Price v. High Pointe Oil Co.

• Decision Date: 15 November 2012
• Docket Number: Docket No. 143831.
• Citation: 828 N.W.2d 660,493 Mich. 238
• Parties: PRICE v. HIGH POINTE OIL COMPANY, INC.
• Court: Michigan Supreme Court

493 Mich. 238
828 N.W.2d 660

PRICE
v.
HIGH POINTE OIL COMPANY, INC.

Docket No. 143831.

Supreme Court of Michigan.

Decided March 21, 2013.
Argued Nov. 15, 2012 (Calendar No. 1).

[828 N.W.2d 661]

Sinas, Dramis, Brake, Boughton & McIntyre, P.C., Lansing (by James F. Graves and Stephen H. Sinas), and Speaker Law Firm, PLLC (by Steven A. Hicks), for Beckie Price.

[828 N.W.2d 662]

Garan Lucow Miller, P.C., Detroit (by Megan K. Cavanagh), for High Pointe Oil Company, Inc.

Clark Hill PLC, Detroit (by Cynthia M. Filipovich and Kristin B. Bellar), for amicus curiae the Michigan Manufacturers Association.

McClelland & Anderson, LLP, Lansing (by Gregory L. McClelland and Melissa A. Hagen), for amicus curiae the Michigan Association of Realtors.

McClelland & Anderson, LLP, Lansing (by Gregory L. McClelland and Melissa A. Hagen), for amicus curiae the Michigan Association of Home Builders.

MARKMAN, J.

[493 Mich. 240]The issue in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. No Michigan case has ever allowed a plaintiff to recover noneconomic damages resulting solely from the negligent destruction of property, either real or personal. Rather, the common law of this state has long provided that the appropriate measure of damages in cases involving the negligent destruction of property is simply the cost of replacement or repair of the property. We are not persuaded of the need for change and therefore continue to adhere to this rule. Accordingly, we reverse the judgment of the Court of Appeals and remand this case to the trial court for entry of summary disposition in defendant's favor.

I. FACTS AND HISTORY

In 1975, plaintiff and her now ex-husband built a house in DeWitt, Michigan. The house was originally heated by an oil furnace located in the basement, but in 2006 plaintiff replaced the oil furnace with a propane furnace. Plaintiff canceled her contract with defendant [493 Mich. 241]oil company's predecessor when the propane furnace was installed. Although the oil furnace was removed, the oil fill pipe remained.

Somehow, in November 2007, plaintiff's address was placed on defendant's “keep full list.” True to the name of the list, while plaintiff was at work, defendant's truck driver pumped nearly 400 gallons of fuel oil into plaintiff's basement through the oil fill pipe before realizing his mistake and immediately calling 911. Plaintiff's house and many of her belongings were destroyed. Between defendant's and plaintiff's insurers, the site was remediated, a new house was built on the property in a different location, plaintiff's personal property was cleaned or replaced, and plaintiff was reimbursed for all temporary-housing-related expenses. It is undisputed that plaintiff was fully compensated for her economic losses.

Nevertheless, plaintiff filed suit in August 2008, alleging claims for negligence, gross negligence, negligent infliction of emotional distress, nuisance, trespass, and a private claim under the Natural Resources and Environmental Protection Act, MCL 324.101 et seq. However, plaintiff's only claim to survive to trial was for the recovery of noneconomic damages for defendant's negligent destruction of her real property. After trial and over defendant's objection, a jury found in favor of plaintiff in the amount of $100,000 for past noneconomic damages. Defendant moved for judgment notwithstanding the verdict and remittitur, arguing that plaintiff had failed to present sufficient proofs to support the verdict. The trial court denied the motion, and defendant appealed. The Court of Appeals affirmed in a published decision, explaining:

Noneconomic damages are generally recoverable in tort claims, and we are not convinced that noneconomic damages stemming from damage to or destruction

[828 N.W.2d 663]

of real property [493 Mich. 242]must or should be excepted from that general rule. We conclude that in negligence actions, a plaintiff may recover mental anguish damages naturally flowing from the damage to or destruction of real property. [Price v. High Pointe Oil Co., Inc., 294 Mich.App. 42, 60, 817 N.W.2d 583 (2011).]

Defendant applied for leave to appeal in this Court. We granted leave and subsequently heard oral argument. Price v. High Pointe Oil Co., Inc., 491 Mich. 870, 809 N.W.2d 566 (2012).

II. STANDARD OF REVIEW

Whether noneconomic damages are recoverable for the negligent destruction of real property presents a question of law, which this Court reviews de novo. See 2000 Baum Family Trust v. Babel, 488 Mich. 136, 143, 793 N.W.2d 633 (2010).

III. ANALYSIS

The question in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. Absent any relevant statute, the answer to that question is a matter of common law.

A. COMMON LAW

As this Court explained in Bugbee v. Fowle, the common law “ ‘is but the accumulated expressions of the various judicial tribunals in their efforts to ascertain what is right and just between individuals in respect to private disputes[.]’ ” Bugbee v. Fowle, 277 Mich. 485, 492, 269 N.W. 570 (1936), quoting Kansas v. Colorado, 206 U.S. 46, 97, 27 S.Ct. 655, 51 L.Ed. 956 (1907). The common law, however, is not static. By its nature, it adapts to changing circumstances. See Holmes, The Common Law (Mineola, New York: Dover Publications, Inc., 1991), p. 1 (noting that the common [493 Mich. 243]law is affected by “[t]he felt necessities of the time, the prevalent moral and political theories, [and] intuitions of public policy” and that it “embodies the story of a nation's development through many centuries”). And as this Court stated in Beech Grove Investment Co v. Civil Rights Comm:

It is generally agreed that two of the most significant features of the common law are: (1) its capacity for growth and (2) its capacity to reflect the public policy of a given era....

* * *

“The common law does not consist of definite rules which are absolute, fixed, and immutable like the statute law, but it is a flexible body of principles which are designed to meet, and are susceptible of adaption to, among other things, new institutions, public policies, conditions, usages and practices, and changes in mores, trade, commerce, inventions, and increasing knowledge, as the progress of society may require. So, changing conditions may give rise to new rights under the law....” [Beech Grove Investment Co. v. Civil Rights Comm., 380 Mich. 405, 429–430, 157 N.W.2d 213 (1968), quoting 15A CJS, Common Law, § 2, pp. 43–44.]

The common law is always a work in progress and typically develops incrementally, i.e., gradually evolving as individual disputes are decided and existing common-law rules are considered and sometimes adapted to current needs in light of changing times and circumstances. In re Arbitration Between Allstate Ins. Co. & Stolarz, 81 N.Y.2d 219, 226, 597 N.Y.S.2d 904, 613 N.E.2d 936 (1993) (noting that the common law evolves through the “incremental process of common-law adjudication as a response to the facts presented”

[828 N.W.2d 664]

); ¹ see also [493 Mich. 244]People v. Aaron, 409 Mich. 672, 727, 299 N.W.2d 304 (1980) (“Abrogation of the felony-murder rule is not a drastic move in light of the significant restrictions this Court has already imposed. Further, it is a logical extension of our decisions....”); Woodman v. Kera LLC, 486 Mich. 228, 267–268, 785 N.W.2d 1 (2010) (Markman, J., concurring in part and dissenting in part).

The common-law rule with respect to the damages recoverable in an action alleging the negligent destruction of property was set forth in O'Donnell v. Oliver Iron Mining Co., 262 Mich. 470, 247 N.W. 720 (1933). O'Donnell provides:

“If injury to property caused by negligence is permanent or irreparable, [the] measure of damages is [the] difference in its market value before and after said injury, but if [the] injury is reparable, and [the] expense of making repairs is less than [the] value of [the] property, [the] measure of damages is [the] cost of making repairs.” [Tillson v. Consumers' Power Co., 269 Mich. 53, 65, 256 N.W. 801 (1934), quoting O'Donnell, 262 Mich. at 471, 247 N.W. 720 (syllabus).] ²

493 Mich. 245]Accord William R Roach & Co. v. Blair, 190 Mich. 11, 16–17, 155 N.W. 696 (1916) (approving as being in accordance with the “general rule” the trial court's articulation of damages as “ ‘the fair cash value at said time and place of said property which was destroyed by said fire, and the diminution in value of property injured and not destroyed’ ”); Davidson v. Michigan C. R. Co., 49 Mich. 428, 431, 13 N.W. 804 (1882) (“[I]n the case of domestic animals injured, the proper rule of damages, as in the case of other perishable chattels, should usually be the reduced value at the time.... [T]he difference between the value before and after the accident will enable the owner to be fully indemnified.”); Guzowski v. Detroit Racing Ass'n, Inc., 130 Mich.App. 322, 328, 343 N.W.2d 536 (1983) (citing Davidson for the conclusion that

[828 N.W.2d 665

the proper measure of damages was the difference in market value of a horse after it was injured from its preinjury market value); Fite v. North River Ins. Co., 199 Mich. 467, 471, 165 N.W. 705 (1917) (indicating the primacy of market value in assessing damages).

Michigan common law has continually followed the O'Donnell rule. See Tillson, 269 Mich. at 65, 256 N.W. 801;Jackson Co. Rd. Comm'rs v. O'Leary, 326 Mich. 570, 576, 40 N.W.2d 729 (1950); State Hwy. Comm'r v. Predmore, 341 Mich. 639, 642, 68 N.W.2d 130 (1955); [493 Mich. 246]Wolverine Upholstery Co.v. Ammerman, 1 Mich.App. 235, 242, 135 N.W.2d 572 (1965); Bayley Products, Inc. v. American Plastic Products Co., 30 Mich.App. 590, 598, 186 N.W.2d 813 (1971) (“It is the settled law of this state that the measure of damages to real property, if permanently irreparable, is the difference between its market value before and after the damage.”); Baranowski v. Strating, 72 Mich.App....