Co-Jo, Inc. v. Strand

• Decision Date: 21 October 1997
• Docket Number: CO-J,Docket Nos. 192190,197209,INC
• Citation: 226 Mich.App. 108,572 N.W.2d 251
• Parties: , 1998 O.S.H.D. (CCH) P 31,517 , So-Bo, Inc., and CC & Company, Inc., d/b/a Ponderosa of Greater Flint, and St. Paul Fire and Marine Insurance Company, Plaintiffs-Appellants, v. Dale STRAND and Pete's Plumbing & Heating, Inc., Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 251

572 N.W.2d 251

226 Mich.App. 108, 1998 O.S.H.D. (CCH) P 31,517

CO-JO, INC., So-Bo, Inc., and CC & Company, Inc., d/b/a Ponderosa of Greater Flint, and St. Paul Fire and Marine Insurance Company, Plaintiffs-Appellants, v. Dale STRAND and Pete's Plumbing & Heating, Inc., Defendants-Appellees.

Docket Nos. 192190, 197209.

Court of Appeals of Michigan.

Submitted Sept. 2, 1997, at Detroit.

Decided Oct. 21, 1997, at 9:20 a.m.

Released for Publication Jan. 22, 1998.

Plunkett & Cooney, P.C. by Ernest R. Bazzana, Detroit, for Plaintiffs-Appellants.

Dumasius and Spern P.L.C. by William L. Spern, Woodhaven, for Defendants-Appellees.

Before MARKMAN, P.J., and McDONALD and FITZGERALD, JJ.

PER CURIAM.

This case involves consolidated appeals. In Docket No. 192190, plaintiffs appeal as of right the jury verdict of no cause of action in this negligence action. In Docket No. 197209, plaintiffs appeal by leave granted the order awarding costs and attorney fees to defendants. We affirm in part and reverse in part.

Plaintiffs Co-Jo, Inc., So-Bo, Inc., and CC & Company, Inc., collectively referred to herein as Co-Jo, operated a Ponderosa Restaurant. The restaurant was insured against fire loss by plaintiff St. Paul Fire and Marine Insurance Company. On December 26, 1990, an employee of the restaurant observed water leaking from a pipe located above the ceiling tiles in the kitchen. The restaurant manager contacted defendant Pete's Plumbing & Heating, Inc., and defendant Dale Strand, an employee of Pete's, was sent out to make the necessary repairs. Strand was working on the pipe with a propane torch and some insulation near the pipe caught fire. The fire spread quickly through the attic of the building, causing approximately $800,000 in losses, for which Co-Jo was reimbursed $666,469 under the fire insurance policy with St. Paul.

On June 12, 1992, plaintiffs filed suit against defendants to recover for their losses from the fire. Plaintiffs asserted a claim that the fire was caused by Strand's negligence and a derivative claim against Pete's on the theory of respondeat superior. Plaintiffs also asserted a claim for negligence against Pete's and a claim for breach of warranty against both Pete's and Strand.

At trial, plaintiffs' theory of the case was that Strand's negligent use of the torch in repairing the pipe caused the fire. Defendants asserted that the fire ignited instantaneously because of defective insulation materials in the attic, excessive grease build-up from the kitchen, or a natural gas leak. Using a special verdict form, seven of the eight jurors found that Strand was negligent. ¹ However, seven of the eight jurors found that Strand's negligence was not the proximate cause of the fire. All eight jurors found that Pete's was not negligent and that Co-Jo was not comparatively negligent. Separate judgments of no cause of action against Strand and Pete's were entered, and plaintiffs' motion for a new trial was denied.

I

Plaintiffs argue that the trial court erred in denying a motion to admit a statement made by Strand on the ground that the statement was privileged as an attorney-client communication.

The purpose of the attorney-client privilege is to permit a client to confide in the client's counselor, knowing that the communications are safe from disclosure. U.S. Fire Ins. Co. v. Citizens Ins. Co. of America, 156 Mich.App. 588, 592, 402 N.W.2d 11 (1986). The privilege attaches only to confidential communications made by the client to its adviser that are for the purpose of obtaining legal advice. Fruehauf Trailer Corp. v. Hagelthorn, 208 Mich.App. 447, 450, 528 N.W.2d 778 (1995).

Here, attorney William Spern was retained by Westfield Insurance Company, the liability insurer for Pete's, to represent Pete's and Strand in any potential action arising out of the fire. Spern clearly stated that he obtained the statement from Strand pursuant to his representation in order to prepare to defend against any possible claim. Spern also stated that he informed Strand that he was retained by the insurer as his attorney and that the statement was pursuant to that representation. Strand had little or no recollection of the meeting or the nature of Spern's role. Strand testified that he thought he was instructed by Pete's to meet with Spern regarding the fire and that he was probably told that Spern was an attorney for Westfield.

Spern's statements support the trial court's conclusion that Strand's statement was intended as a confidential communication to Spern for the purpose of rendering legal advice in the future. Strand's failure to recall any details of the meeting provides little evidence with respect to his understanding of his relationship with Spern at the time of the statement. Thus, although little evidence was presented from which the trial court made its determination, we cannot conclude that the trial court abused its discretion in finding that the statement was privileged as the product of an attorney-client relationship. Dacon v. Transue, 441 Mich. 315, 329, 490 N.W.2d 369 (1992).

Plaintiffs also argue, however, that any privilege was waived when Strand mentioned the statement during his trial testimony. We disagree. Strand's comment was inadvertent and simply an attempt to answer counsel's questions with respect to inconsistencies between his trial and deposition testimony. Strand did not divulge any content of the statement and there is no evidence to suggest an intent to waive the privilege or a lack of intent to preserve the privilege. Sterling v. Keidan, 162 Mich.App. 88, 96, 412 N.W.2d 255 (1987).

Plaintiffs additionally argue that any privilege was waived when defendants turned the statement over to plaintiffs. Again, we disagree. Defendants did not voluntarily disclose the statement to plaintiffs. Rather, it was disclosed only upon order of the court with the understanding that it would be used only to assist the court in answering the question whether the statement was privileged. ² Such disclosure does not constitute a waiver by Strand of the privilege with respect to the statement being introduced at trial. Id. 93-94, 412 N.W.2d 255.

II

Plaintiffs brought a claim of breach of implied or express warranty, alleging that Strand's negligent performance of plumbing services constituted a breach of an express or implied warranty to perform services free from defects. The trial court granted summary disposition of the claim in favor of defendants. Plaintiffs argue that summary disposition was improper in light of Nash v. Sears, Roebuck & Co., 383 Mich. 136, 174 N.W.2d 818 (1970). In Nash, the Court noted that in every contract there is an implied "duty to perform it skillfully, carefully, diligently and in a workmanlike manner." Id. at 142, 174 N.W.2d 818. Where a party to a contract fails to comply with the implied duty to perform in a workmanlike manner, the other party may be entitled to damages resulting from the deficient performance. Id. at 143, 174 N.W.2d 818. This duty has been further explained as requiring the contracting party to perform with reasonable care, thus providing the basis for a negligence claim when a contracting party fails to live up to that duty. Williams v. Polgar, 391 Mich. 6, 18-19, 215 N.W.2d 149 (1974). Accordingly, the Supreme Court has recognized that "the contract merely creates the state of things which furnishes the occasion of the tort." Id. at 19, 215 N.W.2d 149. Hence, the Court has indicated that negligent performance under a contract constitutes a tort as well as a breach of contract. Id. at 19, 215 N.W.2d 149. Plaintiff has not cited any authority, however, in support of a finding that negligent performance under a contract would also constitute a breach of an implied or express warranty, and our research has unveiled none. ³ Hence, the trial court properly granted summary disposition of this claim in favor of defendants.

III

Plaintiffs maintain that the trial court erred in granting defendants' motion in limine to prevent plaintiffs from introducing provisions of the Michigan Occupational Safety and Health Act (MIOSHA), M.C.L. § 408.1001 et seq.; M.S.A. § 17.50(1) et seq., to establish that defendants breached their duty of care.

MIOSHA regulations were enacted to promote safety in the workplace and, therefore, employees are required to follow certain safety regulations. Zalut v. Andersen & Associates, Inc., 186 Mich.App. 229, 235, 463 N.W.2d 236 (1990). The Supreme Court has held in cases involving personal injury to a plaintiff-employee that violations of safety regulations are evidence of negligence, Beals v. Walker, 416 Mich. 469, 481, 331 N.W.2d 700 (1982), and this Court has held that MIOSHA regulations are relevant evidence on the issue of an employee's comparative negligence. Zalut, supra at 235, 463 N.W.2d 236.

The present plaintiffs' claims are distinguishable, however, because they seek to recover for damage to property. Thus, the question is whether MIOSHA regulations can be introduced to establish negligence of an employee resulting in property damage to a third-party plaintiff. While Zalut can be interpreted as establishing a general rule that a violation of MIOSHA regulations can be used as evidence of negligence, such an interpretation appears to go beyond the purpose of creating a safe workplace for employees. The application of the MIOSHA regulations in the manner suggested by plaintiffs would establish the regulations as the measure of the standard of care owed by an independent...