Michigan Court of AppealsApr 3, 1978
82 Mich. App. 291 (Mich. Ct. App. 1978)
82 Mich. App. 291266 N.W.2d 795

Docket Nos. 31461-31468.

Decided April 3, 1978. Leave to appeal applied for.

DeGroot, Kalliel, Triant Conklin, P.C., for plaintiffs.

Catchick Dodge, for defendant James G. Terzes.

Warner, Norcross Judd (by Peter L. Gustafson), for defendants Fred W. Moss and Albert Casemier. Hillman, Baxter Hammond (by Joel E. Krissoff), for defendant E. John Knapp.

Allaben, Massie, VanderWeyden Timmer (by Timothy I. Miner), for defendant Paul Newhof.

Before: J.H. GILLIS, P.J., and R.B. BURNS and ALLEN, JJ.

Plaintiffs Anne and John Oole and James Carpenter were injured when a wooden deck which was part of the residence of defendants James and Katrina Oosting gave way on July 10, 1973. Suit was brought against the Oostings on January 31, 1975, and plaintiffs subsequently amended their complaints on June 26, 1975, to allege negligence by the designers and builders of the deck. This amendment added as defendants E. John Knapp and James G. Terzes, registered architects, Paul Newhof, a registered engineer, and Fred W. Moss and Albert Casemier, contractors. The added defendants moved for accelerated judgments because the suits were brought more than six years after the residence was occupied by the Oostings in 1966, and therefore allegedly barred by MCLA 600.5839(1); MSA 27A.5839(1). The trial court held the statute was inapplicable, and denied the motions. We granted leave to appeal, and affirm as to Moss and Casemier, but reverse as to Knapp, Terzes and Newhof.

The statute which we must interpret provides:

"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 such improvement more than 6 years after the time of occupancy of the completed improvement, use or acceptance of such improvement. This limitation shall not apply to actions against any person in actual possession and control as owner, tenant or otherwise, of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought." MCLA 600.5839(1); MSA 27A.5839(1).

Subsection (2) provides similar protection for licensed land surveyors.

The trial court, relying by analogy upon American States Insurance Co v Taubman Co, Inc, 352 F. Supp. 197 (ED Mich, 1972), decided the statute did not apply where plaintiffs had not dealt directly with defendants. In American States Insurance Co insurance companies subrogated to the rights of the owner of a shopping center and its lessees sued defendants who had negligently installed a light fixture which caused a fire eight years later. The applicable negligence statute of limitations required suit to be brought within three years of when the claim first accrued to the subrogor. MCLA 600.5805; MSA 27A.5805. A claim accrues when all of the elements of the cause of action have occurred and can be alleged in a proper complaint. MCLA 600.5827; MSA 27A.5827, Connelly v Paul Ruddy's Equipment Repair Service Co, 388 Mich. 146; 200 N.W.2d 70 (1972). Because the owner had dealt directly with the defendants, a cause of action against the defendants had accrued as soon as the fixture was negligently installed, for the owner had as a result suffered immediate damage; suit was therefore barred. However, the lessees, who had no contractual relationship with the defendants, had no cause of action accrue until the fire occurred, causing the damages; suit was therefore not barred.

Unlike most statutes of limitations, the time period in the instant statute starts to run from the time of occupancy, use or acceptance of the improvement, and not from the time the cause of action accrues. Although direct dealing may be relevant in some cases as to when a cause of action accrues, American States Insurance Co, supra, it is irrelevant when the time period does not begin to run when the cause of action accrues. The plain wording of the instant statute bars actions by all persons who fall within its provisions, and not only those who have dealt directly with the persons who made the improvements.

The Court in American States Insurance Co, supra, at 201, implied in dictum that only architects and engineers enjoy the six-year cut-off in liability under the instant statute. Defendants Moss and Casemier submit that the statute cuts off claims against all persons who make improvements to real property, as well as actions for contribution and indemnity against architects and engineers.

We must look to the Legislature's intent at the time it passed the statute to determine if it meant to include contractors. A history of the bill indicates that it was first introduced in the Senate February 9, 1967. It read in part:

"A claim based on the improper design planning, supervision or construction of an improvement to real property by state licensed architect or engineer accrues at the time such architect or engineer discontinues such services."

Contractors were not mentioned and the bill definitely applied only to architects and engineers.

March 31 the Committee on Judiciary reported out the bill favorably with amendments. One amendment stated: "This section shall include registered land surveyors as defined in section * * *."

The bill was further amended in the House and returned to the Senate June 15th. June 16th the House amendments were approved by the Senate.

Contractors were not mentioned.

At the present time there is pending in the Legislature Senate Bill No. 111, introduced February 8, 1977, which would amend the act in question and include contractors.

Therefore, in our opinion the Legislature did not intend to include contractors when the bill was passed in 1967.

Defendants Ross and Casemier have argued that the statute should be interpreted as including within its protection contractors in order to avoid substantial equal protection problems. We feel legislative history cannot support that interpretation. Because Ross and Casemier have not requested in the alternative that the statute be held unconstitutional, we do not reach the merits of the equal protection issue.

Plaintiffs argue that the statute deprives them of property without due process, because their claims were barred before they had an opportunity to sue. Similar arguments have been made to the Supreme Court as to other statutes of limitations.

In Connelly v Paul Ruddy's Equipment Repair Service Co, supra, defendants urged the Court to construe MCLA 600.5827; MSA 27A.5827 as providing that a negligence action accrues at the time of the negligent act, and not at the time all of the elements, including damages, are present. Under this construction the statute would abolish a cause of action for negligence if the negligent act was followed by injury within the three-year period. MCLA 600.5805(7); MSA 27A.5805(7). The Court avoided this construction by finding it inconsistent with the intent of the Legislature.

In Dyke v Richard, 390 Mich. 739; 213 N.W.2d 185 (1973), the Court interpreted MCLA 600.5838; MSA 27A.5838, which at that time provided that a claim for malpractice accrued at the time of last treatment or service as to the matter out of which the claim arose. The defendants argued that a claim accrued at the date of last treatment whether or not the plaintiff was aware of the malpractice. The Court drew a distinction between statutes intended to abrogate a common-law cause of action and statutes of limitation. A statute which expressly extinguishes a common-law right is a proper exercise of legislative authority. Bean v McFarland, 280 Mich. 19; 273 N.W. 332 (1937). A statute of limitation is one which requires a person who has a cause of action to bring suit within a specified period of time. Due process requires that a statute of limitation afford a reasonable time within which the suit may be brought. Price v Hopkin, 13 Mich. 318, 324 (1865).

"Since `[i]t is of the essence of a law of limitation that it shall afford a reasonable time within which suit may be brought * * * ', Price, supra, a statute which extinguishes the right to bring suit cannot be enforced as a law of limitation. As to a person who does not know, or in the exercise of reasonable diligence could not ascertain within the two year period that he has a cause of action, this statute has the effect of abolishing his right to bring suit.

"Such a statute, if sustainable at all could be enforced only as one intended to abolish a common law cause of action. But this statute does not purport to do this, is not asserted to do so, and we cannot ascribe any legislative intention to accomplish that end. We read it as a statute of limitation which applies in every case except where the plaintiff does not know of his cause of action." 390 Mich at 746-747; 213 N.W.2d at 188.

The Court then determined that the Legislature did not intend to abrogate the general rule that a cause of action accrues at the time of injury, and read a discovery provision into the statute.

In the above cases the Court interpreted statutes defining when a cause of action accrues so as to avoid constitutional infirmity. In each situation the statutory definition of accrual appeared to be at variance with the traditional definition of accrual, and the Court was able to determine that the Legislature did not intend to depart from the traditional definition. However, as previously noted, the statutory period in the instant case begins to run at the time of occupancy, not at the time the cause of action accrues. It is doubtful whether a discovery provision could be read into the instant statute, and constitutional issues thus avoided. However, we need not reach this issue, for we find plaintiffs lack standing to make this challenge.

The Court in Dyke v Richard assumed that the statute in that case was either one of limitation or one of repose. The parties in the instant case assume the same thing as to the instant statute, plaintiffs arguing that it is a statute of limitation, and defendants arguing that it is a statute of repose. Whether it is a statute of limitation or repose depends upon what the Legislature intended. See Dyke v Richard, supra.

The language as to the operation of the instant statute is unambiguous, and we assume the Legislature intended exactly what it said. "No person may maintain any action * * * more than 6 years after the time of occupancy * * *." As a practical matter, the statute is both one of limitation and one of repose.

As to causes of action which accrue prior to the expiration of six years, the statute is one of limitation, because it requires that the action be brought within a specified period of time. If a cause of action accrued near the end of the six-year period, and a discovery period could not be read into the statute, a person may not have a reasonable period of time within which to bring suit, and the statute may operate to deprive that person of his cause of action without due process. However, plaintiffs' injuries occurred after the expiration of the six-year period. "One cannot attack [a] statute on the ground that its application denies constitutional protection to others." Williams Works, Inc v Springfield Corp, 76 Mich. App. 541, 547; 257 N.W.2d 160, 163 (1977).

Because a person may not maintain a cause of action after six years, the statute operates to prevent a cause of action from ever accruing where the injury occurs more than six years after the time of occupancy. The cause of action is abrogated before it comes into existence. Consequently, an injured party cannot be deprived of a cause of action without due process of law. The Court in Dyke v Richard recognized that a statute of limitation which operates to abrogate a cause of action may be sustainable as a statute of repose. The Legislature has the power to abrogate causes of action. Const 1963, art 3, § 7, Bean v McFarland, supra. A decision by the Legislature that a cause of action should not be abrogated until the passage of a period of time, when proofs grow stale, is not an unreasonable exercise of its authority. Similar acts have been upheld as statutes of repose in other states. See, e.g., Rosenberg v Town of North Bergen, 61 N.J. 190; 293 A.2d 662 (1972), Freezer Storage, Inc v Armstrong Cork Co, 234 Pa. Super. 441; 341 A.2d 184 (1975). As applied to the instant situation, the statute operates in a constitutional manner.

Affirmed in part, reversed in part, and remanded.