Docket No. 58064.
Decided January 3, 1984.
Roesch, Schaberg Baker (by Basil A. Baker), for plaintiffs.
Terry J. Nosan, for defendant.
In 1966, defendant constructed a house. Plaintiffs became remote purchasers of that house in July, 1977, i.e., there were at least two previous owners. Shortly after their purchase, plaintiffs discovered defects in the house which they attributed to defendant. On March 20, 1979, plaintiffs filed a two-count complaint against defendant in district court, alleging negligent construction (Count I) and breach of an implied warranty of habitability (Count II). On defendant's motions, the trial court granted accelerated judgment based on expiration of the applicable statute of limitations, pursuant to GCR 1963, 116.1(5), on Count I and summary judgment, pursuant to GCR 1963, 117.2(1), on Count II. Plaintiffs took an appeal as of right to the circuit court, challenging only the entry of accelerated judgment as to Count I. The circuit court affirmed and this Court granted leave to appeal.
The trial court erred by granting accelerated judgment in favor of defendant. Plaintiffs' tort claim for negligent construction is a viable one. The statute involved in this case, MCL 600.5827; MSA 27A.5827, was enacted as part of the Revised Judicature Act. 1961 PA 236.
"Sec. 5827. Except as otherwise expressly provided, the period of limitations runs from the time the claim accrues. The claim accrues at the time provided in sections 5829 to 5838, and in cases not covered by these sections the claim accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results."
At first glance, it appears that, pursuant to the foregoing statute, the wrong occurred when the house was built in 1966 and that the damage did not result, at the earliest, until plaintiffs purchased the house in 1977. Thus, it would seem that plaintiffs' claim is time-barred.
However, the Supreme Court has interpreted § 5827 as stating that a claim does not accrue until one is injured, not when the wrong is committed. Connelly v Paul Ruddy's Equipment Repair Service Co, 388 Mich. 146, 150; 200 N.W.2d 70 (1972). Also, Williams v Polgar, 391 Mich. 6, 23-25; 215 N.W.2d 149 (1974). In other words, the 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, 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. This Court has similarly ruled in Bonney v Upjohn Co, 129 Mich. App. 18; 342 N.W.2d 551 (1983), that the plaintiffs' products liability claim for personal injuries against a drug company did not accrue until plaintiffs discovered or should have discovered that they had a cause of action. The discovery rule of accrual has also been applied in cases involving property damage as opposed to personal injury, where it has been held that the element of damage does not occur until the damage was either discovered or should have been discovered through the exercise of reasonable diligence. Southgate Community School Dist v West Side Construction Co, 399 Mich. 72, 82; 247 N.W.2d 884 (1976), reh den 400 Mich. 951 (1977); Bluemlein v Szepanski, 101 Mich. App. 184, 190; 300 N.W.2d 493 (1980), lv den 411 Mich. 995 (1981).
In this case, plaintiffs allege negligent construction. The elements of that action are: (1) the existence of a duty owed by defendant to plaintiffs or to any of plaintiffs' predecessors-in-interest, (2) to exercise due care in the construction of a building, and (3) a breach of that duty which (4) proximately caused (5) damages to plaintiffs or to any of plaintiffs' predecessors-in-interest. Moning v Alfono, 400 Mich. 425, 437; 254 N.W.2d 759 (1977); Baranowski v Strating, 72 Mich. App. 548, 556; 250 N.W.2d 744 (1976), lv den 399 Mich. 881 (1977).
Since the final element to have occurred in this case was the property damage and since such damage is not always discoverable at the time it first occurs, the three-year limitation period began to run when that property damage was or with reasonable diligence should have been discovered. For example, if the damage was not discovered and could not reasonably have been discovered until after plaintiffs took possession of the house, then the three-year period of limitations began running at that time and plaintiffs' action is not barred. On the other hand, if the damage was or with reasonable diligence should have been discovered prior to March 20, 1976, and plaintiffs' predecessors-in-interest simply failed to institute any legal action against defendant, then plaintiffs' cause of action is barred by the three-year statute of limitations. However, in both cases, the determination of when the limitations period commenced is for the trier of fact. Bonney, supra.
Reversed and remanded for further proceedings.
I respectfully dissent. The Legislature has the power to limit the period in which a cause of action may be brought. The Legislature has determined that the proper period in this case is three years. MCL 600.5805(8); MSA 27A.5805(8). The Legislature has further expressly provided the time at which a cause of action begins. A cause of action for negligent construction does not accrue when it is discovered by incurring a debt for repairs. A cause of action for negligent construction accrues "at the time the wrong upon which the claim is based was done regardless of the time when damage results". MCL 600.5827; MSA 27A.5827.
Plaintiffs claim damages as a result of the negligent construction of the footings to the house they purchased in 1977. The claimed negligence is the pouring or installation of the footings, apparently underneath the fireplace and chimney. Plaintiffs allege that the footings were only 24" below grade and should have been installed at 48" below grade, and that as a result of the defendant's negligent installation of the footings in 1966 the fireplace and chimney have been replaced and other damage to the dwelling has occurred and may continue into the future.
The trial court granted defendant's motion for accelerated judgment holding that the action was time barred and that the cause of action accrued when the footings were installed. The circuit court affirmed. It is my opinion that the granting of the motion for accelerated judgment was correct and should be affirmed.
The purpose of legislation rendering stale claims unenforceable is to protect the fact-finding process from risk of error in making decisions on the merits. Faulty decisions occur from the difficulty of obtaining reliable evidence of events and circumstances which prevailed in the remote past. Decisions which are based upon stale claims will result in the reduction of the validity of the result. Facts presented from more recent transactions are generally more reliable than facts presented from more remote times. The two opinions that hold that a cause of action accrues when damage results or when all the elements of a cause of action exist or when the injury or damages are discovered or could be discovered do nothing to control the floodgates of the ever-increasing flow to the over-saturated fact-finding process. There are many other policy considerations for controlling access to the courts of this state.
No one suffered any injury to their person on this claim, therefore, Connelly v Paul Ruddy's Equipment Repair Service Co, 388 Mich. 146; 200 N.W.2d 70 (1972), does not apply. It is easy to see that a cause of action could be pled and filed by any interested party the day the forms were removed from the footings. A more correct interpretation of the statute on an injury to property is reflected in Cree Coaches, Inc v Panel Suppliers, Inc, 23 Mich. App. 67; 178 N.W.2d 101 (1970), and H Hirschfield Sons Co v Colt Industries Operating Corp, 107 Mich. App. 720; 309 N.W.2d 714 (1981).