The Michigan Court of Appeals in Pettis & Pettis & Assoc. v. Ada Township held that the 10 year statute of limitations under MCL 600.5809 is applicable to consent judgments involving monetary obligations, but is not applicable to consent judgments that involve performance obligations that are not monetary.
In reaching its decision, the Court of Appeals followed basic rules of statutory interpretation. When interpreting a statute, the Courts look at the entire statute to determine its meaning rather than looking at parts of the statute in isolation. In other words, the Courts will not parse through a statute and apply bits and pieces of it when the statute as a whole is not applicable to the particular case.
In Pettis & Pettis & Assoc. v. Ada Township, the trial court dismissed the Plaintiff’s claims citing to a portion of MCL 600.5809 that provided a 10-year statute of limitations. However, the trial court failed to look at the statute as a whole and see that it was only applicable to claims involving “monetary obligations.” The Plaintiff in Pettis was not seeking the enforcement of a monetary obligation, and therefore the 10 year statute of limitations should not have applied.
Pettis, the owner of a mineral excavating and processing operation and the defendant Township agreed to settle prior litigation through a consent judgment. A consent judgment is issued by a judge based on an agreement between the parties to a lawsuit to settle the matter and is aimed at ending the litigation. In the consent judgment between Pettis and the Township, the parties agreed that Pettis would be permitted to continue its mineral excavating and processing operation in the Township for 10 years, with the possibility of a 10 year extension. The consent judgment did not involve the payment of money by either party, however.
When the Township refused to extend Pettis’ right to operate, Pettis brought a lawsuit against the Township and the Township sought to dismiss it under MCL 600.5809(3) because it was brought over 10 years after the consent judgment was entered. The trial court granted the Township’s request for dismissal, finding that MCL 600.5809(3) barred any claims arising from the consent judgment. On appeal, however, the Court of Appeals reversed the trial court’s decision. The Court of Appeals noted the trial court’s error in reading MCL 600.5809(3) in isolation, and not in the context of the rest of MCL 600.5809. MCL 600.5809 applies to an “action to enforce noncontractual money obligations.” Since Pettis was not seeking to enforce a money obligation and was strictly seeking to make the Township do something, the statute of limitations should not have applied. Furthermore, the Court of Appeals, noted that the trial court’s application of MCL 600.5809(3) to nonmonetary obligations would render the other parts of the statute nugatory. In reviewing a statute, the courts “must give effect to every word, phrase, and clause in a statute and avoid an interpretation that would render any part of the statute surplusage or nugatory.” Since the trial court’s decision would render the rest of MCL 600.5809 nugatory, the reading was clearly erroneous.
The full opinion of the Court of Appeals can be accessed at the link below:
http://law.justia.com/cases/michigan/court-of-appeals-unpublished/2014/313488.html
If you have any questions, please contact the attorneys at Demorest Law Firm.
