Chrum v. Charles Heating & Cooling, Inc

121 Mich. App. 17 (1982) 327 N.W.2d 568

CHRUM
v.
CHARLES HEATING & COOLING, INC.

Docket No. 57660.

Michigan Court of Appeals.

Decided November 2, 1982.

Kenneth R. Lampe, for plaintiffs.

Smith, Haughey, Rice & Roegge (by Lance R. Mather), for defendant.

Before: D.F. WALSH, P.J., and ALLEN and T. GILLESPIE,^[*] JJ.

T. GILLESPIE, J.

In November 1978, Mr. and Mrs. Chrum (hereinafter plaintiffs) purchased a furnace from the defendant, Charles Heating & Cooling, Inc., which the defendant agreed to, and did, install.

On April 11, 1979, the furnace caused a fire which destroyed the plaintiffs' home and its contents. There were no physical injuries. Mr. and Mrs. Chrum were insured by plaintiff State Farm Fire & Casualty Company, who paid the Chrums $43,782.49 as a result of the loss.

State Farm Fire & Casualty Company commenced an action against Charles Heating & Cooling, Inc., on October 17, 1979, seeking subrogation. On December 10, 1979, Mr. and Mrs. Chrum filed a separate action seeking additional compensation for economic loss, alleging negligence in installation. The complaint alleged that the defendant "carelessly, recklessly and negligently" installed the furnace and:

"9. That as a direct and proximate result of defendant's negligence and breach of implied warranties, plaintiffs have suffered loss of their home, household effects and personal belongings. In addition, plaintiffs have suffered emotional distress, fright, mental anguish and loss of income."

The action brought by the Chrums was consolidated with the action brought by State Farm. Defendant moved for partial summary judgment, pursuant to GCR 1963, 117.2(1), with respect to plaintiffs' emotional distress claim. The trial court denied defendant's motion, stating:

"It would be the court's opinion that it is more personal to the purchasers than it would be commercial. We're not talking about a contract to pay money. We're talking about a thing — at least in Michigan — which is essential for life — at least in the months of November through March. Without it, we could not live. It therefore becomes noncommercial, and not in any way commercial to the pecuniary interests of the purchasers.

"It is likely that if — most reasonable people, at least, would likely conclude that a furnace is a potentially dangerous item. It can blow up. It can cause fires. I'm sure there's all sorts of other things that can happen as a result of a defective furnace, which not only could cause total destruction of what could be a married couple's property, but it could be their total economic picture — their total marital estate — which, today, normally is a home and all their furniture; and it would be reasonable for this court to conclude that someone selling a furnace understands the potential and foresees the fact that if there are problems or difficulties with the furnace, they could be totally disruptive to the purchaser's life; and if someone were to lose their home, all their contents, all their personal belongings, that certainly would be likely to cause a great deal of emotional distress, and mental anguish would have to necessarily result."

The remaining claims against defendant were dismissed following a settlement, leaving only the mental distress claim. By order entered August 7, 1981, defendant's application for leave to appeal the trial court's denial of the motion for partial summary judgment was granted.

The law governing damages for mental distress in contract cases was enunciated by the Michigan Supreme Court in the case of Kewin v Massachusetts Mutual Life Ins Co, 409 Mich. 401; 295 NW2d 50 (1980), reh den 409 Mich. 1116 (1980). In that case, the Supreme Court relied upon the rule of Hadley v Baxendale, 9 Exch 341; 156 Eng Rep 145 (1854), and held that damages recoverable for breach of contract are generally limited to damages arising naturally from the breach or contemplated by the parties at the time the contract is made. Where an action is for a breach of a commercial contract, damages for mental distress are not recoverable.

The Supreme Court in Kewin recognized a general exception to the above rule, developed in Stewart v Rudner, 349 Mich. 459; 84 NW2d 816 (1957). In Stewart, plaintiff sued her doctor for breach of an agreement to deliver her child by Caesarean section, alleging that his breach resulted in the stillbirth of her child. The Court allowed damages for mental distress, holding that where the contract breached is a personal agreement involving matters of "mental concern and solicitude", damages for emotional suffering are recoverable. 349 Mich. 471. See also Avery v Arnold Home, Inc, 17 Mich. App. 240; 169 NW2d 135 (1969), allowing damages for failure of a nursing home to notify plaintiff of his mother's impending death, and Allinger v Kell, 102 Mich. App. 798; 302 NW2d 576 (1981), allowing damages for a funeral director's mutilation of the body of plaintiffs' murdered daughter. Earlier cases, both for and against granting damages for mental distress, were carefully compiled and analyzed by Judge ALLEN in this Court's opinion in Kewin v Massachusetts Mutual Life Ins Co, 79 Mich. App. 639; 263 NW2d 258 (1977), in which he invited Supreme Court discussion and harmonization of several views.

Generally, and as evidenced by the above-cited cases, damages for mental distress are allowed where the injury suffered is to the person. This Court has considered another line of cases, where damages for mental distress in breach of contract actions were sought for injuries to property. Plaintiffs in these cases have been uniformly unsuccessful. See Jankowski v Mazzotta, 7 Mich. App. 483; 152 NW2d 49 (1967), where damages for mental distress were sought for defendant's failure to conform a house to specifications; Caradonna v Thorious, 17 Mich. App. 41; 169 NW2d 179 (1969), involving damages for mental distress in a dispute over rebuilding a tornado damaged home; Scott v Hurd-Corrigan Moving & Storage Co, Inc, 103 Mich. App. 322; 302 NW2d 867 (1981), lv den 412 Mich. 881 (1981), where damages for mental distress were sought for a storage company's wrongful sale of plaintiff's household goods.

Still another line of cases denying damages for mental distress in breach of contract cases involves intangible claims such as failure to pay insurance claims and breach of employment contracts. See Van Marter v American Fidelity Fire Ins Co, 114 Mich. App. 171; 318 NW2d 679 (1982); Liddell v Detroit Automobile Inter-Ins Exchange, 102 Mich. App. 636; 302 NW2d 260 (1981), lv den 411 Mich. 1079 (1981); Jerome v Michigan Mutual Automobile Ins Co, 100 Mich. App. 685; 300 NW2d 371 (1980); Fisher v General Telephone Co of Northwest, Inc, 510 F Supp 347 (ED Mich, 1980).

These illustrative cases demonstrate that the rule of Stewart applies where deep, personal human relations are involved. Where property loss is involved, the courts have generally not allowed recovery for mental distress in breach of contract actions. One's property can be lost on a public carrier, in a fire, or as the result of a bailment and, under Kewin, damages for mental distress will not be recoverable. Other than the Stewart exception, the only grounds upon which damages for mental distress are recoverable in a breach of contract case is where plaintiff alleges tortious conduct, independent of any breach of the commercial contract.

In this case, plaintiffs seek to bring their mental distress claim for damages within the purview of the Stewart exception. However, the installation of a furnace a well as other home improvements clearly arise by commercial contract and do not involve matters of mental concern and solicitude. The injury suffered by plaintiffs was to property and not person. Neither the Stewart exception nor the general rule of Kewin authorize damages for mental distress in this case.

We must next examine whether plaintiffs' complaint sufficiently pleads an independent tort, allowing for damages for mental distress under a theory of tort rather than contract.

In Hart v Ludwig, 347 Mich. 559, 564-565; 79 NW2d 895 (1956), the Supreme Court held that the unskilled performance of a contract may give rise to an independent tort action and may be a basis for damages for mental distress.

The case of Daley v LaCroix, 384 Mich. 4; 179 NW2d 390 (1970), clarifies the law of Michigan governing damages for mental distress in tort actions, as Kewin does in contract actions. In that case, the defendant's vehicle ran off the road, shearing a utility pole which snapped a number of high voltage lines. These voltage lines, in turn, tangled with electrical lines leading to the plaintiffs' house, causing an electrical explosion in their home. Plaintiffs sued for mental distress resulting from the accident though no direct physical injury occurred to either of them, except for emotional disturbance and traumatic neurosis.

The Court in Daley overturned the rule previously recognized in Michigan which required some impact on the plaintiff before damages for mental distress could be recovered. The Court prospectively laid down the rule as follows:

"We hold that where a definite and objective physical injury is produced as a result of emotional distress proximately caused by defendant's negligent conduct, the plaintiff in a properly pleaded and proved action may recover in damages for such physical consequences to himself notwithstanding the absence of any physical impact upon plaintiff at the time of the mental shock.

"The rule we adopt today is, of course, subject to familiar limitations.

"Generally, defendant's standard of conduct is measured by reactions to be expected of normal persons. Absent specific knowledge of plaintiff's unusual sensitivity, there should be no recovery for hypersensitive mental disturbance where a normal individual would not be affected under the circumstances." 384 Mich. 1213.

The complaint in the case before us was designed to fall under the rule of Stewart, acknowledged and accepted in Kewin as an exception to the rule that damages for mental distress are not allowed in contract cases. This pleading is inadequate to support an independent claim for mental distress in tort. However, under GCR 1963, 117.3, "[e]ach party shall be given opportunity to amend his pleadings as provided by Rule 118 unless the evidence then before the court shows amendment would not be justified".

Reversed and remanded for further proceedings in light of this opinion.

NOTES

[*] Circuit judge, sitting on the Court of Appeals by assignment.