Peeples v. City of Detroit

• Decision Date: 02 April 1980
• Docket Number: Docket No. 44364
• Citation: 99 Mich.App. 285,297 N.W.2d 839
• Parties: Leandrew PEEPLES, Plaintiff, v. CITY OF DETROIT, a municipal corporation, and Waterford Construction Company, Inc., a Michigan Corporation, Defendants and Third Party Plaintiffs-Appellees, v. DOMAR SYSTEMS (INDIANA), INC., Third Party Defendant-Appellant. 99 Mich.App. 285, 297 N.W.2d 839
• Court: Court of Appeal of Michigan — District of US

Page 839

297 N.W.2d 839

Leandrew PEEPLES, Plaintiff, v. CITY OF DETROIT, a municipal corporation, and Waterford

Construction Company, Inc., a Michigan

Corporation, Defendants and Third Party Plaintiffs-Appellees, v. DOMAR SYSTEMS (INDIANA), INC., Third Party

Defendant-Appellant.

Docket No. 44364.

99 Mich.App. 285, 297 N.W.2d 839

Court of Appeals of Michigan.

April 2, 1980.

On Rehearing Aug. 11, 1980.

Released for Publication Nov. 5, 1980.

[99 MICHAPP 290] James K. Thome, Detroit, for third party defendant-appellant.

Richard A. Harvey, Detroit, for City of Detroit and Waterford Const. Co., Inc.

Peter R. Barbara, Detroit, for Peeples.

Before MAHER, P. J., and CAVANAGH and CYNAR, JJ.

MAHER, Presiding Judge.

The plaintiff, Leandrew Peeples, filed suit against the City of Detroit and Waterford Construction Company to recover for injuries incurred on June 25, 1974. At the time of the accident, the plaintiff was employed by the third-party defendant, Domar Systems (Indiana), Inc., hereinafter Domar. The accident occurred on premises owned by the City of Detroit, with Waterford Construction Company (hereinafter Waterford) acting as the general contractor.

Domar, the subcontractor, was engaged in the construction of a Domar Salt Storage Unit on the property. Plaintiff's alleged injury occurred when he fell from a scaffold which had been provided and assembled by Domar. Plaintiff's complaint alleged negligence on the part of Waterford in failing to exercise due care for plaintiff's safety; [99 MICHAPP 291] failure to observe safety precautions and statutes; failure to warn of hazards associated with the use of scaffolding; and failure to provide guardrails and other safety devices.

On April 7, 1975, the defendants City of Detroit and Waterford filed a third-party complaint against Domar, alleging contractual and common-law indemnity. On January 19, 1978, the City of Detroit was dismissed from this suit pursuant to a motion for summary judgment based on governmental immunity.

On May 1, 1978, Waterford brought a motion for summary judgment under GCR 1963, 117.2(3), based on contractual and common-law indemnity. The motion was denied on June 6, 1978, without prejudice, "there being factual issues to be determined upon further discovery".

On February 21, 1979, the morning of the trial on the third-party action, Waterford renewed its motion for summary judgment alleging the same grounds as before. Additionally Waterford alleged a separate ground of breach of contract based on Domar's failure to provide the requisite insurance on behalf of Waterford. The trial court granted Waterford's motion for summary judgment on the grounds of contractual indemnity, common-law indemnity, and the failure to provide insurance. The trial court also allowed Waterford to amend its third-party complaint to include the breach of contract allegation.

Domar filed an application to this Court for emergency appeal and superintending control, a motion for stay of proceedings, and a motion for immediate consideration. The motion for immediate consideration was granted on February 22, 1979, but the applications for emergency leave and for a stay of proceedings were denied.

[99 MICHAPP 292] A settlement with the primary plaintiff was reached on March 5, 1979, preserving the rights as between Domar and Waterford, which are the subjects of this appeal by Domar.

I. Common-law Indemnity.

Indemnification rests upon the equitable principle of a right to restitution. The theory of indemnity is that where the wrongful act of one results in liability being imposed upon another, the innocent party may have indemnity from the person actually guilty of the wrong. Provencal v. Parker, 66 Mich.App. 431, 435, 239 N.W.2d 623 (1976). There must be a special relationship between the primary defendant and the third-party defendant-whether based on employment, bailment or other factual situation-that permits recovery. Diekevers v. SCM Corp., 73 Mich.App. 78, 81, 250 N.W.2d 548 (1976).

Common-law indemnity is intended only to make whole again a party held vicariously liable to another through no fault of his own. This has been referred to as "passive" rather than "causal" or "active" negligence. Dale v. Whiteman, 388 Mich. 698, 705, 202 N.W.2d 797 (1972). Thus, one seeking indemnification at common law is required to plead and prove freedom from personal fault. McLouth Steel Corp. v. A. E. Anderson Construction Corp., 48 Mich.App. 424, 430, 210 N.W.2d 448 (1973); Husted v. Consumers Power Co., 376 Mich. 41, 51, 135 N.W.2d 370 (1965). If the indemnitee's own negligence played a role in the injury, he may not recover. Wilhelm v. Detroit Edison Co., 56 Mich.App. 116, 157, 224 N.W.2d 289 (1974). The rationale for this requirement is that liability should fall on the party best situated to adopted preventive measures. Dale v. Whiteman, supra.

In order to determine whether the indemnitee [99 MICHAPP 293] was "actively" or "passively" negligent, the Court looks to the primary plaintiff's complaint. If that complaint alleges "active" negligence, as opposed to derivative liability, the defendant is not entitled to common-law indemnity. Hill v. Sullivan Equipment Co., 86 Mich.App. 693, 696-697, 273 N.W.2d 527 (1978); Minster Machine Co. v. Diamond Stamping Co., 72 Mich.App. 58, 63-64, 248 N.W.2d 676 (1976); Diekevers v. SCM Corp., supra.

In the case at bar, the primary plaintiff alleged in his amended complaint that Waterford was negligent because it failed to provide safety equipment, failed to conform to industry standards of due care, and failed to warn of the hazards of using a scaffold without safety devices. These allegations, if true, would make Waterford actively negligent.

However, in passing on a motion which is based on GCR 1963, 117.2(3), the trial court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence then available to it. Before summary judgment may properly be granted, the court must be satisfied that it is impossible for the claim asserted to be supported by evidence at trial. Sullivan v. Thomas Organization, P.C., 88 Mich.App. 77, 85-86, 276 N.W.2d 522 (1979); Rizzo v. Kretschmer, 389 Mich. 363, 207 N.W.2d 316 (1973). Thus, the trial court was not limited to considering the primary plaintiff's pleadings, and properly considered all of the evidence presented in order to decide Waterford's motion.

In the instant case, in ruling on Waterford's common-law indemnity claim, the trial court stated that there was no dispute on the facts presented, only a disagreement on questions of law. The trial court found that under the contract [99 MICHAPP 294] between Domar and Waterford, Domar had undertaken the responsibility for maintaining the premises in a reasonably safe condition. The scaffold in question was supplied by Domar. The work site was under Domar's exclusive control. Waterford alleged that it did not undertake safety inspections, nor did it closely supervise Domar's work site. Therefore, the trial court concluded that Domar's failure to take proper precautions caused the injury to the primary plaintiff, and Waterford was merely a passive tortfeasor in failing to discover Domar's negligence.

We cannot say that there was no disputed question of fact as to Waterford's responsibility for safety on the job site. In their depositions, two key Waterford employees acknowledged that Waterford held safety meetings for the other subcontractors and their employees. Furthermore, there is a disputed question of fact, based on the contract between Waterford and the City of Detroit, as to whether Waterford undertook responsibility for supervision and safety inspections. Therefore, we would find that summary judgment based on common-law indemnity was improper.

II. Contractual Indemnity.

Waterford has a separate claim for indemnity. In the instant case, an express indemnity clause was contained in the contract between Waterford and Domar. Freedom from fault is not required for a recovery on the basis of contractual indemnity. Nanasi v. General Motors Corp., 56 Mich.App. 652, 659, 224 N.W.2d 914 (1974).

Indemnity contracts, like other contracts, are to be enforced so as to effectuate the intentions of the parties. Gartside v. Young Men's Christian Ass'n, 87 Mich.App. 335, 339, 274 N.W.2d 58 (1978). In ascertaining the intentions of the parties, one [99 MICHAPP 295] must consider not only the language used in the contract, but also the situation of the parties and the circumstances surrounding the contract. Gartside, supra. Indemnity contracts are construed most strictly against the party who drafts them, and against the party who is the indemnitee. Gartside, supra; Fireman's Fund American Ins. Companies v. General Electric Co., 74 Mich.App. 318, 253 N.W.2d 748 (1977).

In the building and construction industry, public policy, as expressed by M.C.L. § 691.991; M.S.A. § 26.1146(1), prohibits an indemnitee from recovering for his sole negligence. This statute provides:

"Sec. 1. A covenant, promise, agreement or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition and excavating connected therewith, purporting to indemnify the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee or indemnitee, his agents or employees, is against public policy and is void and unenforceable."

Thus, as a matter of public policy, the indemnitor is not liable even if the contract specifically provides for indemnity for the indemnitee's negligence, unless the indemnitor is also negligent. Nanasi, supra; Robertson v. Swindell-Dressler Co., 82 Mich.App. 382, 399, 267 N.W.2d 131 (1978). Apparently, however, this policy does not preclude clauses...