Legal Research AI

Boyle v. General Motors Corp.

Court: Michigan Supreme Court
Date filed: 2003-05-28
Citations: 661 N.W.2d 557, 468 Mich. 226
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23 Citing Cases

                                                                       Michigan Supreme Court
                                                                       Lansing, Michigan 48909
____________________________________________________________________________________________
                                                                C h i e f J u s ti c e           J u s t ic e s
                                                                Maura D. Corrigan                Michael F. Cavanagh



Opinion
                                                                                                 Elizabeth A. Weaver
                                                                                                 Marilyn Kelly
                                                                                                 Clifford W. Taylor
                                                                                                 Robert P. Young, Jr.
                                                                                                 Stephen J. Markman
____________________________________________________________________________________________________________________________

                                                                                         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   in      September   1995        that   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.     The Court of Appeals concluded that


Fagerberg   was   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).       In the absence of disputed facts, the question


whether   a    cause   of   action   is     barred   by   the   statute   of


limitations     is   also   a   question     of   law.     Moll   v   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