Gagnon v. Dresser Industries Corp.

• Court: Court of Appeal of Michigan
• Writing for the Court: PER CURIAM
• Citation: Gagnon v. Dresser Industries Corp., 344 N.W.2d 582, 130 Mich.App. 452 (Mich. App. 1984)
• Decision Date: 06 February 1984
• Docket Number: Docket No. 59910
• Parties: , 39 UCC Rep.Serv. 867 Michael GAGNON, Plaintiff-Appellee, Cross-Appellant, v. DRESSER INDUSTRIES CORPORATION, a Delaware corporation, Defendant-Appellant, Cross-Appellee.

Page 582

344 N.W.2d 582

130 Mich.App. 452, 39 UCC Rep.Serv. 867

Michael GAGNON, Plaintiff-Appellee, Cross-Appellant, v. DRESSER INDUSTRIES CORPORATION, a Delaware corporation Defendant-Appellant, Cross-Appellee.

Docket No. 59910.

Court of Appeals of Michigan.

Submitted May 3, 1983.

Decided Sept. 1, 1983.

Released for Publication Feb. 6, 1984.

Kelman, Loria, Downing, Schneider & Simpson (by Nicholas J. Rine) Detroit, for plaintiff-appellee, cross-appellant.

Garan, Lucow, Miller, Seward, Cooper & Becker, P.C. (by Thomas F. Myers); and Gromek, Bendure & Thomas (by Mark R. Bendure), Detroit, for defendant-appellant, cross-appellee.

Before GRIBBS, P.J., and BRONSON and BEASLEY, JJ.

PER CURIAM.

Both plaintiff and Dresser Industries Corporation (hereinafter defendant) appeal as of right from a judgment entered on the jury's verdict in favor of plaintiff. The jury found that plaintiff had suffered $200,000 in damages, but that plaintiff had been 50% negligent, reducing his entitlement to $100,000. Plaintiff had received a $100,000 settlement award from third parties in connection with his injuries. The trial court, taking the settlement award into account entered judgment for plaintiff for only $50,000 plus interest.

On appeal, plaintiff raises two issues, neither of which require reversal. First, plaintiff urges that the defense of comparative negligence, Placek v. Sterling Heights, 405 Mich. 638; 275 N.W.2d 511 (1979); M.C.L. Sec. 600.2945; M.S.A. Sec. 27A.2945, does not apply to actions such as the present one, where the plaintiff brings his action under a theory of breach of implied warranty. Plaintiff cites "implied warranty" provisions of the Uniform Commercial Code (UCC), M.C.L. Sec. 440.2314; M.S.A. Sec. 19.2314, in making this argument. These provisions are not apposite. Plaintiff has apparently confused contractual doctrines of implied warranty with the tort-based products liability doctrine of the same name. See Williams v. The Detroit Edison Co., 63 Mich.App. 559, 565; 234 N.W.2d 702 (1975), noting the distinction and pointing out the inapplicability of the UCC. Plaintiff's implied warranty theory is not contractual, but a products liability action as defined by M.C.L. Sec. 600.2945; M.S.A. Sec. 27A.2945. Recent authority indicates that under this statute comparative negligence applies "irrespective of the fact that a plaintiff is injured by the breach of an implied warranty". Karl v. Bryant Air Conditioning Co., 416 Mich. 558, 569; 331 N.W.2d 456 (1982). We also note that comparative negligence is a defense to any claim of inadequate safety devices. Hardy v. Monsanto Enviro-Chem Systems, Inc., 414 Mich. 29; 323 N.W.2d 270 (1979). Accordingly, given that plaintiff's claim is not contractual in nature, Williams, supra, comparative negligence was properly found applicable regardless of whether the claim is characterized as a products liability action for breach of implied warranty on the one hand, or a claim of inadequate safety devices on the other.

Plaintiff raises an alternative argument with respect to the applicability of comparative negligence : that the doctrine does not apply because he filed his original action before the enactment of M.C.L. Sec. 600.2945; M.S.A. Sec. 27A.2945, establishing products liability actions and their defenses, including comparative negligence. Defendant responds that comparative negligence does apply because it was not added as a party defendant until after the statute became effective. Neither party has addressed the crucial aspect of this issue: namely, that comparative negligence applies retroactively as a defense to both negligence, Placek, supra, and products liability, Karl, supra. Under Placek, comparative negligence was declared applicable to any case in which trial had yet to commence; the trial in this case began in 1981, two years after the date the Placek opinion was released, February 8, 1979. Similarly, in Karl, supra, the Court held that comparative negligence applies to all actions brought to trial after the products liability statute's effective date, M.C.L. Sec. 600.2945; M.S.A. Sec. 27A.2945, 1978 P.A. 495, effective December 13, 1978. As noted above, this action was pending as of that date. There is no merit to plaintiff's claim that the application of comparative negligence amounts to a deprivation of due process. In Karl, supra, the Court held that the statute does not deprive a plaintiff of his claim for injuries, but that it merely revises the method of computing his damages. As a remedial statute, it does not deprive defendant of any vested rights. Id., 416 Mich. pp. 579-580, 331 N.W.2d 456.

From the foregoing, we conclude that the issues raised in plaintiff's appeal are without merit.

Defendant's cross-appeal raises several additional issues, which also lack merit. First, defendant contends that the trial court erred in computing plaintiff's comparative damages. According to defendant, the court should have applied the following formula:

 $200,000  total damages found by the jury
                - 100,000  deduction for 50% comparative negligence
                ---------
                 $100,000  remaining amount equals plaintiff's
                             entitlement
                  100,000  settlement amount received by third parties
                ---------
                      -0-  amount left awardable on the verdict
                

Plaintiff, on the other hand, urges this Court to uphold the trial court's application of the following formula:

$200,000  total damages found by the jury
                 100,000  settlement amount
                --------
                $100,000  remaining amount awardable by any verdict
                  31,580  interest from original filing
                --------
                $131,580  total amount awardable, with interest
                  65,670  deduction for 50% comparative
                --------    negligence
                $ 65,670  judgment amount properly entered in
                            plaintiff's favor
                

We agree with plaintiff that the trial court acted properly in adopting the latter formula. It is true that, under the language of some cases cited by defendant, settlement amounts may be deducted from the net recovery (computed after deducting for comparative negligence), rather than from gross damages. However, defendant's proposed formula would allow defendant to derive the windfall of escaping liability for its negligence merely because a third party had made prior settlements to which defendant had not contributed.

It is true that under Placek, supra, as between a plaintiff and nonsettling tortfeasor, the plaintiff must bear responsibility for his losses in proportion to the amount by which plaintiff shares blame with that nonsettling tortfeasor. However, nothing in the Placek language cited by defendant suggests that the plaintiff must deduct amounts received in settling with other tortfeasors. Such a result would be particularly inappropriate where, as here, the matter of the other tortfeasors' degree of fault was not before the jury.

The foregoing reasoning has recently been applied by the Supreme Court in Mayhew v. Berrien County Road Comm., 414 Mich. 399; 326 N.W.2d 366 (1982). There, the Supreme Court expressed a policy against requiring a plaintiff and his adversaries to litigate the relative degree of fault of third parties not represented in the action:

"[N]umerous difficulties would be presented if we were to allow the jury to apportion damages among all tortfeasors, including a settling non-party. It would mean that the settling tortfeasor's liability would be assessed without anyone adequately representing that interest. It would put the plaintiff in a unique trial situation. The plaintiff would not only have to advocate that he was not at fault, he would have to convince the jury that the non-party was only minimally at fault. Otherwise, there might be too great a percentage of fault attributed to the non-party, thus reducing the plaintiff's recovery." 414 Mich. 412, 326 N.W.2d 366.

The foregoing policy would be fulfilled by the application of a formula which allows prior settlements to remove the issue of a third party's liability from any litigation between the plaintiff and the nonsettling tortfeasor. Such a formula can readily be derived as follows. The court could characterize plaintiff's entire claim for injuries as the amount of total damages which the jury has found, in the present case, $200,000. The court could then conclude that this "claim" should be reduced by the amount of the settlement, $100,000 here, recognizing that the settlement represented satisfaction of the third party's liability, thus removing the issue of that third party's fault from the subsequent litigation between plaintiff and the nonsettling tortfeasor, Mayhew, supra. Applying this analysis, the trial would then be confined to the issue of how to apportion fault as between the plaintiff and the nonsettling tortfeasor for the remaining $100,000 in damages. The jury would not have to face the problem of determining the liability of non-parties; its sole duty would be to allocate fault among the parties who were represented at trial, plaintiff and the nonsettling tortfeasor. The trial court's formula is consistent with the foregoing analysis.

The court's formula is also consistent with the language of M.C.L. Sec. 600.2925d; M.S.A. Sec. 27A.2925(4), which, while expressly preserving the doctrine of joint and several liability, specifically discharges settling tortfeasors from continued liability for contribution. The statute's reference to the discharge of settling tortfeasors is consistent with the application of a formula which presupposes that their negligence is no longer an issue at a trial involving the plaintiff and the nonsettling party.

The court's formula is certainly consistent with the parties' understanding of the issues which remained viable at trial. Neither of the parties made any effort to litigate the fault of the settling third party. The only issue was the relative liability as between plaintiff and defendant, Dresser Industries, Inc.

Given the foregoing, we find that the trial court acted properly in...