Roseville Plaza Ltd. Partnership v. United States Gypsum Co.

811 F. Supp. 1200, 1992 U.S. Dist. LEXIS 20461, 1992 WL 405921
CourtDistrict Court, E.D. Michigan
DecidedDecember 15, 1992
Docket2:91-cv-72626
StatusPublished
Cited by13 cases

This text of 811 F. Supp. 1200 (Roseville Plaza Ltd. Partnership v. United States Gypsum Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Roseville Plaza Ltd. Partnership v. United States Gypsum Co., 811 F. Supp. 1200, 1992 U.S. Dist. LEXIS 20461, 1992 WL 405921 (E.D. Mich. 1992).

Opinion

OPINION

DUGGAN, District Judge.

This is a products liability action filed by plaintiff Roseville Plaza Limited Partnership against defendant United States Gypsum Company. 1 Before the Court are defendant’s motion to dismiss based upon the economic loss doctrine; motion for summary judgment based upon expiration of the statute of limitations or, in the alternative, for a separate statute of limitations trial; motion for summary judgment of plaintiffs restitution claim; and motion for summary judgment based upon lack of evidence to support plaintiff’s essential allegations. 2 The Court has considered the written briefs filed in support of and in opposition to such motions, and has had the opportunity to hear arguments from counsel at an October 29, 1992, hearing. For the reasons that follow, defendant’s motions shall be granted in part and denied in part.

I. Factual and Procedural Background

Plaintiff is the owner of a shopping center located in Roseville, Michigan, known as Roseville Plaza. When Roseville Plaza was constructed in the early 1960’s, beams throughout the building were covered with an asbestos-containing fireproofing material (ACFM). Plaintiff contends that defendant designed, manufactured and sold the ACFM; that the ACFM causes cancer, asbestosis and other diseases; that the ACFM suffered bonding failures and fell to the floor and/or through normal and foreseeable use released dust which caused asbestos fibers to become airborne; and that it has and will continue to spend considerable sums removing and replacing the ACFM. Plaintiff seeks compensatory damages in excess of $2,000,000 plus exemplary damages under the following theories: negligence (Count III), misrepresentation (Count IV), implied warranty of merchantability (Count VI), implied warranty of fitness (Count VII), civil conspiracy (Count VIII), nuisance (Count IX) and restitution (Count X). 3

II. The Economic Loss Doctrine

Defendant moves, pursuant to Federal Rule of Civil Procedure 12(b)(6), for dismissal of plaintiff’s complaint in its entirety arguing that the loss claimed by plaintiff is solely economic and, therefore, plaintiff’s exclusive remedies are provided under the UCC. According to defendant, since plaintiff does not seek any remedies pursuant to the UCC, and since all UCC claims are barred by the UCC statute of limitations in any even, 4 plaintiff has failed *1203 to state a claim upon which relief may be granted. Defendant's argument was raised in its previous Rule 12(b)(6) motion, and such argument was rejected by the Court. In renewing its motion, defendant relies upon Neibarger v. Universal Cooperatives, Inc., 439 Mich. 512, 486 N.W.2d 612 (1992), a recent Michigan Supreme Court decision issued after this Court ruled on defendant’s prior Rule 12(b)(6) motion. Plaintiff opposes defendant’s motion distinguishing this case from Neibarger and arguing that the economic loss doctrine does not apply to the present action.

The standard of review for a Rule 12(b)(6) motion to dismiss is “failure to state a claim upon which relief may be granted[.]” Fed.R.Civ.P. 12(b)(6). Under this standard, “the factual allegations in the complaint must be regarded as true. The claim should not be dismissed unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983), cert. denied, 469 U.S. 826, 105 S.Ct. 105, 83 L.Ed.2d 50 (1984) (citation omitted).

In Neibarger, the Michigan Supreme Court held: “[Wjhere a plaintiff seeks to recover for economic loss caused by a defective product purchased for commercial purposes, the exclusive remedy is provided by the UCC, including its statute of limitations.” Neibarger, 439 Mich. at 527-28, 486 N.W.2d 612. “Having decided that the UCC and the economic loss doctrine reflect the proper approach for resolution of defective product claims in the commercial arena,” the Court then turned to application of that doctrine under the facts of the cases before it. Id. at 529, 486 N.W.2d 612.

The Neibarger plaintiffs were owners and operators of dairy farms who had installed new milking systems. After the systems had been in place for some time, plaintiffs’ cattle became ill and died or had to be sold for beef because of their unproductivity or unsuitability as milking animals. Plaintiffs alleged the milking systems were defectively designed and installed by defendants and sought to recover lost profits and consequential damages flowing from the alleged defects. In holding that plaintiffs’ alleged damages fell squarely under the UCC and the economic loss doctrine, the Court stated that when characterizing injuries as economic (versus non-economic loss), “[t]he proper approach requires consideration of the underlying policies of tort and contract law as well as the nature of the damages.” Id. at 531, 486 N.W.2d 612.

In Detroit Board of Education v. Celotex Corp., 196 Mich.App. 694, 493 N.W.2d 513 (1992), a panel of the Michigan Court of Appeals discussed such policy considerations in a case factually similar to the present action. Defendant argues that the Michigan Court of Appeals’ discussion of Neibarger and the economic loss doctrine is dictum and has no precedential value. This Court disagrees. 5 Noting that the relevance of the Neibarger decision was raised at oral argument, the court of appeals stated that it was “obliged” to address the issue before reaching the issues stipulated for review. Celotex, 196 Mich.App. at 701 n. 2, 493 N.W.2d 513. The court then discussed the economic loss doctrine, as set forth in Neibarger, at length, ending its discussion with the following: “We conclude, on the facts of this case, that plaintiffs’ proper remedy lies in tort, not eon- *1204 tract or the UCC.” Id. at 705, 493 N.W.2d 513. Had the court concluded that plaintiffs tort claims were barred by the economic loss doctrine, clearly it would have been unnecessary to proceed with a discussion of the issues stipulated for review. This Court believes the Celotex court’s discussion of the economic loss doctrine and its conclusion regarding the applicability of the doctrine to the facts before it was necessary to the formulation of the decision and directly related to the issues presented. The Court finds the decision relevant to the case sub judice, and shall give the decision due regard. See Sours v. General Motors Corp.,

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Bluebook (online)
811 F. Supp. 1200, 1992 U.S. Dist. LEXIS 20461, 1992 WL 405921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roseville-plaza-ltd-partnership-v-united-states-gypsum-co-mied-1992.