Plaintiff National Sand, Inc., appeals from an order granting partial summary disposition pursuant to MCR 2.116(C)(7) and (8), dismissing defendants Progressive Engineering, Inc., and Missaukee Sanitary Drain Commission from the suit. The order was certified as a final order under MCR 2.604(A). We affirm in part and remand.
Defendant drain commission contracted with defendant Nagel Construction, Inc., to construct a sewage treatment facility. Nagel subcontracted with National Sand to excavate the sewage pits and to line the pits with clay. Progressive Engineering prepared the plans and specifications for the project.
However, on September 16, 1985, it was again discovered that there were insufficient clay deposits in the areas set forth in Progressive Engineering’s plans. The contracts were again modified to provide compensation for the additional costs.
Ultimately, National Sand completed its services under the original subcontract and Nagel Construction paid National Sand the amount due under the original subcontract, but refused to pay an additional $258,000 which National Sand claimed was incurred as a result of the insufficient clay deposits.
The instant action was filed on October 1, 1987. Count i of the complaint alleges breach of contract. Count ii alleges negligence by Progressive Engineering in preparing the construction plans and in failing to use proper procedures in locating the clay deposits.
First, we briefly consider Progressive Engineering’s argument that the jurisdiction of this Court has not been properly invoked because the order appealed from was not properly entered. However, this issue was considered by this Court on Progressive Engineering’s motion to dismiss, which denied
Next, we briefly consider plaintiff’s arguments that Progressive Engineering and the drain commission are proper parties to the suit despite the lack of privity of contract. Contrary to plaintiff’s arguments, on the basis of the Supreme Court’s decision in
Williams v Polgar,
Thus, what can be concluded is not, as plaintiff suggests, that a breach of contract claim can be maintained regardless of privity; rather, it is that a plaintiff may maintain an action in tort where he is injured by the defendant’s negligent performance of contract even where there is no privity between the parties. Thus, in the case at bar, the trial court properly dismissed plaintiff’s breach of contract claims against Progressive Engineering and the drain commission since there was no contractual relationship between plaintiff and those two defendants. However, that does not preclude plaintiff from maintaining its tort claim against Progressive Engineering. 2
This then brings us to the issue whether the
MCL 600.5805; MSA 27A.5805, often referred to as the "negligence” statute of limitations, provides in pertinent part as follows:
(1) A person shall not bring or maintain an action to recover damages for injuries to persons or property unless, after the claim first accrued to the plaintiff or to someone through whom the plaintiff claims, the action is commenced within the periods of time prescribed by this section.
(4) Except as otherwise provided in this chapter, the period of limitations is 2 years for an action charging malpractice.
(8) The period of limitations is 3 years after the time of the death or injury for all other actions to recover damages for the death of a person, or for injury to a person or property. [Emphasis added.]
Plaintiff, relying on Bacco, supra, argues that, since its injury is financial rather than a physical injury to "persons or property,” the provisions of § 5813, relating to "other personal actions,” apply. While Bacco does support plaintiffs position, we believe Bacco was incorrectly decided.
The effect of the "injuries to persons or property” language in § 5805 has been the source of a
Bacco’s
reliance on
Coats, supra,
is misplaced. First,
Coats
specifically acknowledged that this Court does not strictly require a physical injury for § 5805 to be applicable.
Coats, supra
at 391-392, citing
Stringer v Bd of Trustees of Edward W Sparrow Hosp,
Both
Borman’s, supra,
and
Tel-Twelve, supra,
involved negligence by a contractor in performing a contract, and both looked to
Schenburn v Lehner Associates, Inc,
Returning to
Tel-Twelve, supra,
it involved the same decision between applying §5805 or §5807.
Borman’s, supra,
is unclear as to whether it was relying on
Schenburn
for the proposition that the six-year limitation period of § 5807(8) applied or the six-year limitation period of § 5813 applied.
Bacco, supra,
however, did extend the cases to apply to § 5813, ignoring the fact that both
Tel-Twelve
and
Borman’s
involved a contract between the parties and that the case the two were based upon,
Schenburn,
as well as
Tel-Twelve
(and possibly
Borman’s),
was considering whether to apply
Bacco
also ignores the fact that
Stringer, supra,
specifically rejected a narrow reading of § 5805 as requiring a physical injury. Indeed, as the
Stringer
Court noted, §5805 applies to several causes of action which rarely or never involve a physical injury.
4
Stringer, supra
at 701-702.
Stringer, supra
at 701, takes an expansive view of what constitutes "injuries to persons” as including " 'invasions of rights that inhere in man as a rational being,’ ” quoting
Commerce Oil Refining Corp v Miner,
98 RI14, 20-21;
Bacco
also overlooks the decision in
Krum v Sheppard,
For the above reasons, we conclude that Bacco was incorrectly decided. That is, Bacco erred in looking to whether there was physical damage to property in determining which period of limitation to apply. Similarly, plaintiff’s argument in the case at bar that § 5805 is inapplicable because there has been no physical injury, merely an injury to its financial expectations, is misplaced.
Concluding that the
Bacco
approach is incorrect does not, however, resolve the question of which statute of limitations should be applied. For this, we must rely on recent Supreme Court cases. In
Citizens for Pretrial Justice v Goldfarb,
415 Mich
The cases cited by
Goldfarb
also help illuminate the issue.
Goldfarb
cited
Rhule v Armstrong,
Next, we consider the impact of
Sam v Balardo,
Turning to the case at bar, if plaintiff pled malpractice or some other traditional, common-law tort, then we must apply § 5805. Otherwise, § 5813 would be appropriate. In looking to the pleadings, plaintiff’s complaint is not a picture of clarity. However, Count n appears to sound in common-law negligence. Moreover, in its brief on appeal, plaintiff declares the claim to be one of negligence. Finally, the trial court and Progressive Engineering categorize plaintiff’s claim as malpractice, which is certainly a common-law tort. Accordingly, we conclude that plaintiff’s claim as pled falls under § 5805 as either a malpractice claim under § 5805(4) or a negligence claim under § 5805(8).
It is not altogether clear, however, that the trial court’s categorization of this case as malpractice for purposes of the statute of limitations issue is
In Sam, supra, the Court noted that the Revised Judicature Act does not define the term "malpractice” as used in § 5805. Accordingly, the Court held that "malpractice” within the meaning of § 5805 must refer only to those actions which were recognized as constituting malpractice when the Judicature Act of 1915 and the Revised Judicature Act of 1961 were adopted. Sam, supra at 425. Since the common law recognized an action for legal malpractice at the time of the adoption of the ja and the rja, it follows that legal malpractice is "malpractice” within the meaning of § 5805(4) and, therefore, malpractice claims against attorneys are subject to the two-year period of limitation found therein.
The Supreme Court revisited the issue in Dennis, supra. Dennis involved a claim against a funeral director. The Court concluded that since the common law did not recognize a malpractice action against a funeral home or funeral director when the ja or rja was enacted, such a cause of action does not come within the meaning of "malpractice” for purposes of the statute of limitations. Dennis, supra at 703. This is true even though the Court recognized that a person engaged in the practice of mortuary science is practicing a profession. Id. at 705. Thus, not all professional misconduct or negligence is "malpractice” for purposes of the statute of limitations. 9
The
Marysville
decision was followed by
Midland v Helger Construction Co, Inc,
Accordingly, unless Progressive Engineering concedes that the three-year period of limitation is applicable, the trial court is free to conclude that the two-year period of limitation for malpractice nevertheless applies
provided
Progressive Engineering establishes that the common law recog
Finally, we would like to urge the parties to seek review of this issue in the Supreme Court. As our discussion of this issue indicates, the determination of when to apply § 5805 rather than § 5813 has produced a great deal of confusion and the case law is difficult, if not impossible, to harmonize. 15 Accordingly, further review and illumination of this issue by the Supreme Court would be welcomed.
For the above reasons, we affirm the dismissal of the breach of contract claims against both the drain commission and Progressive Engineering. However, the grant of summary disposition in favor of Progressive Engineering on the tort claim is reversed.
Affirmed in part, reversed in part and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. Defendant Missaukee Sanitary Drain Commission may tax costs; appellant and defendant Progressive Engineering may not tax costs, neither having prevailed in full.
Notes
Progressive Engineering’s plan called for the clay to be obtained from excavations on the project site.
Plaintiff has not pled a tort action against the drain commission.
Which was also cited by Coats, supra.
I.e., § 5805(2) (false imprisonment), § 5805(3) (malicious prosecution), § 5805(5) (sheriffs misconduct), § 5805(6) (constable’s misconduct), and § 5805(7) (libel and slander). Also, malpractice, § 5805(4), when committed by a physician results in physical injury, but rarely does when committed by an attorney.
The plaintiffs claimed that defendants, bail bondsmen, charged a greater fee than permitted by statute.
See also
Baatz v Smith,
The common theme Of Goldfarb, Metzen, Walper, and Hart is that the right to recovery does not arise from a common-law right, but arises from a statute. Goldfarb involved overcharging under, the bail bondsmen statute, Metzen a refund under a tax statute, Walper the collection of an assessment under a statute, and Hart the right to compensation for an inverse condemnation.
It should be noted, however, that the Dennis Court did not consider whether § 5813 would be applicable. Rather, it was faced with the question whether to apply the two-year malpractice period of § 5805(4) or the three-year period of § 5805(8).
Progressive Engineering’s argument to the contrary is, therefore, incorrect. Progressive Engineering argues that professional negligence by engineers must be malpractice and cannot be converted to simple
This statute, inter alia, contains a special restriction on actions against architects and engineers for injuries arising from a defective and unsafe condition of a building. Specifically, the action must be brought within six years of the time the building is occupied or within one year after the defect is discovered or should have been discovered.
See, however,
Adkins v Annapolis Hosp,
We should add that we disagree with the trial judge that
Bacco, supra,
stands for the proposition that an action for malpractice may be maintained against engineers. Rather,
Bacco
merely concluded that a
negligence
action may be maintained, never labeling such an action "malpractice.” While professional negligence may be casually referred to as "malpractice,” as discussed above, the two-year malpractice period of limitation applies only to those actions which the common law recognized as being "malpractice” or, in light of
Adkins, supra,
that the Legislature has specifically referred to as "malpractice.” As to the latter point, we note that § 5839 refers to an engineer’s "gross negligence,” not his "malpractice.” In any event, even if
Bacco
should be read as standing for the proposition that engineers commit malpractice, it appears to be a recent determination and does not support the proposition that the common law recognized such an action. In fact, the discussion in
Bacco, supra
at 413-416, suggests that
This issue was not raised on appeal or discussed in the trial court’s opinion beyond the conclusion that the action accrued more than two years before the complaint was filed. Progressive Engineering’s brief indicates that "the most charitable view” would indicate that plaintiffs action accrued on or about September 16, 1985, which would be within three years prior to the filing of the complaint on October 1,1987.
We would note that, under our reading of Sam, it is not merely sufficient that the common law recognized a tort action against engineers, but that the action was known as "malpractice.” Under Sam, if the common law did not recognize an action as being for malpractice, the Legislature could not have intended to include such an action within the term "malpractice” as used in the statute of limitations.
Including some older Supreme Court cases which we have reviewed, but do not discuss in this opinion.