STUDIO B ARCHITECTS INC V PARADIS ASSOC INC
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STATE OF MICHIGAN
COURT OF APPEALS
STUDIO B ARCHITECTS, INC., and XL
DESIGN PROFESSIONALS, INC.,
UNPUBLISHED
November 29, 2005
Plaintiffs-Appellants,
v
PARADIS ASSOCIATES, INC., and GARY O.
PARADIS,
No. 261385
Oakland Circuit Court
LC No. 2004-058947-CK
Defendants-Appellees.
Before: Fort Hood, P.J., and White and O’Connell, JJ.
PER CURIAM.
Plaintiff1 appeals as of right from the trial court’s order granting defendants’ motion for
summary disposition. We affirm.
This litigation arises out of the construction of the headquarters and research facility of
Simpson Industries2 (hereinafter “Simpson”) in Plymouth, Michigan. Plaintiff was hired by
Simpson to perform architectural services for the construction project. Plaintiff, in turn, hired
defendant company to provide structural engineering services, and the individual defendant, a
professional engineer, was in charge of the project. The contract between plaintiff and
defendants was not reduced to writing. After the certificate of occupancy was issued on May 3,
1995, Simpson expressed concerns regarding the structural soundness of the building. In August
1996, Simpson reportedly forwarded to plaintiff a report prepared by Ehlert/Bryan, Inc.,
addressing an on site review of the premises. Plaintiff relayed the concerns to defendants who
repeatedly assured plaintiff that the structural design was correct, sound, and met applicable
codes. Specifically, by letter dated August 23, 1996, defendants opined that any cracks were
caused by shrinkage of the concrete and were not structural in nature. However, despite the
1
Although XL Design Professionals, Inc., is also named as a plaintiff, it was added as a plaintiff
because of its status as subrogee of plaintiff Studio B Architects, Inc. Any actions involved in
the litigation involved the latter plaintiff. Accordingly, the singular “plaintiff” refers to Studio B
Architects, Inc. only.
2
Simpson Industries is now known as Metaldyne.
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explanations and representations regarding the soundness of the structure, Ehlert/Bryan
recommended that continued monitoring of the building occur. Indeed, between 1996 and 2001,
Simpson and plaintiff corresponded regarding the building structure. In turn, plaintiff alleged
that it continued to apprise defendants of the status of the concerns and even advised defendants
to contact their insurance carrier.
In 2001, Simpson compelled plaintiff into arbitration. Despite the arbitration, plaintiff
alleged that it stood by defendants’ work based on the defense representations. Plaintiff alleged
that during the course of the deposition for the arbitration proceeding, individual defendant
denied any knowledge of the course of the concerns regarding the status of the building.
Consequently, plaintiff alleged that it retained an independent expert who concluded that,
contrary to the representations by defendants, errors had been committed with regard to the
structural engineering. Plaintiff alleged that it attempted to involve defendants in a negotiation
with Simpson to resolve the outstanding issues. When defendants allegedly refused to
participate, plaintiff filed a multi-count complaint alleging breach of contract, professional
negligence, indemnification, and fraud. Plaintiff later filed a second amended complaint that
raised claims of gross negligence.
Plaintiff moved for summary disposition of the indemnification claim. In response,
defendants filed their own dispositive motion alleging that the claims were barred by the statute
of limitations or statute of repose. The trial court granted the defense motion for summary
disposition, and plaintiff appeals as of right.
Summary disposition decisions and issues of statutory construction are reviewed de novo
on appeal. In re Capuzzi Estate, 470 Mich 399, 402; 684 NW2d 677 (2004); Cruz v State Farm
Mut Auto Ins Co, 466 Mich 588, 594; 648 NW2d 591 (2002). A statute of limitation is a
procedural device designed to promote judicial economy by protecting the rights of defendants to
be free from a plaintiff who delays in bringing an action to acquire an advantage over an
unsuspecting defendant. Stephens v Dixon, 449 Mich 531, 534; 536 NW2d 755 (1995). On the
contrary, a statute of repose acts to prevent a cause of action from ever accruing when the injury
is sustained after the designated statutory period has elapsed. Sills v Oakland General Hosp, 220
Mich App 303, 308; 559 NW2d 348 (1996). Unlike a statute of limitation, the statute of repose
“may bar a claim before an injury or damage occurs.” Frankenmuth Mut Ins Co v Marlette
Homes, Inc, 456 Mich 511, 513 n 3; 573 NW2d 611 (1998). Both the statute of limitations and
the statute of repose prevent stale claims and provide relief to defendants from the protracted fear
of litigation. Id. at 515. The Legislature has the power to determine that a cause of action cannot
arise unless it accrues within a specific period of time. Sills, supra at 312.
MCL 600.5839 governs the period of limitations applied to professional engineers and
provides:
No person may maintain any action to recover damages for any injury to
property, real or personal, or for bodily injury or wrongful death, arising out of
the defective and unsafe condition of an improvement to real property, nor any
action for contribution or indemnity for damages sustained as a result of such
injury, against any licensed architect or professional engineer performing or
furnishing the design or supervision of construction of the improvement, or
against any contractor making the improvement, more than 6 years after the time
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of occupancy of the completed improvement, use, or acceptance of the
improvement, or 1 year after the defect is discovered or should have been
discovered, provided that the defect constitutes the proximate cause of the injury
or damage for which the action is brought and is the result of gross negligence on
the part of the contractor or licensed architect or professional engineer. However,
no such action shall be maintained more than 10 years after the time of occupancy
of the completed improvement, use, or acceptance of the improvement.
The goal of statutory construction is to discern and give effect to the intent of the Legislature by
examining the most reliable evidence of its intent – the words of the statute. Neal v Wilkes, 470
Mich 661, 665; 685 NW2d 648 (2004). The plain language of MCL 600.5839 provides that any
action for damage to property or for indemnification against a professional engineer may not be
maintained “more than 6 years after the time of occupancy of the completed improvement, use,
or acceptance of the improvement,[3] or 1 year after the defect is discovered or should have been
discovered, provided that the defect constitutes the proximate cause of the injury or damage for
which the action is brought and is the result of gross negligence on the part of the contractor or
licensed architect or professional engineer.” In the present case, the certificate of occupancy was
issued on May 3, 1995. MCL 600.5839. This litigation was filed on June 10, 2004. Therefore,
plaintiff’s claim is barred by the six-year statute of limitations.
Alternatively, plaintiff alleges that the claim was brought within one year of the
discovery of the defect. Plaintiff alleges that it could not have discovered the defect until 2003
because defendants continued to assert that there was no error in the performance of its services.
However, the plain language of the statute does not provide for actual discovery of the injury or
actual confirmation by the wrongdoer of an injury. Rather, the statute provides for litigation for
“1 year after the defect is discovered or should have been discovered …” MCL 600.5839.
When evaluating the discovery rule, a claim does not accrue for the purpose of triggering the
limitation period until a plaintiff discovers, or through the exercise of reasonable diligence,
should have discovered an injury and the causal connection to the defendant’s breach of duty.
Jackson Co Hog Producers v Consumers Power Co, 234 Mich App 72, 78; 592 NW2d 112
(1999). The test to determine when a cause of action has accrued is based on objective facts and
not on the subjective beliefs of a particular plaintiff. Id. “Application of the test is a matter of
law for the court in the absence of any issue of material fact.” Id.
In the present case, plaintiff’s allegation, that the claim could not be discovered until
2003 based on the representations by defendants, is without merit. In 1996, plaintiff was alerted
to the cracking of the walls of the Simpson building. Plaintiff was presented with a report by
Ehlert/Bryan that raised concerns about the construction. Plaintiff consulted with defendants and
submitted a response to Simpson. Plaintiff contends that the discovery period could not arise in
1996, because Ehlert/Bryan accepted the explanation offered for the cracking. On the contrary,
3
The parties do not dispute that the construction at issue constitutes an improvement.
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review of the correspondence in 1996 and 1997 reveals that Ehlert/Bryan did not outright accept
the explanation for the cracking. Instead, it was recommended that continued monitoring of the
premises continue. Moreover, although plaintiff does not provide specific dates, it was presented
with independent reports from the general contractor on the project and continued reports from
Simpson between 1996 and 2001. Plaintiff cannot ignore the information presented by other
sources and rely on an alleged concession of error from defendants in 2003. Therefore, this issue
is without merit.
MCL 600.5855 governs fraudulent concealment of claim or identity of person liable and
provides:
If a person who is or may be liable for any claim fraudulently conceals the
existence of the claim or the identity of any person who is liable for the claim
from the knowledge of the person entitled to sue on the claim, the action may be
commenced at any time within 2 years after the person who is entitled to bring the
action discovers, or should have discovered, the existence of the claim or the
identity of the person who is liable for the claim, although the action would
otherwise be barred by the period of limitations.
The plain language of the statute, Neal, supra, provides that where there is fraudulent
concealment, an action may be brought within two years after the person discovers or should
have discovered the existence of the claim. “The statute was not designed to help those who
negligently refrain from prosecuting inquiries plainly suggested by facts known, and the plaintiff
must be held chargeable with knowledge of the facts, which it ought, in the exercise of
reasonable diligence, to have discovered.” Barry v Detroit Terminal Railroad Co, 307 Mich
226, 232; 11 NW2d 867 (1943). “Fraudulent concealment means employment of artifice,
planned to prevent inquiry or escape investigation and mislead or hinder acquirement of
information disclosing a right of action.” Id. at 233, quoting DeHaan v Winter, 258 Mich 293,
296; 241 NW 923 (1932). The plaintiff has the burden of establishing that the defendant
engaged in an arrangement or contrivance of an affirmative character designed to prevent
subsequent discovery. Prentis Family Foundation, Inc v Barbara Ann Karmanos Cancer
Institute, 266 Mich App 39, 48; 698 NW2d 900 (2005).
Once again, plaintiff alleges that it did not discover nor could have discovered the
existence of the claim in light of defendants’ continued representations that they had not
committed any error. However, in 1996, plaintiff was presented with evidence that cracks were
occurring in the building for which defendant provided engineering services. Although
defendant offered an explanation, the explanation certainly did not pacify plaintiff’s client or
their independently retained consultants. Simpson continued to monitor and research the cracks
and continued to apprise plaintiff of information. Indeed, Ehlert/Bryan continued to recommend
monitoring of the building despite defendants’ explanation for the cracking. Under the
circumstances, plaintiff cannot allege that it did not know or should not have known that any
representations by defendants could be fraudulent when it was repeatedly provided information
from other sources between 1996 and 2001 regarding the cracking and its continuation.
Lastly, whether phrased in terms of a breach of fiduciary duty or gross negligence,
plaintiff’s focus on defendants’ misrepresentations is misplaced. Plaintiff seeks indemnification
for damages sustained as a result of defects in an improvement to real property. Regardless of
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the theory of recovery, plaintiff’s claims are subject to the statute, and the above analysis is
controlling.
Affirmed.
/s/ Karen M. Fort Hood
/s/ Helene N. White
/s/ Peter D. O’Connell
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