Heaton v. Benton Const. Co.

• Decision Date: 27 October 2009
• Docket Number: Docket No. 285805.
• Citation: 780 N.W.2d 618,286 Mich. App. 528
• Parties: HEATON v. BENTON CONSTRUCTION COMPANY.
• Court: Court of Appeal of Michigan — District of US

780 N.W.2d 618

286 Mich. App. 528

HEATON v. BENTON CONSTRUCTION COMPANY.

Docket No. 285805.

Court of Appeals of Michigan.

Submitted October 13, 2009, at Lansing.

Decided October 27, 2009.

Approved for Publication December 22, 2009, at 9:10 a.m.

COPYRIGHT MATERIAL OMITTED

The Gallagher Law Firm (by Jennifer M. Endl, Peter C. Brown, and Byron P. Gallagher, Jr.), Lansing, for plaintiffs.

Garan Lucow Miller, P.C. (by Robert D. Goldstein, Detroit, and Paul E. Tower, Lansing), for Benton Construction Company.

Before: MURRAY, P.J., and MARKEY and BORRELLO, JJ.

PER CURIAM.

Plaintiffs filed this action for damages, asserting that defendants' negligence caused the foundation of their home to shift during its construction. Defendant Benton Construction Company, doing business as Great Lakes Superior Walls (Great Lakes), appeals by right the judgment entered after a jury verdict finding it 60 percent negligent and defendants Pristine Home Builders (Pristine) and Daniel J. Bonawitt (Bonawitt) 40 percent negligent. Great Lakes also appeals the trial court's order granting partial remittitur of the $272,500 jury award in plaintiffs' favor to $195,000, as the amount the evidence showed that plaintiffs' home diminished in value. Great Lakes contends it should have been granted judgment as a matter of law, but if not, the jury's verdict should have been reduced to $77,500, the cost of repairing the damage to plaintiffs' home. Plaintiffs cross-appeal the trial court's order granting remittitur and the trial court's determination of a reasonable attorney fee for case evaluation sanctions. We affirm, but also reverse the trial court's order granting remittitur and remand for entry of judgment for plaintiffs consistent with the jury's verdict.

Plaintiffs Gerald T. Heaton and Jonna Heaton entered a contract with defendant Pristine, operated by defendant Bonawitt, a licensed builder, to build their retirement home at Scenic Lake in Shiawassee County. Bonawitt subcontracted with defendant Great Lakes (hereinafter, defendant) to design, manufacture, and install precast concrete foundation walls for the home. During the construction of the home the foundation walls twice shifted, first in September 2005 after the retaining foundation wall was partially backfilled and again in October 2005 after shear (supporting) walls were installed on the advice of defendant and further backfilling. Plaintiffs sued under theories of breach of contract, express and implied warranties, and negligence. Defendants Pristine and Bonawitt were defaulted. The other defendants, except Great Lakes, settled. The case was tried to a jury on the issues of defendant's liability and damages; Bonawitt participated at trial without counsel on the issue of damages only. Ultimately, the case was submitted to the jury only on plaintiffs' negligence theory.

Defendant first argues that the trial court erred by not granting one of its dispositive motions for judgment as a matter of law. Specifically, the trial court denied defendant's motion for summary disposition under MCR 2.116(C)(10), denied defendant's motions for a directed verdict after opening statement and at the close of plaintiffs' proofs, and denied defendant's motion for judgment notwithstanding the verdict (JNOV). Our review of the trial court's decision regarding each of these motions is de novo. Diamond v. Witherspoon, 265 Mich.App. 673, 680-681, 696 N.W.2d 770 (2005).

Defendant's motion under MCR 2.116(C)(10) tested the factual sufficiency of plaintiffs' claim. Maiden v. Rozwood, 461 Mich. 109, 120, 597 N.W.2d 817 (1999). The trial court was required to consider the substantively admissible evidence the parties submitted in the light most favorable to the nonmoving party. Id. at 120-121, 597 N.W.2d 817; MCR 2.116(G)(5). If the evidence the parties proffer does not establish that a disputed material issue of fact remains for trial and if it appears that a party is entitled to judgment as a matter of law, summary disposition is appropriate. MCR 2.116(C)(10), (G)(4), (I)(1); Maiden, supra at 120, 597 N.W.2d 817.

When reviewing a trial court's decision on a motion for a directed verdict, this Court must view the evidence presented up to the point of the motion and all legitimate inferences from the evidence in the light most favorable to the nonmoving party to determine whether a fact question existed. Zantel Marketing Agency v. Whitesell Corp., 265 Mich.App. 559, 568, 696 N.W.2d 735 (2005). A trial court properly grants a directed verdict only when no factual question exists upon which reasonable minds could differ. Diamond, supra at 681, 696 N.W.2d 770. Similarly, a motion for JNOV should be granted only when there was insufficient evidence presented to create an issue of fact for the jury. Merkur Steel Supply, Inc. v. Detroit, 261 Mich.App. 116, 123, 680 N.W.2d 485 (2004). This Court must view the testimony and all legitimate inferences drawn from the testimony in the light most favorable to the nonmoving party. Diamond, supra at 682, 696 N.W.2d 770; Forge v. Smith, 458 Mich. 198, 204, 580 N.W.2d 876 (1998). "If reasonable jurors could honestly have reached different conclusions, the jury verdict must stand." Diamond, supra at 682, 696 N.W.2d 770.

Defendant argues that it was entitled to judgment as a matter of law because, although plaintiffs couched their complaint in terms of negligence, the case was actually a products liability claim for failure to warn. Defendant contends that the undisputed facts establish that it furnished a "product," precast concrete foundation walls. See Fenton Area Pub. Schools v. Sorensen-Gross Constr. Co., 124 Mich.App. 631, 639, 335 N.W.2d 221 (1983), noting that MCL 600.2945 does not define "product" but a dictionary defines "`product' as `a thing produced by labor'." Here, the undisputed facts established defendant's "product" was neither defective nor the cause of the foundation movement at issue. Rather, the foundation shifted because Bonawitt failed to initially install shear walls, and then subsequently installed shear walls that were inadequately designed or constructed. The lynchpin of defendant's argument is that Bonawitt was a "sophisticated user" of defendant's foundation walls, having been a licensed builder since 1997, and experienced in all phases of construction, including the use of shear walls. Consequently, defendant argues that, under MCL 600.2947(4), it had no duty to warn Bonawitt of the need for shear walls. Finally, defendant correctly notes that the question of duty is one for the trial court to decide as matter of law, citing Antcliff v. State Employees Credit Union, 414 Mich. 624, 640, 327 N.W.2d 814 (1982) ("It is well-settled law that the question of duty is to be resolved by the court rather than the jury."). For these reasons, defendant argues, the trial court erred by not granting one of its dispositive motions for judgment as a matter of law.

The statutes pertinent to this issue provide:

(g) "Product" includes any and all component parts to a product.

(h) "Product liability action" means an action based on a legal or equitable theory of liability brought for the death of a person or for injury to a person or damage to property caused by or resulting from the production of a product.

(i) "Production" means manufacture, construction, design, formulation, development of standards, preparation, processing, assembly, inspection, testing, listing, certifying, warning, instructing, marketing, selling, advertising, packaging, or labeling.

(j) "Sophisticated user" means a person or entity that, by virtue of training, experience, a profession, or legal obligations, is or is generally expected to be knowledgeable about a product's properties, including a potential hazard or adverse effect. An employee who does not have actual knowledge of the product's potential hazard or adverse effect that caused the injury is not a sophisticated user. MCL 600.2945(g), (h), (i), and (j).

* * *

(4) Except to the extent a state or federal statute or regulation requires a manufacturer to warn, a manufacturer or seller is not liable in a product liability action for failure to provide an adequate warning if the product is provided for use by a sophisticated user. MCL 600.2947(4).

The trial court denied defendants motion for two reasons: (1) plaintiffs' claim was not one of products liability but rather one for ordinary negligence, and (2) under the facts of the case, Bonawitt was not a "sophisticated user" as contemplated by the statute. "This Court reviews de novo the interpretation and application of statutes as questions of law." Gilliam v. Hi-Temp Products Inc., 260 Mich.App. 98, 108, 677 N.W.2d 856 (2003). "In addition, we review the trial court's factual findings that support its legal holdings for clear error." Detroit v. Ambassador Bridge Co., 481 Mich. 29, 35, 748 N.W.2d 221 (2008).

First, we accept defendant's argument that its precast concrete foundation walls were a "product" within the meaning of the products liability statutes. Second, for purposes of our analysis of this issue, we accept defendant's assertion that even though plaintiffs' claim was one of ordinary negligence, it still could come within the broad definitions of "product liability action" and "production" in MCL 600.2945(h) and (i). Splicing these two definitions together, they would read, pertinent to this case: "`Product liability action' means an action based on a legal . . . theory of liability brought for . . . damage to property caused by or resulting from the assembly, inspection, . . . warning, or instructing regarding the use of a product." Thus, the fact that plaintiffs' theory of liability was one of negligence does not preclude its action from coming within the statutory definition of a products liability action because negligence is "a legal . . . theory of liability brought for . . . damage to property." Further, the essence of plaintiffs' claim was that defend...