TAYLOR LAND GROUP LLC V BP PRODUCTS NORTH AMERICA INC
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STATE OF MICHIGAN
COURT OF APPEALS
TAYLOR LAND GROUP, L.L.C.,
UNPUBLISHED
May 26, 2011
Plaintiff-Appellant,
v
BP PRODUCTS NORTH AMERICA, INC., BP
AMERICA, INC., and CDC PROPERTIES, INC.,
No. 294764
Wayne Circuit Court
LC No. 08-017824-CH
Defendants-Appellees,
and
EPIC AVIATION, L.L.C. d/b/a BP AVIATION
SERVICES, F X COUGHLIN COMPANY, INC.,
DHL SPECIALIZED SERVICES USA, INC., and
WOLVERINE PIPE LINE COMPANY,
Defendants.
Before: CAVANAGH, P.J., and TALBOT and STEPHENS, JJ.
PER CURIAM.
Plaintiff appeals as of right from the trial court’s order dismissing all of its claims against
defendants BP Products North America, Inc., BP America, Inc.,1 and CDC Properties, Inc.
(“CDC”), pursuant to MCR 2.116(C)(8). We affirm the dismissal of all claims against defendant
CDC, and affirm the dismissal of plaintiff’s statutory and negligence claims against the BP
defendants, but reverse the dismissal of plaintiff’s trespass claim against BP and remand for
further proceedings on that claim.
I. FACTS AND PROCEEDINGS
This action arises from plaintiff’s purchase of industrial property in Taylor, Michigan
from defendant CDC in 2007. The property was formerly owned by BP, which sold it to CDC in
1
This opinion collectively refers to the BP defendants as “BP.”
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1988, but continued to lease it from CDC. Before purchasing the property, plaintiff conducted
phase I and phase II environmental assessments of the property. During the week of September
13-21, 2007, plaintiff submitted a Baseline Environmental Assessment (“BEA”) to the Michigan
Department of Environmental Quality (“DEQ”) in accordance with the Natural Resources and
Environmental Protection Act (“NREPA”), MCL 324.101 et seq. Under MCL 324.20126(1)(c),
submission of the BEA allowed plaintiff to avoid liability for the cost of remediation of preexisting conditions declared on the BEA. Plaintiff also requested that BP mark the location of
any underground pipeline systems on the property. On September 20, 2007, the same day that
plaintiff and CDC closed the sale for the property, BP marked the locations of two underground
pipeline systems with flags and paint.
Plaintiff alleges that after it purchased the property, it discovered previously undisclosed
underground storage tanks (USTs) and a pipeline system that BP used to transport petroleum to
Detroit Metropolitan Airport. Plaintiff alleges that it incurred costs to remove the USTs, and that
it ultimately determined that the property was not suitable for its intended purpose as a recycling
facility. Plaintiff brought this action against CDC, as the seller of the property, and against BP,
as a prior owner and possessor of the property, asserting that both defendants were liable under
the NREPA for the cost of removing the USTs, asserting a breach of contract claim against CDC
for breach of the purchase agreement, and asserting additional common-law claims for
negligence against both defendants, as well as trespass against BP based on the continued
presence of BP’s allegedly undisclosed pipeline.
Defendants filed separate motions for summary disposition under MCR 2.116(C)(8) and
(C)(10). The trial court dismissed all claims pursuant to MCR 2.116(C)(8). The court dismissed
plaintiff’s NREPA claim because plaintiff failed to allege that it incurred “necessary” response
costs under the NREPA. The court dismissed the breach of contract claim against CDC on the
basis of an “as is” clause in the purchase agreement. The court agreed that plaintiff failed to
state a claim for trespass against BP because the pipeline was installed before plaintiff became
the owner of the property. The court also dismissed plaintiff’s negligence claims, agreeing that
plaintiff failed to allege facts establishing a legal duty with respect to both defendants.
II. STANDARD OF REVIEW
This Court reviews a trial court’s summary disposition decision de novo. JohnsonMcIntosh v Detroit, 266 Mich App 318, 322; 701 NW2d 179 (2005). The trial court stated that it
was dismissing all claims pursuant to MCR 2.116(C)(8). A motion under MCR 2.116(C)(8) tests
the legal sufficiency of a claim by the pleadings alone. MCR 2.116(G)(5); Johnson-McIntosh,
266 Mich App at 322. Copies of written instruments that are submitted with a complaint are
considered part of the pleadings for purposes of reviewing a motion under MCR 2.116(C)(8).
Laurel Woods Apartments v Roumayah, 274 Mich App 631, 635; 734 NW2d 217 (2007). Thus,
plaintiff’s purchase agreement with CDC and the BEA report, which were attached to plaintiff’s
complaint, properly may be considered in determining whether summary disposition was
warranted under MCR 2.116(C)(8). Summary disposition is appropriate under MCR 2.116(C)(8)
if no factual development could justify the plaintiff’s claim for relief. Johnson-McIntosh, 266
Mich App at 322.
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Although the trial court stated that it was relying only on MCR 2.116(C)(8) to grant
summary disposition, defendants also moved for summary disposition under MCR 2.116(C)(10),
and the parties submitted documentary evidence in support of, and in opposition to, defendants’
motions. To the extent that summary disposition may have been appropriate under MCR
2.116(C)(10) instead of (C)(8), this Court may affirm an order granting summary disposition if
summary disposition would have been correctly granted under a different subrule. Spiek v Dep’t
of Transportation, 456 Mich 331, 338 n 9; 572 NW2d 201 (1998). A motion under MCR
2.116(C)(10) tests the factual support for a claim. A court must consider the documentary
evidence submitted by the parties in a light most favorable to the nonmoving party to determine
whether there is a genuine issue of material fact and whether the moving party is entitled to
judgment as a matter of law. The Healing Place at North Oakland Med Ctr v Allstate Ins Co,
277 Mich App 51, 56; 744 NW2d 174 (2007).
III. THE NREPA
The NREPA is a recodification of the former Michigan Environmental Response Act
(MERA), MCL 299.601 et seq. See Cairns v City of East Lansing, 275 Mich App 102, 108; 738
NW2d 246 (2007). Part 201 of the NREPA encourages the prompt cleanup of hazardous
substances by authorizing administrative and private actions, and assigning financial liability for
the cleanup. Id. MCL 324.20126 provides, in pertinent part:
(1) Notwithstanding any other provision or rule of law and except as
provided in subsections (2), (3), (4), and (5) and section 20128, the following
persons are liable under this part:
(a) The owner or operator of a facility if the owner or operator is
responsible for an activity causing a release or threat of release.
(b) The owner or operator of a facility at the time of disposal of a
hazardous substance if the owner or operator is responsible for an activity causing
a release or threat of release.
(c) An owner or operator of a facility who becomes an owner or operator
on or after June 5, 1995, unless the owner or operator complies with both of the
following:
(i) A baseline environment assessment is conducted prior to or within 45
days after the earlier of the date of purchase, occupancy, or foreclosure. For
purposes of this section, assessing property to conduct a baseline environmental
assessment does not constitute occupancy.
(ii)
The owner or operator discloses the results of a baseline
environmental assessment to the department and subsequent purchaser or
transferee if the baseline environmental assessment confirms that the property is a
facility.
***
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(2) Subject to section 20107a, an owner or operator who complies with
subsection (1)(c) is not liable for contamination existing at the facility at the
earlier of the date of purchase, occupancy, or foreclosure, unless the person is
responsible for an activity causing the contamination existing at the facility.
Subsection (1)(c) does not alter a person’s liability with regard to a subsequent
release or threat of release at a facility if the person is responsible for an activity
causing the subsequent release or threat of release.
Before December 14, 2010, MCL 324.20126a provided, in pertinent part:
(1) Except as provided in section 20126(2), a person who is liable under
section 20126 is jointly and severally liable for all of the following:
(a) All costs of response activity lawfully incurred by the state relating to
the selection and implementation of response activity under this part.
(b) Any other necessary costs of response activity incurred by any other
person consistent with rules relating to the selection and implementation of
response activity promulgated under this part.
***
(2) The costs of response activity recoverable under subsection (1) shall
also include all of the following:
(a) All costs of response activity reasonably incurred by the state prior to
the promulgation of rules relating to the selection and implementation of response
activity under this part, excepting those cases where cost recovery actions have
been filed before July 12, 1990. A person challenging the recovery of costs under
this subdivision has the burden of establishing that the costs were not reasonably
incurred under the circumstances that existed at the time the costs were incurred.
Recoverable costs include costs incurred reasonably consistent with the rules
relating to the selection and implementation of response activity in effect on July
12, 1990.
(b) Any other necessary costs of response activity reasonably incurred by
any other person prior to the promulgation of rules relating to the selection and
implementation of response activity under this part. A person seeking recovery of
these costs has the burden of establishing that the costs were reasonably incurred
under the circumstances that existed at the time the costs were incurred.
[Emphasis added.]
BP and CDC contend that plaintiff’s failure to allege the expenditure of necessary costs
under §§ 20126 and 20126a, or that the DEQ required plaintiff to remove the USTs, is fatal to
plaintiff’s claim for reimbursement under the NREPA.
The interpretation and application of a statute is a question of law that this Court reviews
de novo. Adair v State, 486 Mich 468, 477; 785 NW2d 119 (2010). In interpreting statutory
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language, this Court’s primary goal is to give effect to the Legislature’s intent. Dep’t of
Agriculture v Appletree Mktg, LLC, 485 Mich 1, 8; 779 NW2d 237 (2010). If statutory language
is clear and unambiguous, it must be enforced as written. Id.; Mich Deferred Presentment Servs
Ass’n v Comm’r of the Office of Fin & Ins Regulation, 287 Mich App 326, 333; 788 NW2d 842
(2010). This Court will not interpret a statute in a way that renders any statutory language
surplusage or nugatory. Id.
In City of Port Huron v Amoco Oil Co, Inc, 229 Mich App 616; 583 NW2d 215 (1998),
this Court addressed a similar issue under the predecessor statute, MERA. In that case, the
plaintiff municipality (treated as a private party for purposes of a cost-recovery action), sought
compensation from the defendant for voluntary cleanup activities. Id. at 620. The pertinent
provision in the MERA stated:
(2) A person described in subsection (1) [defining potentially responsible
persons, or “PRPs”] shall be liable for:
(a) All costs of response activity lawfully incurred by the state relating to
the selection and implementation of response activity under this act.
(b) Any other necessary costs of response activity incurred by any other
person consistent with rules relating to the selection and implementation of
response activity promulgated under this act.
(c) Damages for the full value of injury to, destruction of, or loss of
natural resources, including the reasonable costs of assessing the injury,
destruction, or loss resulting from the release. [Former MCL 299.612(2)
(emphasis added).]
The defendant argued that the plain language of this statute required that a private party seeking
recovery of cleanup costs “establish that the private party incurred the costs of remediation
consistent with the rules promulgated under the MERA, 1990 AACS, R 299.5101 et seq.,
effective July 12, 1990.” City of Port Huron, 229 Mich App at 621. This Court observed:
As defendants point out, the MERA is similar in intent to, and patterned
after, the CERCLA, and both acts provide for the identification of environmental
contamination and for response activity to remediate it. Further, both acts impose
strict liability for cleanup costs on persons who fall within one of the enumerated
categories of potentially responsible persons. MCL 299.612; 42 USC § 9607(a).
[Id. at 621-623 (citations omitted).]
This Court compared former § 12(3)(b), which permitted a right of recovery for private parties
who undertook response activities before the implementation of administrative rules under the
statute, to former § 12(2)(b). The Court made the same comparison between the provisions of
the statute governing the state’s right to compensation from a PRP for remediation actions
undertaken before and after the implementation of administrative rules. City of Port Huron, 229
Mich App at 627-629. The Court explained the difference as follows:
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As for cost recovery actions brought by private parties, § 12(3)(b) applies
to response activity undertaken before the promulgation of the rules on July 12,
1990. Under § 12(3)(b), a PRP shall be liable for “[a]ny other necessary costs of
response activity reasonably incurred” (emphasis provided) by a private party
before the promulgation of the rules. In contrast to cost recovery actions brought
by the state before the promulgation of the rules, a private party has the burden of
proving that its “necessary costs of response activity” were reasonably incurred
before the promulgation of the rules. However, after the administrative rules
became effective on July 12, 1990, recovery of cleanup costs incurred by a private
party is governed by the standard set forth in § 12(2)(b), which subjects a PRP to
liability for “[a]ny other necessary costs of response activity incurred” by a
private party that is “consistent with the rules relating to the selection and
implementation of response activity promulgated under this act.” [Id. at 628.]
This Court then concluded:
[I]t is clear that the Legislature sought to distinguish the “necessary” from
“reasonable” and its cognates, as they are used in subsections 2 and 3. By
allowing a private party, under § 12(3)(b), to recover its “necessary costs of
response activity reasonably incurred” before the promulgation of the rules, which
permitting a private party, under § 12(3)(a) to recover its “necessary costs of
response activity incurred” that are consistent with the rules after their
promulgation, it is evident that the Legislature intended “necessary” to have a
different meaning than “reasonable.” . . . Thus, we construe the phrase
“necessary costs of response activity” to mean those response activity costs that
are “required” in remediating a contaminated site to protect the public health,
safety, or welfare, or the environment, or the natural resources. As defined by
the MERA, then, the kinds or types of response activity costs that are necessary in
remediating a contaminated site cover a wide range of activities, including
“evaluation, interim response activity, remedial action, or the taking of other
actions necessary to protect the public health, safety, or welfare, or the
environment, or the natural resources.” MCL 299.603(aa). [Id. at 629-630
(emphasis added).]
Applying the foregoing rationale to this case, we agree with the trial court that any
liability by defendants under the NREPA for plaintiff’s cleanup costs extends only to
remediation activities that were “necessary costs of response activity” under § 20126(2). With
respect to this issue, the NREPA and MERA contain identical language. Both statutes impose on
a PRP liability for “[a]ny other necessary costs of response activity incurred by any other person
consistent with rules relating to the selection and implementation of response activity
promulgated under this part.” In City of Port Huron, 229 Mich App at 629, this Court held that
“necessary costs of response activity” means “those response activity costs that are ‘required’ in
remediating a contaminated site to protect the public health, safety, or welfare, or the
environment, or the natural resources.” The costs must be “consistent with the rules relating to
the selection and implementation of response activity promulgated under this act.” Id. at 628.
Accordingly, defendants correctly argue that plaintiff is not entitled to reimbursement for the
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cost of any remediation of environmental hazards, but rather only for remediation that is
consistent with the regulations promulgated under the NREPA.
This conclusion is supported by City of Detroit v Simon, 247 F3d 619 (CA 6, 2001), in
which the Sixth Circuit Court of Appeals held that the municipal plaintiff was not entitled under
the NREPA to recover response costs incurred to improve the property’s environmental
condition beyond that necessary to make the property suitable for its intended use. The Court
explained:
With a few exceptions not relevant here, the types of response costs
recoverable under CERCLA are limited to those that are “necessary” in light of
the nature and type of property to be cleaned up. See 42 USC § 9607(a)(4)(B).
Several federal courts have recognized that recovery of environmental cleanup
costs incurred to achieve a higher level than the use of the property necessitates
would violate CERCLA’s requirement that recoverable response costs be
“necessary.”
Similarly, NREPA provides that the cleanup proposed should be
“appropriate” in light of the facility’s categorical criteria, see MCL
324.20120a(1), and it also provides that recoverable costs must be “necessary.”
See MCL § 324.20126a(1)(b). As NREPA (formerly MERA) was patterned after
CERCLA, it should be construed in accordance with the federal statute.
The property at issue in this case has a long history of industrial use. To
require former occupants to assume liability for cleanup costs going beyond the
level necessary to make the property safe for industrial use would be to provide an
unwarranted windfall to the beneficiary of the cleanup. [Id. at 630 (citations
omitted).]
In this case, plaintiff alleged that it incurred costs and expenses to remove the USTs and
other equipment from the property, but did not allege that its response activities were consistent
with the DEQ’s rules or necessary to protect human health and the environment. Although
plaintiff’s complaint also contains the conclusory allegation that it “has incurred and will
continue into the future to incur necessary ‘response costs’ as that term is defined by NREPA,”
plaintiff did not allege any facts in support of that conclusion. “A mere statement of a pleader’s
conclusions, unsupported by allegations of fact, will not suffice to state a cause of action.”
Kloian v Schwartz, 272 Mich App 232, 241; 725 NW2d 671 (2006), quoting Lawsuit Fin, LLC v
Curry, 261 Mich App 579, 592; 683 NW2d 233 (2004). Plaintiff did not allege that removal of
any of the USTs was a remedial measure that was necessary under the NREPA.
On appeal, plaintiff argues that 1999 AC, R 299.5526, authorizes certain “interim
responses” before obtaining approval from the DEQ. However, this rule does not provide for
compensation of response costs that are not necessary under the NREPA or its regulatory rules.
Accordingly, the trial court did not err in dismissing plaintiff’s NREPA claims pursuant
to MCR 2.116(C)(8).
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IV. BREACH OF CONTRACT
Plaintiff argues that the trial court erred in dismissing its breach of contract claim against
CDC because the court erroneously gave the “as is” clause in the purchase agreement precedence
over an indemnification clause. This issue raises a question of contract interpretation, which is
reviewed de novo by this Court. Reicher v SET Enterprises, Inc, 283 Mich App 657, 664; 770
NW2d 902 (2009).
The purchase agreement between plaintiff and CDC contains an indemnity clause that
provides:
15.2 From and after the Closing Date, Seller hereby agrees to indemnify
and hold Purchaser . . . harmless from and against any and all claims, penalties,
damages, liabilities, actions, causes of action, costs and expenses (including
attorneys’ fees) arising out of as a result of or consequences of: . . . (iii) clean-up
costs and future response costs incurred by Purchaser under the Environmental
Laws and relating to the Project, and relating to any violation of the
Environmental Laws prior to the Closing Date.
Paragraph 9 of the purchase agreement, labeled Seller’s Warranties, sets forth warranties (a)
through (g), concerning matters such as pending legal proceedings involving the property. In
¶ 9.1(f), the seller warrants that it had not received notice of any environmental violation on the
property. Paragraph 9.3 states, “Except as otherwise provided herein, the Project is being
acquired ‘as-is,’ ‘where-is.’”
Although plaintiff now argues that the trial court erred in giving the “as-is” clause
precedence over the indemnity clause, plaintiff did not seek indemnity as a remedy in its
complaint. Instead, plaintiff sought the remedy of rescission. Plaintiff alleged that CDC failed
to disclose conditions that would interfere with plaintiff’s intended plans to construct a recycling
facility. Plaintiff does not address the remedy of rescission on appeal. Contrary to what plaintiff
now argues, the trial court did not apply the “as is” clause in a manner that conflicted with the
indemnification provision, but rather determined that the indemnification provision was not
applicable in the first instance.
A written contract must be interpreted according to its plain and ordinary meaning.
Woodington v Shokoohi, 288 Mich App 352, 373-374; 792 NW2d 63 (2010). A contract is
ambiguous if it allows two or more reasonable interpretations, or if the provisions cannot be
reconciled with each other. Id. at 374. If contractual language is clear, its interpretation is a
question of law for the court. Id. Courts must give “effect to every word, phrase, and clause in a
contract and avoid an interpretation that would render any part of the contract surplusage or
nugatory.” Id.
In this case, the indemnification provision limited CDC’s obligation to indemnify
plaintiff to losses arising from specific circumstances, including “clean-up costs and future
response costs incurred by Purchaser under the Environmental Laws and relating to the Project,
and relating to any violation of the Environmental Laws prior to the Closing Date.” As
discussed previously, plaintiff failed to plead that it incurred any response costs under the
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environmental laws. Accordingly, plaintiff failed to plead a breach of the indemnification
provision.
For these reasons, the trial court did not err in dismissing plaintiff’s breach of contract
claim against CDC.
V. NEGLIGENCE
Plaintiff next argues that the trial court erred in dismissing its negligence claim against
both defendants. We disagree.
To establish a prima facie case of negligence, a plaintiff must prove four elements: (1) a
duty owed by the defendant to the plaintiff, (2) a breach of that duty, (3) causation, and (4)
damages. Henry v Dow Chem Co, 473 Mich 63, 71-72; 701 NW2d 684 (2005). Violation of a
penal statute or a safety statute creates a rebuttable presumption of negligence, but only if the
statute is intended to protect against the result of the violation. Green v Wilson, 455 Mich 342,
376 n 16; 565 NW2d 813 (1997); Klanseck v Anderson Sales & Serv, Inc, 426 Mich 78, 87; 393
NW2d 356 (1986). Plaintiff contends that BP breached a statutory duty to register the location
and contents of all USTs on the property. Plaintiff relies on MCL 324.21102, which is part of
the NREPA and provides, in pertinent part:
(1) A person who is the owner of an underground storage tank system
shall register and annually renew the registration on the underground storage tank
system with the department. However, the owner or operator of an underground
storage tank closed prior to January 1, 1974 in compliance with the fire
prevention code, Act No. 207 of the Public Acts of 1941, being sections 29.1 to
29.33 of the Michigan Compiled Laws, and the rules promulgated under that act,
is exempt from the registration requirements of this section.
(2) A person who is the owner of an underground storage tank system
shall register the underground storage tank system with the department prior to
bringing the underground storage tank system into use. Additionally, an
installation registration form containing the information required by the
department shall be submitted to the department at least 45 days prior to the
installation of the underground storage tank system.
(3) The department shall accept the registration or renewal of registration
of an underground storage tank system under this section only if the owner of the
underground storage tank system pays the registration fee specified in subsection
(8).
(4) Except as otherwise provided in subsections (5) and (6), a person who
is the owner of an underground storage tank system registered under subsection
(1) or (2) shall notify the department of any change in the information required
under section 3 or of the removal of an underground storage tank system from
service.
Plaintiff also cites MCL 324.21102, which sets forth the procedure for registering USTs.
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Plaintiff relies on Cipri v Bellingham Frozen Foods, Inc, 235 Mich App 1; 596 NW2d
620 (1999), as authority for its argument that the NREPA is a statute intended to protect future
property owners from the risk of purchasing property containing undisclosed USTs. In Cipri, the
defendant Bellingham Frozen Foods contracted with the defendant Sherburn “to remove some
sweet corn husks to be used as silage for cattle feed.” Sherburn’s feed bunker was not large
enough to fit the entire quantity of corn husks, and the fermenting husks produced leachate that
flowed into streams, which in turn flowed into a privately owned lake on the plaintiff’s property.
The contamination from the leachate killed the lake’s aquatic life. Id. at 3. In Cipri, 235 Mich
App at 14, this Court considered the defendant Bellingham’s argument on cross appeal that the
trial court should have directed a verdict and granted judgment notwithstanding the verdict with
regard to the plaintiff’s negligence claim. This Court held:
[T]he fact that defendant’s conduct may have been in violation of a statute
does not in and of itself shed light on whether defendant owed plaintiff a duty of
care; however, once a duty is found, the violation of a statute can be prima facie
evidence of negligence. See, e.g., Beals v Walker, 416 Mich 469, 481-482; 331
NW2d 700 (1982) (workplace safety regulations); Ward v Frank’s Nursery &
Crafts, Inc, 186 Mich App 120, 135; 463 NW2d 442 (1990) (city ordinance);
Carney v Dep’t of Transportation, 145 Mich App 690, 699-700; 378 NW2d 574
(1985) (standards for highway design). Rather, whether a plaintiff can use a
statute to impose a duty of care on a defendant depends on (1) whether “the
purpose of the [statute] was to prevent the type of injury and harm actually
suffered” and (2) whether the plaintiff was “within the class of persons which [the
statute] was designed to protect.” McKnight v Carter, 144 Mich App 623, 636;
376 NW2d 170 (1985); see also Phillips v Deihm, 213 Mich App 389, 396-398;
541 NW2d 566 (1995) (grandmother with whom child-plaintiff resided had a
statutory duty to prevent sexual abuse by grandfather).
There are no published cases discussing whether the MERA or the MEPA
imposes a duty of care, actionable in tort, toward the general public. We note
initially that the purpose of the statutes is to prevent environmental contamination
and to promote compensation for remediation, and that liability flows from
anyone fitting the definition of a responsible party any member of the public who
incurs response costs or whose natural resources are injured by such
contamination. We therefore conclude that the statutes were intended to prevent
precisely this type of injury and that plaintiff was within the class of persons
intended to be protected by the statutes. [Cipri, 235 Mich App at 16-17.]
However, the decision in Cipri does not establish that the UST registration provisions of
the NREPA were intended to prevent injury to buyers of property containing undisclosed USTs.
As a post-contamination purchaser of the property, plaintiff was not liable under the NREPA for
recovery costs. As discussed previously, plaintiff failed to plead a valid claim under the NREPA
for environmental contamination. Consequently, plaintiff’s alleged injury does not arise from
environmental contamination, but rather from the unwanted presence of underground structures
that interfere with plaintiff’s intended use of the property. Thus, this case is distinguishable from
Cipri, in which the plaintiff’s injury arose from a type of environmental contamination expressly
prohibited by the MERA.
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In Christy v Prestige Builders, Inc, 415 Mich 684; 329 NW2d 748 (1982), our Supreme
Court held that a seller of real property does not have a duty of care to subvendees with respect
to defective conditions on the property. The Court stated:
Under the common law, a land vendor who surrenders title, possession,
and control of property shifts all responsibility for the land’s condition to the
purchaser. Caveat emptor prevails in land sales, and the vendor, with two
exceptions, is not liable for any harm due to defects existing at the time of sale.
[Id. at 694.]
The Court recognized an exception to this general principle where the vendor fails to disclose an
unreasonably dangerous and concealed condition to the original vendee, but stated that “[o]nce
the purchaser discovers the defect and has had a reasonable opportunity to take precautions, third
parties such as subvendees have no further recourse against the vendor.” Id. at 694-695.
Plaintiff here argues that there is a question of fact regarding CDC’s knowledge of the
USTs and the pipeline system. However, the trial court granted summary disposition under
MCR 2.116(C)(8), not (C)(10). Plaintiff’s second amended complaint fails to identify with
specificity any hazard associated with the tanks. Plaintiff alleges only that the tanks should have
been registered in accordance with MCL 324.21101 et seq. Accordingly, BP was entitled to
summary disposition on this count.
Plaintiff argues that the trial court prematurely granted summary disposition for CDC
with respect to the negligence claim because further discovery was needed to determine whether
CDC knew of the USTs on the property. Any duty owed by CDC to plaintiff necessarily arose
from the purchase agreement. If a plaintiff seeks to impose tort liability arising out of a contract,
the plaintiff must establish that the defendant owed a duty that was separate and distinct from the
obligations contained in the contract. Fultz v Union-Commerce Assoc, 470 Mich 460, 467; 683
NW2d 587 (2004). Plaintiff has not identified any duty by CDC, separate and distinct from its
contractual duties under the purchase agreement, to take any action with respect to the USTs.
Accordingly, CDC also was entitled to summary disposition with respect to plaintiff’s
negligence claim.
VI. TRESPASS
Plaintiff lastly challenges the trial court’s dismissal of its trespass claim against BP. We
agree that this claim was improperly dismissed under MCR 2.116(C)(8).
Trespass is an invasion of the plaintiff’s interest in the exclusive possession of his land.
Adams v Cleveland-Cliffs Iron Co, 237 Mich App 51, 59; 602 NW2d 215 (1999). In Rogers v
Kent Bd of Co Rd Comm’rs, 319 Mich 661, 666; 30 NW2d 358 (1948), our Supreme Court
quoted with approval 1 Restatement Torts, § 160, p 368, which provides:
A trespass, actionable under the rule stated in § 158, may be committed by
the continued presence on the land of a structure, chattel or other thing which the
actor or his predecessor in legal interest therein has placed thereon
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(a) with the consent of the person then in possession of the land, if the
actor fails to remove it after the consent has been effectively terminated, or
(b) pursuant to a privilege conferred on the actor irrespective of the
possessor’s consent, if the actor fails to remove it after the privilege has been
terminated, by the accomplishment of its purpose or otherwise.
Consistent with the 1 Restatement Torts, 2 Restatement Torts, § 160, p 284, provides:
A trespass may be committed by the continued presence on the land of a
structure, chattel, or other thing which the actor or his predecessor in legal interest
has placed on the land
(a) with the consent of the person then in possession of the land, if the
actor fails to remove it after the consent has been effectively terminated, or
(b) pursuant to a privilege conferred on the actor irrespective of the
possessor’s consent, if the actor fails to remove it after the privilege has been
terminated, by the accomplishment of its purpose or otherwise.
Comment (g) provides an example that is analogous to plaintiff’s allegations concerning BP’s
pipeline:
Mistaken belief that license is irrevocable. Even though the actor or his
transferor has not agreed to remove the structure, chattel, or other thing from the
land upon the termination of the license pursuant to which it was placed there, as
where the parties act under a mistaken belief that the license is irrevocable, the
termination of the license creates a situation in which the rule stated in this
Section applies.
Illustration
2. A executes and delivers to the B Telephone Company a document
which both parties believe confers on the B Company an irrevocable license to
erect and maintain telephone poles on A’s land. A transfers the land to C, who
discovers that the document and the acts done under it do not create an
irrevocable license. C notifies the B Company to remove its poles from the land.
The B Company’s failure to remove the poles within a reasonable time is a
trespass.
Similarly, Am Jur 2d, Trespass § 77, pp 80-81, provides:
Subject to the privileges of reasonable egress and removal of objects from
land, the actor’s privilege to enter land created by consent of the possessor is
terminated by the doing of any act, or the happening of any event, or the lapse of
any specified period of time by which the consent is restricted; by a revocation of
the possessor’s consent of which the actor knows or has reason to know; or, by a
transfer or other termination of the possessor’s possessory interest in the land.
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For instance, a complete defense to trespass does not exist if the defendant’s only
right to be on the land was a privilege under an oral license, which could be
terminated by a transfer of the property.
We conclude from these authorities that plaintiff pleaded a valid claim for trespass.
Plaintiff alleged that it has the right of exclusive possession of the property, that BP owns the
pipeline that runs through the subject property, that the pipeline is not within any easement of
record, and that the pipeline intrudes onto plaintiff’s property without plaintiff’s consent.
Adams, 237 Mich App at 59. Although the pipeline was placed on the property before plaintiff
acquired ownership, plaintiff, as the exclusive possessor of the property, may withdraw its
consent to BP’s presence. Rogers, 319 Mich at 666; 2 Restatement Torts, § 160; Am Jur 2d,
Trespass, § 77. Accordingly, the trial court erred in determining that plaintiff failed to state a
valid trespass claim.
BP alternatively argues that plaintiff’s claim is barred by the applicable statute of
limitations. Trespass claims are subject to the three-year limitations period for recovery of
damages for injury to property. MCL 600.5805(10); Marilyn Froling Revocable Living Trust v
Bloomfield Hills Country Club, 283 Mich App 264, 279; 769 NW2d 234 (2009). BP contends
that the three-year limitations period began to run when it first installed the pipeline, and thus
expired long before plaintiff acquired the property, regardless of the continuing nature of the
alleged trespass or plaintiff’s recent acquisition of the property and discovery of the pipeline.
We disagree with BP’s argument that the continuing nature of the trespass is not a basis
for finding that plaintiff’s trespass action was timely filed. BP relies on Froling Trust, 283 Mich
App at 285, in which this Court concluded that the Supreme Court’s abrogation of the commonlaw “continuing wrongs” doctrine in Garg v Macomb Co Community Mental Health Servs, 472
Mich 263; 696 NW2d 646 (2005), amended 473 Mich 1205 (2005), applied beyond the context
of civil rights claims “to completely abrogate the continuing wrongs doctrine in trespass and
nuisance actions as well.” The Court also noted that the common-law discovery rule, which
allowed tolling of the limitations period when a plaintiff could not have reasonably discovered
the elements of a cause of action within the limitations period, had also been abrogated, and was
no longer valid except where provided by statute. Id. at 286-287.
However, the present case does not involve the continuing effects of a past trespassory
act. Rather, the physical intrusion that constitutes the trespass remains on plaintiff’s property.
The Court in Froling Trust quoted Defnet v Detroit, 327 Mich 254, 258; 41 NW2d 539 (1950),
for the proposition that “[t]he Michigan Supreme Court . . . has long recognized an exception to
the application of a statutory period of limitations ‘[w]here there are continuing wrongful acts . .
. .’” Froling Trust, 283 Mich at 280. In Defnet, our Supreme Court recognized a continuing
wrong where the defendant continued to operate a sewer that ran under the plaintiff’s property.
Further, this Court in Froling Trust relied substantially on Terlecki v Stewart, 278 Mich
App 644; 754 NW2d 899 (2008), in which the Court distinguished continuing wrongful effects
from a past act from ongoing or continuing acts with respect to the continuing-wrongful-acts
doctrine. Id. at 655-656. Relying on Horvath v Delida, 213 Mich App 620; 540 NW2d 760
(1995), the Court in Terlecki held that the plaintiff’s claim was untimely because the two distinct
tortious acts (replacement of a spillway and capping of a culvert) occurred more than three years
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before the plaintiff’s claim was filed. The Court explained that the flooding and property
damage that formed the basis of the plaintiff’s claim were “merely the harmful effects of the
completed tortious acts” and, therefore, were not the events that triggered the running of the
limitations period. Id. at 656. The Court stated:
The distinctions noted in Horvath with respect to the continuouswrongful-act doctrine apply equally to the present case. Defendants have not
physically intruded on or under plaintiffs’ property with an active sewer (Defnet),
nor annually delivered water through a sewer under plaintiffs’ property to
plaintiffs’ basement (Hodgeson [v Ragnone, 52 Mich App 411; 217 NW2d 395
(1974)]). Neither have defendants constructed a walkway across plaintiffs’
property and physically interfered with their riparian rights (Difronzo [v Village of
Port Sanilac, 166 Mich App 148; 419 NW2d 756 (1988)]). [Terlecki, 278 Mich
App at 656.]
In this case, the continued presence of BP’s pipeline on plaintiff’s property is not merely
the continuing effect of a past intrusive act. Rather, the presence of the pipeline is a continuing
physical intrusion that remains on the property, allegedly interfering with plaintiff’s use and
enjoyment of the property. Consequently, BP was not entitled to summary disposition on the
basis of the statute of limitations.
VII. CONCLUSION
We affirm the trial court’s dismissal of all claims against defendant CDC. We also affirm
the trial court’s dismissal of plaintiff’s NREPA and negligence claims against BP. However, we
reverse the trial court’s order to the extent that it dismissed plaintiff’s trespass claim against the
BP defendants and remand for further proceedings with respect to the trespass claim.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Mark J. Cavanagh
/s/ Michael J. Talbot
/s/ Cynthia Diane Stephens
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