DAVID SLATES V DEAN DERBYSHIREAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
DAVID SLATES and DREAM STAR STABLES,
June 16, 1998
Oakland Circuit Court
LC No. 92-442951 CB
Before: Markman, P.J., and Saad and Hoekstra, JJ.
Defendant appeals as of right the trial court’s order of judgment for plaintiffs. We affirm.
Defendant argues that the trial court lacked personal jurisdiction. We review de novo the trial
court’s jurisdictional rulings. Jeffrey v Rapid American Corp, 448 Mich 178, 184; 529 NW2d 644
(1995). When analyzing whether the exercise of limited personal jurisdiction over a given defendant is
proper, the courts generally apply a two-step inquiry. Id. First, defendant must come within the reach
of Michigan’s “long-arm” statutes: MCL 600.705; MSA 27A.705 (individuals), MCL 600.725; MSA
27A.725 (partnerships). Here, it is undisputed that the partnership filed an assumed name certificate in
Oakland County in 1990. Consistent with the activity listed in the certificate, the partnership raced its
horses in four or five Michigan races over the next two years. This activity constituted the “transaction
of any business” and was a sufficient basis for the court to exercise limited personal jurisdiction pursuant
to MCL 600.705(1); MSA 27A.705(1) and MCL 600.725(1); MSA 27A.725(1).
Second, due process requires that a defendant have certain minimum contacts with the forum
state so that the maintenance of the suit “does not offend traditional notions of fair play and substantial
justice.” Starbrite Distributing, Inc v Excelda Mfg Co, 454 Mich 302, 308; 562 NW2d 640 (1997)
(quoting International Shoe Co v Washington, 326 US 310, 316; 66 S Ct 154; 90 L Ed 95 (1945)).
In determining whether a defendant has sufficient minimum contacts with Michigan to support the
exercise of limited personal jurisdiction, the court applies a three-prong test: (1) the defendant must
have purposefully availed itself of the privilege of conducting activities in Michigan, thus invoking the
benefits and protection of Michigan’s laws; (2) the cause of action must arise from the defendant’s
activities in the state; and (3) the defendant’s activities must be so substantially connected with Michigan
as to make the exercise of jurisdiction over defendant reasonable. Id. at 309. Contrary to defendant’s
argument that his activity in Michigan was insufficient to confer jurisdiction, we find that as applied to
these facts, all three prongs of the minimum contacts test are satisfied.
The partnership purposely availed itself of the privilege of conducting activities in Michigan and
deliberately invoked the benefits and protection of Michigan’s laws by filing an assumed name certificate
in Oakland County in 1990. Defendant’s argument that he did not authorize the filing of the assumed
name certificate is without merit. Under the Uniform Partnership Act, MCL 449.9(1); MSA 20.9(1),
every partner is an agent of the partnership for the purpose of its business, and the act of every partner,
including the execution in the partnership name, of any instrument for apparently carrying on in the usual
way the business of the partnership of which he is a member, binds the partnership. Omnicom of
Michigan v Giannetti Investment Co, 221 Mich App 341, 344; 561 NW2d 138 (1997). Defendant
and the partnership also purposely availed themselves of the privilege of conducting activities in
Michigan by entering partnership-owned horses in Michigan races. Defendant does not dispute that this
business activity occurred “four or five times” over a two-year period. Therefore, the first prong of the
minimum contacts test has been satisfied.
Additionally, this cause of action for dissolution of the partnership and accounting arises from
defendant’s activities in the state. The action for accounting suggests that defendant’s alleged failure to
account for assets, funds, and inventory, as charged in the complaint, could constitute a breach of a
fiduciary duty to the partnership. The partnership was not only doing business in Michigan but also kept
its primary books and records in Michigan. Therefore, the second prong of the minimum contacts test
has been satisfied.
Last, defendant’s activities are so substantially connected with Michigan as to make the exercise
of jurisdiction over him and the partnership reasonable. Nothing in the record indicates that defendant
disputed the propriety of filing an assumed name certificate in Michigan before the instant action.
Indeed, filing in Michigan was entirely appropriate because plaintiff David Slates resided in Michigan
and maintained the books and records for the partnership in Michigan. Additionally, the business
purpose of the partnership was to own, breed, and race horses, and defendant allowed horses to be
raced in Michigan on at least four separate occasions. This Court has held that even a single transaction
may be sufficient to satisfy the minimum contacts test. Parrish v Mertes, 84 Mich App 336, 339; 269
NW2d 591 (1978). Therefore, defendant should have reasonably expected that these actions would
allow him to be haled into a Michigan court.
We hold that the trial court properly exercised limited personal jurisdiction over defendant
because both the Michigan long-arm statutes and the three-prong minimum contacts test outlined in
Starbrite, supra, were satisfied.
Defendant also asserts that because the arbitrator exceeded his powers in several instances, the
trial court erred in refusing to vacate the arbitration award pursuant to MCR 3.602(J)(1)(c) and grant a
rehearing pursuant to MCR 3.602(J)(3). Arbitrators exceed their powers whenever they act beyond
the material terms of the contract from which they primarily draw their authority or act in contravention
of controlling principles of law. Dohanyos v Detrex Corp (After Remand), 217 Mich App 171, 176;
550 NW2d 608 (1996). This Court’s ability to review an arbitration award to determine whether an
arbitrator exceeded the scope of its authority is restricted to cases in which an error of law appears on
the face of the award, the terms of the contract of submission, or such documentation as the parties
agree will constitute the record. Id. at 175-176. Because the parties agreed not to create a record of
the arbitration proceedings in this case, our review is limited to errors of law that appear on the face of
First, defendant argues that the arbitrator exceeded his power by admitting plaintiff’s
summarized schedules pursuant to MRE 1006 rather than requiring plaintiff to submit actual receipts for
money received and expenses paid on behalf of the partnership. Defendant’s claim is not an error of
law that appears on the face of the arbitrator’s decision but instead concerns a procedural matter.
Procedural matters, including a determination of whether and to what extent the rules of evidence will be
followed, are to be left to the arbitrator and are not judicially reviewable. Bay Co Building Authority v
Spence Bros, 140 Mich App 182, 188; 362 NW2d 739 (1984); Gozdor v Detroit Automobile
Inter-Ins Exchange, 52 Mich App 49, 51; 216 NW2d 436 (1974). Therefore, we will not disturb this
Next, in a related argument, defendant asserts that because plaintiff Slates failed to submit actual
receipts for money received and expenses paid on behalf of the partnership, the arbitrator improperly
assessed mediation sanctions. We disagree. Defendant was assessed attorney fees, one-half the cost
of the arbitration, and the entire cost for the supplemental arbitration. According to the arbitrator’s
Second Supplement to Arbitration Decision, the arbitrator determined a fair and reasonable hourly rate
for an experienced attorney. Moreover, defendant presented no evidence to counter plaintiff Slates’
proofs as to attorney fees and costs. We find that the total mediation sanctions were properly assessed.
Next, defendant argues that the arbitrator exceeded his power in prematurely issuing the
mediation award. We disagree. The order that put the case into arbitration expressly provided that the
arbitrator would determine the issue of mediation sanctions and that his finding would be binding. It was
only after the arbitration had concluded and the mediation sanctions were awarded that defendant
argued that the award of mediation sanctions was premature. Nothing on the face of the award
indicates that the arbitrator intended to postpone determination of mediation sanctions until all such
partnership assets had been sold. Indeed, in his Second Supplement to Arbitration Decision, the
arbitrator expressly notes that he knew that all of the horses had not yet been sold when he made his
Last, defendant argues that the arbitrator exceeded his power in failing to consider the exchange
rate between United States and Canadian currency. We disagree. The arbitrator clearly stated that he
received and considered all information provided by both parties, including the parties’ arguments about
the currency and their agreement to be bound by a lump sum award. This Court may not substitute its
finding of fact for that of the arbitrator on this issue. Byron Center Public Schools v Kent Co Ed
Ass'n, 186 Mich App 29, 31; 463 NW2d 112 (1990).
Because no error of law appears on the face of the award, we hold that the trial court properly
refused to vacate the arbitration award or grant a rehearing.
/s/ Stephen J. Markman
/s/ Henry William Saad
/s/ Joel P. Hoekstra