One type of fraud recognized by the State of Michigan can happen when a party promises to perform and never had any subjective intent to perform. If the promissor intended the other party to rely on the representations and the other party actually relied on the representations to his/her detriment then fraud may be established. In Michigan and in several other states fraud is considered so serious that a plaintiff must be especially specific in his/her allegations and prove the fraud by clear and convincing evidence (as opposed to a preponderance of the evidence).
In this case, the Plaintiff was an employee of Court Innovations, Inc. and Mary Jo (“MJ”) Cartwright. She (the Plaintiff) had been hired to do sales for Court Innovations, Inc., – a company that provides web-based services to courts. The Plaintiff began work with Court Innovations and MJ Cartwright in September 2016. Throughout the course of Plaintiff’s tenure with Court Innovations, MJ Cartwright expressed to the Plaintiff that her jewelry and attire were not consistent with the company’s image. One might imagine that this was because the Plaintiff didn’t dress well enough or wore gaudy jewelry; one would be wrong. In fact, Ms. Cartwright’s complaint was that the Plaintiff dressed too well and wore too many pieces of nice jewelry (the Plaintiff wore a wrist watch, 4 chrome-colored rings with small clear crystals (the largest being .92 carat), and a sterling silver tennis bracelet with small clear crystals.
The Plaintiff, a woman, had a director-level male colleague who participated in the sales process. This gentleman routinely wore his Rolex Submariner watch on sales calls and often wore expensive leather shoes. To the best of the Plaintiff’s knowledge, Ms. Cartwright never expressed to the gentleman that such expensive jewelry and clothing were not consistent with the company’s image.
The Plaintiff was demoted to a sales administrator job in late December 2016 and, at the time, was told by MJ Cartwright that a reason for the demotion was how the Plaintiff dressed and wore jewelry. The Plaintiff was then terminated from employment in January 2017.
The Plaintiff hired an attorney (not from this Firm) to assert a claim for gender discrimination. Upon the assertion of the claim, the parties began negotiation for settlement. On April 12, 2017 the parties reached a settlement through email. The settlement required Court Innovations, Inc. to remit $2,800.00 to Plaintiff and for MJ Cartwright to, within 60 days, take a one hour training class in equal employment opportunity (gender discrimination), the parties to release each other and not to disparage each other. As is common with attorney-negotiation settlements, the attorney for the Defendants, Sara Prescott of Salvatore, Prescott & Porter, PLLC, volunteered to write a proposed formal document.
About 7 weeks later, Attorney Prescott provided the proposed formal document to Plaintiff’s Attorney who then provided it to her client, the Plaintiff. The Plaintiff returned the document, signed, to her Attorney who, about 7 weeks later, sent it by email to Attorney Prescott (Plaintiff’s Attorney mistakenly thought that she had previously sent the signed document to Attorney Prescott).
Despite several emails and telephone calls, Attorney Prescott failed to communicate with Plaintiff’s attorney who sought the status of the formal document as well as the status of the $2,800.00 and of MJ Cartwright’s training in gender discrimination. There being no indication that Court Innovations, Inc. and/or MJ Cartwright had any intention to perform on their promises, Plaintiff retained this Firm to represent her.
This Firm filed an action in the 14A1 Judicial District Court claiming breach of contract and fraud against both Court Innovations, Inc. and MJ Cartwright. The Plaintiff claimed fraud because, despite having sufficient time to make good on their promises from the settlement reached on April 12, 2017, the Defendants had failed to perform even one promise indicating they possibly never had any intent to perform on any of their promises. The Defendants moved for summary disposition, claiming the Plaintiff failed to state a claim upon which relief could be granted. The Plaintiff, as was her right, filed an amended complaint and a response to the motion for summary disposition. Soon thereafter, Defendants offered judgment (under Court Rule 2.405) to the Plaintiff in the amount of $2,800.00 holding both Defendants liable on both counts – fraud and breach of contract. The Plaintiff accepted and the judgment entered on December 11, 2017 holding both Court Innovations, Inc. and MJ Cartwright liable for both fraud and breach of contract.
Under Michigan law, a judgment under Michigan Court Rule 2.405 is a full and final judgment on the merits of the case. See Hanley v. Mazda Motor Corp., 239 Mich.App. 596 (Mich.App. 2000).
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