Fenton Area Public Schools v. Sorensen-Gross Const. Co.

• Decision Date: 08 June 1983
• Docket Number: SORENSEN-GROSS,Docket No. 60338
• Citation: 11 Ed. Law Rep. 1032,335 N.W.2d 221,124 Mich.App. 631
• Parties: FENTON AREA PUBLIC SCHOOLS, Plaintiff-Appellee, v.CONSTRUCTION CO., Defendant-Appellant. 124 Mich.App. 631, 335 N.W.2d 221, 11 Ed. Law Rep. 1032
• Court: Court of Appeal of Michigan — District of US

Page 221

335 N.W.2d 221

FENTON AREA PUBLIC SCHOOLS, Plaintiff-Appellee, v. SORENSEN-GROSS CONSTRUCTION CO., Defendant-Appellant.

Docket No. 60338.

124 Mich.App. 631, 335 N.W.2d 221, 11 Ed. Law Rep. 1032

Court of Appeals of Michigan.

Submitted Oct. 7, 1982.

Decided April 5, 1983.

Released for Publication June 8, 1983.

[124 MICHAPP 634] Mark C. McCabe, Flint, for plaintiff-appellee.

Riecker, George, Hartley, Van Dam & Camp, P.C. by Barry B. George, Midland, for defendant-appellant.

[124 MICHAPP 635] Before BEASLEY, P.J., and KELLY and WHITE ^*, JJ.

KELLY, Judge.

Plaintiff brought suit for judgment on an arbitration award. The trial court granted judgment in favor of plaintiff against defendants Sorensen-Gross Construction Company and Aloha Construction Company. Defendants appealed as of right. Pursuant to a stipulation by all of the parties, defendant Aloha Construction Company was dismissed from the appeal by the Clerk of this Court, pursuant to GCR 1963, 809.

I

In September, 1967, plaintiff entered into a construction contract with Sorensen-Gross Construction Company for the erection of a new senior high school in Fenton, Michigan. Shortly thereafter, on November 1, 1967, Collinson Construction Company purchased the assets, name, and good will of Sorensen-Gross Construction Company. Sorensen-Gross Construction Company changed its name to "Love Liquidating Corporation" and Collinson Construction Company filed an assumed name certificate in Genesee County, indicating that it would be conducting business under the name "Sorensen-Gross Company". With plaintiff's consent, Love Liquidating Corporation assigned the contract for construction of the high school to Collinson Construction Company. Love Liquidating was then dissolved.

Construction of the high school began on November 22, 1967. The general contractor, Collinson Construction Company, doing business as Sorensen-Gross Company, by and through its subcontractor, Grooves Roofing Company, Inc., installed a [124 MICHAPP 636] two-ply flat roof on the school. The roof was assembled and installed from various component parts which were delivered to the job site. Construction of the entire school project was completed January 15, 1971. Almost immediately after installation of the roof, plaintiff complained to Collinson Construction Company, Grooves Roofing Company, Inc., and the architect about various leaks in the roof.

On February 16, 1971, a new corporation was formed, bearing the name "Sorensen-Gross Construction Company" (hereafter "new Sorensen-Gross"). At the time of the incorporation, new Sorensen-Gross purchased assets and equipment from both Collinson Construction Company and its "sister" corporation, from which Collinson Construction Company often leased construction equipment, Commercial Realty Corporation. Although the record is unclear as to what percentage of Collinson's assets were purchased by new Sorensen-Gross, new Sorensen-Gross did purchase approximately one-third of the total equipment and assets owned by the two corporations.

On August 15, 1972, new Sorensen-Gross purchased all of the capital stock of Collinson Construction Company. Some officers of Collinson formed a new corporation, J.W. Construction Company. Under the terms of the stock-purchase agreement, new Sorensen-Gross agreed to release the name "Collinson Construction Company" 18 months after the purchase to J.W. Construction Company.

After the acquisition of Collinson by new Sorensen-Gross Company division of Collinson Construction Company had been located to 3407 Torrey Road, Flint, Michigan, the location of new Sorensen-Gross' offices and the same place where the Sorensen-Gross [124 MICHAPP 637] Company division of Collinson Construction Company had been located since 1968. New Sorensen-Gross assumed certain liabilities of Collinson: the mortgage, past taxes and insurance on the Torrey Road office building and liability for workers' compensation for employees new Sorensen-Gross hired who formerly worked for Collinson. Certain minor construction projects which had already been commenced by Collinson prior to the acquisition were finished with labor and equipment from Collinson and management from new Sorensen-Gross.

The assumed name certificate filed by Collinson in 1967 to do business as Sorensen-Gross Company expired on November 11, 1972, two months after new Sorensen-Gross purchased all of the capital stock of Collinson. On November 21, 1973, new Sorensen-Gross released the name "Collinson Construction Company" and changed the name of that corporation to "Aloha Construction Company".

During 1973, plaintiff continued to complain about the leaking of the roof on the high school. In January, 1975, plaintiff commenced a suit against Aloha and the building's architects. Pursuant to the terms of the construction contract, however, the trial court ordered the parties to proceed to arbitration. A subsequent arbitration proceeding resulted in an award against Aloha in the amount of $39,444.60. A simultaneous award which has no bearing on this appeal was granted against the architects for $21,239.40.

In July, 1979, plaintiff filed suit in Genesee County Circuit Court against both Aloha and new Sorensen-Gross, alleging that Aloha had failed to pay the award and that new Sorensen-Gross should be held liable for the debt of its subsidiary, Aloha. Aloha raised a statute of limitations defense. [124 MICHAPP 638] New Sorensen-Gross argued that it could not be held liable for the debts of its subsidiary. The parties agreed to a stipulation of facts under GCR 1963, 111.10.

The trial court granted judgment against both defendants. The court did not clarify its application of the law to the stipulated facts. Rather, the court stated in its opinion:

"The Court does not believe it will be helpful to discuss the facts and law. There may be several legal theories to support plaintiff's judgment. In addition to the persuasive arguments in the plaintiff's brief the Court will add only: (1) It is also possible to consider that new Sorensen-Gross and Aloha are or were one and the same entity, alter egos, or so connected that each becomes a party to an arbitration against the other arising out of the Fenton School job; and (2) There could be several factual bases whereby the arbitrator could have concluded that the statute of limitations did not bar recovery. There may have been representations that the defective product could be repaired or a failure to claim expiration of the applicable limitation period before the arbitrator. In any event, the agreed facts do not establish such a defense or show a reason for vacating the arbitrator's award under GCR 1963, 769."

II

We must first determine whether the present action is within the scope of "products liability" law. Products liability actions are statutorily defined in Michigan:

"As used in sections 2946 and 2949 and section 5805, 'products liability action' means an action based on any legal or equitable theory of liability brought for or on account of death or injury to person or property caused [124 MICHAPP 639] by or resulting from the manufacture, construction, design, formula, development of standards, preparation, processing, assembly, inspection, testing, listing, certifying, warning, instructing, marketing, advertising, packaging, or labeling of a product or a component of a product." M.C.L. Sec. 600.2945; M.S.A. Sec. 27A.2945.

By its terms, the statute embodies suits brought on account of the manufacture, construction, or assembly of any product. In the instant case, the defective roof was constructed or assembled Collinson Construction Company, under the name Sorensen-Gross Company, through its subcontractor. Thus, the only question is whether the assembly of the roof was an assembly of "a product or a component of a product". Prior Michigan cases have not addressed this question.

The term "product" is not statutorily defined and no Michigan case has undertaken the task of assessing the limits of the term. Our responsibility in construing the statute, therefore, is to implement the purpose and intent of those who enacted it. See People v. Gilbert, 414 Mich. 191, 200, 324 N.W.2d 834 (1982). We must construe statutory language "according to the common and approved usage of the language". M.C.L. Sec. 8.3a; M.S.A. Sec. 2.212(1), see People v. Lee, 66 Mich.App. 5, 8, 238 N.W.2d 397 (1975). A resort to dictionary definitions is an appropriate method of achieving this result. See State ex rel. Wayne County Prosecuting Attorney v. Levenburg, 406 Mich. 455, 465, 280 N.W.2d 810 (1979).

The Random House Dictionary of the English Language: The Unabridged Edition (1973 ed.), p. 1148, defines "product" as "a thing produced by labor". Under this definition, the roof, produced by the labor of assembly, would be a product.

There is no language in M.C.L. Sec. 600.2945; M.S.A. [124 MICHAPP 640] Sec. 27A.2945 suggesting that it should not be applied to the roof of a building. Indeed, the Legislature enacted this statute after judicial criticism of distinctions between purchasers of personal property and purchasers of buildings. See Weeks v. Slavik Builders, Inc., 24 Mich.App. 621, 625, 180 N.W.2d 503 (1970) (expressly limiting its criticism to the facts of that case), aff'd, 384 Mich. 257, 181 N.W.2d 271 (1970).

A finding that the statute includes actions based on defective roofs would not be contrary to any Michigan decision available at the time the legislation was enacted. In Gauthier v. Mayo, 77 Mich.App. 513, 258 N.W.2d 748 (1977), this Court held that a suit based on defects in a modular home was properly founded in products liability. In Southgate Community School Dist. v. West Side Construction Co., 399 Mich. 72, 247...