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Boyle v. General Motors Corp.3/22/2002
FOR PUBLICATION
Plaintiffs appeal as of right a circuit court order granting defendants' motion for summary disposition pursuant to MCR 2.116(C)(7). We reverse and remand.
Plaintiff Patricia Boyle applied to buy an existing Chevrolet dealership. Defendants required that she have sufficient operating capital to fund the dealership and set the capitalization figure at $350,000. Plaintiffs raised the money and took over an existing dealership in September 1988.
In 1991, plaintiffs experienced financial difficulties and agreed to sell the dealership to Frank Lopez. A proposed agreement was submitted to defendants for their approval. Defendants represented to plaintiffs that "the rent factor in the agreement with Lopez was not in accordance with its accepted rent factor formula." In reliance on defendants' representation, plaintiffs did not complete the transaction with Lopez. Plaintiffs' dealership went out of business in September 1992 "in the wake of financial problems."
In September 1993 plaintiffs learned that defendants had told the former owner of the dealership that "it was easier for General Motors to let Pat Boyle buy a dealership and watch her fail than it would have been to prevent her from buying a dealership." In September 1995 plaintiffs learned that the dealership was woefully undercapitalized and doomed to fail. Sometime later that year, plaintiffs also learned from a General Motors employee that the rent factor in the proposed sales agreement with Lopez was within the company's formula.
Plaintiffs filed this action in August 1999 asserting two counts of fraud: First, that by setting the capitalization requirement at $350,000, defendants were representing that $350,000 was sufficient to "properly start and effectively operate" the dealership, that the representation was false at the time it was made, and that plaintiffs relied on the misrepresentation. Plaintiffs assert that this misrepresentation was discovered in 1995. Second, that defendants falsely represented that Lopez' "rent factor did not conform with the acceptable formula for rent factors." Plaintiffs assert that this misrepresentation was also discovered in 1995.
Defendants filed a motion for summary disposition, asserting that plaintiffs' claims were barred by the statute of limitations. Relying on Thatcher v Detroit Trust Co, 288 Mich 410; 285 NW 2 (1939), defendants argued that the discovery rule does not apply to a fraud action unless the defendant conceals the cause of action. Plaintiffs, citing Fagerberg v LeBlanc, 164 Mich App 349; 416 NW2d 438 (1987), responded that the discovery rule applies to a fraud action and that Thatcher was no longer good law. The trial court found that it was bound by the Thatcher decision under the rule of stare decisis and granted defendants' motion for summary disposition.
The pivotal issue presented is whether the limitations period for plaintiffs' fraud action began running when the alleged fraud occurred or, under the common law discovery rule, when plaintiffs discovered it. Questions regarding statutes of limitations are reviewed de novo. Ins Comm'r v Aageson Thibo Agency, 226 Mich App 336, 340-341; 573 Nw2d 1997.
A fraud claim must be brought within six years from the time the claim accrues. MCL 600.5813; Kwasny v Driessen, 42 Mich App 442, 445-446; 202 NW2d 443 (1972). A claim accrues when the "wrong" is done, MCL 600.5827, which has been interpreted to mean the time when the plaintiff was harmed rather than the time when the defendant acted. Stephens v Dixon, 449 Mich 531, 534-535; 536 NW2d 7555 (1995).
The alleged wrongs in this case occurred in 1988 and 1991. Plaintiffs assert
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