Bailey v. Schaaf

Decision Date20 February 2014
Docket NumberDocket No. 295801.
Citation852 N.W.2d 180,304 Mich.App. 324
PartiesBAILEY v. SCHAAF (ON REMAND).
CourtCourt of Appeal of Michigan — District of US

OPINION TEXT STARTS HERE

Donald M. Fulkerson, Westland, and David A. Robinson, Southfield, for Devon Scott Bailey.

Gary P. Supanich PLLC (by Gary P. Supanich, Ann Arbor) for T.J. Realty, Inc., d/b/a Hi–Tech Protection, Evergreen Regency Townhomes, Ltd., and Radney Management & Investments.

Before: BECKERING, P.J., and WHITBECK and M.J. KELLY, JJ.

ON REMAND

PER CURIAM.

This case returns to us on remand from our Supreme Court to reconsider whether the trial court properly dismissed plaintiff Devon Scott Bailey's claims against defendants T.J. Realty, Inc., which did business under the name Hi–Tech Protection, Inc. (Hi–Tech), Evergreen Regency Townhomes, Ltd. (Evergreen), and Radney Management & Investments (Radney). Bailey v. Schaaf, 494 Mich. 595, 618–619, 835 N.W.2d 413 (2013). For the reasons more fully explained in this opinion, we again conclude that the trial court erred when it dismissed Bailey's claim against Evergreen and Radney for breach of their duty to involve the police after learning of an ongoing criminal emergency, but did not err when it dismissed Bailey's remaining claims. Accordingly, we again affirm in part, reverse in part, and remand for further proceedings.

I. BASIC FACTS

In November 2007, Bailey sued various parties to recover damages for injuries he sustained after defendant Steven Gerome Schaaf shot him at an outdoor gathering on the grounds of an apartment complex. See Bailey v. Schaaf, 293 Mich.App. 611, 616–617, 810 N.W.2d 641 (2011). In addition to his claim against Schaaf, Bailey eventually alleged claims against Evergreen, which owned the apartment complex; the complex's manager, Radney; the business that provided security for the complex, Hi–Tech; Hi–Tech's owner, Timothy Johnson; and the security guards that Hi–Tech assigned to the complex on the day of the shooting, William Baker and Christopher Campbell. Id. at 617, 810 N.W.2d 641. The trial court dismissed the claims against the individual defendants—Baker, Campbell and Johnson—after Bailey's lawyer declined to argue a basis for holding them individually liable. Id. at 618, 810 N.W.2d 641. The trial court later dismissed the claims against Evergreen, Radney, and Hi–Tech, but entered a default judgment against Schaaf. Bailey then appealed the trial court's decision to dismiss his claims against Evergreen, Radney, and Hi–Tech to this Court. Id. at 619–620, 810 N.W.2d 641.

In that first appeal, we addressed three issues: whether the trial court abused its discretion when it allowed Evergreen and Radney to amend their responses to Bailey's request for admissions, whether the trial court erred when it determined that Bailey was not a third-party beneficiary of the contract for security services between Evergreen and Hi–Tech, and whether the trial court erred when it dismissed Bailey's claims against Evergreen, Radney, and Hi–Tech under MCR 2.116(C)(8) after it determined that Bailey failed to identify a duty that any of these defendants owed to him. See Bailey, 293 Mich.App. at 614–615, 627, 810 N.W.2d 641. We concluded that the trial court did not abuse its discretion when it permitted Evergreen and Radney to amend their responses to Bailey's request to admit and did not err when it determined that Bailey was not a third-party beneficiary under the contract between Evergreen and Hi–Tech. Id. at 620–626, 810 N.W.2d 641.

Turning to the duties that Evergreen and Radney may have owed to Bailey, this Court surveyed the authorities addressing a premises possessor's duty to his or her invitees and recognized that the common law does not normally impose a duty to protect invitees from criminal acts by third parties. Id. at 629–642, 810 N.W.2d 641. This Court, however, acknowledged that our Supreme Court had determined that merchants have a limited duty to respond to criminal acts: the merchant must expedite the involvement of the police “when a situation presently occurring on the premises poses a risk of imminent and foreseeable harm to identifiable invitees.” Id. at 636, 810 N.W.2d 641, citing MacDonald v. PKT, Inc., 464 Mich. 322, 326, 335, 338, 628 N.W.2d 33 (2001). We then reasoned that the limited duty to involve the police applied equally to landlords. Bailey, 293 Mich.App. at 640–642, 810 N.W.2d 641. Because Bailey's complaint adequately alleged a claim against Evergreen and Radney premised on this limited duty, we determined that the trial court erred when it dismissed Bailey's claims against Evergreen and Radney under MCR 2.116(C)(8). Id. at 642, 810 N.W.2d 641.

Finally, we determined that Hi–Tech had no common-law duty to protect Evergreen and Radney's invitees from criminal acts by third parties; we explained that any duty that Hi–Tech may have had arose from its contract to provide security services, which Bailey could not use as a basis for his claim because he was not a third-party beneficiary under the contract. Id. at 642–643, 810 N.W.2d 641, citing Fultz v. Union–Commerce Assoc., 470 Mich. 460, 461–462, 683 N.W.2d 587 (2004). For that reason, we concluded that the trial court did not err when it dismissed Bailey's claim against Hi–Tech. Id. at 643, 810 N.W.2d 641.

On further appeal, our Supreme Court affirmed this Court's extension of the duty stated in MacDonald to the landlord-tenant relationship. Bailey, 494 Mich. at 618–619, 835 N.W.2d 413. It did not, however, affirm this Court's judgment in its entirety; it vacated a portion of the opinion and remanded the case for consideration of two issues. Id. at 619, 835 N.W.2d 413.

First, it asked this Court to consider Evergreen and Radney's argument that the dismissal of the claims against the security guards relieved them of vicarious liability under the decision in Al–Shimmari v. Detroit Med. Ctr., 477 Mich. 280, 731 N.W.2d 29 (2007). See Bailey, 494 Mich. at 619, 835 N.W.2d 413. The Supreme Court indicated that this Court should additionally consider whether Evergreen and Radney properly preserved that issue for appeal. Id.

Second, the Supreme Court asked this Court to reconsider our decision concerning Hi–Tech's duty to Bailey—if any—in light of the decisions in Loweke v. Ann Arbor Ceiling & Partition Co., LLC, 489 Mich. 157, 809 N.W.2d 553 (2011), and Hill v. Sears, Roebuck & Co., 492 Mich. 651, 822 N.W.2d 190 (2012), which clarified and applied the holding in Fultz. See Bailey, 494 Mich. at 619, 835 N.W.2d 413.

II. HI–TECH'S DUTY
A. STANDARD OF REVIEW

We first reconsider whether the trial court properly dismissed Bailey's claim against Hi–Tech on the grounds that he failed to show that Hi–Tech owed him a duty that was distinct from those provided under Hi–Tech's agreement with Evergreen and Radney. This Court reviews de novo whether the trial court properly granted a motion for summary disposition. Barnard Mfg. Co., Inc. v. Gates Performance Engineering, Inc., 285 Mich.App. 362, 369, 775 N.W.2d 618 (2009). This Court also reviews de novo whether the trial court properly interpreted and applied the common law. Brecht v. Hendry, 297 Mich.App. 732, 736, 825 N.W.2d 110 (2012). Likewise, whether Hi–Tech owed a duty to Bailey is a question of law that this Court reviews de novo. See Fultz, 470 Mich. at 463, 683 N.W.2d 587.

B. CONTRACTUAL DUTIES AND TORT LIABILITY

In our prior opinion, we determined that Bailey “failed to identify a duty that was separate and distinct from Hi–Tech's duties under its contract with Evergreen.” Bailey, 293 Mich.App. at 642, 810 N.W.2d 641. We noted that Hi–Tech had no common-law duty to protect Bailey from Schaaf or even to take some affirmative step to aid him after he was injured. Id. Instead, we stated, to the extent that Hi–Tech had any duty to act, its “duties were created by the terms of the contract” that it had with Evergreen. Id. Because Bailey had no right to enforce a “duty imposed solely under a contract to which he is not a party or an intended beneficiary,” we concluded that Bailey failed to state a claim against Hi–Tech. Id. at 643, 810 N.W.2d 641. Although we applied our Supreme Court's decision in Fultz, the Supreme Court has now nevertheless asked us to reconsider our decision in light of the clarification of Fultz that it provided in Loweke and Hill. Bailey, 494 Mich. at 619, 835 N.W.2d 413. Accordingly, we briefly trace the evolution of the test stated in Fultz and clarified in Loweke and Hill.

In order to recover against Hi–Tech, Bailey had to establish as a threshold matter that Hi–Tech owed him a duty of care. See Hill, 492 Mich. at 660, 822 N.W.2d 190. Whether one person owes a duty of care to another depends—in significant part—on the relationship between those persons: “At common law, [t]he determination of whether a legal duty exists is a question of whether the relationship between the actor and the plaintiff gives rise to any legal obligation on the actor's part to act for the benefit of the subsequently injured person.” Id. at 661, 822 N.W.2d 190 (quotation marks and citations omitted) (alteration in original). A duty to act for another person's benefit may arise by contractual agreement, by statute, or under the common law. Id. at 660–661, 822 N.W.2d 190.

A party to an agreement has an enforceable contractual duty to perform as agreed in the contract. See Bloomfield Estates Improvement Ass'n, Inc. v. City of Birmingham, 479 Mich. 206, 212–213, 737 N.W.2d 670 (2007) (characterizing the right to make and enforce contracts as a fundamental right and stating that, “when parties have freely established their mutual rights and obligations through the formation of unambiguous contracts,” the courts must enforce the contract's terms). But not every person benefited by the contractual agreement may sue to enforce the duties arising under it. Rather, only the parties to the agreement and those third parties that the contracting parties intended to...

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