GARY PITSCH V DANIEL M BLANDFORD
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
GARY PITSCH,
UNPUBLISHED
August 10, 2004
APPROVED FOR
PUBLICATION
October 5, 2004
9:05 a.m.
Plaintiff-Appellant,
v
No. 248337
Kent Circuit Court
LC No. 01-011737-NM
DANIEL M. BLANDFORD,
Defendant-Appellee.
Official Reported Version
Before: Whitbeck, C.J., and Owens and Schuette, JJ
PER CURIAM.
In this legal malpractice action, plaintiff appeals as of right from an order granting
defendant summary disposition. We affirm.
Defendant represented plaintiff in litigation against several individuals and entities in an
attempt to recover costs paid by plaintiff to clean up environmental contamination on a property
plaintiff purchased from J & S Group, Inc. Specifically, defendant, on behalf of plaintiff, had
filed suit in 1994 in the Wexford Circuit Court alleging violations of the Michigan
Environmental Response Act (MERA) (MCL 299.601 et seq., since repealed and reenacted as
part of the Natural Resources and Environmental Protection Act, MCL 324.101 et seq.), against J
& S Group, Inc., as well as the company's two individual owners and an excavating company,
which allegedly had removed from the premises an underground storage tank that leaked a
petroleum product on the ground; fraud and misrepresentation against one of the owners and
ESE Michigan, Inc. (ESE), an environmental engineering firm that had conducted an
environmental audit on the property before plaintiff 's purchase; and negligence against ESE and
the excavating company. The trial court granted defendants' motions for summary disposition in
the underlying environmental action, dismissing all claims with the exception of a fraud claim
against one of the owners of J & S Group, Inc.; however, this Court, in Pitsch v ESE Michigan,
Inc, 233 Mich App 578, 581; 593 NW2d 565 (1999), reinstated the MERA claims against J & S
Group, Inc., and the excavating company. Plaintiff ultimately settled with the remaining
defendants.
-1-
In this case, plaintiff alleged that defendant violated the standard of care, thereby
committing legal malpractice, by failing to pursue all proper parties in the environmental action,
failing to conduct necessary discovery, and failing to submit sufficient evidence to avoid
summary disposition. Defendant moved for partial summary disposition; however, the trial
court, after determining that the parties' agreement to toll the applicable period of limitations for
an indefinite time violated public policy, granted defendant full summary disposition on the
ground that all of plaintiff 's claims were time-barred.
Plaintiff first asserts that the trial court erred in granting defendant summary disposition
pursuant to MCR 2.116(C)(10) on the ground that the tolling agreement was invalid. We
disagree. A trial court's decision on a motion for summary disposition is reviewed de novo.
Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). Summary disposition is
appropriately granted if there is no genuine issue regarding any material fact and the moving
party is entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich 109, 120; 597
NW2d 817 (1999).
This Court recently reiterated Michigan's common-law doctrine regarding the validity of
private contracts in Morris & Doherty, PC v Lockwood, 259 Mich App 38, 54-55; 672 NW2d
884 (2003), as follows:
Although, as a general rule, courts must provide competent parties the
"utmost liberty" to engage in contractual relations, Terrien v Zwitt, 467 Mich 56,
71; 648 NW2d 602 (2002), a contract is valid only if it involves "a proper subject
matter." Thomas v Leja, 187 Mich App 418, 422; 468 NW2d 58 (1991), citing
Detroit Trust Co v Struggles, 289 Mich 595; 286 NW 844 (1939). A proposed
contract is concerned with a proper subject matter only if the contract
performance requirements are not contrary to public policy. Cudnik v William
Beaumont Hosp, 207 Mich App 378, 383-384; 525 NW2d 891 (1994). Courts
must proceed with caution in determining what exactly constitutes Michigan's
"public policy," and not merely impose its [sic] belief of what public policy
should be. In other words, Michigan's "public policy" must be clearly apparent in
"our state and federal constitutions, our statutes, and the common law," Terrien,
supra at 67, as well as our "administrative rules and regulations, and public rules
of professional conduct," id. at 67 n 11. [Emphasis in original.]
A contract that violates Michigan's public policy is unenforceable. Id. at 59-60, citing Evans &
Luptak, PLC v Lizza, 251 Mich App 187, 196; 650 NW2d 364 (2002).
A statute of limitations provides a defense to a plaintiff 's claim where undue delay has
occurred between the accrual of the action and the filing of suit. Herweyer v Clark Hwy
Services, Inc, 455 Mich 14, 19; 564 NW2d 857 (1997). As noted by our Supreme Court in
Chase v Sabin, 445 Mich 190; 516 NW2d 60 (1994), the policies that prompted the adoption of
statutes of limitations include allowing "plaintiffs a reasonable opportunity to bring suit," as well
as compelling "'the exercise of a right of action within a reasonable time so that the opposing
party has a fair opportunity to defend'; 'to relieve a court system from dealing with "stale"
claims, where the facts in dispute occurred so long ago that evidence was either forgotten or
-2-
manufactured'; and to protect 'potential defendants from protracted fear of litigation.'" Id. at 199,
quoting Bigelow v Walraven, 392 Mich 566, 576; 221 NW2d 328 (1974) (emphasis added).
It is true that Michigan courts have held that parties may contractually shorten a period of
limitations as long as the shortened period is reasonable. Herweyer, supra at 20. In determining
whether the shortened period is reasonable, courts consider whether "(1) the claimant has
sufficient opportunity to investigate and file an action, (2) the time is not so short as to work a
practical abrogation of the right of action, and (3) the action is not barred before the loss or
damage can be ascertained." Id. However, the focus during these previous cases was whether
the parties shortened the period of limitations to an unreasonable length, whereas this case
concerns the lengthening of the period of limitations, which specifically affects the policy against
adjudicating "stale" claims. However, the language in Herweyer, supra, is still instructive in
determining whether the present agreement violates public policy:
The public policy considerations underlying limitation periods are not
advanced, either, by encouraging uncertain periods of limitation. We agree with
the Court of Appeals dissent that the applicable statutory limitation period is a
straightforward and objective indicator of what period is reasonable. Lothian v
Detroit, 414 Mich 160, 165; 324 NW2d 9 (1982). In the case before us,
defendant has not stated a convincing argument why we should abandon the
objective indicator and authorize nonspecific contractual periods of limitation.
[Id. at 22-23 (emphasis added).]
The Court concluded by noting that "[c]ourts should defer to the statutory period unless the
period in the parties' contract is specific and reasonable." Id. at 24.
The tolling agreement at issue in this case did not toll the applicable period of limitations
for any specific length of time, but, rather, until "twenty (20) days from receipt of any party of a
written notice of termination of this Stipulation by any other party." The agreement also had a
saving clause, which noted that it was to be governed by Michigan law and that, if "the tolling of
the statute of limitations and any and all time-related defenses provided for herein is found to be
contrary to Michigan law or otherwise unenforceable, [defendant] and [plaintiff] agree to waive
any affirmative defense based on any statute of limitations or any other defense based on the
expiration of time to raise a claim after the date of this Stipulation but only for the period this
Stipulation is in effect." (Emphasis added.) This language sets an indefinite period, both for the
tolling provision and for the saving provision. Specifically, the trial court noted that plaintiff
could have potentially waited ten years before bringing his suit. We agree and further note that
this length could be extended indefinitely depending on the whim of the parties.
In addition, while it is true that the statute of limitations defense can be waived, either by
express agreement or by failure to plead it, Lothian, supra at 167, the waiver or saving provision
in this contract is also for an indefinite period, specifically "only for the period this Stipulation
[agreement] is in effect." Therefore, the duration of the waiver relies on the same indefinite
period noted in the tolling provision itself; defendant agreed to waive his statute of limitations
defense but only for some indefinite period. With no specific duration identified, both the tolling
provision and the saving provision run contrary to the Supreme Court's decision in Herweyer,
-3-
supra. Therefore, we find that, because the tolling agreement purported to toll the period of
limitations for some nonspecific time, the agreement violated Michigan's public policy against
the adjudication of stale claims as it would potentially allow plaintiff to file suit against
defendant ten, twenty, thirty, or more years after the action accrued. Because defendant pleaded
in his affirmative defenses that some or all of plaintiff 's claims were barred by the applicable
statute of limitations, the trial court did not err in granting full summary disposition to defendant.
Plaintiff further asserts that the trial court erred in granting defendant summary
disposition on the basis of ambiguities in the contract and plaintiff 's attempt to recover damages
for unpaid environmental cleanup costs. However, we need not address these issues because the
court properly found that plaintiff 's claims were barred by the applicable statute of limitations.
Plaintiff also asserts that the trial court abused its discretion in awarding defendant
sanctions under the offer of judgment rule. We disagree. The decision to award sanctions under
the offer of judgment rule is reviewed for an abuse of discretion. JC Bldg Corp v Parkhurst
Homes, Inc, 217 Mich App 421, 426; 552 NW2d 466 (1996). An abuse of discretion is found
only in extreme cases in which the result is "so palpably and grossly violative of fact and logic"
that it demonstrates a perversity of will, a defiance of judgment, or the exercise of passion or
bias. Dep't of Transportation v Randolph, 461 Mich 757, 768; 610 NW2d 893 (2000).
Until twenty-eight days before trial, a party may serve on his opponent a written offer to
stipulate the entry of a judgment. MCR 2.405(B). If the opponent rejects the offer and the
adjusted verdict is more favorable to the offeror than the average offer, the offering party may
recover actual costs from the offeree. MCR 2.405(D). The purpose of the offer of judgment rule
is to avoid protracted litigation and encourage settlement. Weiss v Hodge (After Remand), 223
Mich App 620, 640; 567 NW2d 468 (1997), citing Gudewicz v Matt's Catering, Inc, 188 Mich
App 639, 643; 470 NW2d 654 (1991).
Under the offer of judgment rule, actual costs are "the costs and fees taxable in a civil
action" plus "a reasonable attorney fee for services necessitated by the failure to stipulate to the
entry of judgment." MCR 2.405(A)(6); Luidens v 63rd Dist Court, 219 Mich App 24, 30; 555
NW2d 709 (1996). The court must determine the actual costs incurred. MCR 2.405(D)(3);
Luidens, supra at 30-31. In the interest of justice, the court may refuse to award attorney fees
under the offer of judgment rule. MCR 2.405(D)(3); Wilkens v Gagliardi, 219 Mich App 260,
274; 556 NW2d 171 (1996). However, the sanction should be routinely enforced and attorney
fees granted absent unusual circumstances. Stitt v Holland Abundant Life Fellowship (On
Remand), 243 Mich App 461, 472; 624 NW2d 427 (2000). The trial court may justify the denial
of an award of attorney fees when the party made an insincere offer. Luidens, supra at 35.
In this case, defendant made an early offer of judgment for $100 to plaintiff, which
plaintiff did not accept. Because plaintiff 's claims were dismissed, defendant fared better than
he would have had plaintiff accepted the offer; therefore, the trial court may award offer of
judgment sanctions to defendant. MCR 2.405(D). Plaintiff argues that sanctions were
inappropriate in this case because the dismissal was based on unsettled law. However, the trial
court based its decision to grant summary disposition to defendant on the conflict between the
parties' tolling agreement and Michigan public policies behind statutes of limitations. As noted
-4-
previously, Michigan's public policies behind statutes of limitations are clear, and the invalidity
of agreements that conflict with public policy is well established in case law. Chase, supra at
199; Morris, supra at 54-55, 59-60. Plaintiff also argues that this small offer is an example of
gamesmanship where a party offers an insincere and small amount for judgment in the hopes of
tacking on attorney fees later. However, plaintiff has failed to show that defendant's offer, while
small, was insincere considering the strength of defendant's case; therefore, we find that the trial
court's decision to grant offer of judgment sanctions was not violative of fact and logic and was
not an abuse of discretion.
We further disagree with plaintiff 's assertion that the amount of attorney fees awarded
was unreasonable. The trial court considered the factors adopted in Wood v Detroit Automobile
Inter-Ins Exch, 413 Mich 573, 588; 321 NW2d 653 (1982), when determining the reasonableness
of the fees awarded. In the face of the trial court's analysis, plaintiff has failed to show that the
amount awarded was unreasonable; therefore, we find that the trial court's decision regarding the
amount of offer of judgment sanctions was not an abuse of discretion.
Affirmed.
/s/ William C. Whitbeck
/s/ Donald S. Owens
/s/ Bill Schuette
-5-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.