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Where a motion has been filed to dismiss counterclaims asserted by a defendant, the motion should be denied because the counterclaims are not time-barred.
“This matter is before the Court on Counter-Defendant’s Motion for Summary Disposition pursuant to MCR 2.116(C)(7) and (C)(8), which requests dismissal of all the counterclaims seeking monetary damages from Jamal Kalabat on the basis that the claims brought against him fail as a matter of law and are time-barred.
“Kalabat argues that while the Danial Parties have vaguely pled that Kalabat fraudulently concealed the 2018 assignment of a 50% membership interest in him, the counterclaim lacks any allegation of affirmative acts or misrepresentations by him that are necessary to support the invocation of MCL 600.5855 for the claims asserted against him. As a result, Kalabat contends the conspiracy and conversion claims based on the 2018 assignment of membership interests in MDC to him are time barred and must be dismissed.
“The Danial Parties contend that they allege, in detail, how the statute of limitations was tolled pursuant to MCL 600.5855 given both Roscoe’s and Kalabat’s fraudulent concealment of the conversion and conspiracy claims.
“The Court disagrees with Kalabat’s conclusion that the Danial Parties did not sufficiently allege that he committed an affirmative act of fraudulent concealment and that, as a result, MCL 600.5855 does not apply to toll the limitations period of the conversion and conspiracy claims asserted against him. The Danial Parties allege, with the requisite specificity, that both Roscoe and Kalabat committed affirmative acts of fraudulent concealment.
“In addition, Kalabat erroneously asserts that because the Danial Parties purportedly fail to allege that Kalabat himself committed an affirmative act of fraudulent concealment, MCL 600.5855 does not apply. The statute expressly provides that the statute of limitations are tolled as to claims against one potential defendant to the extent another defendant fraudulently conceals the identity of that potential defendant. Therefore, because the Danial Parties sufficiently plead that Roscoe fraudulently concealed (i) the existence of any claim arising out of the January 1, 2018 Assignment, and (ii) the identity of Kalabat as a potential defendant in relation to that assignment, MCL 600.5855 applies and the limitations period for conspiracy and conversion claims against Roscoe and Kalabat would be tolled.
“Kalabat argues that the Danial Parties have failed to state conversion claims on which relief can be granted because there is no allegation Kalabat is exercising control over the MDC membership interests or that he is using the MDC membership interests for his personal use, as required by the conversion statute, MCL 600.2919a (‘[a]nother person’s stealing or embezzling property or converting property to the other person’s own use). Kalabat contends that the Danial Parties have not and cannot allege he is personally exercising dominion or control over the MDC membership interests, and as a result the conversion claims against him fail as a matter of law.
“The Danial Parties argue that they have sufficiently pled claims for statutory and common law conversion against Kalabat personally, as the conversion statute and controlling caselaw confirm that one does not have to be the entity or individual who actually converts the property to their ‘own use’ to be liable for conversion as Kalabat suggests. MCL 600.2919a(l)(b) specifically provides that anyone who conceals or aids in the concealment may be liable for conversion. The Danial Parties declare (i) that Kalabat is the member and manager of KCG, (ii) that he aided in KCG’s wrongful receipt of the MDC membership interests, and (iii) as a result, he is personally liable for the conversion that he committed for the benefit of KCG.
“The Court rejects Kalabat’s argument that he cannot be held personally liable for the conversion of MDC interests because those interests were received and retained by KCG and not him personally. Michigan law establishes that company officials may be held personally liable for their individual tortious acts done in the course of business, regardless of whether they were acting for their personal benefit or the company’s benefit. Michigan jurisprudence further establishes that a member-manager who causes company to commit conversion is subject to personal liability even if the company received and retained the benefits.
“The Danial Parties allege Kalabat intentionally interfered with that May 2, 2019 settlement contract with Roscoe, by purchasing a 50% membership interest in MDC on behalf of KCG from Roscoe in August 2024. While unclear, it appears Kalabat argues that the claim fails as a matter of law because it would be impossible for him to instigate or induce Roscoe to breach the 2019 settlement contract when it was already fully performed.
“The Danial Parties argue they have sufficiently alleged that Kalabat unjustifiably instigated Roscoe’s breach of the May 2, 2019 settlement agreement. The Danial Parties allege that Kalabat knew about the Settlement given his participation in the Oliver Trust Litigation, but that he still unjustifiably instigated a breach of that agreement thereafter by purportedly purchasing a 50% membership interest in MDC from Roscoe on behalf of KCG. The Danial Parties argue their allegations more than sufficiently plead an unjustified instigation of the breach by Kalabat.
“The Danial Parties’ allegations, accepted as true and construed in a light most favorable to the Counter-Defendants, are sufficient to state a claim for tortious interference with a contract against Kalabat. Upon review of the allegations under Count VII of the Counterclaim, the Court notes that the Danial Parties adequately plead the requisite elements of a claim for tortious interference with a contract.”
