Dominguez v. Lanham Machinery Co., Inc.

• Decision Date: 23 August 2000
• Docket Number: No. 1:97-CV-212.,1:97-CV-212.
• Citation: 122 F.Supp.2d 852
• Parties: Maximo DOMINGUEZ, Personal Representative of the Estate of Jacqueline Del Carmen Medina, Deceased, Plaintiff, v. LANHAM MACHINERY COMPANY, INC., APV Consolidated, Inc., APV Baker Company, Inc., Defendants.
• Court: U.S. District Court — Western District of Michigan

Page 852

122 F.Supp.2d 852

Maximo DOMINGUEZ, Personal Representative of the Estate of Jacqueline Del Carmen Medina, Deceased, Plaintiff, v. LANHAM MACHINERY COMPANY, INC., APV Consolidated, Inc., APV Baker Company, Inc., Defendants.

No. 1:97-CV-212.

United States District Court, W.D. Michigan, Southern Division.

August 23, 2000.

Stephen L. Grimm, Sukup & Grimm, PC, Steven L. Skahn, Law Offices of Steven L. Skahn, Grand Rapids, MI, for Plaintiff.

Mark H. Verwys, Plunkett & Cooney, PC, Grand Rapids, MI, for Defendants.

MEMORANDUM OPINION

QUIST, District Judge.

Defendants, Lanham Machinery Company, Inc., APV Consolidated, Inc., and APV Baker Company, Inc. (collectively "APV" or "Defendants"), filed a motion seeking dismissal or summary judgment based on, among other things, a statute of limitations/statute of repose, M.C.L. § 600.5839(1). In a January 24, 2000, Memorandum Opinion and Order, this Court held that APV waived its statute of limitations/statute of repose defense by not raising the defense in a timely manner. In that Opinion and Order, this Court did not reach the issue of whether § 600.5839(1) was a statute of limitation or a statute of repose, finding that, regardless of the characterization, the defense was waived by APV's delay in raising it. This matter is before the Court on APV's Motion for Reconsideration arguing that § 600.5839(1) is a statute of repose which cannot be waived and, therefore, the Court should have dismissed Plaintiff's claims.

Discussion

APV contends that § 600.5839(1) is a statute of repose which is substantive in nature and cannot be waived by APV's failure to raise the defense in a timely manner. In support of this argument, APV cites the unreported decision of the United States Court of Appeals for the Sixth Circuit in Hayes v. General Motors Corp., No. 95-5713, 1996 WL 452916 (6th Cir. Aug.8, 1996) (per curiam). The Hayes court found that a Tennessee statute of repose was substantive and, therefore, could not be waived. See id. at *4. Hayes, however, was expressly based on Tennessee characterizations of statutes of repose as substantive mechanisms which cannot be waived, as opposed to statutes of limitations which Tennessee characterizes as waivable procedural mechanisms. See id. Because the Hayes court relied on Tennessee law for its determination the Hayes decision is not controlling on this issue under Michigan law. Other jurisdictions require that a statute of repose be raised as an affirmative defense. See Dunton v. Whitewater W. Recreation, Ltd., 942 P.2d 1348, 1350-51 (Colo.App.1997) (finding that a statute of repose was not jurisdictional and, therefore, could be waived if not raised as an affirmative defense); see also Koch v. Shell Oil Co., 52 F.3d 878, 880 (10th Cir.1995) (applying Kansas law and finding that both statutes of repose and statutes of limitation must be raised as affirmative defenses); Patton v. Hutchinson Wil-Rich Mfg. Co., 253 Kan. 741, 747, 861 P.2d 1299, 1306 (1993) (holding that a statute of repose is an affirmative defense that must be pled).

The specific issue before this Court on reconsideration is whether, under Michigan law, M.C.L. § 600.5839(1) is a statute which need be raised as an affirmative defense or whether it is a statute which prevents a claim from arising in the first instance. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). If it is a statute that must be raised as an affirmative defense, then this Court would again hold that APV waived the defense by failing to plead the affirmative defense in a timely manner. If § 600.5839(1) is a statute which prevents a claim from arising in the first instance, then Plaintiff has failed to state a claim upon which relief can be granted. Failure to state a claim for which relief can be granted is not waived and may even be made at the trial on the merits. See Fed. R.Civ.P. 12(h)(2); Romstadt v. Allstate Ins. Co., 59 F.3d 608, 610 (6th Cir.1995). Therefore, a defendant need not assert in its answer an affirmative defense that plaintiff has failed to state a claim upon which relief can be granted. See id. at 610-11. If matters outside the pleadings are presented to the court, the motion shall be treated as a motion for summary judgment and disposed of as provided in Rule 56. See Fed.R.Civ.P. 12(b).

Statutes

M.C.L. § 600.5839(1):

No person may maintain any action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of such injury, ... against any contractor making the improvement, more than 6 years after the time of occupancy of the completed improvement, use, or acceptance of the improvement

....

28 U.S.C. § 1738:

The records and judicial proceedings of any court of any such State ... shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.

Analysis

This Court concludes that Dominguez has no claim against APV arising out of the 1996 fire. Because this Court will grant APV's motion for reconsideration, the Court will accept Dominguez's Brief in Response to Defendants' Motion for Reconsideration pursuant to L.Civ.R. 7.4(a).

The effect of M.C.L. § 600.5839(1) is set forth most clearly by the Michigan Supreme Court in O'Brien v. Hazelet & Erdal, 410 Mich. 1, 299 N.W.2d 336 (1980), wherein the Court said:

As one Court of Appeals panel explained, the instant statute is both one of limitation and one of repose. For actions which accrue within six years from occupancy, use, or acceptance of the completed improvement, the statute prescribes the time within which such actions may be brought and thus acts as a statute of limitations. When more than six years from such time have elapsed before an injury is sustained, the statute prevents a cause of action from ever accruing. The plaintiff is not deprived of a right to sue a state-licensed architect or engineer because no such right can arise after the statutory period has elapsed.

Id. at 15, 299 N.W.2d at 341 (emphasis added) (footnotes omitted). Then, in quoting Rosenberg v. Town of North Bergen, 61 N.J. 190, 199-200, 293 A.2d 662, 667 (1972), with approval:

[The statute] does not bar a cause of action; its effect, rather, is to prevent what might otherwise be a cause of action, from ever arising. Thus injury occurring more than ten years after the negligent act allegedly responsible for the harm, forms no basis for recovery. The injured party literally has no cause of action. The harm that has been done is damnum absque injuria — a wrong for which the law affords no redress. The function of the statute is thus rather to define substantive rights than to alter or modify a remedy. The Legislature is entirely at liberty to create new rights or abolish old ones as long as no vested right is disturbed.

410 Mich. at 15-16, n. 19, 299 N.W.2d at 341, n. 19 (underlining added). Thus, if more than six years elapsed from the time the Butterworth Facility Oven (the "Oven") was installed, if APV was a person subject to the protection of the statute, and if the Oven was an improvement to real property, M.C.L. § 600.5839(1) prevents "a cause of action from ever accruing." There is no genuine issue of material fact about when the Oven was installed or when the fire occurred. Installation of the Oven was completed no later than 1988, and the fire at the Butterworth facility occurred in 1996. Dominguez's claims, therefore, fall beyond the six year time limit.

1. Issue Preclusion

Under Michigan law, machines and ovens can be improvements to real property as those terms are used in § 600.5839(1). See Matthews v. Beloit Corp., 807 F.Supp. 1289, 1291-92 (W.D.Mich.1992); Phillips v. Langston Corp., 59 F.Supp.2d 696, 702-703 (E.D.Mich.1999) (mem.op.); Pendzsu v. Beazer East, Inc., 219 Mich.App. 405, 411-12, 557 N.W.2d 127, 132 (1996). Furthermore, the statute applies to injuries to third persons such as employees. See Travelers Ins. Co. v. Guardian Alarm Co. of Michigan, 231 Mich.App. 473, 478-82, 586 N.W.2d 760, 763-64 (1998) (per curiam).

On December 6, 1999, in the state court case addressing the issue of whether Roskam had a valid claim against APV because of the 1996 fire, Circuit Court Judge H. David Soet dismissed Roskam's crossclaims in Trafford Park v. Roskam Baking Co., et al. against co-defendant APV for contribution and indemnification as barred pursuant to § 600.5839(1). (See 12/7/99 Order, Defs.' Reply Br. Attach. A.) Judge Soet must have held that § 600.5839(1) was a statute of repose which prevents a claim from arising in the first instance, that the Oven was an improvement to real estate, and that APV was a contractor entitled to the protection of the statute.

This Court must give a Michigan court's judgment the same preclusive effect it would be given under Michigan law. See Spence v. TRW, Inc., 92 F.3d 380, 382 (6th Cir.1996). Under Michigan law, an issue is precluded from relitigation in "a subsequent, different cause of act on between the same parties where the prior proceeding culminated in a valid, final judgment and he issue was actually litigated and necessarily determined." See Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 461-62 (6th Cir.1999)(emphasis added). Because Dominguez was not a party in Trafford Park, issue preclusion does not apply in the present case.

2. Section 600.5839(1)

Dominguez contends that APV was not a contractor and that, even if it were, the Oven was not an improvement to the Butterworth facility. A "contractor" is defined as, among others things, a "corporation ... or other business entity which makes an improvement to real property." M.C.L. § 600.5839(4). Dominguez...