Parish v. B. F. Goodrich Co.

• Decision Date: 25 November 1975
• Docket Number: No. 9,9
• Citation: 395 Mich. 271,235 N.W.2d 570
• Parties: , 18 UCC Rep.Serv. 414 Betty PARISH and Dorothy Fink, Plaintiffs-Appellees, v. B. F. GOODRICH COMPANY, Defendant-Appellant.
• Court: Michigan Supreme Court

Page 570

235 N.W.2d 570

395 Mich. 271, 18 UCC Rep.Serv. 414

Betty PARISH and Dorothy Fink, Plaintiffs-Appellees, v. B. F. GOODRICH COMPANY, Defendant-Appellant.

No. 9.

Supreme Court of Michigan.

Nov. 25, 1975.

Zeff & Zeff, Detroit, for plaintiffs-appellees; Edward Grebs, Detroit, of counsel.

Harvey Kruse & Westen, P.C. by James N. Martin and James D. Hunter, Detroit, for defendant-appellant.

LEVIN, Justice.

The question is, for purposes of determining, under the borrowing statute, the applicability of Michigan's or of another state's statute of limitations, whether a product liability claim of a consumer against a manufacturer accrues in the state where the product is sold or the state where the alleged defect in the product becomes apparent, causing injury and damage. We hold that the claim accrues when and where injury and damage are suffered.

I

Claiming that their injuries in an automobile accident were caused by the blowout of a defective tire, the plaintiffs, the owner-driver and her passenger, commenced an action against the defendant, manufacturer of the tire.

In Ohio, where the accident occurred, an action for bodily injury 'shall be brought within 2 years.' ¹ In Michigan, where this action was commenced, actions to recover damages for injuries to persons or property must be brought within 3 years. ² This action was commenced more than 2 but less than 3 years after the accident.

The Michigan borrowing statute, the Uniform Statute of Limitations on Foreign Claims Act, provides: '(T)he period of limitation applicable to a Claim accruing outside of this state shall be either that prescribed by the law of the place where the claim accrued or by the law of this state, whichever bars the claim.' M.C.L.A. § 600.5861(2); M.S.A. § 27A.5861(2). (Emphasis supplied.)

The trial court granted the defendant an accelerated judgment based on Ohio's statute of limitations. The Court of Appeals agreed that the Ohio statute barred plaintiffs' negligence counts but held that the warranty counts could be maintained. Because the tire was sold in Michigan, the 'causes of action for breach of warranty' accrued in Michigan and the borrowing statute did not apply.

The Court of Appeals relied on § 2--725(1) of the Uniform Commercial Code, ³ providing that an action 'for breach of any contract for sale' must be brought within 4 years and that a breach of warranty occurs 'regardless of the aggrieved party's lack of knowledge of the breach * * * When tender of delivery is made.' (Emphasis supplied.) ⁴ Plaintiffs claim that the tire was purchased in late 1968. This action was commenced March 10, 1972.

We reverse the Court of Appeals and affirm the accelerated judgment. Plaintiffs' claims did not accrue until the blowout, resulting accident and injury 'outside of this state.' Michigan's borrowing statute, thus, applies, and Ohio's shorter limitation governs.

II

At common law, the limitational periods of the forum generally controlled the time for commencing an action, whether the claim arose within or outside the forum. ⁵

Most states have enacted 'borrowing statutes' to resolve the possible conflicts of laws that may arise when a plaintiff's claim accrues outside of the forum. Borrowing statutes, including Michigan's, typically confine a plaintiff whose claim accrues outside the forum to the limitational period--of the forum or the state where the claim accrued--allowing the least time to commence the action. ⁶

The issue presented is one of statutory construction--specifically, the meaning to be ascribed to the words 'claim accruing outside of this state.'

We are persuaded that the Legislature did not intend to allow plaintiffs, inhibited by the borrowing statute from shopping for a forum with a favorable limitational period, to accomplish the same purpose by elaborating a legal theory; it was not intended that the time for commencement of a product-liability action against a manufacturer depend on whether plaintiff's theory of liability is grounded in tort or contract.

III

The provisions of UCC § 2--725 (a warranty is breached upon tender of delivery), while entirely satisfactory in a commercial setting, are inconsistent with principles developed by the courts in consumer actions against manufacturers for personal injury. While most business losses attributable to a defective product will surface during the 4-year period prescribed by § 2--725, consumers often suffer personal injury after a longer period of time has elapsed. Adopting time of delivery, without regard to time of discovery, as the point of departure for statute of limitations purposes frequently will produce unsatisfactory results in personal injury cases. ⁷

Section 2--725 concerns, if not only, primarily claims based on an Agreement of the parties to the litigation--including actions based on warranties implied from or in respect of their agreement. ⁸

The product liability of a manufacturer, not in direct dealing with the consumer, ⁹ has, in contrast, been imposed by the courts with little or no regard to whether there is an agreement between the parties and in the face of attempts by some manufacturers to disclaim liability in recitals accompanying the product into the market place.

While some of the concepts (E.g., implied warranty) developed by the courts in creating the consumer's right of direct action against the manufacturer have been enacted into statute, the UCC draftsmen have acknowledged that the consumer's remedy is not statutory, but essentially a judicial development which the courts should be free to develop further. ¹⁰ The UCC did not create a new and separate consumer's product liability claim against the manufacturer.

This Court has consistently held that the 3-year limitational period applicable to 'all other actions to recover damages for injuries to persons and property' applies without regard to whether the claim sounds in tort or contract, express or implied. ¹¹

To hold that the consumer's claim against a manufacturer for personal injury 'accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach' (UCC § 2--725) would be inconsistent with

--the general rule of law that a claim for personal injury does not accrue for statute of limitations purposes until all elements of the claim, including the element of damage, are present; ¹²

--recent holdings of this Court in consumer actions against suppliers of services, that the statute of limitations does not begin to run before the plaintiff discovers or in the exercise of reasonable diligence should have discovered his loss; ¹³

--the goal of a unified product liability cause of action, disentangled from allegiance to warranty or tort concepts, whether the question presented is 'procedural' or 'substantive' ¹⁴ (a consumer has only one product liability 'claim' against a manufacturer (wherever it arises), however many counts and legal theories (E.g., negligence, warranty, strict liability) he may advance in support of that one claim);

--RJA § 5833: 'In actions for damages based on breach of a warranty of quality or fitness the claim accrues at the time the breach of the warranty is discovered or reasonably should be discovered.' ¹⁵

The Court of Appeals sought to reconcile the conflict between its conclusion that § 2--725 determines Where a claim for implied warranty accrues and the 'long-standing policy in Michigan that the statute of limitations should not expire before damage has been suffered' ¹⁶ by reading RJA 5833 ('the claim accrues' in actions for breach of warranty of quality or fitness when the breach is discovered or reasonably should have been) as tolling, until damage is suffered, the running of the statute against the claim which, under the Court's construction of § 2--725, accrues upon tender of delivery. ¹⁷ We find that analysis strained, unpersuasive and inconsistent with the purpose of § 2--725 to commence the running of the 4-year limitational period, applicable to UCC contract of sale actions, Instanter upon tender of delivery. RJA 5833 is not a tolling statute; in terms it establishes, as does § 2--725, ¹⁸ when a 'claim accrues.'

IV

We have considered the so-called 'interest analysis' ¹⁹ and whether Michigan, the state where the tire was purchased, has a special interest justifying the conclusion that plaintiffs' claims 'arose' in this state:

'The state (of purchase) has a concern for the control of its own commercial climate: for protecting those who come to purchase, and for exacting assurances of safety from those who do business in its markets.' Note, Products Liability and the Choice of Law, 78 Harv.L.Rev. 1452, 1464 (1965).

Analogous reasoning would emphasize the state's interest in protecting its residents against short statutes of limitations of infortuitous places where breach, injury or damages is suffered. But the Legislature could have both barred nonresidents from coming into this state in search of a longer statute of limitations and allowed Michigan residents (who generally are not forum shopping) the benefit of Michigan's frequently longer limitational period by exempting, as many states have, its own residents from the restrictions of its borrowing statute. ²⁰

The Legislature, however, on the recommendation of the Commissioners on Uniform State Laws, has chosen an undifferentiating course barring Michigan residents, as well as nonresidents, from maintaining actions in Michigan courts that accrue in another state and which are timebarred in that state. ²¹ This suggests that there is no legislative policy of special concern for Michigan residents overriding the considerations which prompted the Commissioners on Uniform State Laws to make residence irrelevant.

The tendency of Michigan's borrowing statute is to bar residents of Michigan and nonresidents alike, who suffer personal injury outside this state, howsoever caused, from maintaining an action in Michigan unless commenced not...