Opinion
Docket No. 8396.
Decided April 26, 1974.
Appeal from Alpena, Philip J. Glennie, J. Submitted Division 3 February 12, 1974, at Lansing. (Docket No. 8396.) Decided April 26, 1974.
Complaint by William O. Gilliland against Baldwin-Lima-Hamilton Corporation for breach of express and implied warranty and negligent manufacture and design. Judgment for plaintiff. Defendant appeals. Affirmed in part, reversed in part, and remanded for hearing on the issue of damages.
Isadore Isackson, for plaintiff.
Gillard Gillard, for defendant.
Plaintiff, purchaser of a gravel crushing plant, sued the defendant manufacturer of the plant on theories of breach of express and implied warranty and negligent manufacture and design. The trial court, in a long and detailed opinion, found no breach of warranty and made no specific findings of negligence in manufacture or design of enumerated parts. However, the court made general findings of negligence, and its finding that "plaintiff should not be held liable for costs incurred in synchronizing and regulating a new machine product" implicitly constituted a holding that plaintiff's damage recovery was based on the general negligence theory which he pled.
By consent of the parties, Straits Engineering Company was dropped from the lawsuit.
This Court will not set aside a trial court's finding of fact unless that finding is clearly erroneous. In Re Woods Estate, 49 Mich. App. 412; 212 N.W.2d 240 (1973); GCR 1963, 517.1. Upon reviewing the record, we do not find the trial court's determination that the defendant's negligence caused the plaintiff damages in synchronizing and regulating his new machine to be clearly erroneous.
However, the trial court's determination of the measure and, hence, the amount of damages was clearly erroneous. The trial court specifically found that the defendant's negligence caused the machine to be down for 229 hours and then determined the amount of plaintiff's damage by applying a rental rate of $84.24 per hour, determining plaintiff's total damages in the amount of $19,290.96.
Michigan Courts have held that the use of rental value is proper only when a substitute chattel is actually rented. Young, Inc v Servair, Inc, 33 Mich. App. 643; 190 N.W.2d 316 (1971). Since no substitute plant was rented in the instant case, it was improper to use rental value. An appropriate measure of damages would have been the computation of lost profits due to the number of hours the machine was down. See generally Callaghan's Michigan Pleading Practice, § 36.319.
The trial court's determination of 229 hours of down time is also clearly erroneous because it was based on inadmissible hearsay.
It appears that the State of Michigan had a contract with the plaintiff and state inspectors were on hand at the pits to fill out daily reports on production. The reports would indicate the number of hours the plant was down and the reasons for the stoppage. Generally the state inspectors would have no personal knowledge of the shutdowns or the reason for them but would be informed of these facts by one of the gravel plant operators. Thus the notations in the reports, which were relied on by the trial judge and upon which he based his finding of 229 hours of down time, were often based on hearsay evidence.
Defendant's expert, Robert Scott, testified at length using the state reports. Scott would review the reasons given for the down time on the reports and then give his opinion as to whether the loss of production was due to a malfunction of the machinery. This is hearsay upon hearsay. Even the trial judge conceded that the evidence was hearsay but he admitted the evidence apparently under the official records exception to the hearsay rule. Michigan does recognize the official records exception to the hearsay rule. See MCLA 600.2107; MSA 27A.2107. However, since the information as to hours of down time was not required in an official record by statute, and since the information was not based upon the personal knowledge of the reporter and was offered as evidence of facts reported, it was subject to the hearsay rule and did not fall within the official records exception. Hale v Cole, 241 Mich. 624; 217 N.W. 898 (1928); Derrick v Blazers, 355 Mich. 176; 93 N.W.2d 909 (1959).
The defendant's contention that expert witness fees were improperly awarded is without merit. Although GCR 1963, 526.1, provides that costs shall be allowed to the prevailing party, the fact that plaintiff did not prevail on all his counts does not preclude award of expert witness costs. GCR 1963, 526.3, provides that where there is only a single cause of action, the party who prevails on the entire record shall be deemed the prevailing party. Although the plaintiff's complaint stated two counts, warranty and negligence, the counts clearly arose out of a single cause of action, and since only the plaintiff was awarded damages and thus prevailed on the entire record, the award of witness fees was proper.
The defendant's argument that expert witness fees were improperly awarded since the witness was contradicted at trial is clearly without merit. Expert witness fees are governed by statute. MCLA 600.2164; MSA 27A.2164. The trial judge qualified the witness as an expert. This is a discretional decision reversible only if abuse is shown, and we find none. See Taylor v Michigan Power Co, 45 Mich. App. 453; 206 N.W.2d 815 (1973); Hesse v Diehl, 279 Mich. 168; 271 N.W. 721 (1937).
This Court having determined that the trial court determined damages improperly, the case is remanded to the trial court for a hearing on damages, viz., the number of hours of down time attributable to the negligence of the defendant, the same to be determined without reference to the improper hearsay testimony, and for a computation of the consequent amount of damages based upon any loss of profit which the plaintiff may have suffered due to the malfunction of the machine in question.
Affirmed in part; reversed in part and remanded. Neither party having prevailed, no costs are awarded.
All concurred.