Hill v. Sullivan Equipment Co.

• Decision Date: 06 November 1978
• Docket Number: Docket No. 77-1902,ARMEN-BERRY
• Citation: 86 Mich.App. 693,273 N.W.2d 527
• Parties: Robert Anthony HILL and Dora Hill, Plaintiffs, v. SULLIVAN EQUIPMENT CO., a Michigan Corporation, Defendant-Third-Party Plaintiff-Appellant, v.CO., a Michigan Corporation, Third-Party Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 527

273 N.W.2d 527

86 Mich.App. 693

Robert Anthony HILL and Dora Hill, Plaintiffs, v. SULLIVAN EQUIPMENT CO., a Michigan Corporation, Defendant-Third-Party Plaintiff-Appellant, v. ARMEN-BERRY CO., a Michigan Corporation, Third-Party

Defendant-Appellee.

Docket No. 77-1902.

Court of Appeals of Michigan.

Nov. 6, 1978.

Released for Publication Jan. 12, 1979.

Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen by Dennis M. Powers, Detroit, for Sullivan Equipment Co.

David M. Tyler, Detroit, for Armen-Berry Co.

Paul J. Carron, Detroit, and Bruce W. Franklin, Troy, for Robert and Dora Hill.

Before CAVANAGH, P. J., and BRONSON and WALSH, JJ.

BRONSON, Judge.

Robert Hill, the principal plaintiff, was injured at work when he reached into a screw conveyor and caught his arm in the screw mechanism. Hill sued defendant Sullivan Equipment Co., which designed, manufactured and installed the conveyor for Hill's employer, Armen-Berry Company.

Sullivan filed a third-party complaint against Armen-Berry which alleged that Sullivan had originally designed the machine with a protective cover, but that Armen-Berry had explicitly rejected this design and insisted that the machine be installed without the cover. The third-party complaint further alleged that Armen-Berry stated to Sullivan that the machine would be used in such a manner that the screw conveyor would be inaccessible to workmen while the machine was in operation.

The trial court granted Armen-Berry's summary judgment motion on the third-party complaint, holding that it failed to state a cause of action for indemnity. See GCR 1963, 117.2(1).

Defendant Sullivan alleges alternatively that it is entitled to common law indemnity or indemnity under an implied contract.

I

Common law indemnity is based on the equitable principle that where the wrongful act of one results in another being held liable, the latter party is entitled to restitution from the wrongdoer. See, E. g., Provencal v. Parker, 66 Mich.App. 431, 239 N.W.2d 623 (1976). See generally Prosser, Torts (4th ed), § 51. In the typical case, indemnity is available only if the party seeking it is not "actively" negligent. Husted v. Consumers Power Co., 376 Mich. 41, 135 N.W.2d 370 (1965); Nanasi v. General Motors Corp., 56 Mich.App. 652, 224 N.W.2d 914 (1974); McLouth Steel Corp. v. A. E. Anderson Construction Corp., 48 Mich.App. 424, 210 N.W.2d 448 (1973). In determining this, the court looks to the primary plaintiff's complaint. If that complaint alleges only "active" negligence, as opposed to derivative liability, the defendant is not entitled to common law indemnity. Prosky v. National Acme Co., 404 F.Supp. 852 (E.D.Mich.1975) (decided under Michigan law); Minster Machine Co. v. Diamond Stamping Co., 72 Mich.App. 58, 248 N.W.2d 676 (1976). Accord, Jordan v. Solventol Chemical Products, Inc., 74 Mich.App. 113, 253 N.W.2d 676 (1977).

In the case at bar, plaintiffs' complaint does not allege vicarious liability; the trial court, therefore, correctly determined that defendant was not entitled to common law indemnity. Prosky v. National Acme Co., supra; Diekevers v. SCM Corp., 73 Mich.App. 78, 250 N.W.2d 548 (1976); Minster Machine Co. v. Diamond Stamping Co., supra.

II

The other basis for indemnity raised by Sullivan is an implied indemnity contract. This basis has been recognized in Michigan, see, E. g., Dale v. Whiteman, 388 Mich. 698, 705, 202 N.W.2d 797 (1972), citing Diamond State Telephone Co. v. University of Delaware, 269 A.2d 52 (Del. 1970). See also Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). To determine whether a third-party plaintiff has stated a cause of action for indemnity based on an implied contract, the court must look to the third-party complaint as well as the original complaint. See Diekevers v. SCM Corp., supra, 73 Mich.App. at 81, 250 N.W.2d 548. As this case arises on summary judgment for failure to state a cause of action, we accept as true third-party plaintiff's well-pleaded facts and inquire whether these claims are so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery. Borman's, Inc. v. Lake State Development Co., 60 Mich.App. 175, 179-180, 230 N.W.2d 363 (1975).

In the case at bar, Sullivan alleged in its third-party complaint that Armen-Berry unqualifiedly rejected a proposed protective cover for the machine which injured plaintiff and advised Sullivan that the machinery would be situated and used so that it would be inaccessible to workers while in operation. We believe these allegations are sufficient to state a cause of action for indemnity. I. e., By expressly rejecting the proposed cover and undertaking to situate the conveyor so that it would be inaccessible, Armen-Berry may have impliedly agreed to indemnify Sullivan should Sullivan be held liable for Armen-Berry's rejection of the cover or failure to use the machine as proposed.

As the third-party complaint thus stated a cause of action for indemnity,...