Ronald Brownlow v. McCall Enterprises Inc , 315 Mich. App. 103 ( 2016 )

STATE OF MICHIGAN
COURT OF APPEALS
RONALD BROWNLOW and SUSAN TRAVIS, FOR PUBLICATION
April 19, 2016
Plaintiffs-Appellants, 9:05 a.m.
v Nos. 325843 & 326903
Washtenaw Circuit Court
MCCALL ENTERPRISES, INC. d/b/a PAUL LC No. 10-000049-NZ
DAVIS RESTORATION OF WASHTENAW
COUNTY,
Defendant-Appellee,
and
STATE FARM FIRE & CASUALTY
COMPANY,
Defendant.
Before: GLEICHER, P.J., and MURPHY and OWENS, JJ.
PER CURIAM.
In this consolidated appeal, plaintiffs appeal as of right two orders entered by the trial
court. The first, in Docket No. 325843, is a July 29, 2015 final order granting summary
disposition in favor of defendant, McCall Enterprises, Inc.,1 and dismissing plaintiff Travis’s
claim for damages under the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq.
The second, in Docket No. 326903, is a March 27, 2015 order granting defendant attorney fees
and costs as case evaluation sanctions against plaintiff Travis. Prior to entering its final order
granting summary disposition in favor of defendant and dismissing plaintiff Travis’s claim for
damages under the MCPA, the trial court entered a June 12, 2014 order dismissing plaintiff
Brownlow as a party in the case. The trial court then entered an October 3, 2014 order granting
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’s
order granting summary disposition in favor of defendant. We also reverse the trial court’s order
1
State Farm is not a party to this appeal. Defendant refers to McCall Enterprises.
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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.
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unpublished opinion per curiam of the Court of Appeals, issued February 12, 2013 (Docket Nos.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 & 307883). 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, but there was
significant 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,
which plaintiffs did not appeal. The trial court also dismissed the MCPA claim, concluding that
the transaction was specifically authorized by defendant’s contractor license, and thus 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’s decision granting summary disposition, concluding
that the general transaction of cleaning a house was not specifically authorized by defendant’s
contractor license, and thus, not exempt from the act. Brownlow, unpub op at 3-4. This Court
also addressed defendant’s alternate argument supporting summary disposition—that plaintiffs
could not establish causation under the MCPA. Id. at 4-6. This Court rejected defendant’s
argument, finding that plaintiffs presented “sufficient evidence for a jury to conclude that the
ozone generator caused the damage to plaintiffs’ house without resort to speculation.” Id. at 6.
Specifically, this Court concluded that plaintiffs did not need to establish the precise amount of
ozone that was released into their house in order to establish that the ozone caused the damage.
Id. at 5. 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 5-6. Our Supreme Court denied leave to appeal. Brownlow v McCall
Enterprises, Inc, 495 Mich. 852; 836 N.W.2d 167 (2013).
The case was remanded to the trial court where 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 damages to their “house,”
which implicitly included only the realty. Defendant also requested that the trial court dismiss
plaintiff Brownlow as a party to the action because 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
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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 counter-motion 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 therefore, granted defendant’s
motion for summary disposition pursuant to MCR 2.116(C)(10). It also denied plaintiff Travis’s
counter motion 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 where
this Court previously ruled that 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[,]” provided that
the facts remain materially the same. Driver v Hanley, 226 Mich. App. 558, 565; 575 NW2d 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 NW2d 40 (2000).
Defendant cites Brown v Drake-Willock Int’l, Ltd, 209 Mich. App. 136, 144; 530 NW2d
510 (1995), citing Borkus v Mich Nat’l Bank, 117 Mich. App. 662, 666; 324 NW2d 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
that factual questions existed which precluded summary disposition. In its prior decision in this
case, it was not merely the existence of factual questions that occasioned this Court’s remand
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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 in granting summary disposition, particularly where
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 initially reversed because factual questions existed.
Borkus, 117 Mich. App. at 667. On remand to the trial court, a bench trial was held. Id. at 665.
Defendant appealed the trial court’s ruling and plaintiff argued that the law of the case doctrine
barred this Court from considering the issues raised by defendant. Id. at 666. 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
defendant’s claims raised in the first appeal. Id. at 666-667. Therefore, defendant was free to
raise the issues in the second appeal, following the bench trial, because they were never
addressed by this Court previously. 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, “Where 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.
In Brown, plaintiff argued that the law of the case doctrine precluded defendants from
relitigating the issue of duty to warn. Brown, 209 Mich. App. at 144. This Court stated that
plaintiff misunderstood this Court’s prior decision. Id. Specifically, this Court did not
previously rule 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
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 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 the application of the law of 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 by 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 where this Court merely remands
because factual questions existed and never addresses issues raised in the 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.
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In its 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. South Macomb Disposal Auth, 243 Mich. App. at 655;
Driver, 226 Mich. App. at 565. 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 in its earlier decision did not have the benefit of the new
experts’ opinions, any differences between the experts’ opinions that this Court cited in its earlier
opinion 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 NW2d 780 (2002),
judgment rev’d on other grounds 468 Mich. 886 (2003) (finding that the law of the case doctrine
applied where the facts remained materially the same and any differences were legally
insignificant). The deaths of Verne Brown and Roger Wabeke following this Court’s remand
prompted plaintiffs to substitute new experts. In its earlier opinion, this Court noted that Wabeke
focused on the health risks of ozone and 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 concluded 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 things
that are more organic are more reactive with ozone, such as 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 photos he viewed of the
damage to plaintiffs’ house showed “very stereotypical degradation patterns” from ozone.
Further, defendant spends a great deal of time arguing over the fact that the level of
ozone concentration in the house was unknown and that plaintiffs’ new experts could not opine
as to the level of ozone concentration in the house, as Brown was able to do. 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,
unpub op at 5. 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 speculating. These facts remained materially the same and were not affected by the
substitution of new experts, particularly where, 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
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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.
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 its earlier decision that no witness had advanced any possible cause of the
alleged damages other than ozone exposure. See Brownlow, unpub op at 6. Plaintiffs’ new
experts, however, merely acknowledged that there could be other possible factors which caused
plaintiffs’ damages, but 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 any
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, Siegel could not rule out that age or ultraviolet rays damaged the carpet with
“perfect certainty,” but the damage was certainly consistent with ozone exposure, and he stated
that ozone was the likely cause. Again, the experts’ opinions go to weight of the evidence
presented at trial and do not materially change the facts.2
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’
2
In reaching our decision, we reject defendant’s argument that the trial court determined that
plaintiffs’ new experts were not qualified to opine pursuant to 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 particularly 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 the 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.
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house. This is particularly true where there is no indication based on the testimony of
defendant’s employee that the generator was not operating as intended when he placed it in
plaintiffs’ house, where the ozone generator had successfully removed the smoke odor, and
where 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 finding 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.
Next, plaintiffs argue that the trial court abused its discretion in 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 Hospital of
Detroit, 149 Mich. App. 412, 418; 385 NW2d 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 NW2d 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’ claims for personal property
damage and quiet enjoyment 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
NW2d 120 (2000). The issue of whether plaintiffs’ claim for property damage under the MCPA
was limited to real or personal property was never before this Court previously, and this Court
did not implicitly or explicitly decide that issue.
In its opinion, this Court interchangeably used the terms “home” and “house” and only
referred to damage as “property” damages. Additionally, this Court implicitly referenced
damage that occurred to plaintiffs’ personal property. For example, this Court determined that
there was sufficient evidence that ozone can damage building and household materials.
Brownlow, unpub op at 5. This evidence included plaintiffs’ testimony 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 5-6.
Contrary to the trial court’s determination, there was no need for this Court to be specific
with regard to the types of property, when the issue of whether the MCPA claim was limited to
real or personal property 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.”
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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. 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 counter-
motion for summary disposition as to 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 NW2d 88 (2012). “A motion under MCR 2.116(C)(10) tests the factual sufficiency of
the complaint.” Maiden v Rozwood, 461 Mich. 109, 119; 597 NW2d 817 (1999). In reviewing
the motion, we consider “the pleadings, admissions, and other evidence submitted by the parties
in a light most favorable to the nonmoving party.” Latham v Barton Malow Co, 480 Mich. 105,
111; 746 NW2d 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 NW2d 8 (2008).
Plaintiffs argue summary disposition regarding liability was appropriate because
defendant violated the following provisions of the MCPA:
(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.
***
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(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 cites Zine v Chrysler Corp, 236 Mich. App. 261, 283; 600
NW2d 384 (1999), quoting Mayhall v A.H. Pond Co, Inc, 129 Mich. App. 178, 182-183; 341
NW2d 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 all of the
subsections plaintiffs rely on for their MCPA claim are fraud based, and thus, plaintiff must
plead and establish all the elements of fraud, specifically that defendant had actual knowledge of
the misrepresentation or reckless disregard of its truth.3 However, defendant’s argument
erroneously interprets the rule of law stated in Zine, and writes elements of fraud into the
provisions of the MCPA where they do not, and should not, exist, thereby ignoring the
longstanding principles of statutory interpretation.
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 NW2d 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. “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 NW2d 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 the statute are given
their plain and ordinary meaning, they provide the most reliable evidence of legislative intent.
Id. at 156-157 (citation omitted). Further, to give words their plain and ordinary meaning, this
Court may use dictionary definitions. Id. at 156. 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 was 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 dictionary definition for the plan and ordinary meaning of
non-legally technical words in statutes). Zine, 236 Mich. App. at 283. The panel in Zine looked
to the common-law tort of fraud to determine whether the term “material fact” in subsection
(3)(1)(s) must affect the transaction. Id. at 282-283. This is consistent with the longstanding
principles of statutory interpretation, i.e., this Court must first look to the language of the statute
to determine the Legislature’s intent, and give words their plain and ordinary meaning. But
where 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
3
To support this argument, defendant relies on unpublished cases, which are not precedentially
binding on this Court. MCR 7.215(C)(1).
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Mich at 439 (looking 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.).
Citing 2B Singer, Statutes and Statutory Construction (6th ed), § 50:03, p 152, Ford
Motor Co states 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. 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., the intent of the merchant.
Edwin M. Bladen, How and Why the Consumer Protection Act Came To Be,
(accessed April 1, 2016), p 9-10.4 Its
purpose was to provide consumers with an effective remedy where, 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 NW2d 562 (2012).
Although Bladen states that the authors of the MCPA did not intend for the act to be
construed with reference to the common-law tort of fraud, How and Why the Consumer
Protection Act Came To Be, p 10, other than to eliminate the element of intent, there is nothing
in the MCPA that shows a clear legislative intent to alter the common law meanings of the fraud-
based language contained in the MCPA. See Ford Motor Co, 475 Mich. at 439-440 (noting that
absent a clear legislative intent in the GPTA itself to alter the meaning of the common-law term
“mutual mistake of fact,” the Court may look 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.
Therefore, consistent with our holding in Zine and the longstanding principles of statutory
interpretation, we may look to the common-law tort of fraud for guidance when interpreting
ambiguous provisions of the MCPA, but only where necessary, i.e., where the statute 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 MCPA contain fraud-based language, and there are no
other published cases from this Court or our Supreme Court which state this proposition. By
concluding that a plaintiff must show that the defendant had actual knowledge of the
misrepresentation or 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.
4
Bladen was the principal author of the MCPA.
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Simply because some 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(g) (emphasis added) (“Advertising or
representing goods or services with intent not to dispose of those goods or services as advertised
or represented.”); MCL 445.903(h) (emphasis added) (“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.”). 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 NW2d 337 (1993). Requiring a plaintiff to prove the
intent element of fraud where it is not provided for in the statute clearly inhibits the intended
goals of the MCPA and is contrary to the plain language of the statute.5
The plain, unambiguous language of the prohibited practices at issue in this case,
subsections (3)(1)(c), (e), (s), and (cc), does not require plaintiffs to prove that defendant made a
statement knowing it was false or acted recklessly without any knowledge of its 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 that there is a genuine issue of material fact regarding
defendant’s liability under the MCPA and, therefore, plaintiffs were not entitled to summary
disposition with regard to liability.
First, regarding subsection (3)(1)(c), plaintiffs argue that defendants violated the MCPA
by representing that the ozone generator would remove the smoke odor when, in actuality, it
would not. Plaintiffs cite a public information document issued by the United States
Environmental Protection Agency (EPA), 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, however, states
that vendors of ozone generators made statements that lead the public to believe that the
machines are safe and effective at controlling indoor air pollution, but health professionals have
refuted these claims “for centuries.” Nevertheless, Siegel testified that ozone is capable of
removing odors. It does so by reacting with the components of the odors and chemically
converting them to something that is less odorous. Brian McCall 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.
5
Notably, the Michigan Model Civil Jury Instructions state that plaintiff only has to prove that
(1) defendant engaged in trade or commerce; (2) defendant committed one or more of the
prohibited methods, acts, or practices alleged by plaintiff [as stated in MCL 445.903]; and (3)
plaintiff suffered a loss as a result of defendant’s violation of the act. M Civ JI 113.09. There is
no reference of actual knowledge or reckless disregard for the truth.
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Next, regarding subdivision (e), plaintiffs argue that defendant violated the MCPA by
representing that the use of ozone generator was the standard of the industry, but the EPA
document indicates that is not. Plaintiffs cite defense counsel’s statements at the summary
disposition hearing which referenced the fact that plaintiffs have not provided industry experts
who can define the remediation industry standard regarding 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 subsection (3)(1)(e).
Next, plaintiffs argue that defendant violated subsection (3)(1)(s) by failing to reveal a
material fact, i.e., ozone generators are destructive and would affect the integrity of the house,
which could not have been reasonably known to the consumer and which 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, Brian 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. However, plaintiff
Travis 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 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 positively represented that the machine would get
rid of the smoke odor, but failed to disclose that the machine could also cause collateral property
damage in violation of subsection (3)(1)(cc). However, there is a genuine issue of material fact
whether defendant positively represented that the machine would in fact get rid of the smoke
odor. The statements plaintiffs cite to support this claim on appeal were actually made to
plaintiff Travis by State Farm representatives, who indicated that they would contact defendant
about placing an ozone generator in the house to try to get rid of the smoke odor. Although
plaintiff Travis testified that it was her understanding that the ozone generator would get rid of
the smoke odor, plaintiffs do not point to any statements made by defendant directly 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 holding 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, and
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. 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
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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.
/s/ Elizabeth L. Gleicher
/s/ William B. Murphy
/s/ Donald S. Owens
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