PATRICIA ELLEN BOYLE V GENERAL MOTORS CORP
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Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C h i e f J u s ti c e
Maura D. Corrigan
J u s t ic e s
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
Opinion
____________________________________________________________________________________________________________________________
FILED MAY 28, 2003
PATRICIA ELLEN BOYLE and
PAT BOYLE CHEVROLET, INC.
Plaintiffs-Appellees,
v
No. 121661
GENERAL MOTORS CORPORATION,
CHEVROLET DIVISION and
MOTORS HOLDING DIVISION,
Defendants-Appellants.
________________________________
PER CURIAM
This case presents the question whether an action for
fraud accrues under MCL 600.5827 at the time the wrong was
done, or whether it accrues on the date the plaintiff knew or
should have known of the fraud or misrepresentation.
The
Court of Appeals reversed summary disposition for defendants,
holding that a discovery rule of accrual applies to fraud
actions.
250 Mich App 499; 655 NW2d 233 (2002).
We reverse
the judgment of the Court of Appeals and reinstate the order
of the circuit court because MCL 600.5827 clearly applies and
because prior decisions by this Court rejecting a discovery
rule in fraud cases have never been overruled.1
I
Plaintiff
Patricia
Boyle
took
over
an
existing
car
dealership in September 1988.
The dealership went out of
business in September 1992.
Plaintiffs claim that they
learned
that
in
September
1995
the
dealership
was
undercapitalized, even though plaintiffs raised the amount of
money defendants said was sufficient to run the business.
Plaintiffs
also
claim
that
in
1995
they
learned
that
defendants falsely represented that a “rent factor” in a
proposed agreement to sell the dealership did not conform with
defendants’ standards, as a result of which the sale was not
completed.
Plaintiffs filed a complaint alleging two counts of fraud
in
August
1999.
Defendants
filed
a
motion
for
summary
disposition, arguing that plaintiffs’ claims are barred by the
six-year period of limitation in MCL 600.5813.2
Defendants
argued that plaintiffs’ claims accrued under MCL 600.5827 at
the time the wrongs on which the claims are based were done.
Plaintiffs responded that a discovery rule applies to the
1
Although MCL 600.5855 allows a cause of action that was
fraudulently concealed to be brought within two years after it
is
discovered,
plaintiffs
do
not
allege
fraudulent
concealment.
2
“All other personal actions shall be commenced within
the period of 6 years after the claims accrue and not
afterwards unless a different period is stated in the
statutes.” MCL 600.5813.
2
accrual of a fraud action, i.e., a fraud action does not
accrue until a plaintiff discovers, or should have discovered
by the exercise of reasonable care, the cause of action,
citing Fagerberg v LeBlanc, 164 Mich App 349; 416 NW2d 438
(1987). Defendants replied that there is no discovery rule in
fraud cases, relying on Thatcher v Detroit Trust Co, 288 Mich
410; 285 NW 2 (1939).
The circuit court determined that it
was bound by the Thatcher decision and granted defendants’
motion for summary disposition.
On appeal as of right, the Court of Appeals reversed.
The Court noted that in Thatcher and Ramsey v Child, Hulswit
& Co, 198 Mich 658; 165 NW 936 (1917), this Court rejected
application of a discovery rule to fraud cases.
However, the
Court noted that Fagerberg held that the discovery rule
applies in actions for fraud or misrepresentation without any
discussion of the apparent conflict with the decisions in
Thatcher and Ramsey.
Fagerberg
was
The Court of Appeals concluded that
correctly
decided
and
that
the
subsequent
adoption of the discovery rule in Michigan undercut the
precedential value of Thatcher and Ramsey.
While it is true that our Supreme Court
declined to apply the discovery rule in Thatcher
and Ramsey, it is also true that Thatcher predated
the adoption of the discovery rule in Michigan.
See Johnson [v Caldwell, 371 Mich 368, 378-379; 123
NW2d 785 (1963)].
Moreover, in a case involving
negligent misrepresentation by an abstract company,
our Supreme Court in Williams v Polgar, 391 Mich 6,
25, n 18; 215 NW2d 149 (1974), quoted with approval
a case involving fraud, Hillock v Idaho Title &
3
Trust Co, 22 Idaho 440, 449; 126 P 612 (1912), that
had been quoted with approval in the Court of
Appeals opinion in Williams [v Polgar], 43 Mich App
95, 98; 204 NW2d 57 (1972): “‘“If the statute runs
in favor of the abstractor from the delivery of the
abstract, the company would be released long before
the falsity of the abstract could reasonably be
discovered by the purchaser.
This would not be
justice, and ought not to be the law.”’”
The
Supreme Court’s approval of Hillock supports the
argument that there is no bar to the use of the
discovery rule in fraud actions.
Further, the
Fagerberg panel was aware of and quoted the Supreme
Court’s decision in Williams in concluding that the
discovery rule applies.
Thus, we conclude that
Fagerberg is good law and, therefore, we reverse
the decision of the trial court.
[250 Mich App
504-505.]
Defendants have applied for leave to appeal.
II
We review de novo the interpretation and application of
a statute as a question of law.
If the language of the
statute is clear, no further analysis is necessary or allowed.
Pohutski v City of Allen Park, 465 Mich 675, 683; 641 NW2d 219
(2002).
whether
In the absence of disputed facts, the question
a
limitations
cause
is
of
also
action
a
is
question
barred
of
by
law.
the
statute
Moll
v
of
Abbott
Laboratories, 444 Mich 1, 26; 506 NW2d 816 (1993).
III
This is not the first time that this Court has considered
the question whether a cause of action for fraud accrues when
it is or should have been discovered.
The discovery rule was
rejected in Ramsey, which held that the Legislature effected
a compromise between the rule at law, under which the statute
4
of limitations begins to run from the time the fraud is
perpetrated, and the rule at equity, under which the statute
begins to run when the fraud is discovered.
In addition to
the six-year statute of limitations applicable to frauds, the
Legislature
provided
that
if
the
cause
of
action
was
fraudulently concealed, it could be brought two years after it
was discovered or should have been discovered.3
Subsequently, in Thatcher, this Court again rejected the
claim that a cause of action for fraud accrues when it is
discovered
or
should
have
been
discovered,
basing
that
conclusion on Ramsey and the statutes then in effect.4
3
At issue in Ramsey were 1915 CL 12323 and 12330, the
predecessors of MCL 600.5813 and 600.5855, the six-year
statute of limitations applicable to fraud actions and the
fraudulent-concealment statute, respectively. In Ramsey, this
Court explained:
It will be observed that the legislature did
not see fit to adopt the equitable rule to the full
extent of allowing the six-year limitation period
to be considered as beginning at the date of
discovery of the cause of action, but chose rather
to allow a period of two years from date of such
discovery within which to bring suit, as a special
right, when by the strict terms of the general rule
the action would be barred before the expiration of
such two-year period. Under the two sections above
quoted, a plaintiff now has, in any case, the full
period of six years from the date of the fraudulent
act, or other act creating his cause of action,
within which to institute suit, and moreover, where
the defendant has fraudulently concealed from him
his
cause
of
action,
he
has,
under
any
circumstances, not less than the full period of two
years from date of discovery in which to bring his
action. [198 Mich 667.]
4
The period of limitation and the exception for
fraudulent concealment at that time were codified at 1929 CL
5
The discovery rule has been adopted for certain cases.
For example, in Johnson v Caldwell, the Court held that the
discovery rule applies to actions for medical malpractice.
This Court has not, however, overruled Ramsey and Thatcher, or
held that the discovery rule applies to actions for fraud or
intentional misrepresentation.
Moreover, after Ramsey and
Thatcher were decided the Legislature enacted MCL 600.5827,
which provides:
Except as otherwise expressly provided, the
period of limitations runs from the time the claim
accrues. The claim accrues at the time provided in
sections 5829 to 5838, and in cases not covered by
these sections the claim accrues at the time the
wrong upon which the claim is based was done
regardless of the time when damage results.
Under MCL 600.5827 a claim accrues when the wrong is done,5
unless §§ 5829 to 5838 apply.6
Plaintiff does not claim that
any of those sections apply.
The Court of Appeals erred in holding that the discovery
rule applies to the accrual of actions for fraud.
That
holding directly contradicts Ramsey and Thatcher and ignores
the plain language of MCL 600.5813 and 600.5827.
13976 and 13983.
5
The wrong is done when the plaintiff is harmed rather
than when the defendant acted. Stephens v Dixon, 449 Mich
531, 534-535; 536 NW2d 755 (1995).
6
Those sections govern the accrual of claims regarding
entry on or recovery of land, mutual and open account current,
breach of warranty or fitness, common carriers to recover
charges or overcharges, life-insurance contracts where the
claim is based on the seven-year presumption of death,
installment contracts, alimony payments, and malpractice.
6
Plaintiffs’ cause of action accrued when the wrong was
done, and they had six years thereafter to file a complaint.
Because plaintiffs failed to do so, their cause of action is
barred.
Accordingly, we reverse the judgment of the Court of
Appeals and reinstate the order of the circuit court granting
summary disposition for defendants.
MCR 7.302(F)(1).
Maura D. Corrigan
Michael F. Cavanagh
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
WEAVER, J.
I dissent and would grant leave to appeal.
Elizabeth A. Weaver
7
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