Ormsby v. Capital Welding, Inc.

• Decision Date: 23 July 2004
• Docket Number: Docket No. 123289. Calendar No. 10.,Docket No. 123287
• Citation: 684 N.W.2d 320,471 Mich. 45
• Parties: Ralph ORMSBY and Kimberly Ormsby, Plaintiffs-Appellees, v. CAPITAL WELDING, INC., Defendant-Appellant, and Monarch Building Services, Inc., Defendant-Appellee, and Metropolitan Building Services and Rite Aid of Michigan, Defendants. Ralph Ormsby and Kimberly Ormsby, Plaintiffs-Appellees, v. Capital Welding, Inc., Defendant-Appellee, and Monarch Building Services, Inc., Defendant-Appellant, and Metropolitan Building Services and Rite Aid of Michigan, Defendants.
• Court: Michigan Supreme Court

684 N.W.2d 320

471 Mich. 45

Ralph ORMSBY and Kimberly Ormsby, Plaintiffs-Appellees, v. CAPITAL WELDING, INC., Defendant-Appellant, and Monarch Building Services, Inc., Defendant-Appellee, and Metropolitan Building Services and Rite Aid of Michigan, Defendants.

Ralph Ormsby and Kimberly Ormsby, Plaintiffs-Appellees, v. Capital Welding, Inc., Defendant-Appellee, and Monarch Building Services, Inc., Defendant-Appellant, and Metropolitan Building Services and Rite Aid of Michigan, Defendants.

Docket Nos. 123287, 123289. Calendar No. 10.

Supreme Court of Michigan.

Argued March 10, 2004.

Decided July 23, 2004.

Miller & Padilla, P.C. (by Neil A. Miller) Troy, MI, Sommers, Schwartz, Silver & Schwartz, P.C., of counsel (by Patrick Burkett) Southfield, MI, for the plaintiffs.

Rutledge, Manion, Rabaut, Terry & Thomas, P.C. (by Joseph J. Wright) Southfield, MI, for defendant Capital Welding, Inc.

Pedersen, Keenan, King, Wachsberg & Andrzejak, P.C. (by Michael M. Wachsberg) Commerce Township, MI, for defendant Monarch Building Services, Inc.

Clark Hill, P.L.C. (by Kevin S. Hendrick and Paul C. Smith) Detroit, MI, for the Michigan Chapter and the Greater Detroit Chapter of the Associated General Contractors, amicus curiae.

Novara, Tesija & McGuire, P.L.L.C. (by Nicholas R. Nahat) Southfield, MI, for the Michigan Regional Council of Carpenters, amicus curiae. Richard L. Steinberg, P.C. (by Richard L. Steinberg and Donald C. Wheaton, Jr.) Detroit, MI, for the International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers, amicus curiae.

Clark Hill, P.L.C. (by F.R. Damm and Paul C. Smith) Detroit, MI, for the Michigan Manufacturers Association, amicus curiae.

TAYLOR, J.

We granted leave to appeal in this case to consider the relationship between the "common work area doctrine" and the "retained control doctrine," and to address the scope of each doctrine. At common law, property owners and general contractors generally could not be held liable for the negligence of independent subcontractors and their employees. In Funk v. Gen. Motors Corp., 392 Mich. 91, 104-105, 220 N.W.2d 641 (1974),¹ however, this Court set forth a new exception to this general rule of nonliability, holding that, under certain circumstances, a general contractor could be held liable under the "common work area doctrine" and, further, that a property owner could be held equally liable under the "retained control doctrine."

In this case, the Court of Appeals reversed the trial court's grant of summary disposition for both defendants, holding that these doctrines are two distinct and separate exceptions to the general rule of nonliability of property owners and general contractors concerning the negligence of independent subcontractors and their employees. We disagree with the Court of Appeals and clarify today that these two doctrines are not two distinct and separate exceptions, rather only one — the "common work area doctrine" — is an exception to the general rule of nonliability for the negligent acts of independent subcontractors and their employees. Thus, only when the Funk four — part "common work area" test is satisfied may an injured employee of an independent subcontractor sue the general contractor for that contractor's alleged negligence.

Further, the "retained control doctrine" is a doctrine subordinate to the "common work area doctrine" and is not itself an exception to the general rule of nonliability. Rather, it simply stands for the proposition that when the Funk"common work area doctrine" would apply, and the property owner has sufficiently "retained control" over the construction project, that owner steps into the shoes of the general contractor and is held to the same degree of care as the general contractor. Thus, the "retained control doctrine," in this context, means that if a property owner assumes the role of a general contractor, such owner assumes the unique duties and obligations of a general contractor. Accordingly, we reverse the decision of the Court of Appeals and reinstate the trial court's grant of summary disposition for both defendants.

I. Facts and Proceedings Below

This case arose out of a construction accident that occurred during the construction of a Rite Aid store in Troy, Michigan. Property owner Rite Aid hired defendant Monarch Building Services, Inc. (Monarch), as the general contractor for the project. Monarch subcontracted the steel fabrication and steel erection work to defendant Capital Welding, Inc. (Capital), which then subcontracted the steel erection work to Abray Steel Erectors (Abray). Plaintiff Ralph Ormsby was employed by Abray as a journeyman ironworker on the site.

Capital delivered the steel for the project, at which time a crew from Abray began erecting the building using the steel. During the unloading process, Abray personnel allegedly disregarded an express warning that Capital had attached to the steel beams that stated, "Under no circumstances are deck bundles or construction loads of any other description to be placed on unbridged joists." The warning also cautioned against loading bundles of steel decking, weighing between two and three tons each, onto the unsecured erected steel structure.

Plaintiff began working on the unsecured joists to properly align the joists into position. To do so, he would strike the unsecured joist with a hammer. While performing this task, there was a sudden shift in an unsecured joist that, coupled with the fact that the joist was loaded with decking, allegedly caused the collapse of the structure, resulting in plaintiff's fifteen foot fall and subsequent injuries.

Plaintiff filed suit against Capital, alleging, among other things, that Capital retained control of and negligently supervised the project, and acquiesced to unsafe construction activities, including loading unwelded bar joists.² Plaintiff later amended his complaint and added the same claims against Monarch.

Capital filed a motion for summary disposition contending that there was no genuine issue of material fact regarding whether it retained control over the project because plaintiff failed to present any evidence that he was injured in a common work area. Plaintiff opposed the motion, contending instead that the two doctrines were separate and distinct, and thus Capital could be held liable under the "retained control doctrine" even if he failed to satisfy the elements of the "common work area doctrine."

The trial court agreed with Capital and granted its motion. Combining the doctrines of "common work area" and "retained control," the trial court determined that "the retained control theory applies only in situations involving `common work areas.'" The trial court further stated, "This Court finds that there was no common work area that created a high degree of risk to a significant number of workers" and "there is no evidence that other subcontractors would work on the erection of the steel structure." That is, the trial court found that plaintiff had failed to satisfy two elements of the "common work area doctrine," and thus no genuine issue of material fact existed regarding whether either doctrine applied to Capital.

Following Capital's successful motion, Monarch filed its own motion for summary disposition under MCR 2.116(C)(10), contending that plaintiff had failed to provide any evidence to satisfy each of the four elements of the "common work area doctrine." In response, plaintiff moved for leave to amend his complaint to assert that plaintiff was in fact injured in a "common work area" as defined in Funk. The trial court granted Monarch's motion for the same reasons that it had granted the earlier Capital motion and denied plaintiff's motion to amend his complaint, ruling that the amendment would be futile in light of its ruling that there was no genuine issue of material fact regarding the existence of a common work area.

The Court of Appeals reversed in part, holding (1) that the "common work area doctrine" and "retained control doctrine" are two distinct and separate exceptions and (2) that evidence that "employees of other subcontractors would be or had been working in the same area where plaintiff's injury occurred ... create[d] a genuine issue of material fact regarding whether plaintiff's injury occurred in a common work area." 255 Mich.App. 165, 188, 660 N.W.2d 730 (2003). Accordingly, the Court permitted plaintiff's "retained control" claim to proceed against Capital,³ and permitted plaintiff's "common work area" claim to proceed against both Capital and Monarch. Further, the Court held that the trial court had erred in denying plaintiff's motion to amend his complaint concerning his allegations that he had been injured in a "common work area." Both defendants filed applications for leave to appeal with this Court, which we granted.⁴

II. Standard of Review

Summary disposition under either MCR 2.116(C)(8) or (C)(10) presents an issue of law for our determination and, thus, "[w]e review a trial court's ruling on a motion for summary disposition de novo." Straus v. Governor, 459 Mich. 526, 533, 592 N.W.2d 53 (1999).

When a trial court grants summary disposition pursuant to MCR 2.116(C)(8), or (C)(10), the opportunity for the nonprevailing party to amend its pleadings pursuant to MCR 2.118 should be freely granted, unless the amendment would not be justified. MCR 2.116(I)(5). An amendment, however, would not be justified if it would be futile. Weymers v. Khera, 454 Mich. 639, 658, 563 N.W.2d 647 (1997). We will not reverse a trial court's decision to deny leave to amend pleadings unless it constituted an abuse of discretion. Id. at 654, 563 N.W.2d 647.

III. Analysis

As discussed briefly above, at common law, property owners and general contractors generally could not be held liable for the negligence of independent subcontractors and their employees. However, in Funk, this Court set forth an exception to this general rule of...