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Chrum v. Charles Heating & Cooling, Inc. - 121 Mich. App. 17, 327 N.W.2d 568 (1982)

Rule:

Damages recoverable for breach of contract are generally limited to damages arising naturally from the breach or contemplated by the parties at the time the contract is made. Where an action is for a breach of a commercial contract, damages for mental distress are not recoverable

Facts:

Plaintiffs Anthony M. Chrum and Margaret G. Chrum purchased a furnace from the defendant, Charles Heating & Cooling, Inc., which the defendant installed. Thereafter, the furnace caused a fire which destroyed the Chrums' home and its contents. There were no physical injuries. Mr. and Mrs. Chrum were insured by plaintiff State Farm Fire & Casualty Company, who paid the Chrums $43,782.49 as a result of the fire. The plaintiff insurer then commenced an action against defendant seeking subrogation. The Chrums  then filed a separate action seeking additional compensation for economic loss, alleging negligence in installation with resulting emotional distress, fright, mental anguish, and loss of income. The two actions were consolidated by the Muskegon Circuit Court,  who, thereafter, denied defendant's motion for partial summary judgment with respect to the Chrums' emotional distress claim. The remaining claims against defendant were dismissed following a settlement, leaving only the mental distress claim. Defendant appeals, by leave granted, from the trial court's denial of the motion for partial summary judgment.

Issue:

In an action for breach of commercial contract were damages for mental distress recoverable?

Answer:

No

Conclusion:

The trial court's judgment denying defendant's motion for partial summary judgment was reversed and remanded. The court held that damages recoverable for breach of contract were generally limited to damages that arose naturally from the breach or contemplated by the parties at the time the contract was made. Where an action was for a breach of a commercial contract, damages for mental distress were not recoverable. Damages for mental distress in breach of contract actions were allowed only when the injury suffered was to the person. Where property loss was involved, recovery for mental distress in breach of contract actions was not allowed. The injury suffered by plaintiffs was to property and not a person and they were not entitled to damages for mental distress. Plaintiffs' pleadings were inadequate to support an independent claim for mental distress in tort.

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