McCann v. Brody-Built Const. Co., Inc.

• Decision Date: 21 December 1992
• Docket Number: Docket No. 129837,BRODY-BUILT
• Citation: 197 Mich.App. 512,496 N.W.2d 349
• Parties: Stuart F. McCANN and Bonita McCann, Plaintiffs-Appellants, v.CONSTRUCTION COMPANY, INC., Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 349

496 N.W.2d 349

197 Mich.App. 512

Stuart F. McCANN and Bonita McCann, Plaintiffs-Appellants, v. BRODY-BUILT CONSTRUCTION COMPANY, INC., Defendant-Appellee.

Docket No. 129837.

Court of Appeals of Michigan.

Submitted April 23, 1992, at Detroit.

Decided Dec. 21, 1992, at 9:30 a.m.

Released for Publication March 18, 1993.

Eric J. McCann, P.C. by Eric J. McCann, Bloomfield Hills, for plaintiffs-appellants.

Carson Fisher Potts & Hyman by H. Joel Newman, Birmingham, for defendant-appellee.

Before JANSEN, P.J., and MICHAEL J. KELLY and GRIFFIN, JJ.

MICHAEL J. KELLY, Judge.

In this negligence and breach of warranty action arising out of the sale of a used home, plaintiffs appeal as of right from an order of the circuit court granting defendant's motion for summary disposition. We affirm in part, reverse in part, and remand for proceedings consistent with this opinion.

In August 1985, plaintiffs purchased a house from Janet Brody. The house had been built in 1977 or 1978 by defendant, Brody-Built Construction Company, Inc. Originally, the house was occupied by Morton Brody, a principal in defendant company, and his wife, Janet Brody. The Brodys were divorced in 1984, and, pursuant to the judgment of divorce, Janet Brody was awarded the residence. Morton and Janet Brody were named as defendants in the original complaint but, following the stipulated dismissal with prejudice of Morton Brody and the dismissal without prejudice of Brody-Built Construction, neither of the Brodys was named in the new complaint that led to this appeal.

Shortly after purchasing the house, plaintiffs began to notice structural defects. On May 27, 1988, plaintiffs filed this action, alleging negligent construction and breach of warranty. Subsequently, defendant moved for summary disposition. The court, finding that plaintiffs' negligence claim was barred by the applicable statute of limitations and that the warranty claim could not be pursued because it did not arise out of the sale of a new home, dismissed plaintiffs' complaint.

Plaintiffs first argue that the trial court erred in dismissing their negligence claim on the ground of the statute of limitations. We agree.

Both parties rely on this Court's decision in Filcek v. Utica Building Co., 131 Mich.App. 396, 345 N.W.2d 707 (1984). Plaintiffs argue that the trial court should have evaluated the statute of limitations defense under the Filcek "discovery rule." Defendant argues that plaintiffs' negligence claim is barred under the Filcek discovery rule, because the alleged defects were, or should have been, discovered before May 27, 1985, three years before the action originally was filed. The trial court failed to apply the Filcek decision in this case. Instead, the trial court, relying on H. Hirschfield Sons, Co. v. Colt Industries Operating Corp., 107 Mich.App. 720, 309 N.W.2d 714 (1981), determined that because plaintiffs' complaint had not been filed within three years of the date the negligence occurred, the house having been built in 1977 or 1978 and this action not having been filed until 1988, plaintiffs' action was time-barred. We believe the trial court failed to apply the appropriate law in this case, and we remand for a determination, under the principles of Filcek, whether plaintiffs' negligence claim was barred by the applicable statute of limitations.

The statute of limitations for negligence actions is three years. M.C.L. Sec. 600.5805(8); M.S.A. Sec. 27A.5805(8). M.C.L. Sec. 600.5827; M.S.A. Sec. 27A.5827 provides that a cause of action sounding in negligence "accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results." However, Sec. 5827 has been interpreted as meaning that a claim accrues when one is injured, not when the wrong is committed:

[T]he limitation period does not begin to run until all of the elements of the cause of action have occurred and can be alleged in a proper complaint. Where an element of the cause of action, such as damages, has occurred but cannot be pled in a proper complaint because it is not, with reasonable diligence, discoverable until sometime after it has occurred, both this Court and the Supreme Court have applied a discovery rule of accrual. Thus, in Williams [v. Polgar, 391 Mich. 6, 23-25, 215 N.W.2d 149 (1974) ], the Supreme Court concluded that the plaintiff's claim did not accrue until plaintiff knew or should have known of the defendant's negligent misrepresentation. [Filcek, supra at 399, 345 N.W.2d 707.]

See also Connelly v. Paul Ruddy's Equipment Repair & Service Co., 388 Mich. 146, 150, 200 N.W.2d 70 (1972). Under Filcek, the statutory period applies to both present and prior owners. In other words, the statutory period begins to run when an owner or a predecessor in interest discovered or should have discovered the defect. Applying that rule to this case, if Janet Brody knew or should have known of the defective condition of the house before May 27, 1985, plaintiffs' action, which was filed on May 27, 1988, would be barred by the three-year period of limitation. However, if Janet Brody did not know or should not have known of the defects, plaintiffs' action was timely, plaintiffs having purchased the house in August 1985 and having filed this action in May 1988.

We hold that the trial court erred in failing to evaluate this issue in light of the principles set forth in Filcek. Therefore, we remand this matter for a determination whether Janet Brody knew or should have known of the defective condition of the house. Our remand is without prejudice to the trial court entertaining a new motion for summary disposition on the ground of the statute of limitations. If such a motion is brought, the trial court shall base its decision on the principles set forth in Filcek.

Plaintiffs next argue that the trial court erred in dismissing their claim of breach of an implied warranty of fitness and habitability. We disagree. Such warranties run only to the first purchaser of a home. Weeks v. Slavic Builders, Inc., 24 Mich.App. 621, 180 N.W.2d 503 (1970), aff'd 384 Mich. 257, 181 N.W.2d 271 (1970). Plaintiffs were not the first purchasers of the house in question. Therefore, summary disposition of this claim was proper.

Affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion. We do not retain jurisdiction. No costs, neither party having prevailed.

JANSEN, P.J., concurred.

GRIFFIN, Judge (concurring in part and dissenting in part).

On appeal, plaintiffs raise three issues. In their first and third issues, plaintiffs contend that summary disposition of their negligence claim was improper. They contend that questions of fact exist and that, contrary to the trial court's conclusion, the period of limitation has not run. The merits of these claims need not be addressed. It is well settled that reversal is not required where a trial court reaches the right result but for the wrong reason. Reisman v. Regents of Wayne State University, 188 Mich.App. 526, 530, 470 N.W.2d 678 (1991). Here, plaintiffs' negligence cause of action is barred by the economic-loss doctrine, which precludes them from recovering in tort where their losses are wholly economic, even in the absence of privity. Sullivan Industries, Inc. v. Double Seal Glass Co., Inc., 192 Mich.App. 333, 339-344, 480 N.W.2d 623 (1991). Also see Neibarger v. Universal Cooperatives, Inc., 439 Mich. 512, 486 N.W.2d 612 (1992).

I acknowledge that, unlike Sullivan and Neibarger, the present case does not involve the sale of goods and is therefore not governed by the provisions of the Uniform Commercial Code. Nonetheless, the rationale behind the economic-loss doctrine still applies. Indeed, several courts have held that the economic-loss doctrine precludes a purchaser of a building from recovering in negligence against a builder where the purchaser's losses are wholly economic. See, e.g., Ellis v. Robert C. Morris, Inc., 128 N.H. 358, 513 A.2d 951 (1986), overruled in part on other grounds in Lempke v. Dagenais, 130 N.H. 782, 547 A.2d 290 (1988); Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Nastri v. Wood Bros. Homes, Inc., 142 Ariz. 439, 690 P.2d 158 (App.1984); Redarowicz v. Ohlendorf, 92 Ill.2d 171, 441 N.E.2d 324 (1982); Crowder v. Vandendeale, 564 S.W.2d 879 (Mo.1978), overruled in part on other grounds in Sharp Bros. Contracting Co. v. American Hoist & Derrick Co., 703 S.W.2d 901 (Mo.1986). Cf. Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo.1983).

As discussed at length in Sullivan, tort law is concerned with the "accident problem"; it is designed to protect against harm to persons or...