New Hampshire Ins. Group v. Labombard

• Decision Date: 02 February 1987
• Docket Number: Docket No. 85901
• Citation: 399 N.W.2d 527,155 Mich.App. 369
• Parties: NEW HAMPSHIRE INSURANCE GROUP, subrogee of Harold Higgerson, and Harold Higgerson, individually, Plaintiffs-Appellants, v. Rosemary LABOMBARD, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 527

399 N.W.2d 527

155 Mich.App. 369

NEW HAMPSHIRE INSURANCE GROUP, subrogee of Harold Higgerson and Harold Higgerson, individually, Plaintiffs-Appellants, v. Rosemary LABOMBARD, Defendant-Appellee.

Docket No. 85901.

Court of Appeals of Michigan.

Submitted May 13, 1986.

Decided Oct. 8, 1986.

Released for Publication Feb. 2, 1987.

Davidson, Breen & Doud, P.C. (by Peter J. Riebschleger), Saginaw, for plaintiffs-appellants.

Rubenstein, Pruchnicki, Chittle & Smith (by Thomas E. Chittle), Flint, for defendant-appellee.

Before WALSH, P.J., and SULLIVAN and BAGULEY, ^* JJ.

WALSH, Presiding Judge.

Plaintiffs New Hampshire Insurance Group, subrogee of Harold Higgerson, and Harold Higgerson, individually, appeal from an order of the circuit court granting summary disposition in favor of defendant, Rosemary Labombard. MCR 2.116(C)(8).

On March 12, 1983, plaintiff New Hampshire Insurance Group was the fire insurance carrier for a building being purchased by plaintiff Higgerson; defendant was a tenant in one of the building's four rental units. On that date, defendant's three-year-old daughter was playing with matches and started a fire which rendered defendant's apartment uninhabitable. Plaintiff Higgerson's damages totaled $20,808.40. Plaintiff New Hampshire Insurance Group paid Higgerson $20,558.40 and was subrogated to all claims of Higgerson against any person liable for the loss. The record suggests that the insurance proceeds included reimbursement for rental income lost by Higgerson during the repair of defendant's apartment.

In their complaint, plaintiffs alleged defendant's negligence in allowing her daughter to play with matches. They requested damages in the total amount of Higgerson's loss.

Defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(8). Relying on paragraphs 4 and 9 of the rental agreement, ¹ defendant argued that the rental agreement absolved her of liability for fire damage to the rental premises. She also argued that, as a matter of law, a tenant is not liable for fire damage caused by his or her own negligence.

Citing Van Wormer v. Crane, 51 Mich. 363, 16 N.W. 686 (1883), and noting that any ambiguities in the lease are to be resolved against the draftor/landlord, the circuit court judge ruled that plaintiffs had failed to state a claim upon which relief could be granted. The court found that paragraph 4 of the rental agreement, which obligated defendant to return the premises in good condition, "reasonable wear and damage by the elements excepted," absolved defendant of liability for damage by fire, determined by the court to be one of "the elements." Summary disposition was granted to defendant and plaintiffs' complaint was dismissed.

A motion for summary disposition under MCR 2.116(C)(8) seeks to test the genuineness of a claim by challenging the legal adequacy of the pleadings. The test which a court applies in considering a motion under MCR 2.116(C)(8) is whether the plaintiffs' claim, as stated in the pleadings, is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery. Abel v. Eli Lilly & Co., 418 Mich. 311, 323, 343 N.W.2d 164 (1984), reh. den. 419 Mich. 1201 (1984), cert. den. 469 U.S. 833, 105 S.Ct. 123, 83 L.Ed.2d 65 (1984). In addressing a motion under this provision, the trial court accepts as true all well-pleaded facts. Id., p. 324, 343 N.W.2d 164. In a negligence case, summary disposition is properly granted pursuant to MCR 2.116(C)(8) if it is determined as a matter of law that the defendant owed no duty to the plaintiff. Fisher v. Johnson Milk Co., Inc., 383 Mich. 158, 162, 174 N.W.2d 752 (1970); American States Ins. Co. v. Albin, 118 Mich.App. 201, 206, 324 N.W.2d 574 (1982), lv. den. 417 Mich. 955 (1983). In this case, plaintiff insurer, as subrogee of its insured, plaintiff Higgerson, has no greater rights against defendant than does its insured. Northern Ins. Co. of New York v. B. Elliott, Ltd., 117 Mich.App. 308, 324, 323 N.W.2d 683 (1982), lv. den. 417 Mich. 968 (1983).

In Van Wormer v. Crane, supra, the Supreme Court was asked to determine the scope of a tenant's covenant to return leasehold premises in good repair, "damages by the elements excepted." The leasehold premises in Van Wormer were destroyed by an accidental fire. The Court found that the parties had intended that the covenant exception include "all damages resulting from fire, as much as those attributable to air and water, unless traceable to the agency of man." 51 Mich. at 366, 16 N.W. 686. The purpose of the exception was to absolve lessees of liability for damages from the elements, including fire which "happened without their fault." Id.

We disagree with the lower court's reliance on Van Wormer. In this case, plaintiffs claim damages for negligence. Under Van Wormer, only fire damage occurring without lessee fault or negligence comes within the "damage by the elements" exception. We nonetheless affirm in part the entry of summary disposition in favor of defendant.

In the rental agreement, defendant agreed to keep the premises in good repair and to return the premises in the same condition as when taken, "reasonable wear and damages by the elements excepted." She also agreed to observe all fire and other regulations imposed by any government authority, and all regulations and requirements of underwriters concerning the use and conditions of the premises so as to reduce fire hazards and insurance rates. In connection with this later obligation, she agreed not to permit the accumulation of any waste material on the premises. The agreement provided that, if the premises became wholly untenantable through fire damage not due to defendant's negligence, the agreement would be void. If the premises were rendered only partially untenantable, the landlord agreed to do the necessary repairs "with all convenient speed"; defendant's rental obligation would continue if such repairs were completed within forty days. The landlord generally agreed to make any necessary repairs, and reserved the right to enter the apartment to inspect, repair and maintain the premises and to show it to any insurance agent.

The rental agreement did not address the issue of defendant's liability for fire damage to the premises resulting from her negligence. Cf., Nationwide Mutual Fire Ins. Co. v. Detroit Edison Co., 95 Mich.App. 62, 289 N.W.2d 879 (1980), lv. den. 409 Mich. 854 (1980). In similar situations, courts of other jurisdictions have ruled that defendant tenants are entitled to summary judgment.

In Safeco Ins. Co. v. Capri, 101 Nev. 429, 705 P.2d 659 (1985), the Nevada Supreme Court affirmed entry of summary judgment for the defendant lessee, rejecting the plaintiff fire insurer's subrogation claim for damages caused by the defendant's negligence. The lease provided that the lessee was to maintain the premises and surrender it in good condition, "damage by the elements" excepted. The lessor was expressly required to maintain fire insurance. The Court held that, absent an express lease provision establishing the tenant's liability for loss for negligently started fires, the tenant is, for the purpose of defeating an insurer's subrogation claim, an implied coinsured of the landlord. 705 P.2d 660-661. The Court found that its holding comported most closely with the reasonable expectations of the lessor, lessee and insurer. Landlords commonly provide fire insurance on leased property and consider the premium in establishing the rental rate. Insurance companies expect to pay benefits for fires caused by their insured's negligence, and insurance premiums are adjusted accordingly. A negligent tenant, who is in privity with the insured and who has relied on the landlord to provide fire insurance protection for the realty, should be immune from suit, just as a negligent landlord could not be sued by the landlord's insurer. 705 P.2d 661.

See also Sutton v. Jondahl, 532 P.2d 478, 482 (Okla.App., 1975):

"The landlords of course could have held out for an agreement that the...