Sutherland v. Kennington Truck Service, Ltd.

• Decision Date: 13 May 1997
• Docket Number: Docket No. 102290,No. 15,15
• Citation: 454 Mich. 274,562 N.W.2d 466
• Parties: Larry G. SUTHERLAND and Donna Sutherland, husband and wife, Plaintiffs-Appellants, v. KENNINGTON TRUCK SERVICE, LTD., an Ontario corporation, Elgin Leasing Ltd., a Division of Western Ontario Truck Centre, Inc., an Ontario corporation, Canadian Timken, Ltd., an Ontario corporation, and Gregory R. Zavitz, jointly and severally, Defendants-Appellees. Calendar
• Court: Michigan Supreme Court

Page 466

562 N.W.2d 466

454 Mich. 274

Larry G. SUTHERLAND and Donna Sutherland, husband and wifePlaintiffs-Appellants, v.KENNINGTON TRUCK SERVICE, LTD., an Ontario corporation Elgin Leasing Ltd., a Division of Western Ontario Truck Centre, Inc., an Ontario corporation, Canadian Timken, Ltd an Ontario corporation, and Gregory R. Zavitz, jointly and severally, Defendants-Appellees.

Docket No. 102290.

Calendar No. 15.

Supreme Court of Michigan.

Argued Nov. 14, 1996.

Decided May 13, 1997.

Steinberg, O'Connor, Paton & Burns, P.L.L.C. by Richard L. Steinberg, Detroit, Philo, Atkinson, White, Stephens, Whitaker & Keenan by Harry M. Philo, Detroit, Gallon & Takacs, Co., L.P.A. by Jack Gallon, Toledo, OH, and Bendure & Thomas by Mark R. Bendure, Detroit, for plaintiffs-appellants.

Braunlich, Russow & Braunlich by William H. Braunlich, Monroe, for defendants-appellees.

MALLETT, Chief Justice.

In this choice of law case, an Ontario driver and an Ohio driver collided while on a Michigan highway.Plaintiffs filed suit in Michigan two years and twenty-two days after the accident.Both Ohio and Ontario have two-year statutes of limitations, while Michigan has a three-year statute of limitations.The trial court applied Ontario's statute of limitations, holding that Michigan had no interest in the litigation.We reverse and hold that because neither Ohio nor Ontario have an interest in having its law applied, Michigan law will apply.

IFacts and Proceedings

The facts in this case are fit for a law school choice of law examination.On August 14, 1989, two trucks collided on Interstate 75 in Monroe County, Michigan.The driver of one truck, Larry G. Sutherland, is a resident of Ohio and was operating a truck licensed in Ohio.The driver of the other truck, Gregory Zavitz, is a citizen of Ontario, Canada.He was employed by Kennington Truck Service, an Ontario corporation.Zavitz's truck was owned by Elgin Leasing, which had leased the truck to Canadian Timken.Both Elgin Leasing and Canadian Timken are Ontario corporations.

On September 5, 1991, two years and twenty-two days after the accident, Mr. Sutherland and his wife sued defendants in Monroe Circuit Court, alleging negligence.Defendants moved for summary disposition pursuant to MCR 2.116(C)(7), arguing that the court should apply either Ohio's or Ontario's statute of limitations.Both of these jurisdictions bar negligence actions filed more than two years after the cause of action arose.¹ In response, plaintiffs argued that the case should be governed by Michigan's three-year statute of limitations.²

The trial court granted the motion for summary disposition.Applying "interest analysis,"the court found that Michigan had no interest in the outcome of this litigation because none of the parties are Michigan citizens.The court further found that Ontario had an interest in protecting its citizens from stale claims.On this basis, the court held that Ontario's two-year statute of limitations would apply.

In an unpublished opinion per curiam, the Court of Appeals affirmed.³The Court stated:

The trial court did not err in applying the Ontario statute.The trial court properly conducted an interest analysis to decide which state had the greatest interest in applying its statute of limitation.Although Michigan law once favored application of the law of the forum to procedural matters, such is no longer the case.Recent decisions have criticized the distinction between procedure and substance for conflict of law analysis, recognizing that it has often been used in a manipulative manner.SeeOlmstead v. Anderson, 428 Mich. 1, 28, 400 N.W.2d 292(1987);Sexton v Ryder Truck Rental, 413 Mich. 406, 419-423, 320 N.W.2d 843(1982);Mahne v. Ford Motor Co., 900 F.2d 83, 87(C.A.6, 1990);Penwest Development Corp. v. Dow Chemical Co., 667 F.Supp. 436, 442(E.D.Mich., 1987);Farrell v. Ford Motor Co., 199 Mich.App. 81, 501 N.W.2d 567(1993).Neither party in this action is a citizen of this state, both parties are residents of states that have a two-year statute of limitations, and the statute of limitation issue is not an issue involving conduct.We find no error in the trial court's analysis.

We granted leave to appeal on plaintiffs' motion for reconsideration.

II

The Choice of Law "Revolution"

Before 1963, American choice of law jurisprudence for tort cases was uniform.All fifty states adhered to the doctrine of lex loci delicti, or the law of the place of the wrong, as espoused by Professor Beale in the First Restatement on Conflicts of Law.Under this doctrine, tort cases were governed by the law of the jurisdiction in which the wrong occurred.Thus, a suit by Michigan citizens who were involved in an accident in another jurisdiction would be governed by the law of the other jurisdiction, even if the suit were brought in this state.⁴ The primary advantage of this rule was that conflicts of law questions were easy to resolve, at least in theory.Parties in litigation could usually predict what law would govern the case by determining the state where the last act necessary to create liability occurred.⁵

While all states purported to adhere to the rule of lex loci delicti in the first half of this century, many state courts expressed discomfort with the rigidity of the rule.In order to mitigate what were seen as harsh results, courts developed several "escape devices" to the lex loci delicti rule.For example, a forum court would decline to apply the law of another jurisdiction if that law conflicted with an important public policy of the forum state.Courts would also characterize issues as "procedural," instead of substantive, in order to apply the law of the forum.While the application of these escape devices avoided what were seen as unjust results, they also undermined the predictability of the lex loci delicti rule.⁶

In 1963, New York became the first state to explicitly abandon the traditional approach to conflicts of law.In the seminal case of Babcock v. Jackson, 12 N.Y.2d 473, 484, 240 N.Y.S.2d 743, 191 N.E.2d 279(1963), the New York Court of Appeals stated that the traditional rule "fail[ed] to take into account essential policy considerations and objectives...."Instead of adhering to the lex loci delicti rule, the New York Court of Appeals asserted that it would consider the contacts of the tort with each jurisdiction and the interests that each government had in having its law applied.⁷

Babcock sparked a "revolution" in conflicts of law jurisprudence.Freed from the monolithic adherence to the traditional rule, state after state revisited its conflicts rules and expressed its frustration with the lex loci delicti doctrine.By 1980, thirty-one states had abandoned the traditional rule.Currently, only ten states still purport to apply the lex loci delicti rule.⁸ While Babcock slew the lex loci delicti dragon, it has not produced a consensus on how to deal with conflicts of law questions in the absence of the traditional rule.On lex loci's grave, several competing theories have sprouted.The most prominent of these "modern" theories is "interest analysis," an approach that the late Brainerd Currie has advocated.⁹ Under this approach, courts examine the governmental interests of the involved jurisdictions.If the forum state has no interest in having its law applied but the other jurisdiction does, the law of the other jurisdiction should be chosen.If the forum state has an interest and the other does not, the court should choose forum law.If both the forum state and the alternate have an interest in having its law applied and the laws conflict, then the court should apply the forum's law.If neither jurisdiction is interested, the court should again apply forum law.

While several states have adopted interest analysis, it competes for attention with other theories.Under Professor Leflar's "choice influencing considerations," for example, courts ask which jurisdiction has the "better rule of law."¹⁰ The approach that the Second Restatement on the Conflicts of Law proposes, on the other hand, would require courts to determine which jurisdiction has the "most significant relationship" to the tort.¹¹ At least one state, Kentucky, has adopted a blanket lex fori approach, in which forum law will always be applied.¹²

Proponents of these various approaches have engaged in a vigorous debate over the advantages and disadvantages of each approach.As Justice Riley has noted, conflicts of law has become a fecund milieu for academic scholarship.¹³ While this debate is illuminating, much of it ignores the fact that, in practice, all the modern approaches to conflicts of law are relatively uniform in the results they produce.Professor Borchers has surveyed cases that purport to apply the various modern approaches and concluded that none of the modern approaches differ significantly from the others in three important respects: the percentage of times that courts apply forum law, the percentage of times that plaintiffs recover, or the percentage of times that local parties prevail.¹⁴

In fact, Professor Borchers' research shows that each of the modern approaches tend to favor significantly the application of forum law.Applying the modern approaches, courts select forum law between approximately fifty-five and seventy-seven percent of the time.¹⁵ This has led one commentator to note:

On reading a substantial number of these cases over the years, one has a feeling that the courts may not be doing what they purport to do, that is, employing the modern choice-of-law theories in a neutral way to determine what law applies.Rather, one suspects that courts employing the new theories have a very strong preference for forum law that frequently causes them to manipulate the theories so that they end up applying forum law.[ ¹⁶

Likewise, Professor Sedler has noted:

[T]he results in actual cases that arise are not likely to differ...