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Quest Diagnostics12/10/2002
FOR PUBLICATION
In these consolidated appeals, plaintiffs appeal as of right from the trial court's order granting summary disposition for defendants. We reverse to the extent that these cases relate to defendant Corby Energy Services, Inc. ("Corby").
Facts and Procedure
In June 1999, defendant Corby ruptured a water main while performing underground work on behalf of defendants MCI Worldcom, Inc., MCI Worldcom Communications, Inc., and MCI Worldcom Network Services, Inc. (collectively the "MCI defendants"). Plaintiffs brought the instant negligence action, alleging that as a result of the broken water main, they were without running water for several days, they had to boil their drinking water for several days and the business plaintiffs were forced to close or curtail their operations. Plaintiffs also brought a claim of negligence per se based on defendants' failure to obtain a permit authorizing the excavating work. Defendants moved for summary disposition, arguing that the economic loss doctrine and public policy considerations precluded any recovery by plaintiffs because plaintiffs sought purely economic damages. The trial court granted summary disposition for defendants and these appeals followed.
Oral argument in this case was heard in May 2002. On August 2, 2002, the MCI defendants filed a notice of bankruptcy in these consolidated cases. On August 16, 2002, this Court ordered the administrative closure of the appeal on the grounds that further proceedings were stayed by 11 USC 362 due to the MCI defendants' bankruptcy filing. Plaintiffs filed a motion for rehearing of the stay order. This Court granted in part the motion for rehearing, allowing the appeals to proceed only as they relate to defendant Corby.
Analysis
Plaintiffs argue that the trial court erred in granting summary disposition on the basis that the economic loss doctrine barred plaintiffs' claims. We review de novo a trial court's decision on a motion for summary disposition. Spiek v Dep't of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). Under MCR 2.116(C)(8), a motion for failure to state a claim for which relief may be granted tests the legal sufficiency of the pleadings. Simko v Blake, 448 Mich 648, 654; 532 NW2d 842 (1995). "All well-pleaded factual allegations are accepted as true and construed in a light most favorable to the non-movant." Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999). Summary disposition under MCR 2.116(C)(8) is proper when a claim is so clearly unenforceable as a matter of law that no factual development could establish the claim and justify recovery. Simko, supra.
A large majority of jurisdictions in the United States have adopted some form of a judicially created limitation on tort actions that seek to recover economic damages resulting from commercial transactions. This limitation is known as the economic loss doctrine. Mt. Lebanon Personal Care Home, Inc v Hoover Universal, Inc, 276 F3d 845, 848 (CA 6, 2002), citing Frumer & Friedman, Products Liability, ยง 13.11 (2000). The economic loss doctrine is derived from the Uniform Commercial Code ("UCC").
According to White & Summers, Uniform Commercial Code (4th ed), p 386, "the economic loss doctrine a crude proxy for the dividing line between what is tort and what is not." The doctrine's basic premise is that economic losses that relate to commercial transactions are not recoverable in tort. White and Summers reason:
Putting aside injury to third parties that arises out of conventional tortuous behavior and ignoring personal injury to the buyer, we see no reason why all other liability arising out of defective goods
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