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holding that the law-of-the-case doctrine does "not apply to claims that were not decided on the merits"
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Nos. 325843 326903.
04-19-2016
BROWNLOW v. McCALL ENTERPRISES, INC.
Donnelly W. Hadden, PC, Ann Arbor (by Donnelly W. Hadden ), for Ronald Brownlow and Susan Travis. Secrest Wardle, Troy (by John Mitchell and Sidney A. Klingler ), for McCall Enterprises, Inc.
Donnelly W. Hadden, PC, Ann Arbor (by Donnelly W. Hadden ), for Ronald Brownlow and Susan Travis.
Secrest Wardle, Troy (by John Mitchell and Sidney A. Klingler ), for McCall Enterprises, Inc.
Before: GLEICHER, P.J., and MURPHY and OWENS, JJ.
PER CURIAM.In this consolidated appeal, plaintiffs, Ronald Brownlow and Susan Travis, appeal as of right two orders entered by the trial court. The first, at issue in Docket No. 325843, is a July 29, 2015 final order that granted summary disposition in favor of defendant McCall Enterprises, Inc., and dismissed plaintiff Travis's claim for damages under the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq. The second, at issue in Docket No. 326903, is a March 27, 2015 order that granted defendant attorney fees and costs as case evaluation sanctions against plaintiff Travis. Before entering the final order, which granted summary disposition in favor of defendant, the trial court entered a June 12, 2014 order that dismissed plaintiff Brownlow as a party in the case. The trial court then entered an October 3, 2014 order that granted defendant attorney fees and costs as case evaluation sanctions against plaintiff Brownlow. These two orders are also challenged on appeal. In Docket No. 325843, we reverse the trial court order that granted summary disposition in favor of defendant. We also reverse the trial court order that dismissed plaintiff Brownlow as a party, as well as the order that awarded defendant case evaluation sanctions against plaintiff Brownlow. In Docket No. 326903, we reverse the trial court order that granted case evaluation sanctions against plaintiff Travis.
Plaintiff also filed suit against State Farm Fire and Casualty Company, but State Farm is not a party to this appeal. The term "defendant" as used in this opinion refers to McCall Enterprises.
This case was previously before this Court in Brownlow v. McCall Enterprise, Inc., unpublished opinion per curiam of the Court of Appeals, issued February 12, 2013 (Docket Nos. 306190 and 307883), 2013 WL 514598. A small fire occurred in plaintiffs' microwave on March 12, 2007, which filled plaintiffs' house with smoke. Plaintiffs filed a claim with their insurer, State Farm, who retained defendant to remove the smoke odor from plaintiffs' house. Defendant placed an ozone generator in plaintiffs' kitchen, turned it on, and let it run for 24 hours. Plaintiffs were instructed to leave for the weekend, and when they returned the smoke odor was gone. However, there was significant new damage to the inside of the house, particularly to carpet, upholstery, wood, plastic, and rubber surfaces. Plaintiffs also alleged that they suffered health problems as a result of the ozone exposure.
Plaintiffs filed a complaint against State Farm and McCall Enterprises, alleging that they sustained personal injuries and property damage from excessive ozone exposure and asserting claims for negligence and violations of the MCPA. The negligence claims were dismissed, and plaintiffs do not appeal that ruling. The trial court also dismissed the MCPA claim, concluding that the transaction was specifically authorized by defendant's contractor license, and therefore exempt from the act under MCL 445.904(1)(a), which provides that the MCPA does not apply to "[a] transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States." Plaintiffs appealed the dismissal of their MCPA claim.
This Court reversed the trial court order, concluding that the general transaction of cleaning a house was not specifically authorized by defendant's contractor license and therefore not exempt from the act. Brownlow, 2013 WL 4746638 at *1. This Court also addressed defendant's alternate argument supporting summary disposition—that plaintiffs could not establish causation under the MCPA. Id. at *3. This Court rejected that argument, concluding that plaintiffs had presented "sufficient evidence for a jury to conclude that the ozone generator caused the damage to plaintiffs' house without resort to speculation." Id. at *5. Specifically, this Court concluded that plaintiffs did not need to establish the precise amount of ozone that had been released into their house to establish that it caused the damage. Id. at *4. The literature and expert reports provided by plaintiffs supported the conclusion that ozone can damage household materials, and the damage plaintiffs alleged was consistent with ozone exposure. Id. at *4. Our Supreme Court denied leave to appeal. Brownlow v. McCall Enterprises, Inc., 495 Mich. 852, 836 N.W.2d 167 (2013).
We remanded the case to the trial court, and defendant moved in limine to preclude claims for personal-property damages and use and enjoyment. Defendant argued that this Court's prior opinion specifically limited plaintiffs' MCPA claim to damage to their "house," which implicitly included only the realty. Defendant also asked the trial court to dismiss plaintiff Brownlow as a party to the action on the basis that he did not have a legal interest in the house and, therefore, did not have standing to assert a claim for real property damages. The trial court granted defendant's motion and ordered that plaintiff Travis was precluded from presenting proof of damages to personal property and for use and enjoyment of the property and that plaintiff Brownlow be dismissed from the action. The trial court also granted defendant's motion to award it attorney fees and costs as case evaluation sanctions against plaintiff Brownlow.
Defendant then moved for summary disposition pursuant to MCR 2.116(C)(10) on the MCPA claim, arguing that plaintiff Travis could not prove causation because there was no evidence that the ozone generator did in fact generate harmful levels of ozone in the house. Defendant argued that a test of the machine, conducted years later, revealed that it was broken and incapable of producing ozone. Defendant also argued that the new experts plaintiffs substituted following the death of two of their previous experts were not qualified to provide expert testimony regarding causation. Specifically, defendant argued that the new experts did not have experience with an ozone generator and they did not calculate the ozone levels in the house. Plaintiff Travis filed a countermotion for partial summary disposition regarding liability.
The trial court issued a written opinion finding that plaintiff Travis's experts were not qualified to opine on causation because, among other things, they did not have experience with the type of ozone generator used in this case or they were unable to testify regarding the ozone concentration in the house. The trial court concluded that plaintiff Travis failed to offer evidence through affidavits, depositions, or exhibits sufficient to establish a causal connection between the use of the ozone generator and the damage to the house and granted defendant's motion for summary disposition pursuant to MCR 2.116(C)(10). It also denied plaintiff Travis's countermotion for partial summary disposition. The trial court later granted defendant's motion for case evaluation sanctions against plaintiff Travis. Plaintiffs then filed the present appeal.
First, plaintiffs argue that the law-of-the-case doctrine precluded the trial court from considering defendant's second motion for summary disposition on the issue of causation given that this Court previously ruled there was sufficient evidence of causation to go to a jury. "The law of the case doctrine provides that a ruling by an appellate court with regard to a particular issue binds the appellate court and all lower tribunals with respect to that issue," but only if the facts remain materially the same. Driver v. Hanley (After Remand), 226 Mich.App. 558, 565, 575 N.W.2d 31 (1997). The doctrine's purpose "is the need for finality of judgments and the lack of jurisdiction of an appellate court to modify its judgments except on rehearing." South
Macomb Disposal Auth. v. American Ins. Co., 243 Mich.App. 647, 654, 625 N.W.2d 40 (2000).
Defendant cites Brown v. Drake–Willock Int'l, Ltd., 209 Mich.App. 136, 144, 530 N.W.2d 510 (1995), citing Borkus v. Mich. Nat'l Bank, 117 Mich.App. 662, 666, 324 N.W.2d 123 (1982), for the principle that "[w]hen this Court reverses a case and remands it for a trial because a material issue of fact exists, the law of the case doctrine does not apply because the first appeal was not decided on the merits." Defendant argues that because this Court's prior decision resulted in a remand for trial predicated on the existence of a genuine issue of material fact regarding causation under the MCPA, the law-of-the-case doctrine is not implicated because the first appeal was not decided on its merits. Defendant, however, misinterprets Brown and Borkus.
In both Brown and Borkus, on which Brown relied, this Court did not make a ruling on a question of law before reversing the trial court's grant of summary disposition; it simply ruled in both cases that factual questions existed that precluded summary disposition. In the first appeal in this case, it was not merely the existence of factual questions that occasioned this Court's remand order, unlike in Brown and Borkus. Rather, this Court ruled as a matter of law that the transaction at issue fell under the MCPA, and that ruling was necessary to this Court's determination that the trial court had erred by granting summary disposition, particularly when the trial court held that the transaction was exempt from the MCPA and did not address whether plaintiffs proved causation under the MCPA. It was the decision that the MCPA applied as a matter of law that primarily necessitated this Court's remand, and it was then left to the trier of fact to resolve the question of causation under the MCPA.Further, in Borkus this Court had initially reversed because factual questions existed. Borkus, 117 Mich.App. at 667, 324 N.W.2d 123. On remand to the trial court, a bench trial was held. Id. at 665, 324 N.W.2d 123. The defendant appealed the trial court's ruling and the plaintiff argued that the law-of-the-case doctrine barred this Court from considering the issues raised by the defendant. Id. at 666, 324 N.W.2d 123. However, because this Court's earlier decision in Borkus simply ruled that factual questions existed, which precluded summary disposition, it remanded the case without addressing the merits of the defendant's claims raised in the first appeal. Id. at 666–667, 324 N.W.2d 123. Therefore, the defendant was free to raise the issues in the second appeal, which followed the bench trial, because the issues had not been previously addressed by this Court. Clearly, the law-of-the-case doctrine would not apply to claims that were not decided on the merits; thus, leading to this Court's statement that "[w]here an order of summary judgment is reversed and the case is returned for trial because an issue of material fact exists, the law of the case doctrine does not apply to the second appeal because the first appeal was not decided on the merits." Id. at 666, 324 N.W.2d 123.
In Brown, the plaintiff argued that the law-of-the-case doctrine precluded the defendants from relitigating the issue of duty to warn. Brown, 209 Mich.App. at 144, 530 N.W.2d 510. This Court stated that the plaintiff misunderstood this Court's prior decision. Id. Specifically, that this Court had not previously ruled that the defendants, as manufacturers, had a duty to warn of the dangers of formaldehyde. Id. Rather, this Court held that factual questions existed with regard to whether the use of formaldehyde as a cleaning agent was foreseeable, which precluded summary disposition. Id. It was that ruling which occasioned this Court's remand order. Id. This Court did not decide the merits of the plaintiff's claim regarding the duty to warn of the dangers of formaldehyde, so logically, the law-of-the-case doctrine would not apply, thus leading to the Brown Court's citation of Borkus, stating, "When this Court reverses a case and remands it for a trial because a material issue of fact exists, the law of the case doctrine does not apply because the first appeal was not decided on the merits." Id.
It is too broad to read Brown and Borkus as barring application of the law-of-the-case doctrine whenever there is a grant of summary disposition based on the presence of factual questions, and doing so undermines the doctrine's purpose and effectively eviscerates it. As can be understood from the facts of Brown and Borkus, the principle defendant cites from those cases merely indicates that the law-of-the-case doctrine does not apply to issues that were never decided by this Court. That principle applies to situations in which this Court merely remanded because factual questions existed and never addressed issues that were later raised in a second appeal. Notably, in both Brown and Borkus, the parties were not relitigating the issue on which this Court previously remanded because factual questions existed. Rather, they were challenging other issues that were raised in the first appeal but never decided by this Court.
In our prior decision in this case, this Court clearly determined that the issue of causation should go to the jury. Nevertheless, in moving for summary disposition a second time, defendant relitigated the issue of causation. The law-of-the-case doctrine clearly precluded defendant from doing so, and it was error for the trial court to consider defendant's motion.
We also reject defendant's argument that the law-of-the-case doctrine does not apply because the facts have materially changed. See South Macomb Disposal Auth., 243 Mich.App. at 655, 625 N.W.2d 40 ; Driver, 226 Mich.App. at 565, 575 N.W.2d 31. Defendant argues that the facts materially changed because of the substitution of new expert witnesses whose opinions were speculative and because the ozone generator was broken when it was tested years after the incident.First, although this Court did not have the benefit of the new experts' opinions in the first appeal, any differences between the experts' opinions referred to in our earlier decision and the new experts' opinions were legally insignificant and did not materially change the facts of the case. See Ewing v. Detroit, 252 Mich.App. 149, 164 n. 5, 651 N.W.2d 780 (2002), rev'd on other grounds 468 Mich. 886, 661 N.W.2d 235 (2003) (concluding that the law-of-the-case doctrine applied when the facts remained materially the same and any differences were legally insignificant). The deaths of plaintiffs' experts Verne Brown and Roger Wabeke after this Court's remand prompted plaintiffs to substitute new experts. In our earlier opinion, this Court noted that while Wabeke's testimony focused on the health risks of ozone, he also opined that defendant should have warned plaintiffs of possible damage to materials from ozone. This Court also pointed to Brown's affidavit in which he stated that the damages to plaintiffs' house were consistent with ozone exposure and explained how he had determined that the ozone levels in the house were high enough to cause the damage. The new experts plaintiffs substituted were able to opine that the damage to plaintiffs' house was consistent with ozone exposure. For example, Douglas A. Haase testified that the more organic an item is, the more it reacts to ozone—like the carpet, which was damaged in plaintiffs' house. According to Jeffrey A. Siegel, ozone is ten times more likely to react with materials in a house than it is to ventilate. Siegel also testified that the photographs he reviewed of the damage to plaintiffs' house showed "very stereotypical degradation patterns" from ozone.
Further, defendant mistakenly spends a great deal of time arguing that the level of ozone concentration in the house was unknown and that plaintiffs' new experts, unlike Brown, were unable to express an opinion regarding the level of ozone concentration in the house. Brown's calculation of the ozone levels in plaintiffs' house, however, is not necessary for plaintiffs to establish causation. As this Court stated in the prior opinion, this fact is irrelevant. Brownlow, 2013 WL 514598 at *3–4. Plaintiffs do not need to establish the precise amount of ozone released into their house to infer causation. Id. It was undisputed that defendant placed an ozone generator in plaintiffs' house on Friday and set it to an output of "8" on a scale of 0 to 10. Plaintiffs were instructed to leave for the weekend and returned on Monday to discover extensive interior damage to a variety of surfaces, including carpet, upholstery, wood, brick, plastic, and rubber. Plaintiffs presented evidence, through their experts and literature, that ozone reacts with these various organic materials, and defendant does not dispute that ozone can cause damage to building materials, as well. As this Court previously concluded, this is enough to infer causation without resort to speculation. These facts remained materially the same and were not affected by the substitution of new experts, particularly when, as discussed, the new experts were able to opine that the damage to plaintiffs' house was consistent with ozone exposure. Once this Court concluded that plaintiffs established a prima facie case of causation under the MCPA to warrant a trial, plaintiffs were entitled to prove their case how they saw fit. The experts' opinions simply go to the weight of the evidence presented at trial. See Bouverette v. Westinghouse Electric Corp., 245 Mich.App. 391, 401, 628 N.W.2d 86 (2001) (noting that "an opposing party's disagreement with an expert's opinion or interpretation of facts ... are matters of the weight to be accorded to the testimony, not its admissibility").Defendant also seems to argue that because the new experts could not rule out other causes of damage to plaintiffs' house, the facts materially changed, particularly in light of this Court's statement in our earlier decision that no witness had advanced any possible cause of the alleged damages other than ozone exposure. See Brownlow, 2013 WL 4746638 at *4–5. Plaintiffs' new experts, however, merely acknowledged that there could be other possible factors that caused plaintiffs' damages; they could not say with reasonable certainty whether these other factors in fact caused the damages. David O. Peters, a residential builder who did not have experience with ozone, testified that various things can affect the condition of building materials, including age, ultraviolet light, and humidity. However, his testimony suggested that he had never seen these factors result in damages like those that he observed at plaintiffs' house. Additionally, although Siegel could not rule out that age or ultraviolet rays damaged the carpet with "perfect certainty," the damage was certainly consistent with ozone exposure, and he stated that ozone was the likely cause. Again, the experts' opinions go to the weight of the evidence presented at trial, Bouverette, 245 Mich.App. at 400, 628 N.W.2d 86, and do not materially change the facts, Ewing, 252 Mich.App. at 164 n. 5, 651 N.W.2d 780. Second, the fact that the ozone generator was broken when it was tested six years after the incident did not materially change the facts. Rather, it goes to the weight of the evidence at trial. Simply because the generator was broken six years after the incident does not automatically mean that the machine was not operating properly when it was placed in plaintiffs' house. This is particularly true when there is no indication from the testimony of defendant's employee that the generator was not operating as intended when he placed it in plaintiffs' house, the ozone generator successfully removed the smoke odor, and plaintiffs presented evidence that the damage to their house was consistent with ozone exposure.Therefore, we conclude that the law-of-the-case doctrine applies to the issue of causation. The trial court erred by holding that defendant could seek summary disposition regarding causation after this Court previously ruled that there was sufficient evidence of causation to go to a jury. Accordingly, we reverse the trial court's grant of summary disposition in favor of defendant and dismissing plaintiff Travis's MCPA claim.
In reaching our decision, we reject defendant's argument that the trial court determined plaintiffs' new experts were not in fact qualified to offer expert testimony as required by Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The trial court never held a Daubert hearing to determine the qualifications of plaintiffs' experts, nor did defendant request a hearing. Rather, defendant filed a supplemental brief in support of its second motion for summary disposition, in which it asserted that the new experts were not qualified to provide expert testimony regarding causation. In ruling on the motion for summary disposition, the trial court concluded with respect to both Haase and Siegel—plaintiffs' only expert witnesses on the direct issue of causation—that they were "not qualified to offer expert testimony as to causation." However, this finding was not made pursuant to Daubert. Rather, when examining the trial court's reasoning, it is clear that the trial court primarily found that Haase and Siegel were not qualified to render an opinion regarding causation because they would need to speculate regarding the amount of ozone output from the machine and the level of ozone concentration in the house. As this Court previously ruled, however, plaintiffs do not need to establish the precise amount of ozone that was released into the house to establish the casual link between the ozone and the alleged damages. Further, to the extent that the trial court relied on other findings to conclude that Haase and Siegel were not qualified to offer expert testimony regarding causation, such as lack of experience with the type of ozone generator used in this case, those findings were inadequate to conclude that they were not qualified to render an expert opinion pursuant to Daubert. Rather, the trial court's findings went to the issue of the weight of their testimony and not their qualifications. Bouverette, 245 Mich.App. at 400, 628 N.W.2d 86.
Next, plaintiffs argue that the trial court abused its discretion by granting defendant's motion in limine to exclude damage to personal property. A trial court's decision to grant or deny a motion in limine is reviewed for an abuse of discretion. Bartlett v. Sinai Hosp. of Detroit, 149 Mich.App. 412, 418, 385 N.W.2d 801 (1986). The abuse of discretion standard recognizes that if there is more than one reasonable and principled outcome, a trial court does not abuse its discretion if it selects one of those outcomes. Maldonado v. Ford Motor Co., 476 Mich. 372, 388, 719 N.W.2d 809 (2006).
The trial court determined that this Court's decision in the earlier appeal limited the MCPA claim to damage to real property only, and therefore it was bound by the law-of-the-case doctrine. Specifically, the trial court determined that this Court's use of the term "house" limited damages to "the structure itself" and implicitly excluded plaintiffs' personal-property-damage and quiet-enjoyment claims from being considered on remand.
The law-of-the-case doctrine applies "only to issues actually decided, either implicitly or explicitly, in the prior appeal." Grievance Administrator v. Lopatin, 462 Mich. 235, 260, 612 N.W.2d 120 (2000). The issue whether plaintiffs' claim for property damage under the MCPA was limited to real property was never before this Court previously, and this Court did not implicitly or explicitly decide that issue.
In our opinion, this Court interchangeably used the terms "home" and "house" and only referred to damage as "property" damages. Additionally, this Court implicitly referred to damage that occurred to plaintiffs' personal property. For example, with regard to causation, we determined that there was sufficient evidence that ozone can damage building and household materials. Brownlow, 2013 WL 514598 at *3–4. As we noted in the first appeal, this evidence included plaintiffs' allegations that after the ozone machine had been running for the weekend, "a variety of exposed surfaces—including carpet, upholstery, wood, brick, and plastic—had been damaged. Among other things, finish had come off of wood, furniture changed color, bricks were crumbling, plastic had aged, and carpets were sticky."Id. at *4.
Contrary to the trial court's determination, there was no need for this Court to specify those types of property damages that may be recovered under the MCPA because that issue was not before this Court. Plaintiffs' claim under the MCPA involved property damage to their house, and plaintiffs' complaint made it clear that this included real and personal property—a fact acknowledged and not contested by defendant in the prior appeal. Finally, "house" is defined as "a building in which people live; residence," or "a household." Random House Webster's College Dictionary (2001). The definition in no way restricts the term to "the structure itself" or "realty," as the trial court defined it.
Therefore, the trial court abused its discretion by granting defendant's motion in limine to limit plaintiffs' MCPA claim to real property damages only. Bartlett, 149 Mich.App. at 418, 385 N.W.2d 801. Consequently, the trial court erred by dismissing plaintiff Brownlow as a party for lack of standing because he did have standing to pursue a claim for personal-property damage.
Finally, plaintiffs argue that the trial court erred by declining to grant their countermotion for summary disposition regarding defendant's liability under the MCPA. We review de novo a trial court's decision on a motion for summary disposition. Hoffner v. Lanctoe, 492 Mich. 450, 459, 821 N.W.2d 88 (2012). "A motion under MCR 2.116(C)(10) tests the factual sufficiency of the complaint." Maiden v. Rozwood, 461 Mich. 109, 120, 597 N.W.2d 817 (1999). In reviewing the motion, we consider "the pleadings, admissions, and other evidence submitted by the parties in the light most favorable to the nonmoving party." Latham v. Barton Malow Co., 480 Mich. 105, 111, 746 N.W.2d 868 (2008). Summary disposition is properly granted "if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id. A genuine issue of material fact exists "when reasonable minds could differ on an issue after viewing the record in the light most favorable to the nonmoving party." Allison v. AEW Capital Mgt., LLP, 481 Mich. 419, 425, 751 N.W.2d 8 (2008).
Plaintiffs argue summary disposition regarding liability was appropriate because defendant violated MCL 445.903 of the MCPA, which provides in relevant part:
(1) Unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce are unlawful and are defined as follows:
* * *
(c) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits,
or quantities that they do not have or that a person has sponsorship, approval, status, affiliation, or connection that he or she does not have.
* * *
(e) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.
* * *
(s) Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer.
* * *
(cc) Failing to reveal facts that are material to the transaction in light of representations of fact made in a positive manner.
The parties argue over whether the MCPA should be construed with reference to the common-law tort of fraud. Defendant relies on Zine v. Chrysler Corp., 236 Mich.App. 261, 283, 600 N.W.2d 384 (1999), quoting Mayhall v. AH Pond Co., Inc., 129 Mich.App. 178, 182–183, 341 N.W.2d 268 (1983), in which this Court stated "that it is proper to construe the provisions of the MCPA ‘with reference to the common-law tort of fraud.’ " Defendant argues that the MCPA subsections on which plaintiffs rely are fraud based, and therefore plaintiffs must plead and establish all the elements of fraud, specifically that defendant had actual knowledge of the misrepresentation or a reckless disregard of its truth. However, defendant's argument erroneously interprets the rule of law stated in Zine, and writes elements of fraud into the provisions of the MCPA that do not, and should not, exist, thereby ignoring the longstanding principles of statutory interpretation.
To support this argument, defendant relies on unpublished cases, which are not precedentially binding on this Court. MCR 7.215(C)(1).
It is well-settled that "[t]he primary goal of statutory interpretation is to give effect to the Legislature's intent." Ford Motor Co. v. Woodhaven, 475 Mich. 425, 438, 716 N.W.2d 247 (2006). The first step in determining the Legislature's intent is to review the language of the statute itself. Id. If the language is plain and unambiguous, then this Court is to apply the statute as written. Id. at 438–439, 716 N.W.2d 247. "Unless statutorily defined, every word or phrase of a statute should be accorded its plain and ordinary meaning, taking into account the context in which the words are used." Krohn v. Home–Owners Ins. Co., 490 Mich. 145, 156, 802 N.W.2d 281 (2011) ; see also MCL 8.3a (stating that "[a]ll words and phrases shall be construed and understood according to the common and approved usage of the language"). When the words of a statute are given their plain and ordinary meaning, they provide the most reliable evidence of legislative intent. Krohn, 490 Mich. at 156–157, 802 N.W.2d 281 (citation omitted). Further, to give words their plain and ordinary meaning, this Court may use dictionary definitions. Id. at 156, 802 N.W.2d 281. However, "technical words and phrases, and such as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning." MCL 8.3a.
The panel in Zine held that it is "proper" (but did not hold that it is required) to interpret the provisions of the MCPA with reference to the common-law tort of fraud (just as it is proper, but not required, to resort to a dictionary to determine the plain and ordinary meaning of nontechnical words in statutes). Zine, 236 Mich.App. at 283, 600 N.W.2d 384 ; see also MCL 8.3a. The panel in Zine referred to the common-law tort of fraud to determine whether under MCL 445.903(1)(s) the failure to reveal a "material fact" must affect the transaction to violate the MCPA. Id. at 282–283, 600 N.W.2d 384. This is consistent with the longstanding principles of statutory interpretation, i.e., this Court must first examine the language of the statute to determine the Legislature's intent, and it must give words of the statute their plain and ordinary meaning. But when a statute contains a technical term that has acquired a peculiar meaning under the law, such as " material fact," this Court may look to the common law. See, e.g., Ford Motor Co., 475 Mich. at 439, 716 N.W.2d 247 (referring to the common law to define the term "mutual mistake of fact," as used in the General Property Tax Act (GPTA), MCL 211.1 et seq. ).
Quoting 2B Singer, Statutes and Statutory Construction (6th ed.), § 50:03, p. 152, the Ford Motor Co. Court stated that when interpreting technical terms that have acquired a peculiar meaning in the law " ‘common-law meanings are assumed to apply even in statutes dealing with new and different subject matter, to the extent that they appear fitting and in the absence of evidence to indicate contrary meaning.’ " Ford Motor Co., 475 Mich. at 439, 716 N.W.2d 247. In Zine, it was fitting for the panel to consult the common-law tort of fraud to define "material fact" because the MCPA is in many ways derivative of the common-law tort of fraud. However, the MCPA was enacted to eliminate an essential element of the common-law tort of fraud, i.e., proof of the intent of the merchant. Bladen, How and Why the Consumer Protection Act Came To Be (2005), pp. 9–10, available at << https://higherlogicdownload.s3.amazonaws.com/MICHBAR/3b217bd2-fb65-46ff-86co-ea1a7b303b13/UploadedImages/pdfs/HowWhy.pdf>> (accessed April 1, 2016) [https://per ma.cc/DZ9S-YQ8C]. Its purpose was to provide consumers with an effective remedy when, for example, a merchant's conduct was unfair or deceptive but did not amount to fraud. Id. Although the MCPA eliminated the intent element of fraud, many of its provisions still contain fraud-based language, such as "[u]sing deceptive representations," MCL 903(1)(b), "[m]aking false or misleading statements of fact," MCL 903(1)(i), and "[f]ailing to reveal a material fact," MCL 903(1)(s). Indeed, the elements of actionable fraud include making a material representation that was false. Titan Ins. Co. v. Hyten, 491 Mich. 547, 555, 817 N.W.2d 562 (2012).
Edwin M. Bladen was the principal author of the MCPA. How and Why the Consumer Protection Act Came To Be, at 1 n 2.
Although Edwin M. Bladen, an author of the MCPA, has stated that the authors of the act did not intend for it to be construed with reference to the common-law tort of fraud, How and Why the Consumer Protection Act Came To Be, at 9–10, this statement was made in discussing the authors' aim to eliminate the element of proof of intent. There is nothing in the MCPA that suggests the Legislature intended to alter the common-law meanings of the fraud-based language used in the MCPA. See Ford Motor Co., 475 Mich. at 439, 716 N.W.2d 247 (noting that absent a clear legislative intent in the GPTA to alter the meaning of the common-law term "mutual mistake of fact," the Court could refer to the common law to define the term as used in the GPTA). Indeed, "it is a well-established rule of statutory construction that the Legislature is presumed to be aware of judicial interpretations of existing law when passing legislation." Id. at 439–440, 716 N.W.2d 247 (quotation marks and citation omitted). Therefore, consistently with our holding in Zine and longstanding principles of statutory interpretation, we may refer to the common-law tort of fraud for guidance when interpreting ambiguous provisions of the MCPA, but only if necessary, i.e., when the act contains a technical term that has acquired a peculiar meaning under the law.
Contrary to defendant's argument, the panel in Zine did not hold or imply that a plaintiff must plead and prove all elements of fraud, particularly intent, when asserting a claim under the MCPA, even if certain provisions of the act contain fraud-based language; there are no published cases from this Court or our Supreme Court that state this proposition. By asserting that plaintiffs must show that defendant had actual knowledge of the misrepresentation or a reckless disregard of its truth, defendant ignores the unambiguous language of the MCPA and undermines the Legislature's intent to eliminate the intent element of fraud. Simply because certain subsections of the MCPA contain fraud-based language does not mean that every prohibited practice enumerated in the MCPA requires proof of intent. When the Legislature intended to require a plaintiff to prove the defendant's intent, it specifically so provided in the statute. See, e.g., MCL 445.903(1)(g) ( "Advertising or representing goods or services with intent not to dispose of those goods or services as advertised or represented.") (emphasis added); MCL 445.903(1)(h) ("Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity in immediate conjunction with the advertised goods or services.") (emphasis added). This Court has made clear that "the MCPA is a remedial statute designed to prohibit unfair practices in trade or commerce, [and] it must be liberally construed to achieve its intended goals." Price v. Long Realty, Inc., 199 Mich.App. 461, 471, 502 N.W.2d 337 (1993). Requiring a plaintiff to prove the intent element of fraud when it is not provided for in the statute would clearly inhibit the intended goals of the MCPA and would be contrary to the plain language of the statute.
Notably, the Michigan Model Civil Jury Instructions state that a plaintiff must only prove that "(1) [d]efendant engaged in trade or commerce; (2)[d]efendant committed one or more of the prohibited methods, acts, or practices alleged by plaintiff [as stated in MCL 445.903 ]; and (3)[p]laintiff suffered a loss as a result of defendant's violation of the act." M Civ JI 113.09. There is no element that requires proof of actual knowledge or reckless disregard for the truth.
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The plain, unambiguous language of the prohibited practices at issue in this case, MCL 445.903(1)(c), (e), (s), and (cc), does not require plaintiffs to prove that defendant made a statement knowing it was false, that defendant acted recklessly without any knowledge of the statement's truth, or that defendant knowingly or recklessly failed to reveal a material fact. With regard to the prohibited practices at issue in this case, we conclude there is a genuine issue of material fact regarding defendant's liability under the MCPA and, therefore, plaintiffs were also not entitled to summary disposition with regard to liability.
First, regarding MCL 445.903(1)(c), plaintiffs argue that defendant violated the MCPA by representing that the ozone generator would remove the smoke odor when, in actuality, it would not. In support of their argument, plaintiffs cite a public information document issued by the United States Environmental Protection Agency, which states that ozone is generally ineffective at controlling indoor air pollution. Although the document cites written sources from the late 1990s, there is no indication of when this document was issued. The document states that while vendors of ozone generators have made statements that lead the public to believe the machines are safe and effective at controlling indoor air pollution, health professionals have refuted these claims "for centuries." Nevertheless, Siegel testified during his deposition that an ozone generator is capable of removing odors by reacting with components of the odors and chemically converting them to something that is less odorous. Brian McCall, the owner of McCall Enterprises, also testified that he operates an ozone generator in his building a couple times a month, and he did not state that it was ineffective at removing indoor air pollution. Accordingly, there is a genuine issue of material fact whether the ozone generator was capable of removing the smoke odor.
Next, regarding MCL 445.903(1)(e), plaintiffs argue that defendant violated the MCPA by representing that use of the ozone generator was the standard of the industry, even though the EPA document indicates that it is not. Plaintiffs cite defense counsel's statements at the summary disposition hearing in which he pointed out that plaintiffs have not provided industry experts who can define the remediation industry standard regarding the use of ozone generators. Plaintiffs do not cite specific representations made by defendant that the ozone generator was the industry standard. Accordingly, plaintiffs have not shown how summary disposition in their favor was appropriate under MCL 445.903(1)(e).
Next, plaintiffs argue that defendant violated MCL 445.903(1)(s) by failing to reveal a material fact—that ozone generators are destructive and would affect the integrity of the house—that could not have been reasonably known to the consumer and that tends to mislead the consumer. The literature and expert opinions provided by plaintiffs certainly support the fact that, at certain levels, ozone can damage household materials, and defendant does not dispute this. In fact, McCall testified that he was aware that "very high levels of ozone" could react with natural rubber, but he was unaware what that level would be. Plaintiff Travis, however, testified that in conducting a simple Google search, she learned that ozone could cause damage to household products. This creates a genuine issue of material fact with regard to whether the fact that ozone could damage household materials is a fact that could not reasonably be known by the consumer.
Finally, plaintiffs argue that defendant violated MCL 445.903(1)(cc) in that it positively represented that the machine would eliminate the smoke odor but failed to disclose that the machine could also cause collateral property damage. However, there is a genuine issue of material fact whether defendant positively represented that the machine would in fact eliminate the smoke odor. The statements plaintiffs cite to support their claim on appeal were actually made to plaintiff Travis by State Farm representatives, who indicated they would contact defendant about placing an ozone generator in the house to try to eliminate the smoke odor. Although plaintiff Travis testified that it was her understanding the ozone generator would get rid of the smoke odor, plaintiffs do not point to any statements made directly by defendant that the ozone generator would actually be successful in removing the smoke odor. In fact, plaintiff Brownlow testified that defendant's employee told him that this was the first time defendant had used an ozone generator in a residential house. Accordingly, plaintiffs have not shown how summary disposition in their favor was appropriate. There is a genuine issue of material fact regarding defendant's liability under the MCPA, which is for the jury to decide.Finally, our holdings that the trial court erred by granting defendant's second motion for summary disposition regarding causation and by dismissing plaintiff Brownlow as a party for lack of standing necessitate reversal of the case evaluation sanctions against both plaintiffs; therefore, we decline to address the issues raised by plaintiffs regarding the case evaluation sanctions.
In Docket No. 325843, we reverse the trial court's order granting summary disposition in favor of defendant and against plaintiff Travis. We also reverse the trial court's order dismissing plaintiff Brownlow as a party, as well as the order awarding defendant case evaluation sanctions against plaintiff Brownlow. In Docket No. 326903, we reverse the trial court's orders granting case evaluation sanctions against plaintiff Travis. We remand the matter for proceedings consistent with our opinion, and we direct that on remand the matter be assigned to a different circuit court judge.
Plaintiffs, having prevailed in full, may tax costs pursuant to MCR 7.219.
GLEICHER, P.J., and MURPHY and OWENS, JJ., concurred.