If the Obligation Emanates Only from Contract, No Tort Claim Is Available
April 1, 2008
In a recent case before the United States Court of Appeals, the court upheld a motion for summary judgment granted in favor of the defendant, a national alarm company, by the United States District Court for the Eastern District of Michigan.
In the case, the plaintiff signed a residential services contract with the alarm company to install and monitor a security system at his mother’s home. The agreement included a portable call button alarm that could be activated when in distress. The alarm company received an alarm from the plaintiff's mother’s home. Due to an error in the address that the alarm company gave to the ambulance dispatcher in response to the alarm, emergency personnel were delayed for approximately 16 minutes. By the time the emergency personnel arrived, the plaintiff’s mother was unconscious. She subsequently died in the hospital.
The plaintiff’s lawsuit alleged that by supplying the wrong address to the ambulance dispatcher, the alarm company committed misfeasance, subjecting the alarm company to tort liability. Included in the agreement between the plaintiff and the alarm company was a limitation of liability provision, limiting damages to $500. The District Court granted summary judgment in favor of the alarm company, finding that the company breached no duty independent of the parties’ agreement.
The District Court found the alarm company’s obligation to promptly and correctly dispatch the ambulance company emanated only from the contract, not common law, and thus no tort claim was available. Further, as there was no independent duty, the court indicated that it was not necessary to determine whether the alarm company’s actions constituted misfeasance or negligence.
The plaintiff appealed, claiming that the District Court erred in finding that the case sounded in contract instead of tort. He also claimed the limitation of liability clause was unconscionable and unenforceable under the Michigan Consumer Protection Act.
The Court of Appeals found that under Michigan law, in order for an action in tort to arise out of a breach of contract, the act must constitute a breach of duty separate and distinct from the breach of contract, and must include active negligence or misfeasance.
The Court of Appeals affirmed the judgment of the District Court which granted the alarm company’s motion for summary judgment. This effectively dismissed the lawsuit.