Miller-Davis v Ahrens Construction Inc

Supreme Court to Address Whether "Statute of Repose" for Actions Against Contractors Applies to Implied "Tort" Claims for Injuries to Property

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The Michigan Supreme Court heard oral argument to consider whether MCL 600.5839, the statute of repose, for “any action” against architects, engineers, or contractors to recover damages for “any injury to property, real or personal”, governs a general contractor’s suit for a subcontractor’s breach of contract, or is instead limited to tort actions, among other issues. Miller-Davis sued the subcontractor Ahrens for breach of contract only, related to the alleged substandard performance of the contract to construct a timber roof of a natatorium for the YMCA complex in Sherman Lake, Augusta, Michigan. After a bench trial, the judge entered a verdict in favor of Miller-Davis on the breach of contract issue. On appeal, the defendant argued that MCL 600.5839(1) the “statute of repose” applied to bar the claim because it was in reality an action for “injury to property”. The COA (Jansen, Hoekstra and Markey) in a published opinion agreed and reversed, holding that the language of this statute applied if the allegations in the breach of contract action related to an injury to property, i.e., a tort claim,regardless that the allegations in the complaint was specifically for breach of contract and that the parties in the contract had defined the statute of limitations accrual date to be from the date of substantial completion. This is a very important issue for construction contract law and contract law in general and goes to the very heart of the debate about whether and to what extent "tort law" concepts should influence pure breach of contract actions and whether and to what extent courts should interfere with the freedom of parties to enter into contracts and define the terms and conditions of performance, the damages for breach, and the time periods and provisions regarding timing and tolling for performance and completion.

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Published In: Civil Remedies Updates, Construction Updates, Insurance Updates, Business Torts Updates, Commercial Real Estate Updates

Reference Info:State, 6th Circuit, Michigan | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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