Michigan Supreme Court Issues Opinion Articulating Its Constitutional Limitations and Authority in Changing the Common Law

In Price v. High Pointe Oil Co, Inc., the Michigan Supreme Court provides a clear pronouncement on the constitutional limitations and legitimate authority the judiciary has to change the common law.  In doing so, the Court refused to extend as a common-law rule the view that a plaintiff may recover non-economic damages (i.e., mental and emotional distress, etc.) for claims arising out of destruction of real property.

The facts are quite remarkable.  The plaintiff owned residential property, which was constructed in 1975.  For nearly 30 years, the home was heated by a furnace that utilized heating oil as fuel.  However, in 2006 the plaintiff replaced the oil furnace with a propane furnace.  She canceled her contract with the oil company, which was the predecessor of defendant oil company.  However, the oil fill pipe remained attached to the house.

In November of 2007 plaintiff’s house remained on the defendant’s “keep full” list.  While plaintiff was at work, defendant’s truck driver pumped nearly 400 gallons of fuel oil directly into plaintiff’s basement through the oil fill pipe before realizing his mistake and immediately calling 911.  Plaintiff’s house and many of her belongings were destroyed.  Between plaintiff’s and defendant’s insurers, the site was remediated, a new house was built in a different location, plaintiff’s personal property was either cleaned or replaced, and she was reimbursed for all temporary-housing related expenses.  It was undisputed that plaintiff was fully reimbursed and compensated for her economic losses arising out of the incident.

Plaintiff filed suit against the oil company in 2008 alleging claims for negligence, gross negligence, negligent infliction of emotional distress, nuisance, trespass, and a private claim under the Natural Resources and Environmental Protection Act (NREPA), MCL 324.101 et seq.  Plaintiff’s only claim to survive to trial was for the recovery of non-economic damages for defendant’s negligent destruction of her real property.

A jury found in favor of plaintiff in the amount of $100,000.  The trial court denied defendant’s motion for a judgment notwithstanding the verdict.  On appeal, the Court of Appeals affirmed, holding that in a negligence action, a plaintiff may recover mental anguish damages naturally flowing from the damage to or destruction of real property.  See Price v.  High Pointe Oil Co., 294 Mich. App. 42, 60 (2011).

The Supreme Court granted defendant’s application for leave to appeal.  The issue before the court was whether non-economic damages are recoverable for the negligent destruction of real property.  In a thorough and well-researched opinion authored by Justice Markman (with Justices Cavanagh, McCormack and Viviano not participating) the Court held, without dissent, that the common law of Michigan has long provided that the appropriate measure of damages in cases involving the negligent destruction of property is the cost of replacement or repair of the property.  The Court ruled that it was not persuaded that this long-standing common-law rule should be changed.

The Court goes through the history of the common-law rule respecting the measure of damages available for the negligent destruction of property in Michigan.  In arriving at this conclusion, the Court discusses in detail the meaning and application of the common law by Michigan courts, the means by which the common law may be abrogated, and, particularly, the manner in which the Supreme Court can alter or change a common-law rule.

The Court notes it is the “principal steward” of the common law.  Slip Op. at 20, citing Mich. Const. 1963, art. 7, § 3, which provides:  “[t]he common law and the statute laws now in force, not repugnant to this constitution, shall remain in force until they expire by their own limitations, or are changed, amended or repealed.”  See also Longstreth v. Gensel, 423 Mich. 675 (1985).   The common law remains as such until modified by the Supreme Court or by the Legislature.  In regard to the former, the Court goes on to note that change or alteration of the common law by the Court is to be made with the utmost of caution.  Id. at 20-21, 25 and n. 20.  Ordinarily, the Court goes on to explain, the changes in the law should come about by legislation, because the Legislature is best equipped to consider the social and political ramifications of changing the law.  Id.  In footnote 20, the Court further explains the restraint it will ordinarily exercise in considering whether it should change, alter or modify a common-law rule.

While the rule of law analyzed by the Court is important in guiding future courts, and can also lend aid in the consideration of valuation of real property in a variety of contexts (e.g., takings claims, condemnation proceedings, etc.), the discussion regarding the application and tenacity of the common law is particularly enlightening for future cases anytime courts are faced with established common-law rules.

It is safe to say from this opinion, and others the Court has issued in the past several years, that the non-abrogation principle in the Michigan Constitution is a strong indication that the Court will retain the common-law rule in most cases.  Thus, it is incumbent on advocates to determine whether an existing common-law rule applies in the given case and to determine whether and to what extent a court, and particularly the Supreme Court, rather than the Legislature, will be willing to alter or change that rule as applied.

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