Timko v. Oakwood Custom Coating, Inc

COATING, v INC TIMKO OAEWOODCUSTOM Mаy 2000, January 2, No. Submitted at Detroit. Decided Docket 212927. appeal sought. 2001, at 9:00 A.M. Leave to Wayne against brought in Court Ernest M. Tünko an action Circuit Coating, Inc., alleging that he had been discrimi- Oakwood Custom against provisions Rights Act, in violation of the of the Civil nated seq.; seq., 3.548(101) basis of as MCL 37.2101 et MSA et on the employment. a result of the defendant’s termination of his At the plaintiff, plaintiff signed time the defendant hired the an application provided any bring that that he would employ- arising out of his or termination of action ment, including rights statutes, claims under state and federal civil days giving within 180 after the event rise to the claim and that he any periods contrary. waived limitation to the The defendant summary disposition plaintiff moved for on the basis that the had days court, brought within action of his termination. The Ziolkowski, J., granted summary disposition L. Robert for the 180-day defendant, finding period that the limitation in the contrac- tual was reasonable. The court denied the reconsideration, reiterating motion for that the shortened contrac- period holding employment appli- tual was reasonable and cation did not constitute adhesion contract. The appealed. Appeals The Court of held: opinion Herweyer Hwy 1. The Court in v Clark Services, Inc, (1997), 455 Mich 14 to hold should not be read that employment agree- of limitation contained in an and, therefore, Herweyer ment is unreasonable unenforceable. The specifically expressing opinion indicated that it was regarding period agreed the reasonableness of shortened parties. Herweyer did, however, accepted restate the principle parties contract for a limitation shorter provided than that statute the abbreviated set that a limitation remained reasonable. The Court further noted opportunity if it reasonable allows claimant sufficient action, investigate and file an is not so short as to аmount to the Oakwood Timko right action, abrogation to bar practical and does not act damage can be ascertained. or the an action before the loss reiterated failed to show which criteria 2. The 180-day matter not would render the to con- in this matter is similar The limitation reasonable. by periods courts federal held to be reasonable tractual limitation Michigan state and fed- applying law is consistent with some and period statutory periods. is limitation limitation Because the eral inherently failed to and because the unreasonable not oppor- deprived unfairly period him the show that shortened action, 180-dayperiod qualifies tunity as reasonable. an the to file enforceability depends and a on consideration of contract 3. applica- mutuality obligation. The terms of not of employer’s employee’s part and contract of of an tion constitute clearly provided employment. the the Here defendant application, support of the terms sideration to enforcement specifically employment wages. and 180-day employment application 4. limitation Because the reasonable, agreement not ren- was be is found to adhesion, will of because courts unenforceable as a contract dered where the chal- as contracts of adhesion not invalidate contracts provision lenged is reasonable. Affirmed. 180-day P.J., dissenting, limitation set stated that the McDonald, unreasonably application short is an forth in the Although

period rights bringing Court a civil Services, Inc, (1997), Hwy stated Mich 14 Clark disavowing any expression opinion the six- of whether that it was period case was in the contract month limitation contained opinion disposition reasonable, language and the in that other strongly suggest that the Court in that case ordered of not Under the faсts was reasonable. found the shortened case, was limitation unreasonable. the shortened — — Employment Reasonableness. of Contracts 1. Limitation Actions set than that for a limitation shorter Parties reasonable; provided abbreviated remains statute sufficient if it allows claimant is reasonable action, opportunity investigate so short as to to and file an not right action, practical abrogation of and does amount of damage can be before the loss or the act bar an action ascertained.

Opinion of — — Enforceability Mutuality. 2. Contracts enforceability depends of a contract on consideration and not mutuality obligation. — 3. Contracts Contracts of Adhesion.

Courts will not invalidate contracts as contracts of adhesion where challenged provision is reasonable. (by Sommers, Schwartz, Silver & Schwartz, P.C. Greco), plaintiff. David F. for the Group (by Scharg ‍‌​​​‌​​​‌​​‌​​​‌‌‌‌​‌​‌‌‌​‌​‌​‌‌​​‌‌​‌​​‌‌​​‌​​‌‍The Fishman Donald H. Kramer), Paul D. for the defendant.

Before: McDonald, P.J., and JJ. Gage Talbot, appeals right Gage, J. Plaintiff as of the trial court’s grant summary disposition for defendant.1 The trial granted summary disposition court defendant plaintiff’s age pursuant discrimination claims to MCR 2.116(C)(7) (statute limitations). We affirm. August plaintiff,

On seventy-one, 26, 1996, at began August tool and die work for defendant. On 28, plaintiff signed portion three-paragraph 1996, employment application defendant’s labeled “Authori- Understanding.” Among things, zation and other understanding provided plaintiff’s аgreement for that parties’ employment relationship will, was at print explained, part, in bold in relevant as follows: agree any I that against action or arising suit the firm out my employment or employment, termination of includ- ing, to, but not limited arising claims under State or Federal rights statutes, civil brought days must be within of the giving event rise to the claims be forever barred. I waive periods contrary. to the referring case Because it caption represent appears entity we utilize the that the various defendant names alternate appellations singular “defendant.” for the same appearing entity, when v Oakwood Timko approxi- employment Plaintiff’s for lasted term of February mately until months, five and one-half plaintiff allegedly discharged when defendant unsatisfactorily job. performed plaintiff his because alleging plaintiff defendant, sued 3, 1998, March On Rights under the Civil discrimination unlawful seq. seq.\ 3.548(101) et et MSA MCL 37.2101 Act, summary disposition pursuant moved Defendant plaintiff arguing 2.116(C)(7), that because to MCR days term of after his more than filed suit 180-day period employment of limitation ended the responded precluded Plaintiff that Hwy Services, Inc, v Clark proposition (1997), for the that a stood 564 NW2d857 placed within an of limitation six-month employment and there- was unreasonable trial court that concluded fore unenforceable. requirement 180-dayperiod satisfied the of limitation Michigan of limita- that a shortened law under granted qualify defendant as reasonable and must tion summary disposition filed suit because 180-dayperiod. beyond the bases reconsideration on the Plaintiff moved for mutuality supported obligation defendant’s that attempted enforcement application employment and that

tained within the application form standard defendant’s represented reit- of adhesion. Plaintiff also a contract Michigan law viewed as unreasonable erated found The trial court of limitation. аppli- bound the terms finding its also restated cation. court 180-day con- and, reasonable of limitation was employment applica- sequently, determined Mich tion did constitute an adhesion contract. Accord- plaintiffs the court denied for ingly, motion re- consideration. appeal

Plaintiff on challenges the trial deci- court’s apply 180-day period sion to of limitation con- tained employment application. within the We review de a trial summary disрosition novo court’s ruling. Spiek Dep’t v Transportation, 572 NW2d 201 (1998). summary Defendant sought dis- position based on MCR 2.116(C)(7), provides which claim is . . barred because of . statute of “[t]he limitations.” summary reviewing disposition

When a motion for under 2.116(C)(7), accept plaintiff’s MCR a court must as true a well-pleaded allegations, affidavits, factual or other docu- mentary plaintiff’s evidence and construe them the favor. dispute If no facts are in and reasonable ‍‌​​​‌​​​‌​​‌​​​‌‌‌‌​‌​‌‌‌​‌​‌​‌‌​​‌‌​‌​​‌‌​​‌​​‌‍minds could not concerning lеgal differ facts, effect of those whether a claim is barred the statute of limitations is a question for the court as a Hog matter law. Co [Jackson Co, App 72, 77; Producers Consumers Power (1999) (citation 592 NW2d 112 omitted).] Plaintiff first asserts of limi- tation is supra. according unreasonable to Herweyer, Herweyer, In signed tract with the defendant that described a six-month period of limitation bringing employment-related against claims the defendant, additionally pro- “ the above vided that cоmmitments me ‘if is ever to be legally written, as found unenforceable particular agreement concerned shall be limited ” to allow its as as legally possible.’’ enforcement far Herweyer, supra (emphasis at 16 added). The instant plaintiff reasons that Court would not 239 Timko Oakwood

Opinion the Court of Herweyer whether the question the have considered provision applied savings parties’ highlighted above the six-month that determined preliminarily it not had as qualified unreasonable. involved period there The however, lacks merit. plainly Plaintiff’s argument, in application [Herweyer]’s Supreme “granted saving pro- the contract’s whether to determine order brought any claims to be require can be read to vision Id. period.” at 18-19.2 minimum reasonable within the express “we no that enunciated specifically The Court any short- of reasonableness opinion regarding 18.3 Id. at by parties.” agreed to ened restated in Supreme The for a acсepted parties principle stat- applicable shorter than of limitation the abbreviated provided that of limitation ute rea- “is of limitation remains reasonable. opportunity has sufficient if the claimant (1) sonable is not so action, the time (2) and file an investigate to of abrogation right work a practical as to short 2 appeal, granting which Supreme leave to order Court cited its whether, limita- to if the contractual “limited issue to be considered] [the unreasonable, contract was tion contained unspecified reading providing for an be it as limitation could saved applicable limi- than the statutes time that less minimum reasonable (1996). 915 453 Mich tations.” 3 “[further, appeal waiver Plaintiff’s also on states While knowing, intelligent and/or statutory period was required by law,” contention voluntary this we decline to address as is court, failed to the trial issue before failed raise the because presented, questiоns appellate in briefs statement raise the issue his Detroit, adequately 355 appeal Mitcham v brief the issue. on failed to Inc, BIDCO, Mich 182, 203; (1959); Wallad v Access NW2d 388 Mich Schmidt, (1999); 303, 308; Hilliard v App NW2d 664 respect (1998). with App nonetheless note NW2d 263 We describing period of limi- allegation language abbreviated immediately print paragraph appeared of text located bold tation provi- acknowledging signature with the his above of the text. sions (3) action, the action is not barrеd before the loss damage citing can be ascertained.” Id. at Came- Excavating Co, lot Inc v St Paul Fire & Marine Ins (1981). Co, 410 Mich 118, 127; 301 NW2d 275 To this point, published opinion this Court or the specifically Court has addressed the reason- 180-dayperiod ableness aof shortened, of limitation employment agreement. in the context of an Plaintiff does not address how the instant, short- any pre- ened of limitation violates of the three Applying Michigan scribed considerations. law, at least two federаl courts have found that a six-month employment of limitation contained within an agreement qualified Myers as reasonable. In v West- (CA ern-Southern Co, Ins 849 F2d 260 Life 1988), plaintiff signed the “ agreeing any ‘[n]ot to commence action or suit relat- your ing to . .. more than six months employment, after the date of termination of such ” contrary.’ to waive statute of limitation to the More than sixteen months after retired, the discharge against he filed a constructive lawsuit alleging handicap defendant, discrimination Michigan Rights in violation of the Civil Act, MCL seq.) 3.548(101) seq., 37.2101et MSA et and the Michi- gan Handicappers’ Rights Civil MCL Act,4 37.1101 et seq.) 3.550(101) seq. MSA et The United States District Michigan (Feikens, the Eastern District of J.) granted summary judg- the defendant’s motion for ment based on the six-month of limitation. Myers, supra at 260.

Rights This act Act. MCL currently 37.1101; is known as the Persons with Disabilities Civil MSA 3.550(101). v Oakwood Timko appeal Appeals on of Circuit Sixth of the abbreviated reasonableness addressed writing Judge for the Keith, limitation. of Michigan Supreme reasоn- Court’s court, restated supra, requirements, Camelot, then see ableness as follows: cluded inherently a six- about nothing unreasonable There example, is the six months period. For

month limitations brought be for breach must which claims limit within time Manage- duty representation Labor under the fair of 160(b); v Interna- § DelCostello Act. USC ment Relations 2281; Teamsters, US 103 S Ct Brotherhood tional say that, under the Came- (1983). cannot We L Ed 2d 476 rea- case is less criteria, limitation in this lot representation applied claims. fair than sonable supra [Myers, at 262.] Appeals

Accordingly, the dis- affirmed Court of summary judgment grant the defen- ‍‌​​​‌​​​‌​​‌​​​‌‌‌‌​‌​‌‌‌​‌​‌​‌‌​​‌‌​‌​​‌‌​​‌​​‌‍court’s trict dant. Id. Co, 1987 WL Ins Perez v Western-Southern

In Life Judge 1987), (ED the United Newblatt of Mich, Michi- District of for the Eastern District Court States briefly gan six- reasonableness considered Michigan according law. of limitation month signed the defendant’s also therein provided employment six-month for a contract that any employment-related regarding period of limitation summary judgmеnt moved for The defendant period six-month of the contractual on the basis specifically parties Although did limitation. period qualified as shortened whether the address Camelot, in described the test reasonable under supra, Judge is reason- “that it concluded Newblatt light especially six-month of the able imposed by limitations section 301 of the Labor Man- agement § Act, Relations 29 USC 301.” 1987 WL Judge 16355,*1. Newblatt further observed that three-year period [t]hough injuries of limitations for to a person 600.5805(7) appli- 27A.5805(7)] under MCL[] [MSA employees alleging cable discrimination practices, nothing .. . there is in either the Elliott-Larsen 600.5805(7) prohibits § Act or which shorter reasonable upon by agreed parties any nor which evinces public policy contrary. [Perez, supra *2, state to the at n 2.] granted summary judgment. The court the defendant Id. at *2. agree Judge Myers, supra

We with Keith in at accompanies that no inherent unreasonableness a six- month of limitation. We find that in casе this 180-dayperiod of limitation afforded ade- quate investigate time to and file his discrimina- Michigan provide tion claim. Both law and federal law periods for six-month or even shorter of limitation in the context of various actions. See MCL 423.216(a); 17.455(16)(a) complaint MSA [“No shah upon practice occurring issue based unfair labor prior filing charge more than 6 months to the 15.363(1); with the commission . . .”]; . MCL MSA person 17.428(3)(1) alleges [“A who a violation of th[e may bring A]ct Whistleblowers’ Protection a сivil appropriate injunctive action for ages, relief, or actual dam- days or both within 90 after the occurrence alleged violation of act.”]; see also 29 USC 160(b) (“[N]o complaint upon any shall issue based practice occurring unfair labor more than six months prior filing charge .”). to the with the Board . . . Michigan apply Furthermore, both and federal law periods of limitation even where an 243 Timko Oakwood Opinion of the rights R employee’s AC, See 1999 are involved. civil complaint Michigan’s (requiring Civil 37.4(6) to days Rights within “shall be filed Commission alleged dis- the occurrence the date of from days when date or within crimination, alleged was or discrimination occurrence discovered”); 42 USC see also should have been (“A charge 2000e-5(e)(l) unlawful [of an practice] within one shall be filed under this section days alleged eighty unlawful after the hundred and practice .”).5 . . . occurred why explanation reveals The instant record provide 180-day period did not limitation at issue investigate opportunity and to to a sufficient period, and no within the abbreviated file this action effectively indication exists bring abrogated right to his discrimina- approximate six- Moreover, we find the tion claims. wholly permit adequate to of limitation month any alleged discrimination to ascertain during approximate five-and- have occurred plaintiff’s employment with term of one-half-month 180-day period of limitation defendant. Bеcause inherently unreasonable not constitute does plaintiff failed to other- because amount of time and unfairly that the shortened wise demonstrate deprived opportunity his instant file him of the whichever of limitation from the State or agency edly filing When “the unlawful has terminated local “within earlier.” agency employment practice, Congress person aggrieved thirty days with time of the occurrence USC authority proceedings after 2000e-5(e)(l). has reсeiving initially grant under notice that or seek relief from” instituted of the unlawful provided the State or proceedings the State or local 300-day practice, local with a alleg law, 180-dayperiod qualifies claims, we conclude that the supra; Myers, supra. Camelot, as reasonable. argues 180-dayperiod Plaintiff next that the of limi- tation cannot be enforced because defendant “attempting provisions to enforce the contained in the employment application ifas it is a contract, a con- absolutely obliga- tract where the Defendants have enforceability depends, tion.” “The of a contract how- mutuality obliga- on ever, consideration and not of tion.” v Toussaint Blue Cross & Blue Shield of Michigan, (1980); 579, 600; 292 1 NW2d 880 p § Contracts, Restatement 2d, 79, 200. This Court previously recognized has the terms of an employment application part constituted of an employee’s employer’s employment. cоntract of Butzer v Camelot Hall Convalescent Centre, Inc, 183 App (1989); 194, 200; 454 NW2d 122 v Eliel App Sears, Roebuck & Co, 150 Mich 140; (1985). clearly provided NW2d 842 Here, defendant support consideration to enforcement of the application, specifically terms of the wages. p § (con- Contracts, Restatement 2d, 71, 172 promise per- sideration constitute a return or a including formance, a act, forbearance, or “the cre- legal ation, modification, or destruction of a rela- tion”); Dictionary (7th p ed), Black’s Law (defining “[sjomething consideration as [such of value promise] act, as an forbearance, or a return by promisor promisee”). received from a Lastly, plaintiff alternatively argues parties’ employment contract constitutes an unenforceable negoti- adhesion contract because could not ‍‌​​​‌​​​‌​​‌​​​‌‌‌‌​‌​‌‌‌​‌​‌​‌‌​​‌‌​‌​​‌‌​​‌​​‌‍ate the terms the standard form contract drafted However, defendant. we because have found the Oakwood Timko by McDonald, P.J. Dissent plaintiff’s 180-day period reasonable, limitation argument Rembert v must fail. adhesion Family Ryan’s Houses, Inc, Mich Steak (1999) (“Courts will not invalidate 596 NW2d challenged where the adhesion contracts contracts as reasonable.”). provision is undisputed establish facts because conclusion, In plaintiff’s to a reasonable assent employment-related regarding claims, the properly trial entitled was found that defendant court complaint, summary plaintiff’s dispоsition which months after thirteen filed almost was termination.

Affirmed. J., concurred.

Talbot, (dissenting). claims the Plaintiff P.J. McDonald, applica- in the set forth unreasonably bringing a short tion is an rights agree. I civil Herweyer Hwy Ser- v Clark Our (1997), 564 NW2d 857 24; Mich vices, Inc, 455 held: By enacting limitations, Legislature deter- a statute period a can take maximum mines the reasonable Barnett, 1, 8; Mich 485 NW2d file a claim. Neilsen v statutory period (1992). should defer to Courts specific parties’ and unless the

reasonable. supra, Herweyer, majority and оn relies Excavating Co, v St in Camelot stated factors 127; Mich Co, Ins & Marine Paul Fire 244 Mich Dissent P.J. McDonald, (1981), determining NW2d 275 whether the short- ened of limitation herein is reasonable. Herweyer unanimously agreed However, the supra with Justice Levin’s Camelot, concurrence in at 141,where he stated: allowing parties

The rationale of the contractually rule statutory periods shorten of limitation is that the shortened bargained-for ais Allowing term of the contract. bargained-for such terms in some cases be a useful proper parties allowing means of to structure their bus- dealings. iness contract, In the case of an however, adhesion where the

party ostensibly agreeing to the shortened has alternative, inapplicable. real this rationale is employ Court went on to decide that ment contracts differ from the bond contracts that subject employer were the in Camelot and that an employee length often do not deal at arm’s when . negotiating employee posi contract terms. An in only options: (1) sign tion of has two employer, contract as drafted job. (2) party bargaining lose the Where one has less power agreed upon might than another, the contract necessarily, be, but is not one of adhesion and at judicial scrutiny. Herweyer, least deserves close supra Apple Valley, at Bobo v Thorn Inc, (1998). 892; 587 NW2d 501 Herweyer, supra Justice framed the issue in Kelly as at follоws: wrongful ‍‌​​​‌​​​‌​​‌​​​‌‌‌‌​‌​‌‌‌​‌​‌​‌‌​​‌‌​‌​​‌‌​​‌​​‌‍case, In this single termination the issue is what period

limitation filing appropriate is suit where the period written into the is unreason- ably short. Timko Oakwood by McDonald, P.J. Dissent opinion any expression Despite disavowing con- cerning six-month limita- the reasonableness opinion disposition the Court’s later in the tion suggests limitation that the shortened of the case unenforceable. have been found would recognized nor this trial court that “neither the Court upheld Appeals of limi- the six-month Court of fact, Id. at 21. In neither in the contract.” tation explicitly regarding ruled nor this Court trial court period. deter- Both courts reasonableness of unnecessary regarding the it to rule mined that was because, term even of the shortened reasonableness effectively saving unenforceable, the clause if were it Supreme plaintiff’s Once the barred the saving ineffective, was clause determined that ruling longer on the rea- basis to avoid there was no However, rather of the shortened term. sonableness ruling remanding on for a the reasonableness than Supreme court, the trial the shortened term opinion stating limitation “the concluded its applicable claims is the for each statutory period” the trial remanded the case to By proceedings. at state- Id. this court for farther 24. by implication ment, the Court indicated period shortened plaintiffs preclude action, even did not tract thоugh court, Court, the trial respect directly ruling with Court itself had avoided to the issue. opinion, majority

Contrary I believe Her- to the plaintiffs position. supportive weyer The short- of this case under the facts ened did not and defendant was unreasonable. equal footing. negotiate terms on the contract’s by McDonald, Dissent P.J. seventy-one-year-old plaintiff The leverage negotiating had no merely given

and was signing the choice of job. losing I would reverse and remand for trial.

Case Details

Case Name: Timko v. Oakwood Custom Coating, Inc

Court Name: Michigan Court of Appeals

Date Published: Mar 22, 2001

Citation: 625 N.W.2d 101

Docket Number: Docket 212927

Court Abbreviation: Mich. Ct. App.