Plaintiff’s Damages Against Negligent Oil Company Limited to Economic Losses
In 2006, Beckie Price replaced her oil furnace with a propane furnace, had the oil tank and furnace removed, and cancelled her “keep full” order with High Pointe Oil Company. On November 17, 2007, a High Pointe driver made a delivery to Price’s house while she was at work. Before realizing his error, the driver pumped 396 gallons of fuel oil into the basement, using a fill line outside the house. As a result of the damage to the house, including the leaching of oil into the soil beneath the structure, the entire house was demolished. Following soil excavation and cleanup, the excavation area was deemed unstable for rebuilding, and a new house was built elsewhere on the same property.
In August of 2008, Price sued High Pointe, alleging negligence, gross negligence, negligent infliction of emotional distress, nuisance, trespass, and a private citizen’s claim under the Natural Resources and Environmental Protection Act. In addition to general and compensatory damages for economic harm, Price requested noneconomic damages for annoyance, inconvenience, pain, suffering, mental anguish, emotional distress, and psychological injuries caused by the destruction of her house. High Pointe moved for summary disposition, arguing that, to the extent that Price was entitled to damages, they were limited to economic loss only. It was undisputed that when Price was displaced from her home, all economic losses were covered either by High Pointe, High Pointe’s insurer, or Price’s insurer. Price did not incur any out-of-pocket costs by being displaced from her home. The circuit court ruled that Price was entitled to seek noneconomic damages, and the jury returned a verdict of $100,000 in Price’s favor. High Pointe’s motion for a new trial was denied. High Point also moved for judgment notwithstanding the verdict and remittitur (arguing that the verdict was excessive and should be reduced), however both motions were denied. High Pointe appealed. However, the Court of Appeals affirmed the circuit court and upheld the $100,000 verdict. The Michigan Supreme Court granted High Pointe’s application for leave to appeal.
At issue is whether a plaintiff can seek damages for emotional distress and mental anguish caused by the destruction of real property. The March 21, 2013 opinion, written by Justice Markman, states that Michigan common law has long provided that the appropriate measure of damages in cases where there has been negligent destruction of property is the cost of repair or replacement of the property. No previous case in Michigan’s common law history has discussed the recovery of noneconomic damages for the negligent destruction of real or personal property in an approving manner. The Supreme Court respectfully declined to alter the common-law rule that the appropriate measure of damages for negligently damaged property is the cost of replacement or repair, citing the lack of a compelling argument for change, and finding the rule to be a rational and justifiable rule, as a matter of public policy.
The judgment of the Court of Appeals was reversed and the case remanded to the trial court for entry of summary disposition in High Pointe’s favor.
The full opinion is available at the following link:
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