Herweyer v. Clark Highway Services, Inc

Neff, J.

(dissenting). The trial court and the majority here reached the conclusion that the six-month limitation period contained in the "application for employment” is unreasonable, and I agree with that conclusion. However, I cannot agree that a further provision in the application to the effect that if the six-month term is found to be unenforceable, then a "minimum reasonable time” is to be determined and enforced "as far as legally possible” can properly be read to support the conclusion that thirty-one months is unreasonably long. .

i

As a preliminary matter, I note that the language of the contract is vague and ambiguous. It seems obvious that the drafter (presumably defendant or its attorney) contemplated the probability that the six-month limitation period would be attacked in these circumstances and the possibility of a finding that it is unreasonable, as was found *110to be the case. In anticipation of this result the "minimum reasonable time” and "as far as legally possible” language were added, but without any effort to define these imprecise terms, leaving the parties, and ultimately the courts, with the task of interpretation case by case. This situation leads to an inexact limitation period and, inevitably, to the possibility of different limitation periods arising out of the same contract language.

I find this potential to be untenable. Surely, parties are entitled to certainty in their legal dealings to a greater degree than this contract language allows, particularly with regard to the time limits that govern their mutual rights to seek redress against each other in the courts. Because it is ambiguous and might lead to unreasonable results, I would construe this language strictly against the drafter and strike it from the agreement. See DeMello v McNamara, 178 Mich App 618, 623; 444 NW2d 149 (1989). This would restore the parties to reliance on the applicable statutory limitation periods that have been established by the Legislature. This result would serve a number of important purposes. First, it would provide certainty to the determination of the time in which to bring suit. Second, as the legislative articulation of the limitation period, it is a simple, straightforward, and objective measure of what time period is "reasonable.”

ii

Next, I share the concerns expressed by the trial court with regard to the public policy arguments raised by plaintiff. Shortening the statute of limitations to six months will result in premature litigation because parties will be forced to rush to file suit before they have the opportunity to miti*111gate damages or fully investigate their claims. This is not in keeping with the purpose of a statute of limitations, that is, to protect defendants against stale or fraudulent claims. See Larson v Johns-Manville Sales Corp, 427 Mich 301, 310; 399 NW2d 1 (1986).

In addition, an employee who must choose between signing an agreement such as the one in this case or risking termination does not deal at arm’s length with the employer. This is not a commercial setting where the parties could negotiate the terms of their agreement with regard to the limitation period or even one in which the employee was represented by a labor union that could have negotiated the terms and conditions of employment on his behalf. Where the parties are not on equal footing, the reduction in the limitation period for causes of action pursuant to remedial statutes should not be permitted lightly.

hi

Further, my review of the record reveals that there is nothing to establish whether the thirty-one-month time period between termination and filing was reasonable. If we assume that the language of the application permits a judicial determination of a limitation period more than six months but less than the period established by the Legislature, then defendant has the burden of showing that the elapsed time was unreasonable and plaintiff should have the opportunity to establish whether the time period in question was reasonable. The determination should, in any event, be measured by some'objective standard of reasonableness. It is not enough to say, as the trial court did, that while we agree that a six-month period is unreasonably short and therefore unen*112forceable, thirty-one months exceeds the fuzzy "minimum reasonable time,” but without articulating any reasons for that finding and without saying just how much time does fit within the "minimum reasonable time.” At the very least, we should remand this case to give plaintiff the opportunity to establish whether thirty-one months is reasonable within the context of this case.

IV

Finally, I note that the majority relies for its conclusion on Camelot Excavating Co, Inc v St Paul Fire & Marine Ins Co, 410 Mich 118; 301 NW2d 275 (1981). In my view, that case is distinguishable from this one and does not support the result for which it is cited as authority.

The Camelot case involved a shortened statute of limitations in a construction bond. Two commercial entities, a general plumbing contractor and an insurance company, were the principal and the surety on the bond, which was a labor and material bond, the purpose of which was to protect the owner of the construction project against claims of those who furnished labor or materials to the contractor. The owner of the project was therefore a third-party beneficiary of the bond contract. There is nothing remotely similar in the fact situation of this case where the employer and an individual employee are parties to the application that shortens the limitation period solely for the benefit of the employer.

Ultimátely, I agree with Justice Levin’s concurring opinion in Camelot, supra at 140-143, that the holding there is limited to the narrow circumstances of that case. Specifically, I agree with the following statement:

The rationale of the rule allowing parties to *113contractually shorten statutory periods of limitation is that the shortened period is a bargained-for term of the contract. Allowing such bargained-for terms may in some cases be a useful and proper means of allowing parties to structure their business dealings. [Id. at 141.]

Thus, to the extent this, rule is applicable in other settings, I would require that the parties to the contract, in contrast to the parties here, be more equal with regard to bargaining power. See, e.g., Rowry v Univ of Michigan, 441 Mich 1, 19, n 2; 490 NW2d 305 (1992), concurring opinion of Riley, J. (suggesting that public policy does not prohibit parties to a collectively bargained for agreement from shortening the period of limitation). By allowing this rule to apply in situations involving parties possessing unequal bargaining power, the majority will be allowing one of the contracting parties to unilaterally supplant the period of limitation mandated by the Legislature, a questionable practice from a public policy standpoint. Camelot, supra at 141.

Accordingly, I would reverse and remand for trial or, in the alternative, for a hearing to determine if a thirty-one-month time period was reasonable on the basis of the facts of this case.