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STATE OF MICHIGAN COURT OF APPEALS

QUALITY MANUFACTURING, INC., Plaintiff-Appellee/Cross Appellant, v BRIAN D. MANN, BRIAN D. MANN, JR., and QUALITY WAY PRODUCTS, LLC, Defendants-Appellants/Cross Appellees, and BRIAN D. MANN, Counter Plaintiff-Appellant/Cross Appellee, v QUALITY MANUFACTURING, INC., Counter Defendant-Appellee/Cross Appellant, and BRIAN D. MANN, Third Party Plaintiff-Appellant, v JAMES E. KIRBY, Third Party Defendant-Appellee.

UNPUBLISHED December 15, 2009

No. 286491 Genesee Circuit Court LC No. 04-079512-CZ

Before: Stephens, P.J., and Cavanagh and Owens, JJ.

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PER CURIAM. Defendants Brian D. Mann, Brian D. Mann Jr., and Quality Way Products, LLC appeal by right a judgment entered in favor of plaintiff Quality Manufacturing, Inc., who cross appeals, following a twelve-day bench trial in this case involving a failed business relationship. We reverse in part, affirm in part, and remand for further proceedings. Defendants raise several arguments on appeal, but we begin with their last issue which challenged as erroneous the trial court's conclusions of law that defendants breached fiduciary duties, conspired to breach fiduciary duties, and tortiously interfered with Quality Manufacturing's employees and customer relationships. After review of the trial court's findings of fact for clear error and de novo review of its conclusions of law, we agree with defendants. See Chapdelaine v Sochocki, 247 Mich App 167, 169; 635 NW2d 339 (2001). Although Quality Manufacturing argues that this issue was not preserved for appellate review, a party is not required to take exception to a trial court's findings or decisions when a bench trial is held. See MCR 2.517(A)(7); Morris v Clawson Tank Co, 459 Mich 256, 275 n 13; 587 NW2d 253 (1998). Mann was vice president of Quality Manufacturing from about May of 1994, when it was incorporated, until July 2, 2004, when he notified Kirby, its president and sole shareholder, that he resigned. According to Mann, he resigned because Kirby failed to honor his repeated promise that Mann was a 50 percent owner of the company and legal documents reflecting that interest would be forthcoming. Mann then incorporated a business, called Quality Way, which directly competed with Quality Manufacturing. Employees from Quality Manufacturing voluntarily chose to become employees of Quality Way. Many former customers of Quality Manufacturing became customers of Quality Way. Quality Manufacturing sued, alleging that Mann breached his fiduciary duties as vice president and that Mann Jr. conspired with him to do so. These claims are without legal merit. MCL 450.1541a(1) of the business corporation act provides: (1) A director or officer shall discharge his or her duties as a director or officer including his or her duties as a member of a committee in the following manner: (a) In good faith. (b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances. (c) In a manner he or she reasonably believes to be in the best interests of the corporation. And, with regard to an officer's duties, MCL 450.1531(4) provides: "An officer, as between himself and other officers and the corporation, has such authority and shall perform such duties in the management of the corporation as may be provided in the bylaws, or as may be determined by resolution of the board not inconsistent with the bylaws." It does not appear from the record

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evidence in this case that Mann's duties as vice president were set forth in bylaws.1 Clearly, the statutory duties imposed on Mann as vice president related to the management of Quality Manufacturing. Quality Manufacturing has never claimed that Mann breached his fiduciary duties with regard to the actual operational management of Quality Manufacturing; rather, the claims were that he breached his duties by planning for his competing business while employed at Quality Manufacturing, resigning unexpectedly, opening a competing business, and "taking" its employees and customers with him. The trial court, citing MCL 450.1541(a), held that Mann was required, at least, to give notice of his intentions with regard to Quality Manufacturing: In essence, Brian Mann Sr., vice president of Quality Manufacturing, orchestrated a sneak attack on Quality Manufacturing which was planned while he was an officer of that corporation. His actions cannot be determined to be conducted in "a manner he reasonably believed to be in the best interests of the corporation." At the very least, Quality Manufacturing was entitled to notice of what was a foot [sic]. I find under the circumstances of this case that Mann as vice president of the company had an obligation to give notice of his intention to leave, give notice of his intention to form a competitive company and give notice of his intention to raid Quality Manufacturing's employees. Not doing so was wrongful and a breach of his duties as an officer of that corporation. His conduct put Quality Manufacturing at a competitive disadvantage. We disagree with the trial court's conclusions as unsupported by the facts and the law. First, Quality Manufacturing failed to set forth any legal authority in support of its claim that Mann was required to give any specific notice of his intention to resign as vice president and terminate his employment. Under MCL 450.1535(1), an officer can be removed with or without cause and there is no indication that notice is required. By the same token, MCL 450.1535(3) provides that an officer "may resign by written notice to the corporation." The statutory language is permissive, not mandatory; there is no indication that any particular notice of resignation, written or otherwise, is required by statute. And, according to the record evidence, Mann was not a party to an employment contract with Quality Manufacturing that obligated him to tender any particular notice of resignation. Under Michigan law, then, Mann's employment with Quality Manufacturing is presumed to have been at-will employment. See Rood v General Dynamics Corp, 444 Mich 107, 116; 507 NW2d 591 (1993); Franzel v Kerr Mfg Co, 234 Mich App 600, 612; 600 NW2d 66 (1999). Thus, the employment relationship was terminable by Quality Manufacturing or Mann at any time, for any or no reason whatsoever. Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692, 694695; 316 NW2d 710 (1982); Kimmelman v Heather Downs Mgt Ltd, 278 Mich App 569, 572; 753 NW2d 265 (2008). Therefore, the trial court's legal conclusion that Mann breached a fiduciary duty owed to Quality Manufacturing by failing to provide notice of his intention to terminate the employment relationship is erroneous and is reversed.
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We note that the trial exhibits were not provided to this Court. See MCR 7.210.

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Second, Quality Manufacturing failed to set forth apposite legal support for its claims that it was entitled to notice of Mann's intention to form a competitive company or that Mann could not plan for his own competing business while an officer employed by Quality Manufacturing. Instead, in support of these claims, Quality Manufacturing relies, as it did in its trial brief, solely on the case of Production Finishing Corp v Shields, 158 Mich App 479; 405 NW2d 171 (1987), a case that is clearly factually distinguishable. In that case, the defendant officer was actively pursuing a "longstanding objective" of the plaintiff which was to secure a particular business opportunity with a particular potential client for the plaintiff. Id. at 483. When that potential client indicated that it did not want to do business with the plaintiff, the defendant officer asked if they would consider becoming his personal client. Id. Thereafter, the defendant officer submitted a proposal to the prospective client and met with them several times in pursuit of this business opportunity for himself, not for his employer. Id. at 484. He then purchased equipment and established a corporation to perform those services for that particular client in July of 1981, while he remained an officer of the plaintiff's company. The defendant officer did not inform the plaintiff of these events until after he resigned in August of 1981. This Court held that the defendant officer breached his fiduciary duties by "diverting a corporate opportunity for his own personal gain." Id. at 485. It is clear that, but for the defendant officer's actions on behalf of and at the behest of the plaintiff, he would never have secured that business opportunity for himself. Thus, the well-reasoned rule that "a person who undertakes to act for another shall not, in the same matter, act for himself . . . [and] all profits made and advantage gained by the agent in the execution of the agency belong to the principal" applied. Id. at 486-487. But Quality Manufacturing has never alleged usurpation of a corporate opportunity against Mann or claimed that Mann competed unfairly against Quality Manufacturing by using information gained through his employment. In fact, the evidence of record would not support such a claim. To the contrary, the evidence of record reveals that Kirby, the sole shareholder of Quality Manufacturing, had no experience in the basement column industry and had no experience with the machinery used to fabricate the columns. Mann, on the other hand, had worked at AFCO Manufacturing, which made basement columns, for 22 years, had seen a column machine built, and actually ran the column machine. Mann had also been president of AFCO Manufacturing for a couple of years. Mann knew the customers, suppliers, and subcontractors within the basement column industry. This was the valuable knowledge that he brought to Quality Manufacturing; it was not acquired while he worked at Quality Manufacturing. Kirby had no experience in, or knowledge of, the basement column industry. At the time Mann left Quality Manufacturing, he had worked with basement column customers for about 32 years, only ten of which was while employed at Quality Manufacturing. Not only was there no employment agreement between Quality Manufacturing and Mann, but there also was no anticompetitive covenant. MCL 445.774a(1) provides that "[a]n employer may obtain from an employee an agreement or covenant which protects an employer's reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business." Here, Quality Manufacturing is attempting to secure by judicial intervention what it did not secure by fair contractual bargaining supported by consideration. That is, by virtue of the trial court's judgment, Quality Manufacturing received the benefit of a bargain that was never negotiated or agreed upon. -4-

Quality Manufacturing has also failed to cite any legal support for its claim that Mann was prohibited from planning for a basement column business while an officer of Quality Manufacturing--a claim that defies the well-known general prohibition against restraints of trade in the absence of a valid legal agreement. See St Clair Medical, PC v Borgiel, 270 Mich App 260, 266; 715 NW2d 914 (2006); Bristol Window & Door, Inc v Hoogenstyn, 250 Mich App 478, 485-497; 650 NW2d 670 (2002). Several legal treatises have extensive commentary on the issue, including 3 Fletcher Cyclopedia of the Law of Corporations,

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