Freeman-Darling, Inc. v. Andries-Storen-Reynaert Multi Group, Inc.

• Decision Date: 21 March 1986
• Docket Number: INC,Docket No. 78914,ANDRIES-STOREN-REYNAERT,FREEMAN-DARLIN
• Citation: 382 N.W.2d 769,147 Mich.App. 282
• Parties: , Plaintiff-Appellant, v.MULTI GROUP, INC., a Michigan corporation, Defendant-Appellee, and Daverman Associates, a Michigan corporation, and State of Michigan, Defendants.
• Court: Court of Appeal of Michigan — District of US

Page 769

382 N.W.2d 769

147 Mich.App. 282

FREEMAN-DARLING, INC., Plaintiff-Appellant, v. ANDRIES-STOREN-REYNAERT MULTI GROUP, INC., a Michigan corporation, Defendant-Appellee and Daverman Associates, a Michigan corporation, and State of Michigan, Defendants.

Docket No. 78914.

Court of Appeals of Michigan.

Submitted Oct. 8, 1985.

Decided Nov. 19, 1985.

Released for Publication March 21, 1986.

Federlein & Grylls, P.C. by Walter J. Federlein, Royal Oak, for plaintiff-appellant.

Honigman, Miller, Schwartz & Cohn by Ronald S. Longhofer and David B. Jaffe, Detroit, for defendant-appellee.

Before J.H. GILLIS, P.J., and CYNAR and EVANS, ^* JJ.

PER CURIAM.

The appellant, Freeman-Darling, Inc. (hereinafter Freeman), initiated this cause of action seeking the recovery of damages from defendant-appellee Andries-Storen-Reynaert Multi Group, Inc. (hereinafter ASR), due to ASR's allegedly negligent failure to properly perform its contract with the State of Michigan. The trial court granted the appellee's motion for summary judgment pursuant to GCR 1963, 117.2(1). The resulting appeal is as of right.

The instant case arose out of the construction of the Ypsilanti Correctional Facility by the State of Michigan under a "multi-prime" contract arrangement. Under this plan, rather than hire a general contractor to coordinate the construction, the state awarded nine different contracts covering various phases of the facility's construction. Each of the nine contractors entered into separate contracts directly with the state.

Under the terms of its contract with the state, ASR was required to furnish special locking hardware for a security system to be built into the facility's administrative/medical building. The basis of Freeman's complaint against ASR was that, in selecting a subcontractor to perform the installation of the security locking system, ASR caused an unreasonable delay which affected Freeman's ability to proceed with and fulfill its own contractual obligations. In causing the work delay, it was alleged that ASR breached certain duties owed to Freeman, to-wit: the duty "to perform its work in accordance with the expressed and implied terms and conditions of defendant ASR's contract with the Owner [the state]", and the duty "to refrain from taking actions, inactions, and making omissions, which a similarly situated construction contractor would know, and otherwise should know, would injure plaintiff and plaintiff's conduct and execution of its work pursuant to plaintiff's contract with the owner".

In essence, the theory upon which Freeman seeks to recover against ASR is the "negligent interference with a contractual relationship". We are therefore presented with an action in tort based upon the defendant's failure to perform its contract with a third party. The issue to be resolved, then, is whether Michigan recognizes such a cause of action.

Appellant Freeman begins its argument on appeal by citing two Michigan Supreme Court cases, Clark v. Dalman, 379 Mich. 251, 150 N.W.2d 755 (1967), and Williams v. Polgar, 391 Mich. 6, 215 N.W.2d 149 (1974), for the broad generalization that "Michigan recognizes an action in tort in favor of a non-contracting party which arises out of a contractual relationship". We believe the import of Clark and Williams was more accurately described in Crews v. General Motors Corp., 400 Mich. 208, 220-232, 253 N.W.2d 617 (1977) (opinion by Williams, J.), where Justice Williams indicated that Clark stood only for the proposition that "a duty underlying an action in tort may arise out of a contractual relationship". Crews, supra, p. 225, 253 N.W.2d 617 (emphasis supplied). However, "a tort action will not lie when based solely on nonperformance of a contractual duty". Crews, supra, p. 226, 253 N.W.2d 617 (emphasis in original).

The distinction between the above-stated propositions, although difficult to make, is significant. The concepts with which we are concerned were fully explored by the Supreme Court in Hart v. Ludwig, 347 Mich. 559, 79 N.W.2d 895 (1956). The contract in Hart was for the care and maintenance of an orchard owned by plaintiffs which the defendant failed to complete. As in the present case, the plaintiffs alleged that defendant's omissions were contrary to the common law and constituted negligence. In analyzing the viability of an action in tort arising solely out of the breach of a contract, the Hart Court cited the following passage from a Massachusetts case, Tuttle v. Gilbert Manufacturing Co, 145 Mass. 169, 13 N.E. 465 (1887), which involved a suit by a lessee for injuries sustained when a barn floor, which the lessor had agreed to repair, collapsed:

" 'The action of tort has for its foundation the negligence of the defendant, and this means more than a mere breach of a promise. Otherwise, the failure to meet a note, or any other promise to pay money, would sustain an action in tort for negligence, and thus the promissor be made liable for all the consequential damages arising from such failure.

" 'As a general rule, there must be some active negligence or misfeasance to support tort. There must be some breach of duty distinct from breach of contract. In the case at bar, the utmost shown against the defendant is that there was unreasonable delay on its part in performing an executory contract. As we have seen, it is not liable by reason of the relation of lessor and lessee, but its liability, if any, must rest solely upon a breach of this contract.' " Hart, supra, 347 Mich. p. 563, 79 N.W.2d 895.

The Court went on to identify the important distinction as being one of misfeasance, which may support an action in either tort or contract, and nonfeasance of a contractual obligation, which gives rise only to an action on the contract. The Court elaborated as follows:

"There are, it is recognized, cases in which an incident of nonfeasance occurs in the course of an undertaking assumed. Thus a surgeon fails to sterilize his instruments, an engineer fails to shut off steam, Kelly v Metropolitan R Co, [1895] 1 QB 944 (72 LT 551), a builder fails to fill a ditch in a public way, Ellis v McNaughton, 76 Mich 237 (15 Am St Rep 308). These are all, it is true, failures to act, each disastrous detail, in itself, a 'mere' nonfeasance. But the significant similarity relates not to the slippery distinction between action and nonaction but to the fundamental concept of 'duty'; in each a situation of peril has been created, with respect to which a tort action would lie without having recourse to the contract itself. Machinery has been set in motion and life or property is endangered. It avails not that the operator pleads that he simply failed to sound the whistle as he approached the crossing. The hand that would spare cannot be stayed with...