In a published decision, the Michigan Court of Appeals has held that mention of a potentially responsible non-party at fault in a class action suit was insufficient as a notice of non-party at fault within the meaning of Michigan Court Rule (MCR) 2.112(K), and therefore insufficient to "toll" the statute of limitations to allow amendment of the plaintiffs' complaint to add that party to the lawsuit.
The issue in this case arose when the trial court judge allowed amendment of the complaint in the underlying class action to occur to add a defendant, Consumers Energy (Consumers), even after the statute of limitations as to Consumers had run.
The Court allowed the amendment on the basis that the statute of limitations could be extended because the original defendant named Consumers as a potentially responsible nonparty in an affirmative defense in its answer (which was filed 2 (technically 3) days before the statute of limitations would have expired as to Consumers). However, the original Defendant never filed a notice of fault of nonparties as required by MCR 2.112(K).
Consumers was added to the lawsuit via an amended complaint, with the trial court ruling that despite the failure to comply with MCR 2.112(K), the affirmative defense was sufficient to allow the filing of the amended complaint and toll the statute of limitations. The original Defendant Michigan Petroleum clearly had notice and knew or should have known that Consumers was likely to be a potential defendant and could have filed a proper "notice of nonparty at fault".
On August 4, 2009 a fire occurred at a building owned by the defendant Michigan Petroleum Technologies (Michigan Petroleum) and destroyed the building. The fire was very large and involved noxious fumes and smoke. An investigator from Consumers performed a site investigation at the location of the fire on August 5, 2009. A subsequent investigation performed by Consumers and an independent engineer hired by them concluded that Consumers was not to blame for the fire.
Within a few weeks of the fire, Consumers received letters from two separate law firms, implying that Consumers was responsible and would be named as a defendant in a lawsuit by either Michigan Petroleum or the insurance company that insured the building. Neither the building owner (Michigan Petroleum), nor the insurance company that insured the building filed any claim or lawsuit against Consumers.
On June 20, 2012, a personal injury class action lawsuit was filed in Genessee County Circuit Court naming only Michigan Petroleum as a defendant and seeking damages in tort, among other claims including nuisance (all of the claims in the underlying lawsuit are subject to the three-year statute of limitations in the revised judicature act (RJA), MCL 500.5805(10)).
Michigan Petroleum did not file a notice of non-party at fault within the 30 days provided by MCL 600.2957(2).
On August 2, 2012 (two days before the expiration of the statute of limitations as against Consumers), Michigan Petroleum filed an answer.
On October 8, 2012, after the three-year statute of limitations had run as to Consumers, the circuit court entered a "stipulated order" allowing, inter alia, the plaintiffs to "add" Consumers as a defendant in the lawsuit.
An "amended" complaint was served on Consumers on October 19, 2012, alleging causes of action in nuisance and negligence, all governed by the three-year statute of limitations as pronounced in the RJA.
The legal issue then briefed and argued in early 2013 was whether the naming of a party by a defendant in an affirmative defense under MCR 2.111(F) has the same legal effect as the filing of a "notice of nonparty fault" under MCR 2.112(K). The significance is that MCR 2.112(K) then allows for "tolling" of the statute of limitations pursuant to MCL 600.2957(2).
The trial court did not squarely address that issue. Rather, the trial court found since there were no cases stating that an affirmative defense is insufficient, the naming of the potential nonparty at fault (Consumers) in the affirmative defense was "sufficient" to activate the "tolling" provision of MCL 600.2957(2) and therefore the trial court denied Consumers' motion to dismiss.
The COA had originally denied leave to appeal. The Supreme Court remanded as on leave granted.
This is a published opinion which (1) clarifies the specificity with which one must name a "non-party at fault" for purposes of comparative fault allocation as against that party; and, more importantly, (2) rejects the trial court's reasoning that mere mentioning of a potentially responsible party in the defendant's affirmative defense is sufficient to put that party on notice and subject it to a lawsuit even after the statute of limitations has expired as to that party.
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