Johnson v. QFD, Inc.
292 Mich. App. 359
| Mich. Ct. App. | 2011Background
- Plaintiffs allege QFD violated the Michigan Mobile Home Commission Act (MHCA) and seek rescission and damages under MCL 125.2331.
- The purchase agreement contained a one-year contract limitations clause for breach actions and a UCC limitation option to reduce to one year.
- Plaintiffs contended MHCA provides an independent private remedy not governed by contract-based limits.
- QFD did not have a Burton location license, a MHCA violation the plaintiffs invoked in support of rescission.
- The MHCA provides three-year internal limitations, and a voidable contract clause (¶11) attempted to waive MHCA rights, which is invalid.
- Trial court granted summary disposition to QFD, concluding rescission claims were time-barred and contract-based.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MHCA 125.2331 permits rescission despite licensing violations | Maids Int'l allowed non-void contracts; MHCA provides private remedy | Rescission claims are contract claims and time-barred by 1-year clause | Yes; MHCA provides independent rescission remedy despite license violations |
| Whether plaintiffs pleaded a rescission/damages claim under 125.2331 | Counts I and VIII notified QFD of rescission claim | Pleadings did not specify 125.2331 | Plaintiffs adequately pleaded rescission/damages claim under 125.2331 |
| Whether 1-year contract limitation applies to 125.2331 claim | 125.2331 claim is statutory, not breach of contract | Contract clause shortens period to 1 year for breach actions | MHCA governs; 3-year MHCA limitations apply to 125.2331 claim |
| Whether MHCA three-year limitation governs and prevails over UCC | MHCA-specific limits control; claim timely | UCC allows 1-year reduction | MHCA 3-year limit controls; claim timely under MCL 125.2333 |
| Whether Paragraph 11 waiving MHCA rights is enforceable | Waiver is void under 125.2332 | Waiver binds purchaser | Paragraph 11 void; MHCA rights not waived |
Key Cases Cited
- Maids Int'l, Inc v Saunders, Inc., 224 Mich App 508 (1997) (contract voidness concerns; MHCA private remedies prevail when statute provides remedy)
- Sands Appliance Servs, Inc v Wilson, 463 Mich 231 (2000) (statutory remedies not mutually exclusive; enforceability of remedies under MHCA)
- Ladd v Ford Consumer Fin Co, Inc., 217 Mich App 119 (1996) (MHCA vs. UCC limitations where specific statute governs)
- Tipton v William Beaumont Hosp, 266 Mich App 27 (2005) (notice-pleading; read complaint as a whole to determine claims)
- Jefferson Park Land Co v Wayne Circuit Judge, 234 Mich 341 (1926) (elective remedies; distinctions between equitable rescission and damages)