MSU’s motion for summary disposition.” Court of Appeals Judge Michael J. Kelly dissented and said, “… MCL 600.5855 is a tolling statute. It cannot be used to toll claims before those claims exist.”
The defendant appealed to the Michigan Supreme Court. The high court ordered oral argument on the application and instructed the parties to address the following issues:
whether the fraudulent concealment exception in MCL 600.5855 applies to the statutory notice period in MCL 600.6431(1).
whether the holding in Doe v Roman Catholic Archbishop of Archdiocese of Detroit, 264 Mich App 632 (2004), that “actions taken before the alleged injury” are not “capable of concealing causes of action that did not yet exist” applied in this case – and if so, how.
when the plaintiffs’ cause of action accrued.
In an order, the Michigan Supreme Court declined to hear the defendant’s appeal, stating it was “not persuaded” it should review the question presented. Justice Richard H. Bernstein issued a separate concurrence, which Justice Elizabeth M. Welch joined. Justice Welch also wrote her own concurrence, which Justice Noah P. Hood joined. Justice Brian K. Zahra dissented.
Concurring Statements
In his concurrence to the high court’s order, Justice Bernstein wrote separately “to address the intersection between this Court’s decision in Christie v Wayne State Univ, 511 Mich 39 (2023), and the notice requirements of the Court of Claims Act, MCL 600.6401 et seq.”
Justice Bernstein noted that MCL 600.6431(1) says: “Except as otherwise provided in this section, a claim may not be maintained against this state unless the claimant, within 1 year after the claim has accrued, files in the office of the clerk of the court of claims either a written claim or a written notice of intention to file a claim against this state or any of its departments, commissions, boards, institutions, arms, or agencies.” In other words, “MCL 600.6431(1) establishes a precondition to filing suit against the state.”
Meanwhile, Justice Bernstein pointed out the fraudulent-concealment provision in MCL 600.5855 says: “If a person who is or may be liable for any claim fraudulently conceals the existence of the claim or the identity of any person who is liable for the claim from the knowledge of the person entitled to sue on the claim, the action may be commenced at any time within 2 years after the person who is entitled to bring the action discovers, or should have discovered, the existence of the claim or the identity of the person who is liable for the claim, although the action would otherwise be barred by the period of limitations.”
Justice Bernstein further explained that, in Mays v Governor (Mays II), 506 Mich 157 (2020), he had expressed his “belief that the fraudulent-concealment exception of MCL 600.5855 tolls the statutory notice period of MCL 600.6431(1). … While the Court of Claims Act does not expressly incorporate MCL 600.5855, I noted that if the fraudulent-concealment exception could not be applied to toll the statutory notice period of MCL 600.6431 when a claim was fraudulently concealed from a plaintiff for more than six months, a plaintiff’s otherwise actionable claim would thus always fail on notice grounds. … To hold that the Legislature barred only non-governmental actors from benefiting from their own fraud would be more than a little disturbing, especially given that the language of the relevant statutes does not require such a conclusion. I continue to stand by my previous position.”
Justice Bernstein concluded, “I believe that the fraudulent-concealment exception of MCL 600.5855 tolled the one-year notice period of MCL 600.6431(1) for plaintiffs’ claims. This conclusion is faithful to the statutory scheme, is not inconsistent with our decision in Christie, and fulfills the Legislature’s intent to provide claimants whose claims were concealed by deceitful defendants the ability to litigate their otherwise justiciable claims. Accordingly, I join in this Court’s decision to deny leave in this case.”
Justice Welch joined Justice Bernstein’s concurring statement and also wrote her own concurrence, which Justice Noah P. Hood joined. “I write separately to observe that the matter could also be resolved on alternative and arguably simpler grounds: plaintiffs’ claims did not accrue until they discovered the fraudulent concealment in May 2022,” Justice Welch said. “And because plaintiffs filed their complaint four months after the accrual date, they satisfied the one-year statutory notice requirement.”
According to Justice Welch, the plaintiffs’ claims “did not accrue until they discovered the alleged fraudulent concealment in May 2022. And because plaintiffs filed their complaint four months later, they satisfied the Court of Claims Act’s notice requirement. See MCL 600.6431(1). Accordingly, tolling was not necessary.”
Dissenting Statement
In his dissent, Justice Zahra explained the Court of Appeals majority had relied on Mays v Governor (Mays I), 323 Mich App 1 (2018), to find that “the fraudulent concealment exception in MCL 600.5855 – a provision of the Revised Judicature Act (RJA) – is capable of tolling the one-year statutory notice provision set forth in MCL 600.6431, which is part of the Court of Claims Act ….”
The Court of Appeals majority “then went on to hold that a genuine issue of material fact exists as to whether that exception applies under the facts of this case,” Justice Zahra said. “In keeping with my position in Mays v Governor (Mays II), I instead conclude that the fraudulent-concealment exception cannot toll the one-year statutory notice provision.”
According to Justice Zahra, his conclusion was “mandated by the plain language of MCL 600.6431 and by this Court’s recent decision in Christie v Wayne State Univ, in which this Court unanimously opined that the only exception to the notice requirement in MCL 600.6431(1) is contained within the text of MCL 600.6431 itself.”
Further, “[t]o read MCL 600.5855 (or other provisions of the RJA) into MCL 600.6431 would undermine the Legislature’s intentional choice to incorporate sections of the RJA in certain provisions of the COCA, but not others,” Justice Zahra stated. “For these reasons, I conclude that MCL 600.5855 is incapable of tolling MCL 600.6431’s notice period.”
Therefore, “[g]iven my conclusion that MCL 600.5855 does not apply to MCL 600.6431, I need not consider whether the alleged facts support its application in this case,” Justice Zahra said. “Plaintiffs failed to comply with MCL 600.6431’s notice requirement, and defendant is therefore entitled to summary disposition. Accordingly, I would reverse the judgment of the Court of Appeals.”
