Miller–davis Co. v. Ahrens Constr. Inc.
| Decision Date | 11 July 2011 |
| Docket Number | Docket No. 139666. |
| Citation | 802 N.W.2d 33,489 Mich. 355 |
| Parties | MILLER–DAVIS COMPANY, Plaintiff–Appellant,v.AHRENS CONSTRUCTION, INC., Defendant–Appellee,andMerchants Bonding Company, Defendant. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Gemrich Law PLC (by Alfred J. Gemrich) and Scott Graham PLLC (by Scott Graham) for Miller–Davis Company.Field & Field, P.C. (by Samuel T. Fields), for Ahrens Construction, Inc.Clark Hill PLC (by Kevin S. Hendrick, Thomas M. Keranen, Detroit, and Brian P. Lick, Lansing) for amicus curiae the Associated General Contractors of Michigan.Thrun Law Firm, P.C. (by Christopher J. Iamarino and Kirk C. Herald), East Lansing, for amicus curiae Michigan Association of School Boards and Michigan School Business Officials.
This case involves a dispute over a construction contract. At issue is whether the limitations period in MCL 600.5839(1) applies to an action for breach of contract. The Court of Appeals held that it does and that the statute's six-year limitations period expired before plaintiff filed its complaint, barring the suit. Accordingly, the Court of Appeals reversed the judgment of the trial court, which had awarded plaintiff damages for breach of contract, and remanded the case for entry of a judgment in favor of defendant. 1
Plaintiff alleges that the general statute of limitations for breach of contract actions, MCL 600.5807(8), controls its action and that it filed suit within six years of the date its action accrued. Defendant alleges that the contractor statute of repose, MCL 600.5839(1), controls plaintiff's action and that plaintiff filed it more than six years after the occupancy, use, or acceptance of the roof defendant built.2 If defendant is correct, the suit is time-barred; if plaintiff is correct, the suit may not be time-barred.
We agree with plaintiff that MCL 600.5839(1) does not apply to actions for breach of contract. MCL 600.5807(8) is the applicable statute. The limitations period in both statutes is six years. But unlike the period in MCL 600.5839(1), which runs from “the time of occupancy of the completed improvement, use, or acceptance of the improvement,” the limitations period in MCL 600.5807(8) runs from the date the “claim first accrued....”
Accordingly, we reverse the judgment of the Court of Appeals. Because there is a question about the date plaintiff's action accrued, we remand the case to the Court of Appeals to resolve this issue, as well as other issues not yet considered.
Plaintiff, Miller–Davis Company, was the general contractor hired to improve and construct various buildings for the YMCA Camping and Retreat Services of Battle Creek and Kalamazoo. The project included construction of a natatorium. Plaintiff contracted with defendant Ahrens Construction, Inc., to install the natatorium's roof.
A temporary certificate of occupancy was issued for the entire project on June 11, 1999. The roof was installed before that date. Soon after its installation, the YMCA noticed excessive condensation in the natatorium, so severe at times that it appeared to be “raining” in the pool area. The parties refer to this condition as the “natatorium moisture problem” (NMP).
The temperature and air pressure in the pool were adjusted. Also, defendant performed corrective work on the roof. But the NMP continued into 2003, when plaintiff's architect recommended removing the roof as the only means to determine whether defendant's improper installation caused the NMP. The architect, who eventually testified as plaintiff's expert witness, opined that rips in and missing sections of the vapor barrier and improper installation of the insulation had caused the NMP.
Defendant insisted that the NMP was the result of design defects rather than poor workmanship. After all defendant's efforts to correct the problem were unsuccessful, plaintiff declared a default. Plaintiff eventually performed the corrective work itself in the fall of 2003.
In May 2005, plaintiff sued defendant, alleging that it had breached its contract by installing a roof that did not conform to the plan's specifications. Plaintiff sought indemnification for the necessary corrective work. Its complaint did not allege that defendant's work created a defective and unsafe condition, that defendant caused the NMP, or that plaintiff's damages arose from a defective and unsafe condition. Nor did it refer to defendant's express one-year guarantee or allege a breach of warranty.
Defendant sought summary disposition under MCR 2.116(C)(7), claiming that plaintiff had filed suit after expiration of the six-year period specified in the statute of repose contained in MCL 600.5839(1). The trial court denied defendant's motion without addressing the applicability of MCL 600.5839(1).3
The case proceeded to a bench trial. Plaintiff's theory was that defendant had constructed a defective roof and that the nature of the defect became apparent only when the roof was removed. It asserted that the NMP did not reappear after the roof was reconstructed. Defendant's defense was that design defects caused the NMP. For example, defendant claimed that the NMP arose because the roof's design allowed the vapor barrier to come into contact with cold outside air. Defendant's expert testified that once the defectively designed roof had been removed, the NMP was corrected because trapped moisture was allowed to escape. Alternatively, defendant argued that the alleged defects in the roof were caused when plaintiff removed it. In closing argument, defendant again raised the statute of repose.
The trial court ruled in favor of plaintiff. It determined that defendant was in material breach of its contract for having performed nonconforming and defective work on the roof, which required corrective measures. This resulted in damages of $348,851.50. On the indemnity claim, the court ruled in favor of defendant because no suits had been filed against plaintiff. Hence, no indemnification was required. The court did not address the statute of repose issue.
Defendant appealed as of right, raising the statute of repose, among other defenses. Plaintiff cross-appealed the denial of its indemnity claim. The Court of Appeals agreed with defendant on the statute-of-repose issue and reversed the judgment of the trial court.4 Because that resolution rendered moot the other issues, including the cross-appeal, the Court of Appeals declined to consider them and remanded the case for entry of a judgment for defendant.5
We granted plaintiff's application for leave to appeal.6
The issue in this case is whether the statute of repose contained in MCL 600.5839(1) or the statute of limitations contained in MCL 600.5807(8) applies to plaintiff's civil action. This case also involves the interpretation and application of MCL 600.5805. The issue presents a question of law that we review de novo.7
MCL 600.5805 sets forth various periods of limitations for civil actions. It provides, in pertinent part:
(1) A person shall not bring or maintain an action to recover damages for injuries to persons or property unless, after the claim first accrued to the plaintiff or someone through whom the plaintiff claims, the action is commenced within the periods of time prescribed by this section.
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(10) The period of limitations is 3 years after the time of the death or injury for all other actions to recover damages for the death of a person, or for injury to a person or property.
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(14) The period of limitations for an action against a state licensed architect, professional engineer, land surveyor, or contractor based on an improvement to real property shall be as provided in [MCL 600.5839].
MCL 600.5839 provides:
(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 state licensed architect or professional engineer performing or furnishing the design or supervision of construction of the improvement, or 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, or 1 year after the defect is discovered or should have been discovered, provided that the defect constitutes the proximate cause of the injury or damage for which the action is brought and is the result of gross negligence on the part of the contractor or licensed architect or professional engineer. However, no such action shall be maintained more than 10 years after the time of occupancy of the completed improvement, use, or acceptance of the improvement.
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(4) As used in this section, “contractor” means an individual, corporation, partnership, or other business entity which makes an improvement to real property.
Plaintiff asserts that MCL 600.5839(1) does not apply to its action. Rather, it claims that the general statute of limitation for contract actions, MCL 600.5807(8), applies. It provides: “The period of limitations is 6 years for all other actions to recover damages or sums due for breach of contract.”
THE SCOPE AND APPLICATION OF MCL 600.5839(1)
In order to determine the scope of MCL 600.5839(1), we consider first the overall statutory scheme involving periods of limitations for tort and contract actions contained in the Revised Judicature Act.8 MCL 600.5805 is entitled “Injuries to persons or property.” 9 It is commonly known as the general tort statute of limitations because it is “ ‘a compilation of the limitations on the general tort remedies.’ ” 10
Section 5805(1) requires that all actions for injury to persons or property be brought within the time periods set forth in the section. There follow 14 subsections, 12...
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