Case Name: HERWEYER v. CLARK HIGHWAY SERVICES, INC
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1995-07-11
Citations: 212 Mich. App. 105
Docket Number: Docket No. 171720
Parties: HERWEYER v CLARK HIGHWAY SERVICES, INC
Judges: Before: Sawyer, P.J., and Griffin and Neff, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 212
Pages: 105–113

Head Matter:
HERWEYER v CLARK HIGHWAY SERVICES, INC
Docket No. 171720.
Submitted March 15, 1995, at Grand Rapids.
Decided July 11, 1995, at 9:10 a.m.
Leave to appeal sought.
Jack Herweyer brought an action in the Missaukee Circuit Court against Clark Highway Services, Inc., alleging breach of an employment contract, discrimination, and retaliatory discharge. The court, Charles D. Corwin, J., granted summary disposition for the defendant, ruling that the action, which had been brought thirty-one months after the discharge, was not timely under the limitation provisions of the contract. The plaintiff appealed.
The Court of Appeals held:
1. A contractual limitation period that is shorter than the applicable statutory period of limitation will be upheld if it is reasonable. A contractual period is reasonable where the claimant has a sufficient opportunity to investigate and file an action, the time is not so short as to be a practical abrogation of the right of action, and the action is not barred before loss or damages can be ascertained. In this case, where the contract provided a six-month limitation period and a saving clause stating that any term found to be legally unenforceable as written is to be limited in application so as to allow the enforcement of the term as far as legally possible, the trial court did not err in concluding that, even if the six-month period was unreasonable, the limitation period could be saved by reading it as providing for an unspecified minimum reasonable time that is less than thirty-one months.
2. The question whether it is against public policy to allow employers to shorten by contract limitation periods for actions brought by employees is best addressed by the Legislature, not the Court of Appeals.
Affirmed.
Neff, J., dissenting, stated that the six-month limitation period under the contract was unreasonable, that the saving clause was vague and ambiguous and should be stricken from the contract, that the statutory three-year period of limitation should apply, and that the case should be remanded for trial. Alternatively, the matter should be remanded for a hearing to determine whether thirty-one months was a reasonable contractual period of limitation.
References
Am Jur 2d, Limitation of Actions §§ 64, 65.
See ALR Index under Contracts; Limitation of Actions.
Limitation of Actions — Contracts — Statutes of Limitation.
A contractual limitation period that is shorter than the applicable statutory period of limitation will be upheld if it is reasonable; a contractual period is reasonable where the claimant has a sufficient opportunity to investigate and file an action, the time is not so short as to be a practical abrogation of the right of action, and the action is not barred before loss or damages can be ascertained.
Bott & Spencer, P.C. (by R. Dillon McCormick), for the plaintiff.
Warner, Norcross & Judd (by Robert J. Chovanec, Douglas E. Wagner, and Rodrick W. Lewis), for the defendant.
Before: Sawyer, P.J., and Griffin and Neff, JJ.

Opinion:
Sawyer, P.J.
Plaintiff appeals from an order of the circuit court granting summary disposition in favor of defendant on plaintiff's claim for breach of contract, discrimination, and retaliatory discharge on the basis of the claim not having been timely brought under the provisions of that contract. We affirm.
Plaintiff entered into an employment contract with defendant, which contract included provisions that any claims arising from the termination of employment must be brought within six months and that plaintiff specifically waived any applicable statute of limitations to the contrary. Plaintiff was discharged after filing a worker's compensation claim. Thirty-one months later, plaintiff brought the instant action. Defendant moved to have the action dismissed on the basis of the contractual provision of bringing all claims within six months, and the trial court granted summary disposition.
We first jointly consider two of plaintiffs arguments, namely that the trial court erred in granting summary disposition when the applicable statute of limitations had not run and whether the contractual provision of a six-month limitation was unreasonable and, therefore, the full statutory period should be applied. It is settled law in Michigan that the courts will uphold a contractual provision limiting the time to bring suit where that limitation is reasonable, even though the period specified is less than the applicable statute of limitations. Camelot Excavating Co, Inc v St Paul Fire & Marine Ins Co, 410 Mich 118, 126; 301 NW2d 275 (1981). The determination of such reasonableness is made by looking at whether the claimant had a sufficient opportunity to investigate and file an action, the time was not so short as to be a practical abrogation of the right of action, and the action was not barred before the loss or damages could he ascertained. Id. at 127.
In the case at bar, the trial court expressed its reservation that the six-month limitation provided for in the contract may not be reasonable, but concluded that in any event a reasonable time would be less than the thirty-one months in which it took plaintiff to commence suit and, therefore, plaintiffs action was barred by the contractual provision. Plaintiff, in essence, argues that if the six-month period is unreasonable, then the statutory provision of a three-year period of limitation must be applied.
In concluding that the contract can be read to provide for a reasonable period of limitation less than the three years provided by statute, but nonetheless more than the six months specifically provided in the contract, the trial court looked to a provision in the contract that stated that if any term was found to be legally unenforceable as written, the particular provision would be limited to allow its enforcement as far as legally possible. The trial court interpreted this provision to mean that even if the six-month period provided in the contract was unreasonable, that provision would then be read as providing for the minimum reasonable time. While the trial court did not specifically indicate what the minimum reasonable time was, it did determine that it was less than the thirty-one months that it took plaintiff to bring suit. We agree with the trial court's interpretation of the contract.
The savings clause in the contract can be read as providing that the period of limitation shall be the minimum reasonable time in excess of six months. Furthermore, like the trial court, we agree that thirty-one months is in excess of the minimum reasonable time. While we do not draw a bright line with respect to what the minimum reasonable time is, we are not persuaded that plaintiff required thirty-one months in which to investigate and file the action, nor would a period of less than thirty-one months operate as a practical abrogation of the right to sue and certainly did not bar the bringing of the action before the loss or damage could be ascertained. See Camelot, supra at 127. Therefore, whatever the minimum reasonable time is, it is less than thirty-one months. Accordingly, the action was barred by the provisions of the contract at the time plaintiff brought the action. Thus, the trial court properly granted summary disposition in favor of defendant.
Plaintiff also argues that allowing employers to shorten the statute of limitations for employment actions is contrary to public policy. That may or may not be the case, but we believe it presents a public policy question best addressed by the Legislature, not this Court. The Legislature is in a superior position to consider the arguments, consider the ramifications of restricting the right to contract in this area, and determine what is in the public interest. If the Legislature deems such contractual provisions to be contrary to public policy, it may endeavor to enact the appropriate legislation. We, however, decline to impose by judicial fiat such restrictions on the right to contract.
Affirmed. Defendant may tax costs.
Griffin, J., concurred.