MARKMAN, J.
The issue in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. No Michigan case has ever allowed a plaintiff to recover noneconomic damages resulting solely from the negligent destruction of property, either real or personal. Rather, the common law of this state has long provided that the appropriate measure of damages in cases involving the negligent destruction of property is simply the cost of replacement or repair of the property. We are not persuaded of the need for change and therefore continue to adhere to this rule. Accordingly, we reverse the judgment of the Court of Appeals and remand this case to the trial court for entry of summary disposition in defendant's favor.
In 1975, plaintiff and her now ex-husband built a house in DeWitt, Michigan. The house was originally heated by an oil furnace located in the basement, but in 2006 plaintiff replaced the oil furnace with a propane furnace. Plaintiff canceled her contract with defendant oil company's predecessor when the propane furnace was installed. Although the oil furnace was removed, the oil fill pipe remained.
Somehow, in November 2007, plaintiff's address was placed on defendant's "keep full list." True to the name of the list, while plaintiff was at work, defendant's truck driver pumped nearly 400 gallons of fuel oil into plaintiff's basement through the oil fill pipe before realizing his mistake and immediately calling 911. Plaintiff's house and many of her belongings were destroyed. Between defendant's and plaintiff's insurers, the site was remediated, a new house was built on the property in a different location, plaintiff's personal property was cleaned or replaced, and plaintiff was reimbursed for all temporary-housing-related expenses. It is undisputed that plaintiff was fully compensated for her economic losses.
Nevertheless, plaintiff filed suit in August 2008, alleging claims for negligence, gross negligence, negligent infliction of emotional distress, nuisance, trespass, and a private claim under the Natural Resources and Environmental Protection Act, MCL 324.101 et seq. However, plaintiff's only claim to survive to trial was for the recovery of noneconomic damages for defendant's negligent destruction of her real property. After trial and over defendant's objection, a jury found in favor of plaintiff in the amount of $100,000 for past noneconomic damages. Defendant moved for judgment notwithstanding the verdict and remittitur, arguing that plaintiff had failed to present sufficient proofs to support the verdict. The trial court denied the motion, and defendant appealed. The Court of Appeals affirmed in a published decision, explaining:
Defendant applied for leave to appeal in this Court. We granted leave and subsequently heard oral argument. Price v. High Pointe Oil Co., Inc., 491 Mich. 870, 809 N.W.2d 566 (2012).
Whether noneconomic damages are recoverable for the negligent destruction of real property presents a question of law, which this Court reviews de novo. See 2000 Baum Family Trust v. Babel, 488 Mich. 136, 143, 793 N.W.2d 633 (2010).
The question in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. Absent any relevant statute, the answer to that question is a matter of common law.
As this Court explained in Bugbee v. Fowle, the common law "`is but the accumulated expressions of the various judicial tribunals in their efforts to ascertain what is right and just between individuals in respect to private disputes[.]'" Bugbee v. Fowle, 277 Mich. 485, 492, 269 N.W. 570 (1936), quoting Kansas v. Colorado, 206 U.S. 46, 97, 27 S.Ct. 655, 51 L.Ed. 956 (1907). The common law, however, is not static. By its nature, it adapts to changing circumstances. See Holmes, The Common Law (Mineola, New York: Dover Publications, Inc., 1991), p. 1 (noting that the common law is affected by "[t]he felt necessities of the time, the prevalent moral and political theories, [and] intuitions of public policy" and that it "embodies the story of a nation's development through many centuries"). And as this Court stated in Beech Grove Investment Co v. Civil Rights Comm:
The common law is always a work in progress and typically develops incrementally, i.e., gradually evolving as individual disputes are decided and existing common-law rules are considered and sometimes adapted to current needs in light of changing times and circumstances. In re Arbitration Between Allstate Ins. Co. & Stolarz, 81 N.Y.2d 219, 226, 597 N.Y.S.2d 904, 613 N.E.2d 936 (1993) (noting that the common law evolves through the "incremental process of common-law adjudication as a response to the facts presented");
The common-law rule with respect to the damages recoverable in an action alleging the negligent destruction of property was set forth in O'Donnell v. Oliver Iron Mining Co., 262 Mich. 470, 247 N.W. 720 (1933). O'Donnell provides:
Accord William R Roach & Co. v. Blair, 190 Mich. 11, 16-17, 155 N.W. 696 (1916) (approving as being in accordance with the "general rule" the trial court's articulation of damages as "`the fair cash value at said time and place of said property which was destroyed by said fire, and the diminution in value of property injured and not destroyed'"); Davidson v. Michigan C. R. Co., 49 Mich. 428, 431, 13 N.W. 804 (1882) ("[I]n the case of domestic animals injured, the proper rule of damages, as in the case of other perishable chattels, should usually be the reduced value at the time.... [T]he difference between the value before and after the accident will enable the owner to be fully indemnified."); Guzowski v. Detroit Racing Ass'n, Inc., 130 Mich.App. 322, 328, 343 N.W.2d 536 (1983) (citing Davidson for the conclusion that
Michigan common law has continually followed the O'Donnell rule. See Tillson, 269 Mich. at 65, 256 N.W. 801; Jackson Co. Rd. Comm'rs v. O'Leary, 326 Mich. 570, 576, 40 N.W.2d 729 (1950); State Hwy. Comm'r v. Predmore, 341 Mich. 639, 642, 68 N.W.2d 130 (1955); Wolverine Upholstery Co. v. Ammerman, 1 Mich.App. 235, 242, 135 N.W.2d 572 (1965); Bayley Products, Inc. v. American Plastic Products Co., 30 Mich.App. 590, 598, 186 N.W.2d 813 (1971) ("It is the settled law of this state that the measure of damages to real property, if permanently irreparable, is the difference between its market value before and after the damage."); Baranowski v. Strating, 72 Mich.App. 548, 562, 250 N.W.2d 744 (1976); Bluemlein v. Szepanski, 101 Mich.App. 184, 192, 300 N.W.2d 493 (1980); Strzelecki v. Blaser's Lakeside Indus. of Rice Lake, Inc., 133 Mich.App. 191, 193-194, 348 N.W.2d 311 (1984); see also People v. Hamblin, 224 Mich.App. 87, 94, 568 N.W.2d 339 (1997) (analogizing to civil property-loss cases, including Baranowski, in order to determine how to measure damages in a criminal case); 2 Michigan Law of Damages & Other Remedies (3d ed.), § 19.18, p. 19-13 ("[T]he measure of damages for injury to real property generally is the difference between the market value of the property before and after the injury to the property."); 7 Michigan Civil Jurisprudence (2009 rev.), § 50, p. 379 ("The measure of damages for negligent injury to real property, if permanent and irreparable is the difference between its market value before and after the damage."). Accordingly, the long-held common-law rule in Michigan is that the measure of damages for the negligent destruction of property is the cost of replacement or repair.
Lending additional support to this conclusion is the simple fact that, before the Court of Appeals' opinion below, no case ever in the history of the Michigan common law has approvingly discussed the recovery of noneconomic damages for the negligent destruction of property. Indeed, no case has even broached this issue except through the negative implication arising from limiting damages for the negligent destruction or damage of property to replacement and repair costs. Put another way, despite the fact that throughout the course of our state's history, many thousands of houses and other real properties have doubtlessly been negligently destroyed or damaged, and despite the fact that surely in a great many, if not a majority, of those cases the residents and owners of those properties suffered considerable emotional distress, there is not a single Michigan judicial decision that expressly or impliedly supports the recovery of noneconomic damages in these circumstances.
Moreover, the Court of Appeals has decided two relatively recent cases concerning injury to personal property in which noneconomic damages were disallowed. In Koester v. VCA Animal Hosp., 244 Mich.App. 173, 624 N.W.2d 209 (2000), the plaintiff dog owner sought noneconomic damages in a tort action against his veterinarian following the death of his dog resulting from the veterinarian's negligence. The trial court granted the defendant's motion for summary disposition, holding that "emotional damages for the loss of a dog do not exist." Id. at 175, 624 N.W.2d 209. On appeal, the Court of Appeals
Later, in Bernhardt v. Ingham Regional Med. Ctr, 249 Mich.App. 274, 641 N.W.2d 868 (2002), the plaintiff visited the defendant hospital to bring home her adopted, newborn son. Before washing her hands, the plaintiff removed her jewelry, which consisted of her grandmother's 1897 wedding ring (which was also her wedding ring) and a watch purchased in 1980 around the time of her brother's murder. The plaintiff accidentally forgot the jewelry in the washbasin and left the hospital. Upon realizing her mistake, the plaintiff contacted the defendant and was advised that she could retrieve the jewelry from hospital security. However, when she tried to retrieve the jewelry, it could not be located. The plaintiff sued, and the defendant moved for summary disposition, arguing that the plaintiff's damages did not exceed the $25,000 jurisdictional limit of the trial court. The plaintiff countered that her damages exceeded that limit because the jewelry possessed great sentimental value. The trial court granted the defendant's motion. On appeal, the Court of Appeals affirmed, citing Koester, 244 Mich.App. at 176, 624 N.W.2d 209, for the proposition that there "is no Michigan precedent that permits the recovery of damages for emotional injuries allegedly suffered as a consequence of property damage," Bernhardt, 249 Mich.App. at 279, 641 N.W.2d 868. Bernhardt concluded:
In support of its conclusion, Bernhardt quoted the following language from the Restatement Second of Torts:
While Koester and Bernhardt both involved negligent injury to personal property, they speak of property generally.
Finally, we would be remiss if we did not address Sutter v. Biggs, 377 Mich. 80, 86, 139 N.W.2d 684 (1966) (concerning a medical malpractice claim in which the plaintiff's ovary and fallopian tube were removed without her consent), which the Court of Appeals cited as providing the "general rule" for the recovery of damages in tort actions. Sutter stated:
Although Sutter articulates a "general rule," it is a "general rule" that has never been applied to allow the recovery of noneconomic damages in a case involving only property damage,
The development of the common law frequently yields "general rules" from which branch more specific "general rules" that apply in limited circumstances. Where tension exists between those rules, the more specific rule controls.
Because the Court of Appeals determined that the "general rule" is that "in a tort action, the tort-feasor is liable for all injuries,"
"This Court is the principal steward of Michigan's common law," Henry v. Dow Chem. Co., 473 Mich. 63, 83, 701 N.W.2d 684 (2005), and it is "axiomatic that our courts have the constitutional authority to change the common law in the proper case," North Ottawa Community Hosp. v. Kieft, 457 Mich. 394, 403 n. 9, 578 N.W.2d 267 (1998). This authority is traceable to Const. 1963, art. 3, § 7, which states, "The common law and the statute laws now in force, not repugnant to this constitution, shall remain in force until they expire by their own limitations, or are changed, amended or repealed." Thus, as this Court has explained, "the common-law rule remains the law until modified by this Court or by the Legislature." Longstreth v. Gensel, 423 Mich. 675, 686, 377 N.W.2d 804 (1985). However, this Court has also explained that alteration of the common law should be approached cautiously with the fullest consideration of public policy and should not occur through sudden departure from longstanding legal rules. Henry, 473 Mich. at 83, 701 N.W.2d 684 ("[O]ur common-law jurisprudence has been guided by a number of prudential principles. See Young, A judicial traditionalist confronts the common law, 8 Texas Rev. L. & Pol. 299, 305-310 (2004). Among them has been our attempt to `avoid capricious departures from bedrock legal rules as such tectonic shifts might produce unforeseen and undesirable consequences,' id. at 307...."); see also Woodman, 486 Mich. at 231, 785 N.W.2d 1 (opinion by YOUNG, J.) ("[M]odifications [of the common law] should be made with the utmost caution because it is difficult for the judiciary to assess the competing interests that may be at stake and the societal trade-offs relevant to one modification of the common law versus another in relation to the existing rule."); id. at 268, 785 N.W.2d 1 (MARKMAN, J., concurring in part and dissenting in part) (explaining that the common law develops incrementally); North Ottawa, 457 Mich. at 403 n. 9, 578 N.W.2d 267 (providing that common law should only be changed "in the proper case").
With the foregoing principles in mind, we respectfully decline to alter the common-law rule that the appropriate measure of damages for negligently damaged property is the cost of replacement or repair. We are not oblivious to the reality that destruction of property or property damage will often engender considerable mental distress, and we are quite prepared to believe that the particular circumstances of the instant case were sufficient to have caused exactly such distress. However, we are persuaded that the present rule is a rational one and justifiable as a matter of reasonable public policy. We recognize that might also be true of alternative rules that could be constructed by this Court. In the final analysis, however, the venerability of the present rule and the lack of any compelling argument that would suggest its objectionableness in light of changing social and economic circumstances weigh, in our judgment, in favor of its retention. Because we believe the rule to be sound, if change is going to come, it must come by legislative alteration.
First, one of the most fundamental principles of our economic system is that the market sets the price of property. This is so even though every individual values property differently as a function of his or her own particular preferences. Inherent in this principle is that any property an individual owns is presumably valued by that individual at or above its market rate. Otherwise, he or she presumably would not have purchased the property or continue to own it. Just as an individual typically does not pay for this surplus value, the law does not necessarily compensate that individual where that surplus value has been lost.
Second, economic damages, unlike noneconomic damages, are easily verifiable, quantifiable, and measurable. Thus, when measured only in terms of economic damages, the value of property is easily ascertainable. Employing market prices in calculating compensation for property
Third, limiting damages to the economic value of the damaged or destroyed property limits disparities in damage awards from case to case. Disparities in recovery are inherent in legal matters in which the value of what is in dispute is neither tangible nor objectively determined, but rather intangible and subjectively determined. Whereas under the present rule, all plaintiffs suffering an identical harm to their properties are compensated on a uniform basis, under the Court of Appeals' rule, there would be as many levels of compensation as there are plaintiffs because no two plaintiffs would likely react to the damage or destruction of their properties in exactly the same fashion. Indeed, both objective and subjective disparities would result. Objective disparities would arise because, even if noneconomic harms were precisely quantifiable, identical injuries to identical properties could lead to severe mental distress for one person, while causing only minor annoyance for another. Subjective disparities would arise because noneconomic harms cannot be precisely quantified, so we must normally rely on juries to determine (1) whether noneconomic harms were caused, (2) the extent of such harms, and (3) the monetary value of such harms. The disparity in assessing damages by different fact-finders would presumably compound with each step in this chain of conjecture.
Fourth, the present rule affords some reasonable level of certainty to businesses regarding the potential scope of their liability for accidents caused to property resulting from their negligent conduct. As explained earlier in this opinion, under the Court of Appeals' rule, those businesses that come into regular contact with real property — contractors, repairmen, and fuel suppliers, for example — would be exposed to the uncertainty of not knowing whether their exposure to tort liability will be defined by a plaintiff who has an unusual emotional attachment to the property or by a jury that has an unusually sympathetic opinion toward those emotional attachments. Insurers would have a similarly difficult time calculating the extent of the risks against which they are insuring. Schwartz & Laird, Non-economic damages in pet litigation: The serious need to preserve a rational rule, 33 Pepp. L. R. 227, 261 (2006) ("When wild-card non-economic damages are added to the equation, however, actuaries cannot accurately predict the likely costs of lawsuits."), citing Huss, Valuation in veterinary malpractice, 35 Loy. U. Chi. L. J. 479, 532 (2004).
Once again, it is not our view that the common-law rule in Michigan cannot be improved, or that it represents the best of all possible rules, only that the rule is a reasonable one and has survived for as long as it has because there is some reasonable basis for the rule and that no compelling reasons for replacing it have been set forth by either the Court of Appeals or plaintiff. We therefore leave it to the Legislature, if it chooses to do so at some future time, to more carefully balance the benefits of the current rule with
The issue in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. No Michigan case has ever allowed a plaintiff to recover noneconomic damages resulting solely from the negligent destruction of property, either real or personal. Rather, the common law of this state has long provided that the appropriate measure of damages in cases involving the negligent destruction of property is simply the cost of replacement or repair of the negligently destroyed property. We continue today to adhere to this rule and decline to alter it. Accordingly, we reverse the judgment of the Court of Appeals and remand this case to the trial court for entry of summary disposition in defendant's favor.
YOUNG, C.J., and MARY BETH KELLY and ZAHRA, JJ., concurred with MARKMAN, J.
MICHAEL F. CAVANAGH, J., took no part in the decision of this case because of a familial relationship with counsel of record.
McCORMACK and VIVIANO, JJ., took no part in the decision of this case.
(1) Alabama: "The proper measure of compensatory damages in a tort action based on damage to real property is the difference between the fair market value of the property immediately before the damage and the fair market value immediately after the damage." Birmingham Coal & Coke Co., Inc. v. Johnson, 10 So.3d 993, 998 (Ala., 2008) (citations and quotation marks omitted).
(2) Colorado: "In cases involving damage to property,... the ordinary measure of damages is the diminution of market value of the property." Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d 821, 827 (Colo., 2008).
(3) Georgia: "[A]s a general rule the measure of damages in actions for real property is the difference in value before and after the injury to the premises[.]" Royal Capital Dev., LLC v. Maryland Cas. Co., 291 Ga. 262, 264, 728 S.E.2d 234 (2012) (citation omitted).
(4) Idaho: "If land is taken or the value thereof totally destroyed, the owner is entitled to recover the actual cash value of the land at the time of the taking or destruction...." Nampa & Meridian Irrigation Dist. v. Mussell, 139 Idaho 28, 33, 72 P.3d 868 (2003) (citation and quotation marks omitted).
(5) Kansas: "The ordinary measure of damages to real property is the difference in value immediately before and after the damage and, in the event of total destruction, the fair market value at the time of the destruction." Evenson v. Lilley, 295 Kan. 43, 52, 282 P.3d 610 (2012).
(6) New Mexico: "[T]he market value for lost or destroyed property is the proper measure of damages...." Castillo v. Las Vegas, 2008-NMCA-141, ¶ 31, 145 N.M. 205, 214, 195 P.3d 870 (2008).
(7) Oklahoma: "[W]here damages are of a permanent nature, the measure of damage is the difference between the actual value immediately before and immediately after the damage is sustained." Schneberger v. Apache Corp., 1994 OK 117, ¶ 10, 890 P.2d 847, 849 (1994) (citations and quotation marks omitted).
(8) Pennsylvania: "The proper measure of damages in a case where the injury to the property was permanent is the market value of the property immediately before the injury." Oliver-Smith v. Philadelphia, 962 A.2d 728, 730 (Pa.Cmwlth., 2008).
(9) South Carolina: "[T]he general rule is that in case of an injury of a permanent nature to real property ... the proper measure of damages is the diminution of the market value by reason of that injury...." Yadkin Brick Co., Inc. v. Materials Recovery Co., 339 S.C. 640, 645, 529 S.E.2d 764 (S.C.App., 2000) (citation and quotation marks omitted).
(10) Texas: "As a rule, [the recoverable value of property] is measured by the property's market value or the cost of repairing it." City of Tyler v. Likes, 962 S.W.2d 489, 497 (Tex., 1997).
(1) Alabama: "[P]laintiffs cannot recover for mental anguish or emotional distress unless they suffered physical injury or were in the `zone of danger.'" Birmingham, 10 So.3d at 999.
(2) Alaska: "The general rule is that where a tortfeasor's negligence causes emotional distress without physical injury, such damages may not be awarded." Hancock v. Northcutt, 808 P.2d 251, 257 (Alaska, 1991).
(3) Maryland: "[A] plaintiff cannot ordinarily recover for emotional injuries sustained solely as a result of negligently inflicted damage to the plaintiff's property." Dobbins v. Washington Suburban Sanitary Comm., 338 Md. 341, 351, 658 A.2d 675 (1995).
(4) Nevada: "[T]he better rule is to allow recovery only in cases which pertain to emotional distress arising from harm to another person, and not in cases, such as the one before us, which pertain to emotional distress arising from property damage."' Smith v. Clough, 106 Nev. 568, 569-570, 796 P.2d 592 (1990).
(5) New Mexico: "[A] plaintiff may not recover for emotional distress based solely on a claim for negligent damage to property." Castillo, 2008-NMCA-141 at ¶ 21, 145 N.M. at 210.
(6) New York: Damages for mental anguish are not recoverable absent "competent evidence of contemporaneous or consequential physical harm[.]" Iannotti v. City of Amsterdam, 225 A.D.2d 990, 990, 639 N.Y.S.2d 537 (N.Y.App., 1996).
(7) Oklahoma: "[E]motional distress as a consequence of an intentional tort is distinguishable from distress resulting from breach of contract or negligence, which requires a showing of physical injury." Cleveland v. Dyn-A-Mite Pest Control, Inc., 2002 OK Civ App 95, ¶ 52, 57 P.3d 119, 131 (2002) (citation and quotation marks omitted).
(8) Oregon: "[P]sychic and emotional injuries" are not recoverable where the "plaintiff suffered no physical injury from [the] defendants' alleged negligence and [where the plaintiff] has not shown that [the] defendants' conduct was anything more than negligent[.]" Hammond v. Central Lane Communications Center, 312 Or. 17, 20, 816 P.2d 593 (1991).
(9) Texas: "[M]ental anguish based solely on negligent property damage is not compensable as a matter of law." Likes, 962 S.W.2d at 497.
As the comments to subsection (2) indicate, the basis for allowing the recovery for emotional distress in this context is that those actions "threaten[] the plaintiff with bodily harm. ..." Id. at 114 (emphasis added). Accordingly, when there is nothing threatening the plaintiff with bodily harm, for instance when a claim involves only property damage, a defendant is not liable for unintended emotional distress.
The O'Donnell rule is precisely such a specific rule in an action for the negligent destruction of property.
Thus, this Court does not alter the common law at its unchecked discretion, much less at its whim. Rather, we are bound to tradition and stability and continuity. By virtue of its overtly political and representative nature, the Legislature is bound by different considerations. The barriers standing before this Court's alteration of the common law are significantly higher than those facing the Legislature.
