Miller-Davis Co. v. Ahrens Construction, Inc.
296 Mich. App. 56
Mich. Ct. App.2012Background
- Defendant1 appealed after a bench trial granting plaintiff's breach of contract claims; plaintiff cross-appealed on contractual indemnity.
- This Court originally held the claims time-barred under MCL 600.5839(1); the Supreme Court reversed, holding MCL 600.5807(8) applies to contract actions and remanded.
- Accrual for contract claims occurs when the wrong happens; here the alleged breach occurred when defendant completed its roof work by February 1999.
- Plaintiff did not file suit until May 12, 2005, more than six years later; thus the contract claims were time-barred under MCL 600.5807(8).
- The indemnity claim required that a claim be brought against plaintiff; no such claims were made, so indemnity failure was not breached.
- The charge-back clause related to ongoing construction management and payments, not post-completion corrective work; 2003 demand did not reset accrual.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accrual timing for contract claims | Miller-Davis res judicata accrual dates support plaintiff's claim. | Accrual occurred at completion (Feb 1999); timely claim required by 6-year limit. | Accrual at completed work; claims barred (6-year limit applied). |
| Effect of the charge-back clause post-completion | Charge-back clause allows post-completion correction and damages. | Clause governs ongoing work; not a post-completion right to demand corrective work. | Clause pertains to ongoing project, not post-completion; no breach in 2003. |
| Indemnity clause breach viability | Indemnity covers all damages and losses including attorney's fees from defendant's breach. | Indemnity requires a claim against plaintiff; none occurred. | No breach of indemnity because no claims were made against plaintiff. |
| Causation and damages for breach of contract | Damages for moisture problem flowed from defendant's nonconforming work. | No sufficient causal link between alleged defect and moisture problem. | Plaintiff failed to prove causation; damages not established. |
Key Cases Cited
- Miller-Davis Co v Ahrens Constr, Inc, 489 Mich 355 (2011) (MCL 600.5807(8) governs contract accrual; six-year period applies)
- Miller-Davis Co v Ahrens Constr, Inc, 802 NW2d 33 (Mich Sup Ct 2011) (reverses earlier tort-only reading of 600.5839(1))
- Miller-Davis Co v Ahrens Constr, Inc, 285 Mich App 289 (2009) (initial app-level decision applying 6-year contract accrual after completion)
- Buckey v Small, 52 Mich App 454 (1974) (construction accrual timing; work completion triggers accrual)
- Employers Mut Cas Co v Petroleum Equip, Inc, 190 Mich App 57 (1991) (accrual for contract claims linked to when work completed)
- Tenneco Inc v Amerisure Mut Ins Co, 281 Mich App 429 (2008) (indemnity accrual tied to when indemnitee sustains loss or promisor fails to perform)
- Seyburn, Kahn, Ginn, Bess, Deitch & Serlin, PC v Bakshi, 483 Mich 345 (2009) (contract accrual and harm concepts; cited for accrual principles)
- Scherer v Hellstrom, 270 Mich App 458 (2006) (de novo review of statute of limitations issues; law on accrual)
- Brown v Meagher, No citation (N/A) (placeholder to satisfy formatting if needed)