Sutherland v. Kennington Truck Serv. - 454 Mich. 274, 562 N.W.2d 466 (1997)

Rule:

In a choice of law situation, in determining whether a rational reason to displace the law of the forum state exists, the court undertakes a two-step analysis. First, the court must determine if any foreign state has an interest in having its law applied. If no state has such an interest, the presumption that the law of the forum state will apply cannot be overcome. If a foreign state does have an interest in having its law applied, the court must then determine if the forum state's interests mandate that the forum state's law be applied, despite the foreign interests.

Facts:

On August 14, 1989, two trucks collided on Interstate 75 in Monroe County, Michigan. The driver of one truck, Larry G. Sutherland, is a resident of Ohio and was operating a truck licensed in Ohio. The driver of the other truck, Gregory Zavitz, is a citizen of Ontario, Canada. He was employed by Kennington Truck Service, an Ontario corporation. On September 5, 1991, two years and twenty-two days after the accident, Mr. Sutherland and his wife sued defendants in Monroe Circuit Court, alleging negligence. Defendants moved for summary disposition pursuant to MCR 2.116(C)(7), arguing that the court should apply either Ohio's or Ontario's statute of limitations. Both of these jurisdictions bar negligence actions filed more than two years after the cause of action arose. In response, plaintiffs argued that the case should be governed by Michigan's three-year statute of limitations. The trial court granted the motion for summary disposition.

Issue:

Is there a rational reason to displace Michigan law and replace it with either Ohio or Ontario law?

Answer:

No.

Conclusion:

Ohio and Ontario were the only two foreign jurisdictions that potentially have an interest in having their law applied in this case. Ohio, where the plaintiffs reside, had a two-year statute of limitations for these types of actions. However, a court could not apply Ohio law to this case without violating the defendants' due process rights. As Justice Brennan stated in Allstate Ins v. Hague, in order for a court to choose a state's law, "[the] State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair." In this case, the only contact that Ohio had with this litigation was that plaintiffs are Ohio residents. The United States Supreme Court has stated that the plaintiff's residence, with nothing more, is insufficient to support the choice of a state's law.

Because Ohio does not have an interest in seeing the court apply its law, Ontario was the only remaining candidate. Ontario, like Ohio, had a two-year statute of limitations. Defendants claim that because Ontario law would benefit the Ontario defendants by barring the claim, Ontario has an interest in having its statute of limitations applied. Certainly, one purpose of a statute of limitations is to protect defendants from stale claims. However, the Court disagreed that Ontario had an interest in protecting the defendants from stale claims in this situation. In fact, according to Canadian and Ontario law, Ontario had an interest in having Michigan's statute of limitations applied in this case. The Court doubted that an Ontario court would find that the application of Michigan's three-year statute of limitations in this case would "give rise to injustice." Certainly, no Ontario court had expressed qualms about applying American law. Thus, had plaintiffs filed this suit in Ontario, Ontario's courts would have applied Michigan's three-year statute of limitations. Because even Ontario courts would not allow the defendants to escape this claim through application of Ontario law, it was hard to see how Ontario can have an interest in having Michigan courts apply Ontario law.

Therefore, no foreign state had an interest in having its law applied to this case. The lex fori presumption was not overcome, and there was no need to evaluate Michigan's interests. Michigan's three-year statute of limitations applied to this case.