McCann v. BRODY-BUILT CONSTR. CO. INC.

496 N.W.2d 349, 197 Mich. App. 512

• Court: Michigan Court of Appeals
• Decided: December 21, 1992
• Docket: Docket 129837
• Status: Published

Opinions

Michael J. Kelly, J.

In this negligence and breach of warranty action arising out of the sale of a used home, plaintiffs appeal as of right from an order of the circuit court granting defendant’s motion for summary disposition. We affirm in part, reverse in part, and remand for proceedings consistent with this opinion.

In August 1985, plaintiffs purchased a house from Janet Brody. The house had been built in 1977 or 1978 by defendant, Brody-Built Construction Company, Inc. Originally, the house was occupied by Morton Brody, a principal in defendant company, and his wife, Janet Brody. The Brodys were divorced in 1984, and, pursuant to the judgment of divorce, Janet Brody was awarded the residence. Morton and Janet Brody were named as defendants in the original complaint but, following the stipulated dismissal with prejudice of Morton Brody and the dismissal without prejudice of Brody-Built Construction, neither of the Brodys was named in the new complaint that led to this appeal.

Shortly after purchasing the house, plaintiffs began to notice structural defects. On May 27, 1988, plaintiffs filed this action, alleging negligent construction and breach of warranty. Subsequently, defendant moved for summary disposition. The court, finding that plaintiffs’ negligence claim was barred by the applicable statute of limitations and that the warranty claim could not be pursued because it did not arise out of the sale of a new home, dismissed plaintiffs’ complaint.

Plaintiffs first argue that the trial court erred in dismissing their negligence claim on the ground of the statute of limitations. We agree.

Both parties rely on this Court’s decision in Filcek v Utica Building Co, 131 Mich App 396; 345 NW2d 707 (1984). Plaintiffs argue that the trial court should have evaluated the statute of limitations defense under the Filcek "discovery rule.” Defendant argues that plaintiffs’ negligence claim is barred under the Filcek discovery rule, because the alleged defects were, or should have been, discovered before May 27, 1985, three years before the action originally was filed. The trial court failed to apply the Filcek decision in . this case. Instead, the trial court, relying on H Hirschfield Sons, Co v Colt Industries Operating Corp, 107 Mich App 720; 309 NW2d 714 (1981), determined that because plaintiffs’ complaint had not been filed within three years of the date the negligence occurred, the house having been built in 1977 or 1978 and this action not having been filed until 1988, plaintiffs’ action was time-barred. We believe the trial court failed to apply the appropriate law in this case, and we remand for a determination, under the principles of Filcek, whether plaintiffs’ negligence claim was barred by the applicable statute of limitations.

The statute of limitations for negligence actions is three years. MCL 600.5805(8); MSA 27A.5805(8). MCL 600.5827; MSA 27A.5827 provides that a cause of action sounding in negligence "accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results.” However, § 5827 has been interpreted as meaning that a claim accrues when one is injured, not when the wrong is committed:

[T]he limitation period does not begin to run until all of the elements of the cause of action have occurred and can be alleged in a proper complaint. Where an element of the cause of action, such as damages, has occurred but cannot be pled in a proper complaint because it is not, with reasonable diligence, discoverable until sometime after it has occurred, both this Court and the Supreme Court have applied a discovery rule of accrual. Thus, in Williams [v Polgar, 391 Mich 6, 23-25; 215 NW2d 149 (1974)], the Supreme Court concluded that the plaintiff’s claim did not accrue until plaintiff knew or should have known of the defendant’s negligent misrepresentation. [Filcek, supra at 399.]

See also Connelly v Paul Ruddy’s Equipment Repair & Service Co, 388 Mich 146, 150; 200 NW2d 70 (1972). Under Filcek, the statutory period applies to both present and prior owners. In other words, the statutory period begins to run when an owner or a predecessor in interest discovered or should have discovered the defect. Applying that rule to this case, if Janet Brody knew or should have known of the defective condition of the house before May 27, 1985, plaintiffs’ action, which was filed on May 27, 1988, would be barred by the three-year period of limitation. However, if Janet Brody did not know or should not have known of the defects, plaintiffs’ action was timely, plaintiffs having purchased the house in August 1985 and having filed this action in May 1988.

We hold that the trial court erred in failing to evaluate this issue in light of the principles set forth in Filcek. Therefore, we remand this matter for a determination whether Janet Brody knew or should have known of the defective condition of the house. Our remand is without prejudice to the trial court entertaining a new motion for summary disposition on the ground of the statute of limitations. If such a motion is brought, the trial court shall base its decision on the principles set forth in Filcek.

Plaintiffs next argue that the trial court erred in dismissing their claim of breach of an implied warranty of fitness and habitability. We disagree. Such warranties run only to the first purchaser of a home. Weeks v Slavic Builders, Inc, 24 Mich App 621; 180 NW2d 503 (1970), aff'd 384 Mich 257; 181 NW2d 271 (1970). Plaintiffs were not the first purchasers of the house in question. Therefore, summary disposition of this claim was proper.

Affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion. We do not retain jurisdiction. No costs, neither party having prevailed.

Jansen, P.J., concurred.