Employers Mut. Cas. Co. v. Petroleum Equipment, Inc.

• Decision Date: 18 June 1991
• Docket Number: Nos. 117264,117395,s. 117264
• Citation: Employers Mut. Cas. Co. v. Petroleum Equipment, Inc., 475 N.W.2d 418, 190 Mich.App. 57 (Mich. App. 1991)
• Court: Court of Appeal of Michigan
• Parties: EMPLOYERS MUTUAL CASUALTY COMPANY, Plaintiff-Appellant, Cross-Appellee, v. PETROLEUM EQUIPMENT, INC., Cohagen Equipment Company, Inc. and Federated Mutual Insurance Company, Defendants-Appellees, and Warner & Sons, Inc., Defendant-Appellee, Cross-Appellant, and B & D Company and Bruce Flanigan, Defendants. C.A. MURPHY OIL COMPANY, INC., John Bowen and Cheryl Bowen, Plaintiffs-Appellees, v. PETROLEUM EQUIPMENT, INC., and Cohagen Equipment Company, Inc., Defendants/Third-Party Plaintiffs-Appellants, Cross-Appellees, and Warner & Sons, Inc., Third-Party Defendant-Appellee, Cross-Appellant, and B & D Company and Bruce Flanigan, Defendants. 190 Mich.App. 57, 475 N.W.2d 418

Page 418

475 N.W.2d 418

EMPLOYERS MUTUAL CASUALTY COMPANY, Plaintiff-Appellant, Cross-Appellee, v. PETROLEUM EQUIPMENT, INC., Cohagen Equipment Company, Inc. and Federated Mutual Insurance Company,

Defendants-Appellees,

and

Warner & Sons, Inc., Defendant-Appellee, Cross-Appellant,

and

B & D Company and Bruce Flanigan, Defendants.

C.A. MURPHY OIL COMPANY, INC., John Bowen and Cheryl Bowen, Plaintiffs-Appellees, v. PETROLEUM EQUIPMENT, INC., and Cohagen Equipment Company,

Inc., Defendants/Third-Party

Plaintiffs-Appellants, Cross-Appellees,

and

Warner & Sons, Inc., Third-Party Defendant-Appellee,

Cross-Appellant,

and

B & D Company and Bruce Flanigan, Defendants.

Nos. 117264, 117395.

190 Mich.App. 57, 475 N.W.2d 418

Court of Appeals of Michigan.

Submitted Nov. 6, 1990, at Grand Rapids.

Decided June 18, 1991, at 9:40 a.m.

Released for Publication Oct. 28, 1991.

[190 MICHAPP 59] Piatt, Bartosiewicz & Tiderington by Gary P. Bartosiewicz, Kalamazoo, for Employers Mut. Cas. Co.

Early, Lennon, Fox, Thompson, Peters & Crocker by Lisa A. Godfrey, Kalamazoo, for Petroleum Equipment, Inc., and Cohagen Equipment Co., Inc.

Howard & Howard by Brad A. Rayle, Bloomfield Hills, for Warner & Sons, Inc.

Before NEFF, P.J., and MAHER and HOOD, JJ.

[190 MICHAPP 60] PER CURIAM.

In these consolidated appeals, the plaintiff in Docket No. 117264, Employers Mutual Casualty Company, and the third-party plaintiffs in Docket No. 117395, Petroleum Equipment, Inc., and Cohagen Equipment Company, Inc., appeal as of right from the trial court's order granting summary disposition in favor of Warner & Sons, Inc., a defendant in Docket No. 117264 and a third-party defendant in Docket No. 117395. Warner & Sons has filed a cross appeal in both cases, claiming that the trial court erred in denying its request for costs and attorney fees pursuant to MCR 2.405. We affirm in part and reverse in part.

In 1980, Petroleum and Cohagen contracted with C.A. Murphy Oil Company, Inc., to build a fuel storage facility on Murphy Oil's property. Petroleum and Cohagen subcontracted certain excavating and installation work to Warner & Sons. Although ten tanks of varying capacities (e.g., 8,000 to 20,000 gallons) were installed, it was unclear who supplied or installed each of the individual tanks. All tanks were apparently installed in 1981. Beginning in 1982, complaints were received about gasoline odors in the area. Although initial tests by Petroleum and Cohagen failed to ascertain any leaks, a test performed by an independent firm in 1984 confirmed the presence of a leak from one of the 8,000-gallon tanks.

On September 2, 1986, Employers Mutual filed its complaint against Petroleum and Cohagen, B & D Company, and Bruce Flanigan, seeking reimbursement for cleanup costs Employers Mutual had paid on behalf of its insured, Murphy Oil, because of the fuel leak. A separate action was commenced against these same defendants on March 11, 1987, by both Murphy Oil and John and Cheryl Bowen (subsequent purchasers of the subject property). On June 24, 1987, the two actions [190 MICHAPP 61] were consolidated in the lower court. On July 30, 1987, Employers Mutual filed its first amended complaint adding Warner & Sons as a defendant, alleging breach of contract, negligence, and breach of warranty. On August 13, 1987, Petroleum and Cohagen filed a third-party complaint against Warner & Sons for contribution and indemnification.

On August 22, 1988, Warner & Sons filed a motion for summary disposition pursuant to MCR 2.116(C)(7), (8), and (10), seeking dismissal of all counts alleged by Employers Mutual in its first amended complaint and dismissal of Petroleum and Cohagen's third-party complaint for contribution and indemnification. On December 28, 1988, the trial court granted the motion on various grounds. Warner & Sons' subsequent motion requesting costs pursuant to MCR 2.405 was denied by the trial court. The parties now appeal each of these rulings as of right.

I. EMPLOYERS MUTUAL'S APPEAL (DOCKET NO. 117264).

The trial court summarily dismissed all of Employers Mutual's claims against Warner & Sons on the following grounds: (1) there was no issue of fact that Warner & Sons did not supply the leaking tank, (2) there was no issue of fact that express warranties were not made, (3) breach of implied warranties had not been pleaded, and (4) Employers Mutual's claims against Warner & Sons were barred by the applicable statute of limitations.

Initially, we must address Employers Mutual's claim that the trial court improperly relied on several deemed admissions when ruling on Warner & Sons' motion for summary disposition. During discovery, Warner & Sons served Employers Mutual with several requests for admissions pursuant to MCR 2.312. No response was made to these [190 MICHAPP 62] requests. Pursuant to court rule, therefore, the subject matter of the requests was deemed admitted. MCR 2.312(B)(1). A matter which is admitted is considered conclusively established unless the trial court, on motion, permits withdrawal or amendment for good cause shown. MCR 2.312(D)(1). Finally, the court rule governing motions for summary disposition, MCR 2.116, expressly allows a motion brought under subsection C(7) or (10) to be supported by affidavits, depositions, admissions, or other documentary evidence. MCR 2.116(G). Pursuant to the plain language of the court rules, therefore, the matters addressed in Warner & Sons' requests for admissions were considered to be conclusively established and could properly be considered by the trial court for purposes of ruling on Warner & Sons' motion for summary disposition.

As noted above, MCR 2.312(D)(1) allows a trial court, on motion and for good cause shown, to permit a party to withdraw or amend a matter admitted under the court rule. While Employers Mutual summarily argues on appeal that the trial court abused its discretion by not allowing it to withdraw its admissions, the record fails to disclose that it ever moved or otherwise requested such relief in the trial court. Therefore, having failed to request the requisite relief in the trial court, Employers Mutual cannot claim an abuse of discretion on appeal.

We will now address the merits of the trial court's rulings. As noted above, the trial court granted Warner & Sons' motion for summary disposition against Employers Mutual on several grounds. One ground on which summary disposition was granted was MCR 2.116(C)(7), that Employers Mutual's claims were barred by the applicable statute of limitations.

[190 MICHAPP 63] Employers Mutual first argues that the trial court erred in holding that the filing date for purposes of Warner & Sons was July 31, 1987, when Employers Mutual filed its amended complaint adding Warner & Sons as a party, rather than September 2, 1986, the date Employers Mutual's original complaint was filed. We disagree. Although an amendment generally relates back to the date of the original filing if the new claim asserted arises out of the conduct, transaction, or occurrence set forth in the original pleading, MCR 2.118(D), the relation-back doctrine does not extend to the addition of new parties. Gardner v. Stodgel, 175 Mich.App. 241, 249, 437 N.W.2d 276 (1989). Therefore, July 31, 1987, was the proper filing date with respect to Warner & Sons.

The period of limitation for an action alleging breach of contract is six years from the time the claim accrues. M.C.L. Sec. 600.5807(8); M.S.A. Sec. 27A.5807(8). A cause of action for breach of a construction contract accrues at the time work on the contract is completed. Buckley v. Small, 52 Mich.App. 454, 455-456, 217 N.W.2d 422 (1974). In this case, an affidavit filed by Warner & Sons represented that all work performed by Warner & Sons was completed on or before July 1, 1981. This same fact was also established by Employers Mutual's admission under MCR 2.312. Accordingly, commencement of the instant action against Warner & Sons on July 31, 1987, was beyond the applicable period of limitation.

Employers Mutual argues that this Court's decision in Malesev v. Wayne Co. Rd Comm'rs, 51 Mich.App. 511, 215 N.W.2d 598 (1974), supports its position on appeal that the instant action was timely filed. We disagree. Citing State Mutual Cyclone Ins. Co. v. O & A Electric Cooperative, 381 Mich. 318, 161 N.W.2d 573 (1968), this Court held in Malesev [190 MICHAPP 64] that the statute of limitations is three years in all actions for injury to person or property, see M.C.L. Sec. 600.5805; M.S.A. Sec. 27A.5805, whether they sound in contract or tort. However, the Court held that the action does not accrue until the injuries first become apparent. Malesev, supra, 51 Mich.App. at pp. 512-513, 215 N.W.2d 598. In the present case, Warner & Sons' motion for summary disposition was supported by the following: (1) deposition testimony from one of Employers Mutual's representatives that it first received notice of a claim in June 1983, (2) test results confirming the presence of a leak on July 25, 1984, and (3) Employers Mutual's admission under MCR 2.312 that its subrogee, Murphy Oil, discovered or should have discovered that the tanks were leaking on or before July 1, 1984. Each of these items properly established that there was no issue of fact that Employers Mutual first had notice of the injuries more than three years before commencement of its action against Warner & Sons.

Accordingly, we conclude that Employers Mutual's claims against Warner & Sons were properly dismissed under MCR 2.116(C)(7) on the ground that they were barred by the applicable statute of limitations.

While our ruling with regard to the statute of limitations issue effectively renders it unnecessary for us to address the remaining grounds on which summary disposition was granted, we will nevertheless do so briefly.

The trial court concluded that there was no issue of fact that Warner & Sons...