Background
Sherilyn Hart and her husband Anthony McCarty owned a residential property at 1324 N. Waverly Rd. in Ingham County, which they purchased in 2013 intending to rehabilitate and rent. Only Hart held title. North Waverly LLC purchased the adjacent commercial property to the south at 1300 N. Waverly Rd. in March 2015. Beginning in mid-May 2016, North Waverly modified its building’s drainage system, removing downspout extensions and connecting them to two long black plastic corrugated collector pipes. One pipe ran over a retaining wall between the properties and emptied directly onto the 1324 Property; the other was buried just under the surface at the property line, causing water to bubble up and saturate the soil.
McCarty testified that prior to 2016, the property had no water damage or drainage issues. After the modifications, heavy rains caused water to pool against the garage and house, flooding the basement, damaging the foundation, and saturating the yard. The damage was extensive: the east basement wall bowed inward and eventually slid off its sill, requiring the house to be jacked up and the wall replaced; the roof leaked; the driveway was damaged; and a new furnace, air conditioning unit, and water heater were ruined. McCarty attempted various mitigation efforts, including capping the pipes in June 2020 (which dried out the soil until the caps were removed) and installing a water return system in September 2021 (which worked for 90 days until the Township ordered it removed).
Hart and McCarty sued North Waverly for trespass, nuisance in fact, nuisance per se, and to quiet title. North Waverly counterclaimed to quiet title based on adverse possession regarding a retaining wall that encroached onto the 1324 Property. Following a four-day bench trial, the trial court dismissed McCarty for lack of standing, found for Hart on trespass and nuisance, and awarded $150,000 in economic damages, $50,000 in noneconomic damages, and $40,000 in attorney fees, totaling $240,000. The court also ordered North Waverly to replace deteriorated railroad ties in the retaining wall within six months. On North Waverly’s motion to amend judgment, the trial court vacated the attorney fees and reduced economic damages by 20% based on comparative negligence, resulting in an amended judgment of $170,000. North Waverly appealed.
The Court’s Holding
The Michigan Court of Appeals affirmed in part, reversed in part, and remanded. The panel—Wallace, P.J., and Cameron and Korobkin, JJ.—held that noneconomic damages are not recoverable on a trespass claim under the binding precedent of Mack v Natural Way, Inc, which extended Price v High Pointe Oil’s bar on noneconomic damages for negligent property destruction to trespass claims. However, the court affirmed the $50,000 noneconomic damages award under Hart’s nuisance in fact claim, reasoning that nuisance abatement proceedings are equitable in nature and do not implicate the concerns about verifiability and certainty that bar such damages in legal claims for property destruction.
Regarding economic damages, the court found the trial court clearly erred in finding McCarty testified he spent $60,000–$65,000 on garage repairs; the testimony actually concerned house repairs. The court determined that $65,000 was a fair estimation of economic damages for the house, and after applying the 20% comparative negligence reduction, the economic damages award should be $52,000. The court rejected North Waverly’s causation arguments, finding sufficient evidence that the focused water drainage caused the damages, and noted that North Waverly waived challenges to the sufficiency of trial exhibits by failing to file them with the trial court clerk or the Court of Appeals as required by MCR 7.210(C).
The court affirmed dismissal of North Waverly’s adverse possession counterclaim, holding that North Waverly failed to establish the 15-year statutory period or a basis for tacking prior owners’ possession. Finally, the court clarified the equitable abatement order: it applies only to remediation of the railroad tie portion of the retaining wall to the extent it still encroaches upon the 1324 Property, vacating the remainder of the abatement award as inadequately accounting for post-2021 repairs.
Key Takeaways
- Noneconomic damages for emotional distress are recoverable in equitable nuisance claims but not in legal trespass claims involving property destruction.
- A party’s failure to file trial exhibits with the trial court clerk under MCR 7.210(C) waives appellate challenges to the sufficiency of that evidence.
- Adverse possession requires clear proof of 15 years of hostile possession; tacking requires privity of estate demonstrated by deed description or parol transfer statements.
- Comparative negligence principles apply to reduce economic damages in property disputes, but do not bar noneconomic damages where the plaintiff is less than 50% at fault.
Why It Matters
This decision clarifies the distinction between legal and equitable remedies in property disputes, particularly regarding noneconomic damages. While Michigan law bars emotional distress damages for negligent or trespassory property destruction, such damages remain available in nuisance actions seeking abatement, which are equitable in nature. The ruling also underscores the importance of procedural compliance: appellants who fail to ensure trial exhibits are part of the record on appeal risk waiving evidentiary challenges.
For practitioners, the case illustrates the strategic value of pleading nuisance claims alongside trespass claims in property damage cases, as the former may preserve noneconomic damages that the latter cannot support. Additionally, the court’s treatment of the abatement order demonstrates that equitable relief must be tailored to current conditions and cannot be based solely on aesthetic concerns or past conditions that have been remediated.