Loweke v. Ann Arbor Ceiling & Partition Co.

• Citation: 32 IER Cases 649,809 N.W.2d 553,489 Mich. 157
• Decision Date: 06 June 2011
• Docket Number: Docket No. 141168.Calendar No. 6.
• Parties: Richard LOWEKE and Sherri Loweke, Plaintiffs–Appellants, v. ANN ARBOR CEILING & PARTITION CO., L.L.C., Defendant–Appellee.
• Court: Michigan Supreme Court

32 IER Cases 649
489 Mich. 157
809 N.W.2d 553

Richard LOWEKE and Sherri Loweke, Plaintiffs–Appellants,
v.
ANN ARBOR CEILING & PARTITION CO., L.L.C., Defendant–Appellee.

Docket No. 141168.Calendar No. 6.

Supreme Court of Michigan.

Argued March 8, 2011.Decided June 6, 2011.

[809 N.W.2d 554]

Goren, Goren & Harris, P.C., Bingham Farms (by Steven E. Goren), and Mark Granzotto, P.C., Royal Oak (by Mark Granzotto), for plaintiffs.

Plunkett Cooney, Detroit (by Ernest R. Bazzana) for defendant.

[809 N.W.2d 555]

Cardelli, Lanfear & Buikema, P.C., Grand Rapids (by Anthony F. Caffrey III), for Michigan Defense Trial Counsel, Inc.Mark Granzotto, P.C., Royal Oak (by Mark Granzotto), for the Michigan Association for Justice.MICHAEL F. CAVANAGH, J.

[489 Mich. 159] Plaintiff, an employee of an electrical subcontractor, was injured at a construction site when several cement boards fell on him. The boards had been leaned against a wall by employees of defendant, a carpentry and drywall subcontractor, which, like plaintiff's employer, had been hired by a general contractor to work on the construction project. Plaintiff sued defendant for negligence and defendant moved for summary disposition, asserting that, under Fultz v. Union–Commerce Assoc., 470 Mich. 460, 469–470, 683 N.W.2d 587 (2004), and its progeny, it owed no duty to plaintiff that was “separate and distinct” from defendant's contractual duties to the general contractor. The trial court granted defendant's motion and the Court of Appeals affirmed. We granted plaintiff's application for leave to appeal. Loweke v. Ann Arbor Ceiling & Partition Co., Inc., 488 Mich. 876, 788 N.W.2d 461 (2010).

We take this opportunity to clarify Fultz's “ ‘separate and distinct’ mode of analysis,” 470 Mich. at 467, 683 N.W.2d 587, and hold that a contracting party's assumption of contractual obligations does not extinguish or limit separately existing common-law or statutory tort duties owed to noncontracting third parties in the performance of the contract. Davis v. Venture One Constr., Inc., 568 F.3d 570, 575, 577 (C.A.6, 2009).¹ In this case, plaintiff asserts that defendant had a common-law duty, separate and distinct[489 Mich. 160] from its contractual obligations to the general contractor, to use ordinary care in order to avoid physical harm to persons and property in the execution of its undertakings. See, e.g., Clark v. Dalman, 379 Mich. 251, 261, 150 N.W.2d 755 (1967); Rinaldo's Constr. v. Mich. Bell Tel. Co., 454 Mich. 65, 84, 559 N.W.2d 647 (1997). Because defendant raised its motion for summary disposition on the basis of an improper understanding of Fultz, and the Court of Appeals affirmed the trial court's decision granting summary disposition on that basis, we reverse the judgment of the Court of Appeals and remand this case to the trial court for further proceedings consistent with this opinion.

I. FACTS AND PROCEDURAL HISTORY

Plaintiff, Richard Loweke,² was an electrician employed by Shaw Electric, a subcontractor on a construction project at Detroit Metro Airport. Walbridge Aldinger Company, the general contractor for the project, also subcontracted with defendant to provide carpentry and drywall services. Defendant's employees leaned numerous 4– by 8–foot sheets of cement board against a wall in a hallway where plaintiff was working. Plaintiff claimed that at the time of the accident, he was standing midway in front of the cement boards when, for unknown reasons, sheets of the cement

[809 N.W.2d 556]

board began to fall. Plaintiff attempted to stop the boards from falling on him, but to no avail: several sheets of cement board fell onto plaintiff's right leg, injuring him.

[489 Mich. 161] Plaintiff sued defendant, alleging that defendant was negligent in stacking the cement boards in an unstable position, creating a new hazard that previously did not exist. Relying primarily on Fultz, defendant moved for summary disposition, asserting that it was not liable to plaintiff in tort because plaintiff's allegations were based on an assertion that defendant negligently performed its contractual obligations to the general contractor and, thus, were not based on any separate and distinct duty that defendant owed to plaintiff. To support its argument, defendant cited its contract with Walbridge, which held defendant responsible for “unloading, moving, lifting, protection, securing and dispensing of its materials and equipment at the Project Site.” Defendant asserted that it had not violated any duty that was independent of the contract because, in its view, the management and storage of its materials was a subject of its contract with Walbridge. The trial court agreed with defendant and granted its motion for summary disposition, reasoning that what had happened was within defendant's obligations under the contract. Plaintiff appealed.

The Court of Appeals affirmed. The Court explained that, under Fultz, a “court must look at the terms of the contract and determine whether the defendant's action was required under the contract.” Loweke v. Ann Arbor Ceiling & Partition Co., Inc., unpublished opinion per curiam of the Court of Appeals, issued April 22, 2010 (Docket No. 289451), p. 3, 2010 WL 1629151. Because defendant was required under its contract with Walbridge to secure the cement board at the project site, the Court reasoned that plaintiff's claim was based on defendant's negligence in performing its obligations under the contract and that the alleged hazard had not presented any unique risk that was not contemplated by the contract. Finally, the Court claimed that its holding was supported[489 Mich. 162] by two peremptory orders of this Court: Mierzejewski v. Torre & Bruglio, Inc., 477 Mich. 1087, 729 N.W.2d 225 (2007), and Banaszak v. Northwest Airlines, Inc., 477 Mich. 895, 722 N.W.2d 433 (2006). We granted plaintiff's application for leave to appeal. Loweke, 488 Mich. 876, 788 N.W.2d 461.

II. STANDARD OF REVIEW

This Court reviews de novo a trial court's decision on a motion for summary disposition. In re Egbert R. Smith Trust, 480 Mich. 19, 23, 745 N.W.2d 754 (2008). This Court also reviews de novo questions of law. Byker v. Mannes, 465 Mich. 637, 643, 641 N.W.2d 210 (2002). Whether a defendant is under a legal obligation to act for a plaintiff's benefit—i.e., whether a defendant owes a particular plaintiff a duty—is a question of law. Dyer v. Trachtman, 470 Mich. 45, 49, 679 N.W.2d 311 (2004); Valcaniant v. Detroit Edison Co., 470 Mich. 82, 86, 679 N.W.2d 689 (2004).

III. ANALYSIS

To establish a prima facie case of negligence, a plaintiff must prove the following elements: (1) the defendant owed the plaintiff a legal duty, (2) the defendant breached the legal duty, (3) the plaintiff suffered damages, and (4) the defendant's breach was a proximate cause of the plaintiff's damages. Roulo v. Auto. Club of Mich., 386 Mich. 324, 328, 192 N.W.2d 237 (1971). Accordingly, a defendant is not liable to a plaintiff unless the defendant owed a legal duty to the plaintiff. Beaty v. Hertzberg & Golden, PC, 456 Mich. 247, 262, 571 N.W.2d 716 (1997). In this case,

[809 N.W.2d 557]

the issue is when a duty of care arises between a party to a contract and a noncontracting third party. In other words, when two parties enter into a contract and a noncontracting third party, i.e., one who is a stranger to the contract, is [489 Mich. 163] injured, under what circumstances does a duty of care arise between the contracting party and the third party?

In Fultz,³ this Court attempted to clarify the standards for determining when a negligence action based on a defendant's contractual obligations with another and brought by a third party to that contract may lie. Since Fultz and its progeny were issued, however, courts have erroneously interpreted this Court's decisions as rejecting accepted tort-law principles and creating a legal rule “unique to Michigan tort law,” which bars negligence causes of action on the basis of a lack of duty if a third-party plaintiff alleges a hazard that was the subject of the defendant's contractual obligations with another. Bennett v. MIS Corp., 607 F.3d 1076, 1091–1092, 1094–1095 (C.A.6, 2010); see, also, Hatcher v. Senior Home Health Care Inc., unpublished opinion per curiam of the Court of Appeals, issued August 19, 2010 (Docket No. 289208), p. 5, 2010 WL 3296088 (stating that a claim is barred if an injury is “caused by a hazard that is even remotely connected to a contractual relationship”). Because this broad interpretation is misguided, we write to clarify Fultz.

A. LEGAL BACKGROUND

Before Fultz, when a plaintiff pleaded a tort arising out of a defendant's breach of contractual obligations, Michigan courts historically drew a distinction between “misfeasance” of a contractual obligation—i.e., “active misconduct”—and “nonfeasance” of a contractual obligation—i.e., “passive inaction,” [489 Mich. 164] Williams v. Cunningham Drug Stores, Inc., 429 Mich. 495, 498, 418 N.W.2d 381 (1988), or “failing to do what one has promised to do in the absence of a duty to act apart from the promise made,” Ferrett v. Gen. Motors Corp., 438 Mich. 235, 245 n. 11, 475 N.W.2d 243 (1991) (quotation marks and citation omitted). Under this dichotomy, a contracting party generally was not liable in tort for the complete nonperformance of a contractual obligation, or nonfeasance, whereas defective performance of a contractual obligation, or misfeasance, could support an action in tort or contract. Rinaldo's Constr., 454 Mich. at 83–84, 559 N.W.2d 647; Ferrett, 438 Mich. at 245 n. 11, 475 N.W.2d 243; Chase v. Clinton Co., 241 Mich. 478, 486, 217 N.W. 565 (1928). As this Court has stated, however, the fundamental principle distinguishing a cause of action in tort from one in contract is the concept of duty. Rinaldo's Constr., 454 Mich. at 83, 559 N.W.2d 647. Accordingly, in cases of nonfeasance, a defendant who fails to perform his contractual duties is ordinarily not liable in tort...