Phinney v. Perlmutter

Decision Date04 April 1997
Docket NumberDocket Nos. 175485,175857 and 176940
Parties, 118 Ed. Law Rep. 1156 Carolyn PHINNEY, Plaintiff/Appellee/Cross-Appellant, v. Lois Verbrugge and Richard Adelman, Defendants/Cross-Appellees, and Marion PERLMUTTER, Defendant/Appellant/Cross-Appellee. Carolyn PHINNEY, Plaintiff/Appellee/Cross-Appellant, v. Richard ADELMAN, Defendant/Appellant/Cross-Appellee, and Lois Verbrugge and Marion Perlmutter, Defendants. Carolyn PHINNEY, Plaintiff/Appellant/Cross-Appellee, v. UNIVERSITY OF MICHIGAN BOARD OF REGENTS, Defendant/Appellee/Cross-Appellant.
CourtCourt of Appeal of Michigan — District of US

Green & Green by Philip Green (Sommers, Schwartz, Silver & Schwartz, P.C. by Patrick Burkett, Southfield, of counsel), Ann Arbor, for Carolyn Phinney.

Bodman, Longley & Dahling, L.L.P. by Jerold Lax, Ann Arbor, for Marion Perlmutter.

Butzel Long by Diane M. Soubly and James S. Rosenfeld, Birmingham, for Lois Verbrugge, Richard Adelman, and University of Michigan Board of Regents.

Before WAHLS, P.J., and MURPHY and C.D. CORWIN *, JJ.

WAHLS, Presiding Judge.

Defendant Marion Perlmutter hired plaintiff, Carolyn Phinney, as a senior research associate at the Institute of Gerontology (IOG) at the University of Michigan. At the time, Perlmutter was a research scientist at the IOG, and defendant Richard Adelman was the Director of the Institute. Plaintiff accused Perlmutter of stealing her research. Adelman appointed defendant Lois Verbrugge to conduct an investigation. The investigators found that Perlmutter was not guilty of scientific misconduct. Perlmutter was also found not guilty in two other investigations concerning allegations that she committed plagiarism. In the meantime, plaintiff lost her job at the IOG.

Plaintiff sued, alleging that Perlmutter had defrauded her of her research, and that Adelman and defendant University of Michigan Board of Regents retaliated against her for reporting Perlmutter's misconduct. The jury agreed with plaintiff and awarded her $133,000 in damages against Perlmutter for fraud and $989,200 against Adelman for retaliatory discrimination. The trial court, sitting as the Court of Claims, found no cause of action against the board of regents with regard to plaintiff's claim under the Whistleblowers' Protection Act (WPA), M.C.L. § 15.361 et seq.; M.S.A. § 17.428(1) et seq.

In Docket No. 175485, which involved the fraud claim, Perlmutter appeals and plaintiff cross appeals the judgment against Perlmutter. We affirm in part and remand for a recalculation of the amount of prejudgment interest to which plaintiff is entitled.

In Docket No. 175857, the retaliation claim against Adelman, Adelman appeals and plaintiff cross appeals the judgment against Adelman. We affirm in part and remand for a recalculation of the amount of prejudgment interest to which plaintiff is entitled.

In Docket No. 176940, the claim against the board of regents, plaintiff appeals and the board of regents cross appeals the trial court's order finding no cause of action against the board of regents. We affirm.

Docket No. 175485
I

Perlmutter argues that the trial court lacked subject-matter jurisdiction because plaintiff's claim involves rights arising under federal copyright law. We disagree.

Whether a court has subject-matter jurisdiction is a question of law. Universal Am-Can Ltd. v. Attorney General, 197 Mich.App. 34, 37, 494 N.W.2d 787 (1992). The burden is on the plaintiff to establish jurisdiction. Id. Although the jurisdictional issue here was never resolved by the trial court, a challenge to subject-matter jurisdiction may be raised at any time, even for the first time on appeal. Lehman v. Lehman, 312 Mich. 102, 105, 19 N.W.2d 502 (1945); Ass'n of Businesses Advocating Tariff Equity v. Public Service Comm., 192 Mich.App. 19, 24, 480 N.W.2d 585 (1991).

In general, a federal court does not have original jurisdiction over a case in which the complaint presents a state-law cause of action. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 2846-47, 77 L.Ed.2d 420 (1983). Here, plaintiff's complaint alleges a state-law claim of fraud. See Hi-Way Motor Co. v. Int'l Harvester Co., 398 Mich. 330, 336, 247 N.W.2d 813 (1976); Baker v. Arbor Drugs, Inc., 215 Mich.App. 198, 208, 544 N.W.2d 727 (1996). Accordingly, a federal court does not have subject-matter jurisdiction over this claim. Franchise Tax Bd, supra.

In addition, plaintiff's claim was not preempted by the Copyright Act. Before an action for infringement may be made under the federal Copyright Act, a publication must be registered. 17 USC 411(a); Marshall & Swift v. BS & A Software, 871 F.Supp. 952, 957 (W.D.Mich., 1994). This is a jurisdictional requirement. Id, at p. 958; Carter v. Helmsley-Spear, Inc., 861 F.Supp. 303, 331 (S.D.N.Y., 1994), modified on other grounds 71 F.3d 77 (C.A.2, 1995). Here, plaintiff never claimed that any of the works written by her, whether alone or as a joint author, were duly registered with the Register of Copyrights. In addition, defendants have provided no evidence of such registration. Thus, assuming arguendo that plaintiff's complaint can be construed to allege a violation under the Copyright Act, a federal court would not have had jurisdiction to hear such a claim. Marshall & Swift, supra, at p. 958; Carter, supra, at p. 331. Accordingly, the trial court had jurisdiction to hear plaintiff's claim.

II

Perlmutter argues that the trial court abused its discretion by permitting plaintiff to file a fourth amended complaint. We disagree. Amendment is generally a matter of right rather than grace. Patillo v. Equitable Life Assurance Society of the United States, 199 Mich.App. 450, 456, 502 N.W.2d 696 (1992). A trial court should freely grant leave to amend if justice so requires. MCR 2.118(A)(2). Leave to amend should be denied only for particularized reasons, such as undue delay, bad faith, or dilatory motive on the movant's part, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, or where amendment would be futile. Horn v. Dep't of Corrections, 216 Mich.App. 58, 65, 548 N.W.2d 660 (1996). This Court reviews a grant or denial of a motion for leave to amend pleadings for abuse of discretion. Id. Here, Perlmutter has identified no prejudice that occurred because of the trial court's decision other than the generalized assertion that justice was not done. The trial court did not abuse its discretion in granting plaintiff leave to amend her complaint. Patillo, supra, at p. 456, 502 N.W.2d 696.

III

Perlmutter argues that plaintiff's claim was barred by the statute of frauds. We disagree. Assuming arguendo that plaintiff's claim is inextricably bound to her contract claim, an agreement for an indefinite term of employment is generally regarded as not being within the proscription of the statute of frauds. Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 612, n. 24, 292 N.W.2d 880 (1980). Employers are not protected against jury resolution of a claim of an oral agreement for an indefinite term. Id. Because plaintiff testified that Perlmutter offered her a position that could turn into a "long term research career" if they were successful in bringing in grant money, the trial court did not err in denying defendant's motion for summary disposition. Id.

IV

Perlmutter argues that the trial court erred in denying her motion for a directed verdict based on governmental immunity. We disagree. Viewing the evidence in the light most favorable to plaintiff, Hatfield v. St. Mary's Medical Center, 211 Mich.App. 321, 325, 535 N.W.2d 272 (1995), Perlmutter made job promises to plaintiff with knowledge of their falsity and with the intent that plaintiff would act on those promises. Because a question of fact existed regarding whether Perlmutter's actions were so reckless as to demonstrate a substantial lack of concern for whether an injury resulted, the trial court did not err in denying Perlmutter's motion for a directed verdict based on governmental immunity. M.C.L. § 691.1407(2); M.S.A. § 3.996(107)(2); Johnson v. Wayne Co., 213 Mich.App. 143, 159, 540 N.W.2d 66 (1995).

V

Perlmutter argues that the verdict against her was against the great weight of the evidence. We disagree. Perlmutter preserved this issue by moving for a directed verdict, a judgment notwithstanding the verdict (JNOV), and a new trial on this basis.

The standard of review for JNOV requires review of the evidence and all legitimate inferences in the light most favorable to the nonmoving party. Orzel v. Scott Drug Co., 449 Mich. 550, 557, 537 N.W.2d 208 (1995); Severn v. Sperry Corp., 212 Mich.App. 406, 412, 538 N.W.2d 50 (1995). Only if the evidence, so viewed, fails to establish a claim as a matter of law, should a motion for JNOV be granted. Orzel, supra, at p. 558, 537 N.W.2d 208. Similarly, in deciding a motion for a directed verdict, the trial court must consider the evidence in the light most favorable to the nonmoving party, making all reasonable inferences in favor of the nonmoving party. Mahrle v. Danke, 216 Mich.App. 343, 350, 549 N.W.2d 56 (1996). This Court reviews all the evidence presented up to the time of the motion to determine whether a question of fact existed. Hatfield, supra, at p. 325, 535 N.W.2d 272. This Court will not disturb the trial court's decision absent a clear abuse of discretion. Id. Finally, with respect to a motion for a new trial, the trial court's function is to determine whether the overwhelming weight of the evidence favors the losing party. Severn, supra, at p. 412, 538 N.W.2d 50. This Court's function is to determine whether the trial court abused its discretion in making such a finding. Id. This Court gives substantial deference to the trial court's conclusion that a verdict was...

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