PER CURIAM.
In this case, defendant
We review de novo as a question of law whether a claim is barred by a statute of limitations. Scherer v. Hellstrom, 270 Mich.App. 458, 461, 716 N.W.2d 307 (2006).
We are to apply MCL 600.5807, which provides:
Thus, MCL 600.5807(8) requires that an action to recover damages for breach of contract must be brought within six years after the claim first accrued. Miller-Davis, 489 Mich. at 358, 802 N.W.2d 33; Blazer Foods, Inc. v. Restaurant Properties, Inc., 259 Mich.App. 241, 245, 673 N.W.2d 805 (2003).
With respect to accrual of a claim, MCL 600.5827 provides that except for cases covered by MCL 600.5829 to MCL 600.5838, "[a] claim accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results." Sections 5829 to 5838 cover claims relating to possession of land, a mutual and open account, warranty, common carriers, life insurance, installment contracts, alimony, and malpractice. None of these provisions applies in this case. Although plaintiff presents arguments in its supplemental brief regarding certain warranty provisions, plaintiff's complaint did not include a claim for breach of warranty. Miller-Davis, 489 Mich. at 359,
A contract claim accrues when the wrong occurs, i.e., when the promise is breached, regardless of when damage results. MCL 600.5827; Seyburn, Kahn, Ginn, Bess, Deitch & Serlin, PC v. Bakshi, 483 Mich. 345, 355, 771 N.W.2d 411 (2009); Tenneco Inc. v. Amerisure Mut. Ins. Co., 281 Mich.App. 429, 458, 761 N.W.2d 846 (2008). The "wrong" on which the contract claim is based is determined by examining the parties' contract. Tenneco, 281 Mich.App. at 458, 761 N.W.2d 846, citing Scherer 270 Mich.App. at 463, 716 N.W.2d 307. Although plaintiff asserts the breach of a so-called charge-back clause and an indemnification clause, the underlying basis for its claim is that defendant breached a contract condition providing that "[a]ll materials and/or work furnished on this order shall comply with the terms and requirements of the plans and specifications — where applicable."
Plaintiff was the general contractor on a construction project that included building a natatorium for a YMCA recreational complex, and defendant was a subcontractor with the responsibility of installing a proprietary wooden roofing system over which other roofing materials would be installed by other subcontractors. Miller-Davis, 285 Mich.App. at 292-293, 309, 777 N.W.2d 437. The wrong that plaintiff alleged with respect to defendant's having failed to "comply with the terms and requirements of the plans and specifications" of the contract must have occurred on or before defendant completed its portion of the overall construction project. This conclusion is consistent with this Court's prior decisions. "A cause of action for breach of a construction contract accrues at the time work on the contract is completed." Employers Mut. Cas. Co. v. Petroleum Equip., Inc., 190 Mich.App. 57, 63, 475 N.W.2d 418 (1991), citing Buckley v. Small, 52 Mich.App. 454, 455-456, 217 N.W.2d 422 (1974). In our prior opinion, we addressed the date when defendant completed its work on the project. In particular, we noted that defendant completed its work on the project by the end of February 1999 and certified to plaintiff that the work was complete on April 26, 1999, for the purpose of being paid.
We have not been presented any reason to revisit this analysis of when defendant completed the work it contracted with plaintiff to perform. Because defendant completed its work on the roof by the end of February 1999, the breach that plaintiff alleged — that defendant had failed to comply with the terms and requirements of the plans and specifications — must have occurred by that date. Further, because plaintiff did not file its complaint until May 12, 2005, more than six years after February 1999 and more than six years after plaintiff accepted the work through its payment at the end of April 1999, the statute of limitations barred those claims. MCL 600.5807(8); Buckley, 52 Mich.App. at 455-456, 217 N.W.2d 422.
Plaintiff asserts in its supplemental brief on remand that defendant waived application of the statute of limitations by not briefing and arguing the proper statute, MCL 600.5807(8). We find this argument disingenuous and reject it. At the outset of this case, defendant set forth several affirmative defenses to plaintiff's complaint. The affirmative defense defendant first asserted was the statute of repose. The second affirmative defense that defendant set forth was that plaintiff's claim was barred by the applicable statute of limitations. Throughout this litigation, in the trial court and on appeal, plaintiff has argued that MCL 600.5807(8) is the proper statute to determine whether its complaint was timely; defendant has argued that MCL 600.5839(1) was the proper statute for doing so. Our Supreme Court has now resolved the issue and remanded the case for this Court to apply MCL 600.5807(8) to determine whether plaintiff's breach of contract claims are time-barred. We find no reason not to comply with the remand instructions.
Plaintiff also argues that its claim accrued on June 11, 1999, the date the construction project was certified as being substantially complete by the YMCA, the architect, and plaintiff. Alternatively, plaintiff asserts that the date the certificate of occupancy was issued, August 2, 1999, is the pertinent accrual date. For the reasons already discussed, we reject these alternative accrual dates as applicable to when the purported breach of contract — the wrong — occurred. We note that the date of substantial completion, June 11, 1999, fixed the beginning of the one-year guarantee period that defendant provided regarding its work. Although the natatorium moisture problem was apparent almost immediately after occupancy, plaintiff made no claim against defendant during the guarantee period.
Plaintiff also asserts that defendant breached its contract in 2003 when defendant refused plaintiff's demand for corrective work that required deconstructing the natatorium's roof and reconstructing it according to a modified design that included application of a waterproofing element not in the original plans and specifications. Plaintiff asserts that defendant's refusal to perform the corrective work was a breach
The primary goal of interpretation of a contract is to honor the intent of the parties. Tenneco, 281 Mich.App. at 444, 761 N.W.2d 846. "[I]t is a court's obligation to determine the intent of the parties by examining the language of the contract according to its plain and ordinary meaning. If the contractual language is unambiguous, courts must interpret and enforce the contract as written, because an unambiguous contract reflects the parties' intent as a matter of law." In re Egbert R. Smith Trust, 480 Mich. 19, 24, 745 N.W.2d 754 (2008). When a contract, though poorly drafted or clumsily arranged, fairly discloses only one meaning, it is not ambiguous. Meagher v. Wayne State Univ., 222 Mich.App. 700, 722, 565 N.W.2d 401 (1997). Like a statute, a contract must be construed as a whole, and its terms must be construed in context. Perry v. Sied, 461 Mich. 680, 689 n. 10, 611 N.W.2d 516 (2000). Thus, when reading the terms of a contract according to their commonly used meaning, courts must also consider that "under the doctrine of noscitur a sociis, a word or phrase is given meaning by its context or setting." Bloomfield Estates Improvement Ass'n, Inc. v. City of Birmingham, 479 Mich. 206, 215, 737 N.W.2d 670 (2007) (citations and quotation marks omitted).
The charge-back clause of the parties' eight-page purchase-order contract provides:
We conclude that a fair reading of the charge-back clause in context does not admit of an interpretation that plaintiff may at any time it chooses, after plaintiff has accepted defendant's contract work and the project itself has been substantially completed, require defendant to correct work plaintiff believes is nonconforming. Rather, the paragraphs above and below the charge-back clause on the same page all relate to management and payment for defendant's work while the construction project is ongoing. The three paragraphs above the clause provide that "[t]ime of completion is of the essence of this order," that defendant must follow the direction of plaintiff's construction manager, and that defendant must complete its work in a manner that does not interfere with or delay the work of other subcontractors. Below the charge-back clause, a paragraph requires defendant to comply with applicable safety laws and regulations. The final paragraph on the same page provides for payment to defendant, which "will be made each month equal to 90% of the value of the work satisfactorily completed...." Moreover, the internal wording of the charge-back clause makes sense only if applied to the period when construction is ongoing, the subcontracted work is not
Our reading of the charge-back clause is also consistent with defendant's having provided a one-year guarantee of its work from the date of substantial completion of the project. In contrast, plaintiff's reading of the charge-back clause would render superfluous defendant's one-year guarantee. Thus, we conclude, on the basis of reading the charge-back clause as a whole and its placement in the contract, that the clause does not give plaintiff the right to demand corrective work after the project has been substantially completed and defendant has been paid for its work. Consequently, defendant did not breach the charge-back clause in 2003 when it refused plaintiff's demand that it perform corrective work on the natatorium roof. Plaintiff could still have timely brought its breach of contract claim on the theory of nonconforming work, but its declaration of defendant's default in 2003 for failing to perform corrective work did not reset the accrual date of that claim under MCL 600.5807(8) and MCL 600.5827.
We further note that our reading of the charge-back clause is consistent with our prior analysis of that provision. In discussing whether "acceptance" of defendant's work occurred within the meaning of MCL 600. 600.5839(1), we opined:
As discussed already, these dates also fixed the accrual date for plaintiff's breach of contract claim regarding alleged nonconforming work under the applicable statute of limitations, MCL 600.5807(8). Employers Mut. Cas. Co., 190 Mich.App. at 63, 475 N.W.2d 418.
The last contract claim that plaintiff asserted in its May 12, 2005, complaint is that defendant breached an indemnity clause by not reimbursing plaintiff for the costs associated with the 2003 corrective work, lost business profits, and its attorney fees for this action. After a bench trial, the trial court ruled that plaintiff had no cause of action for contractual indemnity because "no claims, suits, actions, recoveries, or demands were ever made, brought or recovered against" plaintiff within the meaning of the indemnity clause in plaintiff's contract with defendant. This
Regarding the statute of limitations on a promise to indemnify, "the period of limitations runs from `when the indemnitee sustained the loss,' or `when the promisor fails to perform under the contract.'" Tenneco, 281 Mich.App. at 458, 761 N.W.2d 846 (citations omitted). Under plaintiff's interpretation of the indemnity clause, the alleged breach of promise occurred in 2003 when defendant refused to reimburse plaintiff its costs associated with the corrective work on the roof of the YMCA's natatorium. This claim was clearly brought within the six-year period of limitations. MCL 600.5807(8). The issue remains whether the trial court correctly ruled that the indemnity clause of the parties' contract did not apply on the facts of this case. This is an issue of contract interpretation we review de novo, as already discussed. "An indemnity contract is to be construed in the same fashion as other contracts." Zahn v. Kroger Co., 483 Mich. 34, 40, 764 N.W.2d 207 (2009).
The indemnity clause of the parties' contract provides, in pertinent part:
Plaintiff argues that the use of the word "all" in the indemnification clause means the clause is intended to provide the broadest possible coverage. Further, plaintiff argues, the indemnification clause requires that defendant indemnify plaintiff for "all ... damages, losses ... and expenses including attorney's fees" caused by defendant's breach of contract, i.e., the failure to comply with the contract's plans and specifications. Plaintiff also asserts that the trial court clearly erred by finding that plaintiff was not under "demand" when it performed the corrective work because the indemnification clause is not conditioned on the filing of a formal claim or suit against plaintiff.
We conclude that the trial court correctly ruled that no one had brought a claim or demand against plaintiff within the meaning of the indemnification clause. Thus, because no claims or demands were
We read the indemnification clause as those clauses have traditionally been applied: to apportion ultimate liability among the contracting parties for liability to third parties. See Baker Contractor, Inc. v. Chris Nelsen & Son, Inc., 1 Mich.App. 450, 454, 136 N.W.2d 771 (1965). Indemnification clauses are not intended to be used as a sword or shield in disputes between the contracting parties with respect to the performance of the contract itself. Id. This view of the clause is buttressed by the second paragraph extending defendant's duty to indemnify to the other contracting parties from "all liabilities, either in tort or contract tort or contract."
Additionally, we note that even if the owner's "demand" that plaintiff correct the natatorium moisture problem was within the meaning of the indemnification clause, we would still affirm the trial court on this issue on alternative grounds. To the extent the owners demanded that plaintiff correct the natatorium moisture problem, the demand arose out of the owner's contract with plaintiff, not plaintiff's subcontract with defendant. "When a trial court reaches the right result for the wrong reason, the ruling will not be disturbed." Burise v. City of Pontiac, 282 Mich.App. 646, 652 n. 3, 766 N.W.2d 311 (2009).
Moreover, plaintiff failed to present sufficient proof at trial that the moisture problem was caused by defendant's failure to follow plans and specifications or by faulty workmanship. There is no evidence in the record that supports a conclusion that defendant's alleged defective workmanship caused the moisture problem other than an inference drawn from the fact that after the corrective work it was no longer present. The logical force of this inference, however, is totally lacking because the corrective work contained three important elements that were not present in the original plans: (1) a waterproofing agent was added, (2) expanding foam insulation sealed any gaps between the structural support and the Styrofoam block, and (3) butyl caulk sealant was applied to the top of all T superstructures.
A party claiming a breach of contract must establish by a preponderance of the evidence (1) that there was a contract, (2) that the other party breached the contract and, (3) that the party asserting breach of contract suffered damages as a result of the breach. Stevenson v. Brotherhoods Mut. Benefit, 312 Mich. 81, 90-91, 19 N.W.2d 494 (1945); Residential Ratepayer Consortium v. Pub. Serv. Comm., 198 Mich.App. 144, 149, 497 N.W.2d 558 (1993) (recognizing that the "preponderance of the evidence" is the quantum of proof in civil cases); see M. Civ. J.I. 142.01. This standard means the evidence must persuade the fact-finder that it is more likely than not that the proposition is true. M. Civ. J.I. 8.01. A party may meet its burden with circumstantial evidence, Karbel v. Comerica Bank, 247 Mich.App. 90, 97, 635 N.W.2d 69 (2001), and the fact-finder may weigh both the quality and the quantity of evidence presented, Kelly v. Builders Square, Inc., 465 Mich. 29, 39, 632 N.W.2d 912 (2001).
The specific weakness in plaintiff's case is the lack of evidence to causally link defendant's alleged nonconforming workmanship to the moisture problem,
This Court in Karbel, 247 Mich.App. at 98, 635 N.W.2d 69, examined the "the basic legal distinction between a reasonable inference and impermissible conjecture" by quoting Skinner v. Square D Co., 445 Mich. 153, 164-165, 516 N.W.2d 475 (1994), quoting Kaminski v. Grand Trunk W. R. Co., 347 Mich. 417, 422, 79 N.W.2d 899 (1956):
In Skinner, 445 Mich. at 164, 516 N.W.2d 475, the Court noted that to be adequate, "a plaintiff's circumstantial proof must facilitate reasonable inferences of causation, not mere speculation."
"`The plaintiff must introduce evidence which affords a reasonable basis for the conclusion that it is more likely than not that the conduct of the defendant was a cause in fact of the result. A mere possibility of such causation is not enough; and when the matter remains one of pure speculation or conjecture, or the probabilities are at best evenly balanced, it becomes the duty of the court to direct a verdict for the defendant.'" [Id. at 165, 516 N.W.2d 475, quoting Mulholland v. DEC Int'l Corp., 432 Mich. 395, 416, n. 18, 443 N.W.2d 340 (1989), quoting Prosser & Keeton, Torts (5th ed.), § 41, p.269 (emphasis added).]
Although these cases considered when a plaintiff had presented sufficient evidence to allow submission of the case to a jury, the same principles apply equally to cases tried before a judge without a jury. See Mich. Aero Club v. Shelley, 283 Mich. 401, 403-404, 410-411, 278 N.W. 121 (1938).
The only evidence in the record that supports finding that defendant's allegedly defective workmanship caused the natatorium moisture problem is an inference drawn from the fact that after the corrective work the problem was not present. The logical force of this inference is totally lacking because the corrective work contained three important elements, as noted already, that were not present in the original plans and specifications. Without other evidence, it is equally likely that the elements added to the reconstructed roof, as opposed to correcting the alleged defects, prevented the condensation problem.
Finally, plaintiff asserts for the first time in its supplemental brief on remand that certain sections in form contract documents of the American Institute of Architects (AIA), "General Conditions of the Contract for Construction," are pertinent to its contract claims against defendant. Although the documents were admitted at trial, the record is not clear whether they were part of the contract between plaintiff and defendant. Nor does it appear that any argument was presented to the trial court concerning their application to this case. Finally, plaintiff's complaint did not refer to the documents, nor did it have attached to it the pertinent parts on which plaintiff now wishes to rely. See MCR 2.113(F). Under these circumstances, plaintiff has waived any claims regarding the AIA documents.
We reverse in part, affirm in part, and remand for entry of judgment for defendant. We do not retain jurisdiction.
JANSEN, P.J., AND HOEKSTRA and MARKEY, JJ., concurred.
