Court Opinion

ID: 9735987
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:38:38.346079+00
Date Added: 2024-06-11T18:27:03.047837
License: Public Domain

T. M. Burns, J.
(dissenting). Because I do not believe that plaintiffs’ claims against the individual defendants were barred by the arbitration clause in plaintiffs’ contract with defendant corporation, I respectfully dissent. I feel that the majority fails to adequately distinguish between the individual architects’ liability in tort and the corporation’s liability in contract under the facts of this case.
Plaintiffs filed suit in circuit court against the individual architects alleging that they acted in a tortious manner by committing negligent acts. The circuit court granted accelerated judgment on the ground that the claims were required to be presented to arbitration pursuant to the contract between the doctors and the architectural firm, i.e., the corporation. I believe that the trial court erred by granting accelerated judgment on this ground.
*187I disagree with the majority’s assertion that the situation in this case differs from that involving a claim against a tortfeasor for negligently inflicted damage or injury. That is exactly the type of claim which is involved here. Plaintiffs have asserted a claim of professional malpractice or negligence against the individual architects involved.
Moreover, the individual architects did owe plaintiffs a duty of due care under the circumstances of this case. The individual architects had employment contracts with the architectural firm. Negligent performance of a contract can constitute a tort as well as a breach of contract. In Clark v Dalman, 379 Mich 251, 261; 150 NW2d 755 (1967), it was held that breach of a contract may give rise to an action in tort to a third person who is not a party to that contract. The Clark Court stated:
Actionable negligence presupposes the existence of a legal relationship between parties by which the injured party is owed a duty by the other, and such duty must be imposed by law. . . . Such duty of care may be a specific duty owing to the plaintiff by the defendant, or it may be a general one owed by the defendant to the public, of which the plaintiff is a part. Moreover, while this duty of care, as an essential element of actionable negligence, arises by operation of law, it may and frequently does arise out of a contractual relationship, the theory being that accompanying every contract is a common-law duty to perform with ordinary care the thing agreed to be done, and that a negligent performance constitutes a tort as well as a breach of contract. But it must be kept in mind that the contract creates only the relation out of which arises the common-law duty to exercise ordinary care. Thus in legal contemplation the contract merely creates the state of things which furnishes the occasion of the tort. This being so, the existence of a contract is ordinarily a relevant factor, competent to be alleged and proved in a *188negligence action to the extent of showing the relationship of the parties and the nature and extent of the common-law duty on which the tort is based. [379 Mich 260-261.]
See also Williams v Polgar, 391 Mich 6, 18-19; 215 NW2d 149 (1974), and Khalaf v Bankers & Shippers Ins Co, 404 Mich 134, 143; 273 NW2d 811 (1978). I believe that a common-law duty to exercise ordinary care arose out of the relation in this case.
Defendant architects have suggested that, because Bidigare/Bublys is incorporated, they are insulated from personal liability. I believe that architects are not shielded from tort liability when they render professional services on behalf of a corporation. Regardless of whether the Business Corporation Act, MCL 450.1101 et seq.; MSA 21.200(101) et seq., or the Professional Service Corporation Act, MCL 450.221 et seq.; MSA 21.315(1) et seq., is applicable, my conclusion remains the same. The mere fact that an individual architect works for a corporation is irrelevant to his tort liability to an injured third party. Basic tort principles indicate that a tortfeasor may be held liable for his or her negligent acts. The fact that the tortfeasor is an employee of, or working on behalf of, a corporation does not change this principle. Tortfeasors are not insulated from tort liability for their own negligent acts simply because their negligent conduct occurred during the Course of employment for a corporation. I must conclude that plaintiffs could assert a cause of action in tort action against the individual architects in this case.
However, liability in tort must be distinguished from liability in contract. The only party which had a contract with plaintiffs was the corporation. *189That contract specifically refers to the individual doctors as "the Owner” and Bidigare/Bublys, Inc., Architects, as "the Architect.” The individual clauses of the contract repeatedly refer to the the Owner and the Architect. The individual architects are distinguished from the Architect and are referred to as "principals.” Basic contract principles and corporate law principles indicate that a person rendering services on behalf of a corporation will not be held personally liable for breach of a contract between the corporation and another party. One must be a party to a contract in order to breach it. Moreover, basic principles indicate that a shareholder or officer of a corporation is generally not personally liable for debts or liabilities of the corporation arising from a breach of contract. Unless special circumstances exist which are recognized under corporate law, the corporation alone is responsible for its own debts and liabilities.
While plaintiffs may have been required to submit their contract claims against the corporation to arbitration, I find no factual support for the claim that plaintiffs were required to submit their tort claims against the individual defendants to arbitration.1 Expressed mutual consent of the parties is ordinarily required for arbitration. Horn v Cooke, 118 Mich App 740, 744; 325 NW2d 558 (1982); Whitehouse v Hoskins Mfg Co, 113 Mich App 138, 141; 317 NW2d 320 (1982). See also St Clair Prosecutor v American Federation of State, *190County & Municipal Employees, 425 Mich 204; 388 NW2d 231 (1986). No agreement existed between the doctors and the individual architects in this case. There was only a contract between the doctors and the corporation. Because there was no agreement between the individual architects and the doctors, there is no expressed mutual consent of the parties which would authorize arbitration.
In addition, even if the individual architects had been parties to an agreement with the doctors, they would be required to arbitrate only matters relating to the breach of contract. Plaintiffs did not file suit for breach of contract. Rather, they filed suit for damages resulting from tortious conduct. Thus, the trial court erred in granting accelerated judgment on the ground that arbitration was required.
In light of the foregoing discussion, it is clear that the trial court also erred in modifying the arbitrator’s award. The arbitrator awarded plaintiffs $10,003 against Bidigare/Bublys, Inc., for breach of its contract with plaintiffs. I am not persuaded that corporate shareholders, officers or employees should be held responsible for a liability arising out of a contract entered into by the corporation.
Because I believe that the circuit court erred by granting accelerated judgment in favor of defendants on the ground that the claims were required to be submitted to arbitration, I must also determine whether accelerated judgment could properly have been granted on the basis of the statute of limitation. I believe that the trial court properly declined to grant accelerated judgment in favor of defendants on that ground.
The applicable statute of limitation was set forth in MCL 600.5839(1); MSA 27A.5839(1) before *191amendment by 1985 PA 188. The relevant portion of that statute stated:
No person may maintain any action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity ¡for damages sustained as a result of such injury against any state licensed architect or professional engineer performing or furnishing the design or supervision of construction of such improvement more than 6 years after the time of occupancy of the completed improvement, use or acceptance of such improvement.
In O’Brien v Hazelet & Erdal, 410 Mich 1; 299 NW2d 336 (1980), the Supreme Court held that the six-year restriction on tort liability was constitutional. Moreover, this statute of limitation is specifically applicable to architects and, thus, controls over the more general malpractice or negligence statutes of limitation. See Hawkins v Regional Medical Laboratories, PC, 111 Mich App 651, 655; 314 NW2d 450 (1979), aff'd in part 415 Mich 420; 329 NW2d 729 (1982). Because plaintiffs brought their cause of action within six years after occupancy, use or acceptance, the action was timely filed.
I disagree with the majority and with the panel in Marysville v Pate, Hirn & Bogue, Inc, 154 Mich App 655; 397 NW2d 859 (1986), that a distinction should be made between a suit for injuries "arising out of’ an architectural defect and a suit "for the defect” itself.
First, the statute explicitly applies to actions to recover damages for any injury to property, real or personal, arising out of a defective condition of an *192improvement. Such broad language indicates the Legislature’s intent to make the statute applicable to any action for damages when defective building design is involved. The Legislature determined that a special six-year period of limitation was necessary in cases involving negligent design or supervision of construction of buildings apparently because many structural defects are not readily discoverable soon after a building’s completion. However, the Legislature also chose to limit the liability of architects and engineers in order to relieve them of the potential burden of defending claims brought long after completion of the improvement. O’Brien, supra, p 14. As indicated by the Supreme Court in O’Brien, supra, p 16, the Legislature could reasonably have concluded that allowing suits against architects and engineers to be maintained within six years from the time of occupancy, use or acceptance of an improvement would allow sufficient time for most meritorious claims to accrue and would permit suit against those guilty of the most serious lapses in their professional endeavors. To hold that this statute is inapplicable to actions to recover for the damage to the improvement itself because of an improper design would defeat one of the main purposes of the Legislature in enacting the statute. The policies underlying the need for this statute are the same regardless of the exact nature of the harm which results from a defective design. I believe that any harm to the improvement itself is harm which "arises out of’ the defective condition of the improvement.
In their complaint, plaintiffs alleged that their damages included disruption of the use of the building, building deterioration, delamination of outer plywood, decrease in building value and the *193costs associated with replacement of the defective glass curtain wall and related materials. Thus, the plaintiffs have filed an action to recover damages for injury to property which arises out of a defective condition of an improvement to real property. The six-year limitation period is therefore applicable and plaintiffs have timely filed.
In conclusion, while I believe that the trial court improperly modified the arbitration award to hold the individual architects personally liable, I also believe that the trial court improperly granted accelerated judgment in regard to plaintiffs’ circuit court complaint.
I would modify the arbitration award to eliminate the personal liability of the individual architects and remand the case to the circuit court for further proceedings regarding plaintiffs’ tort cause of actions.

 I do not believe that we are bound to conclude that the claims against the individual defendants are subject to the arbitration clause of the contract simply because plaintiffs have failed to file a brief in support of their cross-appeal. In order to achieve a proper resolution of the issues in this case, it is necessary to determine whether the contract and the arbitration clause were applicable to the individual defendants. Moreover, any questions to be answered in this regard are questions of law and all the facts necessary for their resolution have been appropriately presented.