The statute of repose for the construction industry; MCL 600.5839(1); The 6-year repose period under MCL 600.5839(1)(a); The 10-year repose period under MCL 600.5839(1)(b); Abbott v John E. Green Co; Comparing Citizens Ins Co v Scholz; “Improvement”; Pendzsu v Beazer E, Inc; Fraudulent concealment; Equitable estoppel

The court held that defendant was entitled to protection under MCL 600.5839(1), the statute of repose for the construction industry. Plaintiffs sued for injuries they sustained in an explosion they claimed was caused by defendant’s negligence when installing a sewer line. The trial court denied defendant’s motion for summary disposition, finding it was not entitled to protection under MCL 600.5839(1) as plaintiffs’ injuries were not caused by the sewer line, but rather by the damage (gas leak) done to the line. On appeal, defendant argued that: (1) plaintiffs’ allegations did not amount to gross negligence, so the six-year repose period under MCL 600.5839(1)(a) applied, and (2) even if the allegations did amount to gross negligence, the 10-year repose period under MCL 600.5839(1)(b) would apply. The court agreed, noting that in prior opinions it “has held that an ‘improvement’ for purposes of the statute is a ‘permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs.’” The sewer line here “enhanced the value and utility of the properties it served and was intended to be permanent. In light of Abbott and Citizens Ins Co, both the physical object and the labor expended in its construction constitute the ‘improvement’ under MCL 600.5839(1).” As such, “any action ‘arising out of the defective or unsafe condition of’ the work performed to install the sewer line had to be brought within either six or 10 years of 2008. This suit, brought in 2023, falls well outside the statutory period of repose.” The court rejected plaintiffs’ contention that the caselaw interpreting the statute was distinguishable, noting that “a statute of repose operates independently of notice, aiming solely to provide finality by barring claims regardless of when the injury is discovered.” Finally, the court rejected the gas company’s fraudulent concealment and equitable estoppel arguments as meritless. Reversed and remanded.