Court Opinion

ID: 9659919
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:58:31.771639+00
Date Added: 2024-06-11T18:14:12.938716
License: Public Domain

Kelly, J.,
(dissenting). I respectfully dissent.
In Neibarger v Universal Cooperatives, Inc, 439 Mich 512, 527-528; 486 NW2d 612 (1992), our Supreme Court adopted the “economic loss doctrine” and held that where a plaintiff seeks to recover for economic loss caused by a defective product purchased for commercial purposes, the exclusive remedy is provided by the Uniform Commercial Code (ucc), and its statute of limitations applies. See also Frommert v Bobson Constr Co, 219 Mich App 735, 737-738; 558 NW2d 239 (1996). An injury caused by a service, however, would not arise out of a “transaction in goods” and would not be governed by the ucc. Neibarger, supra, p 533; Frommert, supra, p 738. The test for determining whether contracts for mixed goods and services are governed by the ucc is as follows:
*48The test for inclusion or exclusion is not whether they are mixed, but, granting that they are mixed, whether their predominant factor, their thrust, their purpose, reasonably stated, is the rendition of service, with goods incidentally involved ... or is a transaction of sale, with labor incidentally involved. [Neibarger, supra, p 534, adopting the test set forth in Bonebrake v Cox, 499 F2d 951, 960 (CA 8, 1974).]
In my opinion, the transaction between the parties involved services, not goods. Frommert, supra, pp 738-739. Kim’s, a Chinese restaurant, contracted with others to erect an addition to its restaurant. Hence, the essence of the contract(s) with the architects and builders was for services, not goods. Defendant also provided a service; it developed the flame retardancy chemical formula that was applied to the lumber used to build the addition to Kim’s restaurant. The goods purchased by Kim’s, the trusses and plywood roof decking, were merely incidental to the erection of the addition to the restaurant. As in Frommert, the wood trusses and plywood roof decking would have been of no value unless they were installed. Therefore, I conclude that the transaction between the parties was predominantly one for services, rather than for a sale of goods, and was not subject to Article 2 of the ucc. Under these circumstances, the four-year statute of limitations in Article 2 of the ucc does not apply. Frommert, supra, p 739.
Moreover, I do not believe that the Neibarger rationale should be applied in cases such as this. Unlike the plaintiffs in Neibarger who were in the dairy business and knew the foreseeable consequences of the failure of the milking-machine systems developed by defendants, Kim’s restaurant was not in the lumber business and did not deal in goods such as fire-*49retardant-treated lumber. Therefore, the foreseeability of the risks involved with chemically treated lumber would not have been nearly as apparent to Kim’s, a Chinese restaurant, as were the risks involved in the milking-machine systems to the plaintiffs in Neibarger who were in the dairy business. The goods and services in this case, unlike in Neibarger, were merely incidental to Kim’s restaurant business. Hence, this was more like a consumer transaction to which the UCC would not apply.
I would reverse.