Duty to use due care to avoid physical harm to foreseeable persons & property; Clark v Dalman; Loweke v Ann Arbor Ceiling & Partition Co, LLC; Intangible economic losses; Rinaldo’s Contr Corp v Michigan Bell Tel Co; Mercedes-Benz U.S. International (MBUSI)

Holding that the damages plaintiffs asserted were the type of “intangible economic losses” to which the general common law duty to use due care does not extend, the court affirmed summary disposition for defendant. The case arose from a fire at defendant’s manufacturing facility. Defendant had a contract to supply nonparty-MBUSI with certain goods. MBUSI, an affiliate of nonparty-Daimler AG, used the goods obtained from defendant to manufacture some Daimler vehicles. Due to the fire, “Daimler suffered significant business interruptions and profit losses as a result of the forced reduction of production and assembly operations of its vehicles. Daimler, who was insured by plaintiffs, filed a claim for losses that it suffered as a result of the fire, and plaintiffs paid the claim. Plaintiffs, as insurers and assignees of Daimler,” brought a negligence action against defendant. The court noted it was true that “defendant owed Daimler, as a member of the public, a general common law duty to use due care during its undertakings, and this duty was separate and distinct from its contractual obligations to MBUSI.” However, the Michigan Supreme Court held in Rinaldo’s that this duty “does not extend to ‘intangible economic losses.’” In Clark, the Supreme Court held that “the duty is limited to preventing harm to ‘the person or property of others.’” The court determined here that “one could consider the complaint as alleging that by allowing the fire to occur defendant breached its duty to use ordinary care during its undertakings. However, plaintiffs only alleged economic harm. In their complaint, plaintiffs described the damages suffered by Daimler as a ‘business interruption,’ the ‘loss of business income,’ and ‘lost profits.’ These damages are precisely the sort of ‘intangible economic losses’ to which” the Supreme Court has clearly ruled the duty does not extend. The court added that the fact “Daimler’s economic losses were caused by damage to MBUSI’s property does not change the fact that Daimler only suffered intangible economic losses. While defendant did have a duty to exercise due care as to not damage MBUSI’s property, this is not a duty that was owed to Daimler because the breach of this duty caused Daimler to suffer only intangible economic losses.”