Beckie Price’s home in Dewitt was initially heated by an oil furnace, with the oil tank in the basement. She had a standing order with Mooney Oil, which was later purchased by High Pointe Oil Company, to keep the tank full. In 2006, Price replaced her oil furnace with a propane furnace, cancelled her service with High Pointe Oil, and had the oil furnace and oil tank removed.
But on November 17, 2007, while Price was at work, High Pointe’s driver made a delivery to the house; her name had been inadvertently placed back on the company’s “keep full” list. The oil truck driver began pumping fuel oil into the basement, using a fill line outside the house. By the time the driver realized his mistake, 396 gallons of fuel oil had been pumped into Price’s basement.
An environmental consulting company assessed the damage. Although some of Price’s personal items could be salvaged, many were too heavily contaminated, and because the oil had leached into the soil, the entire house had to be demolished and the site had to be decontaminated. On April 18, 2008, the Department of Environmental Quality notified Price that the excavation and cleanup of the soil were complete. While she was displaced, Price lived in her parents’ home, then in a duplex, before moving into a new house on the same property as her old home. The new house, which Price helped to build, had to be built in a different location on the property because the excavation had left the old site unstable.
In August 2008, Price sued High Pointe, alleging negligence, gross negligence, negligent infliction of emotional distress, nuisance, trespass, and a private citizen’s claim under the Natural Resources and Environmental Protection Act, MCL 324.101 et seq. She requested general and compensatory damages for the economic harm caused by defendant’s conduct, as well as noneconomic damages for annoyance, inconvenience, pain, suffering, mental anguish, emotional distress, and psychological injuries caused by the destruction of her house.
Price and High Pointe both filed motions for summary disposition. Price requested, among other matters, that the circuit court rule as a matter of law in her favor on several of her claims. High Pointe asked the court to dismiss Price’s claim for noneconomic damages, arguing that, to the extent Price was entitled to damages, those damages were limited to economic loss only. The parties agreed that, while Price was displaced from her home, all her economic losses were covered by High Pointe, High Pointe’s insurer, or Price’s own insurer. Price testified at her deposition that she had not incurred any out-of-pocket costs by being displaced from her home.
The circuit court granted summary disposition in favor of Price on her negligence claim, but dismissed her claims of gross negligence and negligent infliction of emotional distress. The court stated, “I have deprived the Plaintiff of the opportunity to seek mental anguish damages secondary to property damage, and I think that’s the law . . . .” But, the court said, Price could pursue her claim for non-economic damages in connection with her negligence claim.
In January 2010, the case proceeded to a jury trial – ultimately, only on the issue of Price’s noneconomic damages for her negligence claim. Over the objections of High Pointe’s counsel, the circuit court ruled that Price was entitled to seek noneconomic damages for mental anguish, fright, shock, denial of social pleasures or enjoyments, and any embarrassment she suffered as a result of High Pointe’s negligence. Price testified that she felt a great sense of loss over the destruction of her house, that she was embarrassed to move into her parents’ house as an adult, that she took an antidepressant for several months, and that she suffered from sleeplessness and an inability to concentrate because of the stress of the situation. The jury returned a verdict of $100,000 in Price’s favor. The circuit court denied High Pointe’s motion for a new trial. High Pointe also moved for judgment notwithstanding the verdict (arguing that Price presented insufficient evidence to go to the jury), and remittitur (arguing that the verdict was excessive and should be reduced), but the court denied those motions as well. High Pointe appealed.
But in a published decision, the Court of Appeals affirmed the circuit court and upheld the $100,000 verdict. “We agree with the trial court that it was legally permissible for plaintiff to seek mental anguish damages in this case,” the Court of Appeals stated.
The issue – whether a plaintiff can seek damages for emotional distress and mental anguish caused by the destruction of real property – is one of first impression in Michigan, the appellate panel noted. But, “[a]s a general rule, noneconomic damages are recoverable in tort claims, and emotional damages include both emotional distress and mental anguish,” the panel explained. In a tort action, the one who committed the tort is liable for all injuries caused by the wrongful act whether or not those injuries are foreseeable, provided that the injuries are the “legal and natural consequences of the wrongful act” and “might reasonably have been anticipated,” said the panel, citing Sutter v Biggs, 377 Mich 80 (1965).
High Pointe argued that Price was limited to recovering the difference between the market value of her house before and after the damage; because she had already been paid the difference in market value, Price was fully compensated for her loss, High Pointe contended. But the appellate court rejected that argument, saying it concerned only economic loss and not non-economic damages.
The panel also was not persuaded to follow earlier decisions that disallowed damages for emotional suffering for injuries to “chattel” – a person’s belongings. “Authors and poets alike wax philosophical about the unique value of a home, which often provides as much, if not more, in the way of feelings of emotion and memories as it does shelter,” the appellate court said. “[D]amage to or destruction of one’s home or land would, in most cases, produce emotional suffering. … Put simply, there are numerous and substantial differences between real and personal property. As such, we decline to extend the noneconomic damages carveout that this Court has applied to personal property.”
High Pointe argued, citing Daley v LaCroix, 384 Mich 4 (1970), that Price could not recover damages for emotional distress because she was not present when the oil was pumped into her basement and could not have suffered fear of physical harm. But the Court of Appeals disagreed: “Contrary to defendant’s argument, the Daley Court’s holding does not require that a plaintiff suffer emotional distress as a result of fear of physical impact. Nor did the Court hold that a plaintiff must witness or contemporaneously experience the underlying wrong. Rather, all that is required under Daley is that a plaintiff’s physical injury be a natural result of emotional distress proximately caused by the defendant’s negligence.”
Moreover, emotional distress and mental anguish are separate measures of damages, the Court of Appeals said, so Price was not required to show that she suffered a physical injury to maintain her mental anguish claim. Although emotional distress requires a manifestation of physical injury, mental anguish does not, the appellate panel said. “In order for a plaintiff to recover mental anguish damages, those damages must naturally flow from the injury … in this case, the destruction of plaintiff’s real property. Mental anguish encompasses, among other things, shame, mortification, mental pain and anxiety, annoyance, discomfiture, and humiliation.” Although High Pointe argued that Price had not presented sufficient evidence of mental anguish, “the trial court did not err by determining that a genuine issue of material fact existed in regard to plaintiff’s claim for noneconomic damages,” the Court of Appeals said. “Plaintiff presented evidence that as a result of the destruction of her home, she suffered mental anguish, specifically mental pain and anxiety, and discomfiture … She also presented evidence of fright, shock, and denial of the enjoyment of her property.”
The panel also upheld the $100,000 verdict, saying that High Pointe had not shown that the verdict must be reduced. “Given the evidence presented by plaintiff and the lack of support for defendant’s claim that the jury was improperly influenced by sympathy, we cannot conclude that the trial court abused its discretion by denying defendant’s motion for remittitur,” the Court of Appeals concluded.
High Pointe appealed, and in an order dated March 21, 2012, the Supreme Court granted leave to appeal. In its order, the Court directed the parties to address in their briefs “whether mental distress damages may be awarded for negligent damage to real property.”