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Volume XXIII, No. 26, September 2, 2011

From the Law Offices of Garan Lucow Miller, P.C.

 

From the Co-Editors

James L. Borin & Simeon R. Orlowski

 

COURT OF APPEALS ALLOWS EMOTIONAL DISTRESS DAMAGES IN REAL PROPERTY DAMAGE CLAIM

 

CONTRIBUTOR – WILLIAM J. BRICKLEY

On August 25, 2011, the Michigan Court of Appeals issued a published decision in the case of Beckie Price v High Point Oil Company, which addressed the issue of whether a person whose real property was damaged could claim emotional distress damages as well. The Court of Appeals, in what they considered to be an issue of “first impression”, indicated that the Plaintiff was entitled to collect such damages.

Ms. Price owned a home which was heated by an oil furnace. For several years she had a contract with the Defendant to fill her tank with heating oil to fuel her oil furnace. Plaintiff decided to switch to a propane furnace and sold the furnace and oil tank to a neighbor. She informed the Defendant that she no longer needed their service of delivering oil. Over a year later and for reasons not fully known, Defendant came to the Plaintiff’s home. The fuel pipe located outside the house remained unchanged even though the furnace and oil tank had been removed. The Defendant’s truck driver took the hose from his truck, hooked it up to fill the pipe, and started pumping oil into the Plaintiff’s basement. Close to 400 gallons of fuel were dumped into the basement before he realized that there was no tank.

The property damage was extensive. Clearly, many personal items were lost and it also was discovered that the oil had leaked into the ground, which meant that the whole house had to be demolished. Between the Plaintiff’s insurance company, the Defendant’s insurance company, and the Defendant, all the Plaintiff’s out-of-pocket expenses were taken care of. The Plaintiff ended up bringing suit on a variety of legal theories seeking to be compensated for the mental and emotional distress damages she suffered.

It was learned that during the time that the Plaintiff was out of her home, she was living in a variety of places, sleeping on couches, and she generally testified to a lot of stress in her life as a result of the damage done to her home. Please note that Ms. Price did not witness the event and she had not shown any physical signs of the mental distress she claimed. The Defendant sought to dismiss these claims on the basis that Michigan law did not allow one to recover mental and emotional distress damages when a person’s real property was damaged. The trial court disagreed and allowed the matter to go on to the jury. The jury awarded the Plaintiff $100,000.00.

One of the disputes between the Court of Appeals and defense counsel was that defense counsel believed that Michigan Courts had already ruled on the issue of whether somebody could claim mental and emotional distress damages when the only damage was to their real property. They pointed out that numerous cases before had found that this was not a viable cause of action. The Court of Appeals disagreed. Defense counsel even pointed out that in some cases involving personal property, the Courts clearly held that there is no right of recovery for mental and emotional distress damages.

With respect to the second argument, the Court of Appeals conceded that, in fact, there were cases involving personal property, such as a dog, jewelry, or some other items that are considered personal property, where the Courts have held that there is no recovery for mental and emotional distress damage when the personal property is harmed. The Court though declined to extend that rule to a circumstance involving damage to real property, such as a home. The Court simply indicated the general rule with respect to damages in tort actions is:

The general rule, expressed in terms of damages, and long followed in the state, is that in a tort action, the tort feasor is liable for all injuries resulting directly from his wrongful act, whether foreseeable or not, provided the damages are the legal and natural consequences of the wrongful act, and are such as, according to common experience in the usual course of events, might reasonably have been anticipated.

The Court ruled that it was reasonable to anticipate that somebody would suffer mental and emotional distress damages as a result of being put out of her home for a long period of time and of going through all the inconvenience of having to deal with the damage to her home.

The Defendant also attempted to argue that a condition for recovery of emotional damages should be a physical manifestation of an injury. In other circumstances where mental and emotional distress damages were claimed, the courts generally connected the ability to claim damages to some form of physical injury to the body. Again, the Court disagreed. They would not put these types of conditions on the right to make the recovery.

The Defendant also argued that the Plaintiff should, at the very least, be around at the time when the property damage occurred. Again, the Court disagreed. The Court again felt they could not place some limits on recovery that were not otherwise limited by other courts.

The Court of Appeals did not address the effect of a ruling such as this on the implication of future property loss claims. It could be huge. More likely than not you will see a significant increase in claims related to damage to a person’s real property with claims for mental and emotional distress damages being asserted. A prime example could be a circumstances where a person’s tree is wrongly cut down. In addition to claiming damages for the value of the tree, a person will most likely also want the emotional and mental distress damages associated with the loss of that tree (whatever that may be). Another example could come in fire loss claims. While normally these are subrogation actions where the insurance company has made the payment on the fire loss and then brings a negligence claim against a third party for improper repair of the home or other acts which may have led to the fire, do not be surprised if you see the homeowners becoming part of those lawsuits individually as well. Clearly, they will also want damages for the inconvenience in being put out of their house as a result of the fire. Do not be surprised if you start seeing plaintiff lawyers making recommendations to their clients to visit counselors and therapists and possibly family physicians and receiving drugs for anxiety and depression because of the damage to their property.

This author has no personal knowledge, but would expect that there would most likely be an appeal of this decision to the Michigan Supreme Court. Obviously we will try to track it and keep you advised as to any changes in this ruling.

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UPCOMING SEMINARS

The Troy Breakfast Seminar will be held on Thursday October 27, 2011 at the Troy Marriott.

To register for this seminar, please contact Eileen Carty at ecarty@garanlucow.com.

The Windy City Seminar will be held on Thursday November 10, 2011 at the Chicago Marriott Suites O’Hare in Rosemont, Illinois. Please watch Law Fax for further information and Agenda.