Litigation Defenders

The long held common law rule in Michigan is that the measure of damages for negligent destruction of property is the cost of replacement or repair.

While many property owners have, no doubt, experienced considerable emotional distress when their items have been negligently destroyed, there is not a single Michigan judicial decision that expressly or impliedly supports the recovery of noneconomic damages in such instances. That is, you are not entitled to recover for emotional distress where your property is negligently destroyed – no matter how much annoyance, anguish or inconvenience a property owner has suffered.

The Michigan Supreme Court addressed this issue in Price v. High Pointe Oil Co., Inc., where the plaintiff-homeowner’s basement was negligently pumped full of nearly 400 gallons of fuel oil. In this case, the plaintiff’s house, as well as many of her belongings, were destroyed. The damage to her house required remediation of the site and that a new home be built on the lot in a different location.

While it is human nature for people to grow attached to their items and experience annoyance and anguish when their property is destroyed, courts do not permit recovery where the destruction is due to negligence.

The Supreme Court gave four reasons in support of upholding the longstanding rule prohibiting noneconomic damages.

First, one of the most fundamental principles of our economic system is that the market sets the price of property. Permitting noneconomic damages would undercut this principle as presumably all individuals value their items at or above their market rate.

Second, noneconomic damages are not easily verifiable, quantifiable or measurable. Employing the market rate eliminates the need to engage in subjective determinations of property value and allows the legal system to undertake commonplace and precise determinations of value.

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.

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.

For these reasons, the Supreme Court has maintained the long held common rule and to this day, no Michigan case has allowed a plaintiff to recover noneconomic damages resulting solely from the negligent destruction of property.