Breach of fiduciary duty & conversion claims related to a payroll agreement; Separate & distinct duty limiting tort claims; Rinaldo’s Constr Corp v Michigan Bell Tel. Co; Contractual limitation of remedies & consequential damages; Hart v Ludwig; Treble damages; MCL 600.2919a

The court held that plaintiff-Precision’s fiduciary duty and conversion claims failed because defendant-ADP’s obligations arose solely from the parties’ payroll services contract and the contract’s liability provisions barred the claimed consequential damages. Thus, the trial court properly granted ADP summary disposition and denied reconsideration. Under a payroll agreement, Precision sent funds to ADP to pay its payroll taxes, but ADP failed to remit the taxes or file returns for a period of time, later sending checks to Precision and eventually paying the outstanding taxes only after Precision hired a certified public accountant and an attorney to press the issue. Precision sued for breach of fiduciary duty and conversion, alleging that ADP used approximately $250,000 of Precision’s funds for its own purposes and seeking about $10,776 in professional fees as damages, trebled under MCL 600.2919a. ADP moved for summary disposition, relying on contract provisions that required ADP to correct errors and reimburse penalties or interest while disallowing consequential damages, and arguing that Precision could not repackage a contractual dispute as tort claims. The trial court agreed, ruled that ADP owed no duty separate from the contract, dismissed the tort claims, and invited Precision to replead a contract claim, but Precision instead sought reconsideration. On appeal, the court reaffirmed the separate and distinct duty framework, noting that Precision’s allegations described negligent performance and nondisclosure related to contractual obligations rather than violation of an independent legal duty. It expressly concluded that “Precision failed to allege that ADP violated a duty that it owed Precision separate and distinct from those owed under the contract.” The court further emphasized that the agreement’s limitation of liability clause expressly addressed late payment of tax funds by requiring ADP to reimburse penalties and interest and at the same time excluded consequential damages such as professional fees incurred in connection with the services, explaining that “the contract specifically provided a remedy for the exact scenario that occurred” and that because “Precision incurred its alleged damages in connection with the contract, . . . they were specifically excluded under the contractual language.” Affirmed.