Beckie Price v. High Pointe Oil Co Inc

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Syllabus Robert P. Young, Jr. Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader. John O. Juroszek
PRICE v HIGH POINTE OIL COMPANY, INC
Docket No. 143831. Argued November 15, 2012 (Calendar No. 1). Decided March 21, 2013.
Beckie Price brought an action in the Clinton Circuit Court against High Pointe Oil
Company, Inc., claiming, among other things, noneconomic damages for the mental anguish,
emotional distress, and psychological injuries that she sustained when High Pointe negligently
pumped 400 gallons of fuel oil into the basement of her house. The incident created an
environmental hazard that required the razing of the house. Before the jury trial, High Pointe
moved for summary disposition, in part on the issue of noneconomic damages, arguing that
noneconomic damages resulting from real property damage were not compensable. The court,
Randy L. Tahvonen, J., denied that part of High Pointe’s motion, concluding that noneconomic
damages could be recovered in a negligence action. The jury awarded Price $100,000 for
noneconomic damages, after which High Pointe moved for judgment notwithstanding the verdict
and remittitur. The court denied the motion and High Pointe appealed. The Court of Appeals,
BECKERING, P.J., and FORT HOOD and STEPHENS, JJ., affirmed, concluding that a plaintiff may
recover mental anguish damages naturally flowing from damage to or the destruction of real
property. 294 Mich App 42 (2011). The Supreme Court granted High Pointe’s application for
leave to appeal. 491 Mich 870 (2012).
In an opinion by Justice MARKMAN, joined by Chief Justice YOUNG and Justices MARY
BETH KELLY and ZAHRA, the Supreme Court held:
Michigan common law 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. Because that rule is sound, any change in the rule must come by legislative alteration.
1. The common-law rule with respect to damages recoverable in an action alleging the
negligent destruction of property is that if the injury is permanent or irreparable, the measure of
damages is the difference in the property’s market value before and after the injury, but if the
injury is reparable and the expense of making repairs is less than the value of the property, the
measure of damages is the cost of making repairs. Because replacement and repair costs reflect
economic damages, the logical implication of this rule is that the measure of damages excludes
noneconomic damages. No previous case in the history of Michigan’s common law has
approvingly discussed the recovery of noneconomic damages for the negligent destruction of
property. Further, recent Court of Appeals precedent has disallowed recovery of damages for
emotional injuries suffered as a consequence of personal property damage. There was no legally
relevant basis that would logically justify prohibiting the recovery of noneconomic damages for
the negligent destruction of personal property but allow it for the negligent destruction of real
property.
2. A common-law rule remains the law until modified by the Michigan Supreme Court
or the Legislature. Alteration of the common law by the Court should be approached cautiously
with the fullest consideration of public policy and should not occur through sudden departure
from longstanding legal rules. While the destruction of property or property damage will often
engender considerable mental distress, the present rule denying recovery for that distress is
rational and justifiable as a matter of reasonable public policy. Given the lack of any compelling
argument for altering the common law, retention of the rule was appropriate.
Judgment of the Court of Appeals reversed and case remanded to the trial court for entry
of summary disposition in High Pointe’s favor.
Justice CAVANAGH took no part in the decision of this case because of a familial
relationship with counsel of record.
Justices MCCORMACK and VIVIANO took no part in the decision of this case.
©2013 State of Michigan
Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Opinion Robert P. Young, Jr. Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
FILED MARCH 21, 2013
STATE OF MICHIGAN
SUPREME COURT
BECKIE PRICE,
Plaintiff-Appellee,
v No. 143831
HIGH POINTE OIL COMPANY, INC,
Defendant-Appellant.
BEFORE THE ENTIRE BENCH (except CAVANAGH, MCCORMACK, and VIVIANO, JJ.)
MARKMAN, J.
The issue in this case is whether noneconomic damages are recoverable for the
negligent destruction of real property. No Michigan case has ever allowed a plaintiff to
recover noneconomic damages resulting solely from the negligent destruction of
property, either real or personal. Rather, the common law of this state has long provided
that the appropriate measure of damages in cases involving the negligent destruction of
property is simply the cost of replacement or repair of the property. We are not
persuaded of the need for change and therefore continue to adhere to this rule.
Accordingly, we reverse the judgment of the Court of Appeals and remand this case to
the trial court for entry of summary disposition in defendant’s favor.
I. FACTS AND HISTORY
In 1975, plaintiff and her now ex-husband built a house in DeWitt, Michigan. The
house was originally heated by an oil furnace located in the basement, but in 2006
plaintiff replaced the oil furnace with a propane furnace. Plaintiff canceled her contract
with defendant oil company’s predecessor when the propane furnace was installed.
Although the oil furnace was removed, the oil fill pipe remained.
Somehow, in November 2007, plaintiff’s address was placed on defendant’s “keep
full list.” True to the name of the list, while plaintiff was at work, defendant’s truck
driver pumped nearly 400 gallons of fuel oil 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 defendant’s and plaintiff’s insurers, the
site was remediated, a new house was built on the property in a different location,
plaintiff’s personal property was cleaned or replaced, and plaintiff was reimbursed for all
temporary-housing-related expenses. It is undisputed that plaintiff was fully
compensated for her economic losses.
Nevertheless, plaintiff filed suit in August 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, MCL
324.101 et seq. However, plaintiff’s only claim to survive to trial was for the recovery of
noneconomic damages for defendant’s negligent destruction of her real property. After
2
trial and over defendant’s objection, a jury found in favor of plaintiff in the amount of
$100,000 for past noneconomic damages. Defendant moved for judgment
notwithstanding the verdict and remittitur, arguing that plaintiff had failed to present
sufficient proofs to support the verdict. The trial court denied the motion, and defendant
appealed. The Court of Appeals affirmed in a published decision, explaining:
Noneconomic damages are generally recoverable in tort claims, and
we are not convinced that noneconomic damages stemming from damage to
or destruction of real property must or should be excepted from that general
rule. We conclude that in negligence actions, a plaintiff may recover
mental anguish damages naturally flowing from the damage to or
destruction of real property. [Price v High Pointe Oil Co, Inc, 294 Mich
App 42, 60; 817 NW2d 583 (2011).]
Defendant applied for leave to appeal in this Court. We granted leave and subsequently
heard oral argument. Price v High Pointe Oil Co, Inc, 491 Mich 870 (2012).
II. STANDARD OF REVIEW
Whether noneconomic damages are recoverable for the negligent destruction of
real property presents a question of law, which this Court reviews de novo. See 2000
Baum Family Trust v Babel, 488 Mich 136, 143; 793 NW2d 633 (2010).
III. ANALYSIS
The question in this case is whether noneconomic damages are recoverable for the
negligent destruction of real property. Absent any relevant statute, the answer to that
question is a matter of common law.
A. COMMON LAW
As this Court explained in Bugbee v Fowle, the common law “‘is but the
accumulated expressions of the various judicial tribunals in their efforts to ascertain what
3
is right and just between individuals in respect to private disputes[.]’” Bugbee v Fowle,
277 Mich 485, 492; 269 NW 570 (1936), quoting Kansas v Colorado, 206 US 46, 97; 27
S Ct 655; 51 L Ed 956 (1907). The common law, however, is not static. By its nature, it
adapts to changing circumstances. See Holmes, The Common Law (Mineola, New York:
Dover Publications, Inc., 1991), p 1 (noting that the common law is affected by “[t]he felt
necessities of the time, the prevalent moral and political theories, [and] intuitions of
public policy” and that it “embodies the story of a nation’s development through many
centuries”). And as this Court stated in Beech Grove Investment Co v Civil Rights
Comm:
It is generally agreed that two of the most significant features of the
common law are: (1) its capacity for growth and (2) its capacity to reflect
the public policy of a given era. . . .
* * *
“The common law does not consist of definite rules which are
absolute, fixed, and immutable like the statute law, but it is a flexible body
of principles which are designed to meet, and are susceptible of adaption to,
among other things, new institutions, public policies, conditions, usages
and practices, and changes in mores, trade, commerce, inventions, and
increasing knowledge, as the progress of society may require. So, changing
conditions may give rise to new rights under the law . . . .” [Beech Grove
Investment Co v Civil Rights Comm, 380 Mich 405, 429-430; 157 NW2d
213 (1968), quoting 15A CJS, Common Law, § 2, pp 43-44.]
The common law is always a work in progress and typically develops incrementally, i.e.,
gradually evolving as individual disputes are decided and existing common-law rules are
considered and sometimes adapted to current needs in light of changing times and
circumstances. In re Arbitration Between Allstate Ins Co & Stolarz, 81 NY2d 219, 226;
597 NYS2d 904; 613 NE2d 936 (1993) (noting that the common law evolves through the
4
“incremental process of common-law adjudication as a response to the facts presented”);1
see also People v Aaron, 409 Mich 672, 727; 299 NW2d 304 (1980) (“Abrogation of the
felony-murder rule is not a drastic move in light of the significant restrictions this Court
has already imposed. Further, it is a logical extension of our decisions . . . .”); Woodman
v Kera LLC, 486 Mich 228, 267-268; 785 NW2d 1 (2010) (MARKMAN, J., concurring in
part and dissenting in part).
The common-law rule with respect to the damages recoverable in an action
alleging the negligent destruction of property was set forth in O’Donnell v Oliver Iron
Mining Co, 262 Mich 470; 247 NW 720 (1933). O’Donnell provides:
“If injury to property caused by negligence is permanent or
irreparable, [the] measure of damages is [the] difference in its market value
before and after said injury, but if [the] injury is reparable, and [the]
expense of making repairs is less than [the] value of [the] property, [the]
measure of damages is [the] cost of making repairs.” [Tillson v Consumers
Power Co, 269 Mich 53, 65; 256 NW 801 (1934), quoting O’Donnell, 262
Mich at 471 (syllabus).][2]
1
See also Kestin, The bystander’s cause of action for emotional injury: Reflections on
the relational eligibility standard, 26 Seton Hall L R 512, 512 (1996) (“Growth in the
common law is incremental, often scarcely noticeable in the short run, but inexorable
when viewed in the long term.”); Davis v Moore, 772 A2d 204, 238 (DC, 2001) (Ruiz, J.,
dissenting) (“It cannot be forgotten that the incremental pace at which common law
develops, coupled with the increasing importance of statutory law, ensures that cases
where truly ‘new’ rules of common law are announced . . . will not frequently occur.”).
2
Tillson quoted O’Donnell’s syllabus. The portion of the opinion from which the
statement in the syllabus was derived provided:
As the case must go back for a new trial, on account of the errors
pointed out, we also call attention to another alleged error. The court
instructed the jury that, if it found that the injury to plaintiff’s property was
caused by defendant’s negligence, the damages should represent the
difference between the market value of the house at the date of the injury
5
Accord William R Roach & Co v Blair, 190 Mich 11, 16-17; 155 NW 696 (1916)
(approving as being in accordance with the “general rule” the trial court’s articulation of
damages as “‘the fair cash value at said time and place of said property which was
destroyed by said fire, and the diminution in value of property injured and not
destroyed’”); Davidson v Michigan C R Co, 49 Mich 428, 431; 13 NW 804 (1882) (“[I]n
the case of domestic animals injured, the proper rule of damages, as in the case of other
perishable chattels, should usually be the reduced value at the time. . . . [T]he difference
between the value before and after the accident will enable the owner to be fully
indemnified.”); Guzowski v Detroit Racing Ass’n, Inc, 130 Mich App 322, 328; 343
NW2d 536 (1983) (citing Davidson for the conclusion that the proper measure of
damages was the difference in market value of a horse after it was injured from its
and that value it would have had if the property had remained undamaged.
This is the measure of recovery only where the injury is permanent. No
instruction was given as to what the measure of damages should be in case
the jury found the injuries were reparable, nor did defendant make any
showing as to the cost of full restoration and repair of the house.
Apparently, plaintiff tried the case on the theory that the damage was
permanent and irreparable. Nevertheless, if defendant shows that the
property can be repaired and restored to the condition it would have been in
had it not been damaged by the subsidence, and also gives proper testimony
as to the cost of the repairs, the court should make it clear to the jury that
the question as to the permanency of the damage, and, if reparable, the cost
of repairs, is one of fact for them to decide, if they conclude that defendant
was responsible for the damages. [O’Donnell, 262 Mich at 476-477, going
on to cite Berkey v Berwind-White Coal Mining Co, 229 Pa 417, 428; 78 A
1004 (1911).]
6
preinjury market value); Fite v North River Ins Co, 199 Mich 467, 471; 165 NW 705(1917) (indicating the primacy of market value in assessing damages).
Michigan common law has continually followed the O’Donnell rule. See Tillson,
269 Mich at 65; Jackson Co Rd Comm’rs v O’Leary, 326 Mich 570, 576; 40 NW2d 729
(1950); State Hwy Comm’r v Predmore, 341 Mich 639, 642; 68 NW2d 130 (1955);
Wolverine Upholstery Co v Ammerman, 1 Mich App 235, 242; 135 NW2d 572 (1965);
Bayley Products, Inc v American Plastic Products Co, 30 Mich App 590, 598; 186
NW2d 813 (1971) (“It is the settled law of this state that the measure of damages to real
property, if permanently irreparable, is the difference between its market value before and
after the damage.”); Baranowski v Strating, 72 Mich App 548, 562; 250 NW2d 744
(1976); Bluemlein v Szepanski, 101 Mich App 184, 192; 300 NW2d 493 (1980);
Strzelecki v Blaser’s Lakeside Indus of Rice Lake, Inc, 133 Mich App 191, 193-194; 348
NW2d 311 (1984); see also People v Hamblin, 224 Mich App 87, 94; 568 NW2d 339
(1997) (analogizing to civil property-loss cases, including Baranowski, in order to
determine how to measure damages in a criminal case); 2 Michigan Law of Damages &
Other Remedies (3d ed), § 19.18, p 19-13 (“[T]he measure of damages for injury to real
property generally is the difference between the market value of the property before and
after the injury to the property.”); 7 Michigan Civil Jurisprudence (2009 rev), § 50, p 379
(“The measure of damages for negligent injury to real property, if permanent and
irreparable is the difference between its market value before and after the damage.”).
Accordingly, the long-held common-law rule in Michigan is that the measure of damages
7
for the negligent destruction of property is the cost of replacement or repair.3 Because
replacement and repair costs reflect economic damages, the logical implication of this
3
A substantially similar, market-based approach to damages is employed by a number of
other states, for example:
(1) Alabama: “The proper measure of compensatory damages in a tort action
based on damage to real property is the difference between the fair market value of the
property immediately before the damage and the fair market value immediately after the
damage.” Birmingham Coal & Coke Co, Inc v Johnson, 10 So 3d 993, 998 (Ala, 2008)
(citations and quotation marks omitted).
(2) Colorado: “In cases involving damage to property, . . . the ordinary measure of
damages is the diminution of market value of the property.” Goodyear Tire & Rubber Co
v Holmes, 193 P3d 821, 827 (Colo, 2008).
(3) Georgia: “[A]s a general rule the measure of damages in actions for real
property is the difference in value before and after the injury to the premises[.]” Royal
Capital Dev, LLC v Maryland Cas Co, 291 Ga 262, 264; 728 SE2d 234 (2012) (citation
omitted).
(4) Idaho: “If land is taken or the value thereof totally destroyed, the owner is
entitled to recover the actual cash value of the land at the time of the taking or
destruction . . . .” Nampa & Meridian Irrigation Dist v Mussell, 139 Idaho 28, 33; 72
P3d 868 (2003) (citation and quotation marks omitted).
(5) Kansas: “The ordinary measure of damages to real property is the difference in
value immediately before and after the damage and, in the event of total destruction, the
fair market value at the time of the destruction.” Evenson v Lilley, 295 Kan 43, 52; 282
P3d 610 (2012).
(6) New Mexico: “[T]he market value for lost or destroyed property is the proper
measure of damages . . . .” Castillo v Las Vegas, 2008 NMCA 141, ¶ 31; 145 NM 205,
214; 195 P3d 870 (NM App, 2008).
(7) Oklahoma: “[W]here damages are of a permanent nature, the measure of
damage is the difference between the actual value immediately before and immediately
after the damage is sustained.” Schneberger v Apache Corp, 1994 OK 117, ¶ 10; 890
P2d 847, 849 (Okla, 1994) (citations and quotation marks omitted).
8
rule is that the measure of damages excludes noneconomic damages and the latter are not
recoverable for the negligent destruction of property.4 See also 4 Restatement Torts, 2d,
(8) Pennsylvania: “The proper measure of damages in a case where the injury to
the property was permanent is the market value of the property immediately before the
injury.” Oliver-Smith v Philadelphia, 962 A2d 728, 730 (Pa Cmwlth, 2008).
(9) South Carolina: “[T]he general rule is that in case of an injury of a permanent
nature to real property . . . the proper measure of damages is the diminution of the market
value by reason of that injury . . . .” Yadkin Brick Co, Inc v Materials Recovery Co, 339
SC 640, 645; 529 SE2d 764 (SC App, 2000) (citation and quotation marks omitted).
(10) Texas: “As a rule, [the recoverable value of property] is measured by the
property’s market value or the cost of repairing it.” City of Tyler v Likes, 962 SW2d 489,
497 (Tex, 1997).
4
A number of other states also preclude the recovery of noneconomic damages for the
negligent destruction of property, for example:
(1) Alabama: “[P]laintiffs cannot recover for mental anguish or emotional distress
unless they suffered physical injury or were in the ‘zone of danger.’” Birmingham, 10 So
3d at 999.
(2) Alaska: “The general rule is that where a tortfeasor’s negligence causes
emotional distress without physical injury, such damages may not be awarded.” Hancock
v Northcutt, 808 P2d 251, 257 (Alas, 1991).
(3) Maryland: “[A] plaintiff cannot ordinarily recover for emotional injuries
sustained solely as a result of negligently inflicted damage to the plaintiff’s property.”
Dobbins v Washington Suburban Sanitary Comm, 338 Md 341, 351; 658 A2d 675
(1995).
(4) Nevada: “[T]he better rule is to allow recovery only in cases which pertain to
emotional distress arising from harm to another person, and not in cases, such as the one
before us, which pertain to emotional distress arising from property damage.” Smith v
Clough, 106 Nev 568, 569-570; 796 P2d 592 (1990).
(5) New Mexico: “[A] plaintiff may not recover for emotional distress based
solely on a claim for negligent damage to property.” Castillo, 2008 NMCA at ¶ 21; 145
NM at 210.
9
§ 911 comment e, p 475 (“Compensatory damages are not given for emotional distress
caused merely by the loss of . . . things . . . .”); 1 Dobbs, Law of Remedies (2d ed, 1993),
Damages-Equity-Restitution, § 5.15(1), p 876 (“In general, the owner of damaged
property cannot recover damages for emotional distress as an element of damage to the
property.”); 22 Am Jur 2d, Damages, § 255, pp 238-239; 38 Am Jur 2d, Fright, Shock,
Etc, § 19, p 31 (“Subject to some exceptions, generally, under ordinary circumstances,
there can be no recovery for mental anguish suffered by a plaintiff in connection with an
injury to his or her property.”); 2 Restatement Torts, 2d, § 313, pp 113-115 (implying that
damages for emotional distress are not recoverable in cases concerning negligently
inflicted injury to property);5 4 Restatement Torts, 2d, § 911 comment e, p 474 (“Even
(6) New York: Damages for mental anguish are not recoverable absent “competent
evidence of contemporaneous or consequential physical harm[.]” Iannotti v City of
Amsterdam, 225 AD2d 990, 990; 639 NYS2d 537 (NY App, 1996).
(7) Oklahoma: “[E]motional distress as a consequence of an intentional tort is
distinguishable from distress resulting from breach of contract or negligence, which
requires a showing of physical injury.” Cleveland v Dyn-A-Mite Pest Control, Inc, 2002
OK Civ App 95, ¶ 52; 57 P3d 119, 131 (2002) (citation and quotation marks omitted).
(8) Oregon: “[P]sychic and emotional injuries” are not recoverable where the
“plaintiff suffered no physical injury from [the] defendants’ alleged negligence and
[where the plaintiff] has not shown that [the] defendants’ conduct was anything more
than negligent[.]” Hammond v Central Lane Communications Center, 312 Or 17, 20;
816 P2d 593 (1991).
(9) Texas: “[M]ental anguish based solely on negligent property damage is not
compensable as a matter of law.” Likes, 962 SW2d at 497.
5
Section 313 of the Restatement Second of Torts concerns “Emotional Distress
Unintended.” It provides:
10
when the subject matter has its chief value in its value for use by the injured person, if the
thing is replaceable, the damages for its loss are limited to replacement value, less an
amount for depreciation.”); 28 ALR2d 1070, § 8, p 1093 (“In simple negligence cases
involving personal property, the courts have been reluctant to authorize the allowance of
damages for mental anguish or disturbance allegedly caused by the defendant’s wrongful
acts.”).
Lending additional support to this conclusion is the simple fact that, before the
Court of Appeals’ opinion below, no case ever in the history of the Michigan common
law has approvingly discussed the recovery of noneconomic damages for the negligent
destruction of property. Indeed, no case has even broached this issue except through the
(1) If the actor unintentionally causes emotional distress to another,
he is subject to liability to the other for resulting illness or bodily harm if
the actor
(a) should have realized that his conduct involved an unreasonable
risk of causing the distress, otherwise than by knowledge of the harm or
peril of a third person, and
(b) from facts known to him should have realized that the distress, if
it were caused, might result in illness or bodily harm.
(2) The rule stated in Subsection (1) has no application to illness or
bodily harm of another which is caused by emotional distress arising solely
from harm or peril to a third person, unless the negligence of the actor has
otherwise created an unreasonable risk of bodily harm to the other. [2
Restatement Torts, 2d, § 313, p 113 (emphasis added).]
As the comments to subsection (2) indicate, the basis for allowing the recovery for
emotional distress in this context is that those actions “threaten[] the plaintiff with bodily
harm . . . .” Id. at 114 (emphasis added). Accordingly, when there is nothing threatening
the plaintiff with bodily harm, for instance when a claim involves only property damage,
a defendant is not liable for unintended emotional distress.
11
negative implication arising from limiting damages for the negligent destruction or
damage of property to replacement and repair costs. Put another way, despite the fact
that throughout the course of our state’s history, many thousands of houses and other real
properties have doubtlessly been negligently destroyed or damaged, and despite the fact
that surely in a great many, if not a majority, of those cases the residents and owners of
those properties suffered considerable emotional distress, there is not a single Michigan
judicial decision that expressly or impliedly supports the recovery of noneconomic
damages in these circumstances.6 Thus, supplementing the affirmative judicial decisions
that we have cited in support of the limiting principles of the common law for the
calculation of property damages is the absence of even a single affirmative judicial
decision in support of the contrary proposition, a proposition that one would expect to
have become commonplace within the law if it had ever existed. However, this particular
dog has been perpetually silent and has never barked.
Moreover, the Court of Appeals has decided two relatively recent cases
concerning injury to personal property in which noneconomic damages were disallowed.
In Koester v VCA Animal Hosp, 244 Mich App 173; 624 NW2d 209 (2000), the plaintiff
dog owner sought noneconomic damages in a tort action against his veterinarian
following the death of his dog resulting from the veterinarian’s negligence. The trial
court granted the defendant’s motion for summary disposition, holding that “emotional
6
Indeed, O’Donnell, Baranowski, and Strzelecki all involved negligent damage to
houses, while Tillson, Bayley, and Bluemlein involved negligent damage to other
privately owned real property.
12
damages for the loss of a dog do not exist.” Id. at 175. On appeal, the Court of Appeals
affirmed, noting that pets are personal property under Michigan law and explaining that
there “is no Michigan precedent that permits the recovery of damages for emotional
injuries allegedly suffered as a consequence of property damage.” Id. at 176.
Later, in Bernhardt v Ingham Regional Med Ctr, 249 Mich App 274; 641 NW2d
868 (2002), the plaintiff visited the defendant hospital to bring home her adopted,
newborn son. Before washing her hands, the plaintiff removed her jewelry, which
consisted of her grandmother’s 1897 wedding ring (which was also her wedding ring)
and a watch purchased in 1980 around the time of her brother’s murder. The plaintiff
accidentally forgot the jewelry in the washbasin and left the hospital. Upon realizing her
mistake, the plaintiff contacted the defendant and was advised that she could retrieve the
jewelry from hospital security. However, when she tried to retrieve the jewelry, it could
not be located. The plaintiff sued, and the defendant moved for summary disposition,
arguing that the plaintiff’s damages did not exceed the $25,000 jurisdictional limit of the
trial court. The plaintiff countered that her damages exceeded that limit because the
jewelry possessed great sentimental value. The trial court granted the defendant’s
motion. On appeal, the Court of Appeals affirmed, citing Koester, 109 Mich App at 176,
for the proposition that there “is no Michigan precedent that permits the recovery of
damages for emotional injuries allegedly suffered as a consequence of property damage,”
Bernhardt, 249 Mich App at 279. Bernhardt concluded:
In the present case, the two items of jewelry have a market value that
can easily be ascertained. Hence, fair market value is the measure of
damages. Because the items have a fair market value, there is no need to
13
resort to an alternative measure of damages to compensate plaintiff for her
loss. [Id. at 281.]
In support of its conclusion, Bernhardt quoted the following language from the
Restatement Second of Torts:
If the subject matter cannot be replaced, however, as in the case of a
destroyed or lost family portrait, the owner will be compensated for its
special value to him, as evidenced by the original cost, and the quality and
condition at the time of the loss. . . . In these cases, however, damages
cannot be based on sentimental value. Compensatory damages are not
given for emotional distress caused merely by the loss of the things, except
that in unusual circumstances damages may be awarded for humiliation
caused by deprivation, as when one is deprived of essential elements of
clothing. [Id. at 281, quoting 4 Restatement Torts, 2d, § 911, comment e,
pp 474-475 (quotation marks omitted).]
While Koester and Bernhardt both involved negligent injury to personal property,
they speak of property generally.7 Although the Court of Appeals in the instant case
seeks to draw distinctions between personal and real property, neither that Court nor
plaintiff has explained how any of those distinctions, even if they had some pertinent
foundation in the law, are relevant with regard to the propriety of awarding noneconomic
7
Koester and Bernhardt stated that there is no Michigan precedent permitting the
recovery of noneconomic damages resulting from property damage. Those statements
are not limited to personal property damage. For example, Bernhardt cited the
Restatement of Torts, which provides that “[c]ompensatory damages are not given for
emotional distress caused merely by the loss of the things . . . .” Bernhardt, 249 Mich
App at 281 (citation and quotation marks omitted). A house may be a home, but it is also
a thing, albeit a thing to which many people develop emotional attachment. But like the
jewelry in Bernhardt, a house has “a market value that can easily be ascertained.” Id. at
281. Moreover, in Wolverine, 1 Mich App at 242, the Court of Appeals expressly applied
the rule from O’Donnell, a real-property case, to personal property. See also Strzelecki,
133 Mich App at 194 (citing Wolverine for the proposition that the O’Donnell rule
applies “as well to damages for personal property injured through negligence”).
14
damages.8 In short, while it is doubtlessly true that many people are highly emotionally
attached to their houses, many people are also highly emotionally attached to their pets,9
their heirlooms, their collections, and any number of other things. But there is no legally
relevant basis that would logically justify prohibiting the recovery of noneconomic
damages for the negligent killing of a pet or the negligent loss of a family heirloom but
allow such a recovery for the negligent destruction of a house.10 Accordingly, Koester
8
In justifying its holding, the Court of Appeals identified the following differences
between real and personal property: (1) trespass to land, unlike trespass to chattels, does
not require an actual showing of damage, Price, 294 Mich App at 55; (2) breach of
contract for the sale of real property includes the right to specific performance, id. at 56;
(3) “[a]uthors and poets alike wax philosophical about the unique value of a home,” id.;
and (4) the destruction of a house causes “the stress and upheaval of displacement and the
need to alternate shelter,” id. at 57. However, none of these differences is relevant to
whether noneconomic damages should be available for the negligent destruction of real
property: (1) allowing for nominal damages in a real-property trespass claim, and not a
trespass-to-chattels claim, is merely a recognition in the law that a trespass to land can
occur without causing actual damage, whereas a trespass to chattel actually deprives the
owner of the chattel and, by necessity, causes actual damage; (2) specific performance
remedies may be granted in cases involving both personal and real property, see
Richardson v Lamb, 253 Mich 659, 663; 235 NW 817 (1931); (3) authors and poets wax
philosophical-- or poetic-- about many things, but these waxings do not define the
common law; and (4) the costs of relocating and rebuilding a house-- obtaining “alternate
shelter” and attendant personal upheavals-- define the measure of what are largely
economic costs and were covered by defendant, defendant’s insurer, and plaintiff’s
insurer. We do not question that there is personal stress attendant to the suffering of any
tort, but such stress can as easily accompany the destruction or damage of personal
property as of real property.
9
Indeed, Koester, 244 Mich App at 175, recognized the fact that “domesticated pets have
value and sentimentality associated with them which may not compare with that of other
personal property . . . .”
10
As defense counsel pointed out at oral argument, it seems anomalous that under the
Court of Appeals’ theory, while plaintiff could not recover damages for her emotional
attachment to a family portrait that hung on the wall in her house, she could recover for
15
and Bernhardt underscore O’Donnell’s exclusion of noneconomic damages for negligent
injury to real and personal property.
Finally, we would be remiss if we did not address Sutter v Biggs, 377 Mich 80, 86;
139 NW2d 684 (1966) (concerning a medical malpractice claim in which the plaintiff’s
ovary and fallopian tube were removed without her consent), which the Court of Appeals
cited as providing the “general rule” for the recovery of damages in tort actions. Sutter
stated:
The general rule, expressed in terms of damages, and long followed
in this State, is that in a tort action, the tort-feasor is liable for all injuries
resulting directly from his wrongful act, whether foreseeable or not,
provided the damages are the legal and natural consequences of the
wrongful act, and are such as, according to common experience and the
usual course of events, might reasonably have been anticipated. Remote
contingent, or speculative damages are not considered in conformity to the
general rule. Van Keulen & Winchester Lumber Co. v. Manistee and
Northeastern Railroad Co., 222 Mich 682 [193 NW 289 (1923)];
Woodyard v. Barnett, 335 Mich 352 [56 NW2d 214 (1953)]; and Fisk v.
Powell, 349 Mich 604 [84 NW2d 736 (1957)]. See, also McLane, Swift &
Co. v. Botsford Elevator Co., 136 Mich 664 [99 NW 875 (1904)], and
Cassidy v. Kraft-Phenix Cheese Corp., 285 Mich 426 [280 NW 814(1938)]. [Id.]
Although Sutter articulates a “general rule,” it is a “general rule” that has never been
applied to allow the recovery of noneconomic damages in a case involving only property
damage,11 and it is a “general rule” that must be read in light of the more narrow and
emotional attachment to the wall itself. The Court of Appeals’ distinctions between real
and personal property are ultimately arbitrary and unsustainable.
11
None of the cases cited by Sutter in support of its “general rule” involved noneconomic
damages. Van Keulen, 222 Mich 682 (whether and to what extent the defendant was
16
specific “general rule” of O’Donnell.12
The development of the common law frequently yields “general rules” from which
branch more specific “general rules” that apply in limited circumstances. Where tension
exists between those rules, the more specific rule controls.13 See Moning v Alfono, 400
Mich 425, 442-449; 254 NW2d 759 (1977) (acknowledging the “general standard of
liable for failing to notify a consignee that delivered lumber had not been kiln-dried);
Woodyard, 335 Mich 352 (whether the defendant was liable for the plaintiff’s inability to
complete his beet harvest); Fisk, 349 Mich 604 (whether the defendants were liable for
the plaintiffs’ partial crop failure); McLane, 136 Mich 664 (whether the defendant’s
failure was a proximate cause of the plaintiff’s loss of oats); Cassidy, 285 Mich 426(whether the defendant’s refusal to enter into a written contract removed the plaintiff’s
claim from the statute of frauds).
12
Valentine v Gen American Credit, Inc, 420 Mich 256, 261; 362 NW2d 628 (1984),
explained that emotional harm attendant to economic loss is insufficient to warrant
noneconomic damages even where a plaintiff would not be made whole absent such
damages:
The denial of mental distress damages, although the result is to leave
the plaintiff with less than a full recovery, has analogy in the law. The law
does not generally compensate for all losses suffered. Recovery is denied
for attorney’s fees, for mental anguish not accompanied by physical
manifestation, and “make-whole” or full recovery has been denied where
the cost of performance exceeds the value to the promisee. The courts have
not, despite “make whole” generalizations regarding the damages
recoverable, attempted to provide compensation for all losses. Instead,
specific rules have been established that provide for the calculation of the
damages recoverable in particular kinds of actions. [Citations omitted.]
The O’Donnell rule is precisely such a specific rule in an action for the negligent
destruction of property.
13
This tension does not suggest that the more general rule is incorrect, only that it must
yield to the more specific rule in the appropriate circumstances. That is the case for
Sutter’s rule; that is, while Sutter provided an appropriate “general rule” for tort actions
generally, O’Donnell provided an exception to that rule that has been specifically adapted
to tort actions involving only property damage.
17
conduct” in a negligence case but allowing the jury to consider “one of the many specific
rules concerning particular conduct that have evolved in the application of the general
standard of care”); see also Beech Grove, 380 Mich at 430 (“‘[C]hanging conditions may
give rise to new rights under the law, and, also, where the reason on which existing rules
of the common law are founded ceases, the rules may cease to have application.’”),
quoting 15A CJS, Common Law, § 2, pp 43-44. With respect to this case, although
Sutter articulated a general rule, O’Donnell articulated a more specific “general rule,”
applicable in negligence actions in which there is only property damage. Accordingly,
because this case involves only property damage, the O’Donnell rule, not the Sutter rule,
controls.14
B. ALTERING THE COMMON LAW
Because the Court of Appeals determined that the “general rule” is that “in a tort
action, the tort-feasor is liable for all injuries,”15 the Court of Appeals contended that it
14
Although Sutter was decided some years after O’Donnell, the “general rules”
articulated in these cases have each been restated repeatedly over the years without
conflict (until this case). This history underscores that the two “general rules” here
operate in parallel and are complementary.
15
The Court of Appeals did not acknowledge Valentine. It addressed the O’Donnell
rule-- by reference to Strzelecki and Baranowski-- but determined that application of that
rule to the instant case would be inappropriate because the cases in which that rule has
been applied “addressed the measure of damages for economic loss suffered as a result of
the destruction of real property” and did not include “a discussion of noneconomic
damages.” Price, 294 Mich App at 53. This ignores Wolverine (and Strzelecki’s citation
of Wolverine), which applied the O’Donnell rule to damages for personal property.
Moreover, in our judgment, the absence of discussion regarding noneconomic damages,
as explained earlier in this opinion, supports, rather than undermines, our conclusion that
noneconomic damages are not recoverable. Not only did both Strzelecki and Baranowski
18
was not altering the common law but, rather, “declin[ing] to extend” to real property the
personal property “exception” set forth in Koester and Bernhardt.16 Price, 294 Mich App
at 54-55 (quotation marks and citation omitted). However, as previously mentioned, the
Court of Appeals’ opinion constitutes the first and only Michigan case to support the
recovery of noneconomic damages for the negligent destruction of property.17 See 2
Michigan Law of Damages & Other Remedies (3d ed), § 19.18.18 Accordingly, contrary
involve damage to houses, but one would think that decades-long restatements by the
judiciary of this state that tort damage to property is recompensed by x + y would at some
point logically communicate that z is not also included.
16
Contrary to the analysis of the Court of Appeals in this case, Koester, 244 Mich App at
176, explained that it was declining to create new tort liability:
In essence, plaintiff requests that we create for pet owners an
independent cause of action for loss of companionship when a pet is
negligently injured by a veterinarian. Although this Court is sympathetic to
plaintiff’s position, we defer to the Legislature to create such a remedy.
17
It is also worth noting that none of the cases cited by the Court of Appeals in this case
involved only property damage. Indeed, with the exception of Daley v LaCroix, 384
Mich 4; 179 NW2d 390 (1970), none of the cases cited by the Court of Appeals involved
property damage at all. Sutter, 377 Mich at 83-84, and McClain v Univ of Mich Bd of
Regents, 256 Mich App 492, 493-494; 665 NW2d 484 (2003), both involved claims for
bodily injury resulting from medical malpractice. Phillips v Butterball Farms Co, Inc
(After Second Remand), 448 Mich 239, 241-242; 531 NW2d 144 (1995), involved a
claim for emotional distress resulting from a retaliatory discharge, and Daley, 384 Mich
at 13, involved a claim for emotional distress resulting from fright. Moreover, Stevens v
City of Flint, unpublished opinion per curiam of the Court of Appeals, issued December
20, 2007 (Docket No. 272329), and Bielat v South Macomb Disposal Auth, unpublished
opinion per curiam of the Court of Appeals, issued November 9, 2004 (Docket No.
249147)-- the unpublished opinions the Court of Appeals cited as persuasive authority--
both involved trespass-nuisance claims.
18
The treatise cites the Court of Appeals’ decision as the only exception to the O’Donnell
rule:
19
to the Court of Appeals’ own characterization and for the reasons discussed in part III(A)
of this opinion, the Court of Appeals’ holding represents an alteration of the common
law. With that understanding, we address whether the common law should be altered.
“This Court is the principal steward of Michigan’s common law,” Henry v Dow
Chem Co, 473 Mich 63, 83; 701 NW2d 684 (2005), and it is “axiomatic that our courts
have the constitutional authority to change the common law in the proper case,” North
Ottawa Community Hosp v Kieft, 457 Mich 394, 403 n 9; 578 NW2d 267 (1998). This
authority is traceable to Const 1963, art 3, § 7, which states, “The 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.” Thus, as this
Court has explained, “the common-law rule remains the law until modified by this Court
or by the Legislature.” Longstreth v Gensel, 423 Mich 675, 686; 377 NW2d 804 (1985).
However, this Court has also explained that alteration of the common law should be
approached cautiously with the fullest consideration of public policy and should not
occur through sudden departure from longstanding legal rules. Henry, 473 Mich at 83(“[O]ur common-law jurisprudence has been guided by a number of prudential principles.
See Young, A judicial traditionalist confronts the common law, 8 Texas Rev L & Pol
299, 305-310 (2004). Among them has been our attempt to ‘avoid capricious departures
Note that the Michigan Court of Appeals has held that a plaintiff
may seek recovery for noneconomic damages in a negligence action for
mental anguish naturally flowing from the damage to or destruction of real
property. [2 Michigan Law of Damages & Other Remedies (3d ed),
§ 19-18, citing Price, 294 Mich App 42.]
20
from bedrock legal rules as such tectonic shifts might produce unforeseen and
undesirable consequences,’ id. at 307 . . . .”); see also Woodman, 486 Mich at 231(opinion by YOUNG, J.) (“[M]odifications [of the common law] should be made with the
utmost caution because it is difficult for the judiciary to assess the competing interests
that may be at stake and the societal trade-offs relevant to one modification of the
common law versus another in relation to the existing rule.”); id. at 268 (MARKMAN, J.,
concurring in part and dissenting in part) (explaining that the common law develops
incrementally); North Ottawa, 457 Mich at 403 n 9 (providing that common law should
only be changed “in the proper case”).19 As this emphasis on incrementalism suggests,
when it comes to alteration of the common law, the traditional rule must prevail absent
compelling reasons for change. This approach ensures continuity and stability in the law.
With the foregoing principles in mind, we respectfully decline to alter the
common-law rule that the appropriate measure of damages for negligently damaged
property is the cost of replacement or repair. We are not oblivious to the reality that
19
Similarly, Koester, 244 Mich App at 176-177, explained:
There are several factors that must be considered before expanding
or creating tort liability, including, but not limited to, legislative and
judicial policies. In this case, there is no statutory, judicial, or other
persuasive authority that compels or permits this Court to take the drastic
action proposed by plaintiff. Case law on this issue from sister states is not
consistent, persuasive, or sufficient precedent. We refuse to create a
remedy where there is no legal structure in which to give it support.
However, plaintiff and others are free to urge the Legislature to visit this
issue in light of public policy considerations, including societal
sentiment . . . .
21
destruction of property or property damage will often engender considerable mental
distress, and we are quite prepared to believe that the particular circumstances of the
instant case were sufficient to have caused exactly such distress. However, we are
persuaded that the present rule is a rational one and justifiable as a matter of reasonable
public policy. We recognize that might also be true of alternative rules that could be
constructed by this Court. In the final analysis, however, the venerability of the present
rule and the lack of any compelling argument that would suggest its objectionableness in
light of changing social and economic circumstances weigh, in our judgment, in favor of
its retention. Because we believe the rule to be sound, if change is going to come, it must
come by legislative alteration.20 A number of factors persuade us that the longstanding
20
Although this Court is vested with the power to alter the common law, as already
explained, such alteration should not be undertaken lightly. As counseled in People v
Kevorkian, 447 Mich 436, 482 n 60; 527 NW2d 714 (1994) (opinion by CAVANAGH,
C.J., and BRICKLEY and GRIFFIN, JJ.), quoting Justice Cardozo’s The Nature of the
Judicial Process:
The judge, even when he is free, is still not wholly free. He is not to
innovate at pleasure. He is not a knight-errant, roaming at will in pursuit of
his own ideal of beauty or of goodness. He is to draw his inspiration from
consecrated principles. He is not to yield to spasmodic sentiment, to vague
and unregulated benevolence. He is to exercise a discretion informed by
tradition, methodized by analogy, disciplined by system, and subordinated
to the primordial necessity of order in the social life. Wide enough in all
conscience is the field of discretion that remains. [Quotation marks and
citations omitted.]
Thus, this Court does not alter the common law at its unchecked discretion, much less at
its whim. Rather, we are bound to tradition and stability and continuity. By virtue of its
overtly political and representative nature, the Legislature is bound by different
considerations. The barriers standing before this Court’s alteration of the common law
are significantly higher than those facing the Legislature.
22
character of the present rule is not simply a function of serendipity or of judicial inertia,
but is reflective of the fact that the rule serves legitimate purposes and values within our
legal system.
First, one of the most fundamental principles of our economic system is that the
market sets the price of property. This is so even though every individual values property
differently as a function of his or her own particular preferences. Inherent in this
principle is that any property an individual owns is presumably valued by that individual
at or above its market rate. Otherwise, he or she presumably would not have purchased
the property or continue to own it. Just as an individual typically does not pay for this
surplus value, the law does not necessarily compensate that individual where that surplus
value has been lost.21
Second, economic damages, unlike noneconomic damages, are easily verifiable,
quantifiable, and measurable. Thus, when measured only in terms of economic damages,
the value of property is easily ascertainable. Employing market prices in calculating
compensation for property damage eliminates the need to engage in subjective
determinations of property value and enables the legal system to undertake commonplace
and precise determinations of value. This explains why, at least where the plaintiff has
not sustained physical injury, the cost of the property’s replacement or repair has been the
traditional standard for making a plaintiff “whole” under the law. See Valentine v Gen
21
Concomitantly, even if an individual values his or her property below the market rate,
the law does not reduce his or her tort damages by that amount.
23
American Credit, Inc, 420 Mich 256, 261; 362 NW2d 628 (1984); Bernhardt, 249 Mich
App at 279. This is so despite the fact that nearly every case involves some measure of
emotional harm-- if only from the stress of litigation-- to victimized parties.
Third, limiting damages to the economic value of the damaged or destroyed
property limits disparities in damage awards from case to case. Disparities in recovery
are inherent in legal matters in which the value of what is in dispute is neither tangible
nor objectively determined, but rather intangible and subjectively determined. Whereas
under the present rule, all plaintiffs suffering an identical harm to their properties are
compensated on a uniform basis, under the Court of Appeals’ rule, there would be as
many levels of compensation as there are plaintiffs because no two plaintiffs would likely
react to the damage or destruction of their properties in exactly the same fashion. Indeed,
both objective and subjective disparities would result. Objective disparities would arise
because, even if noneconomic harms were precisely quantifiable, identical injuries to
identical properties could lead to severe mental distress for one person, while causing
only minor annoyance for another. Subjective disparities would arise because
noneconomic harms cannot be precisely quantified, so we must normally rely on juries to
determine (1) whether noneconomic harms were caused, (2) the extent of such harms,
and (3) the monetary value of such harms. The disparity in assessing damages by
different fact-finders would presumably compound with each step in this chain of
conjecture.
Fourth, the present rule affords some reasonable level of certainty to businesses
regarding the potential scope of their liability for accidents caused to property resulting
24
from their negligent conduct. As explained earlier in this opinion, under the Court of
Appeals’ rule, those businesses that come into regular contact with real property--
contractors, repairmen, and fuel suppliers, for example-- would be exposed to the
uncertainty of not knowing whether their exposure to tort liability will be defined by a
plaintiff who has an unusual emotional attachment to the property or by a jury that has an
unusually sympathetic opinion toward those emotional attachments. Insurers would have
a similarly difficult time calculating the extent of the risks against which they are
insuring. Schwartz & Laird, Non-economic damages in pet litigation: The serious need
to preserve a rational rule, 33 Pepp L R 227, 261 (2006) (“When wild-card non-
economic damages are added to the equation, however, actuaries cannot accurately
predict the likely costs of lawsuits.”), citing Huss, Valuation in veterinary malpractice,
35 Loy U Chi L J 479, 532 (2004).
Once again, it is not our view that the common-law rule in Michigan cannot be
improved, or that it represents the best of all possible rules, only that the rule is a
reasonable one and has survived for as long as it has because there is some reasonable
basis for the rule and that no compelling reasons for replacing it have been set forth by
either the Court of Appeals or plaintiff. We therefore leave it to the Legislature, if it
chooses to do so at some future time, to more carefully balance the benefits of the current
rule with what that body might come to view as its shortcomings.22
22
Having reached this conclusion, we need not address defendant’s additional claims on
appeal.
25
IV. CONCLUSION
The issue in this case is whether noneconomic damages are recoverable for the
negligent destruction of real property. No Michigan case has ever allowed a plaintiff to
recover noneconomic damages resulting solely from the negligent destruction of
property, either real or personal. Rather, the common law of this state has long provided
that the appropriate measure of damages in cases involving the negligent destruction of
property is simply the cost of replacement or repair of the negligently destroyed property.
We continue today to adhere to this rule and decline to alter it. Accordingly, we reverse
the judgment of the Court of Appeals and remand this case to the trial court for entry of
summary disposition in defendant’s favor.
Stephen J. Markman
Robert P. Young, Jr.
Mary Beth Kelly
Brian K. Zahra
CAVANAGH, J., took no part in the decision of this case because of a familial
relationship with counsel of record.
MCCORMACK and VIVIANO, JJ., took no part in the decision of this case.
26