Reed v. St. Clair Rubber Co.

• Court: Court of Appeal of Michigan
• Writing for the Court: PER CURIAM; BRONSON
• Citation: Reed v. St. Clair Rubber Co., 324 N.W.2d 512, 118 Mich.App. 1 (Mich. App. 1982)
• Decision Date: 07 October 1982
• Docket Number: Docket No. 56603
• Parties: Brian REED, Plaintiff, v. ST. CLAIR RUBBER COMPANY, Defendant and Third-Party Plaintiff-Appellant, and SOUTHEASTERN MICHIGAN GAS COMPANY, jointly and severally, Defendant, v. HOOVER CHEMICALS, INC., Third-Party Defendant-Appellee.

Page 512

324 N.W.2d 512

118 Mich.App. 1

Brian REED, Plaintiff, v. ST. CLAIR RUBBER COMPANY, Defendant and Third-Party Plaintiff-Appellant, and SOUTHEASTERN MICHIGAN GAS COMPANY, jointly and severally, Defendant, v. HOOVER CHEMICALS, INC., Third-Party Defendant-Appellee.

Docket No. 56603.

Court of Appeals of Michigan.

Submitted Feb. 17, 1982.

Decided July 13, 1982.

Released for Publication Oct. 7, 1982.

Vandeveer, Garzia, Tonkin, Kerr & Heaphy, P.C. by C. F. Boyle, Jr., Detroit, for St. Clair Rubber Co.

Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen by James R. Kohl, Detroit, for Hoover Chemicals, Inc.

Before MacKENZIE, P. J., and BRONSON, and THOMAS, ^* JJ.

PER CURIAM.

Third-party defendant's motion for summary judgment was granted in the St. Clair County Circuit Court for third-party plaintiff's failure to state a claim upon which relief can be granted. Defendant third-party plaintiff now appeals as of right. For purposes of this opinion, defendant third-party plaintiff will hereinafter be referred to as "St. Clair Rubber" and third-party defendant will be referred to as "Hoover".

On August 3, 1976, an explosion occurred at Hoover's chemical and adhesive factory in Port Huron. Plaintiff and several others, employees of Hoover, were performing their jobs at the time and were injured as a result of that explosion. Apparently, St. Clair Rubber had delivered four 54-gallon drums of flammable petroleum-based adhesive material to Hoover for packaging in 2 oz. tubes. Once packaging was completed, the tubes were to be returned to St. Clair and eventually sold. Thereafter, plaintiff filed a complaint against both the Southeastern Michigan Gas Company and St. Clair Rubber. Plaintiff set forth three theories of recovery against St. Clair Rubber: (1) failure to provide adequate warnings regarding the extremely flammable adhesive product; (2) negligent entrustment, as St. Clair knew or should have known that Hoover was not competent to handle such a dangerous product in a safe and reasonable manner; and (3) defective manufacture or design resulting in breaches of the implied warranties of fitness and merchantability. Subsequently, St. Clair Rubber filed a third-party complaint against Hoover seeking "both contractual indemnity and common law indemnity". The trial court found that an indemnity contract did not exist and that, since plaintiff's complaint only pled theories of active negligence on the part of St. Clair Rubber, common law indemnity was not available. Thus, Hoover's motion for summary judgment was granted.

St. Clair Rubber first asserts that the trial court erred in granting summary judgment on its claim of an express contract of indemnification pursuant to GCR 1963, 117.2(1), failure to state a claim upon which relief can be granted, because it was necessary to look beyond the pleadings to resolve the motion. A motion brought pursuant to GCR 1963, 117.2(1) challenges the legal sufficiency of plaintiff's claim only. In Partrich v. Muscat, 84 Mich.App. 724, 729-730, 270 N.W.2d 506 (1978), this Court detailed the applicable rules for passing on a motion seeking summary judgment pursuant to GCR 1963, 117.2(1):

"The standard governing this Court's review of a grant or denial of a motion for summary judgment based on GCR 1963, 117.2(1) is well settled. The motion is to be tested by the pleadings alone. Todd v. Biglow, 51 Mich.App. 346, 214 N.W.2d 733 (1974), lv.den., 391 Mich. 816 (1974). The motion tests the legal basis of the complaint, not whether it can be factually supported. Borman's, Inc. v. Lake State Development Co., 60 Mich.App. 175, 230 N.W.2d 363 (1975). The factual allegations of the complaint are taken as true, along with any inferences or conclusions which may fairly be drawn from the facts alleged. Unless the claim is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recover, the motion under this subrule should be denied. Crowther v. Ross Chemical & Manufacturing Co., 42 Mich.App. 426, 202 N.W.2d 577 (1972)."

Applying this standard, it is clear that the motion for summary judgment should not have been granted as to the allegation of an express contract of indemnity. Hoover's motion did not test the legal sufficiency of the pleadings but instead claimed that there was no genuine issue of material fact, i.e., that the language relied upon by St. Clair, which appeared at the bottom of a shipping invoice covering the four drums of adhesive product sent to Hoover for packaging, did not create an indemnity contract. That language was examined by the trial court and is as follows:

"EXPRESS WARRANTY CLAUSES

"THIS WARRANTY IS MADE IN LIEU OF ALL OTHERS, EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY. SELLER'S ONLY OBLIGATION SHALL BE TO REPLACE SUCH QUANTITY OF THE PRODUCT PROVED TO BE DEFECTIVE. Seller shall not be liable for any loss, damage or injury whether ordinary, direct, incidental or consequential, arising from the purchase possession, handling, use or inability to use this material. Before using, user shall determine the suitability of the product for his intended use, and user assumes all risk and liability whatsoever in connection therewith. Neither the scope of the warranty nor liability thereunder may be modified or extended except in writing executed by a duly elected officer of the St. Clair Rubber Company.

"ADHESIVE EXPRESS WARRANTY Because we have no control over methods of application or conditions of use, adhesives are warranted only to be made of our standard commercial grade materials to meet our standards. Users should test for suitability for their specific purposes and user assumes all risk and liability. THIS WARRANTY IS MADE IN LIEU OF ALL OTHERS, EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY.

"LIABILITY UNDER THIS WARRANTY IS LIMITED TO REPLACEMENT OF ADHESIVES FAILING TO MEET OUR STANDARDS and we shall not be liable for any loss, damage or injury, whether ordinary, direct, incidental or consequential, arising from the purchase, possession, handling, use or inability to use this material.

"Neither the scope of the warranty nor liability thereunder may be extended except in writing executed by a duly elected officer of the St. Clair Rubber Company.

"NO CLAIMS HONORED UNLESS REPORTED WITHIN 10 DAYS FROM DATE OF INVOICE."

A motion grounded on GCR 1963, 117.2(3) requires the filing of supporting affidavits. GCR 1963, 117.3. Although Hoover's attorney filed an affidavit with the motion, claiming that "the contents of same are true and accurate to the best of his present information and knowledge", such has been equated with an affidavit made on "information and belief". Brooks v. Reed, 93 Mich.App. 166, 173-174, 286 N.W.2d 81 (1979), lv.den. 411 Mich. 862 (1981). The latter is insufficient to support a motion pursuant to GCR 1963, 117.2(3). Nonetheless, we need not reverse on this basis. Hoover failed to raise the affidavit issue at the trial level. Consequently, appellate review of this procedural error is precluded. Hayes v. Booth Newspapers, Inc., 97 Mich.App. 758, 773, 295 N.W.2d 858 (1980).

As to the merits of St. Clair Rubber's claim that an express contract of indemnification existed with Hoover, the following is applicable. The express warranty clauses in issue seek to disclaim and limit any liability St. Clair Rubber might have vis-a-vis subsequent purchasers, possessors, or users of the adhesive product. The clauses totally fail to set forth contractual indemnity provisions. St. Clair Rubber is merely referred to as the seller. It is clear, however, that St. Clair Rubber did not sell Hoover anything. Rather, Hoover was to be paid four cents for each tube that it filled with the material supplied by St. Clair Rubber. Although Hoover was a "possessor" of the material, it clearly did not possess the material in the sense contemplated by the warranty language, i.e., as one in the retail distribution chain or as an ultimate consumer. Even if Hoover were to be deemed a "possessor" of the material, Hoover is not attempting to hold St. Clair Rubber liable. Rather, St. Clair Rubber is attempting to use warranty clauses obviously designed as a shield for the company as a sword to impose liability on Hoover.

Indemnity contracts are construed strictly against the party who drafts them and the indemnitee. Gartside v. Young Men's Christian Association, 87 Mich.App. 335, 339, 274 N.W.2d 58 (1978), lv.den. 406 Mich. 915 (1979). In order for an indemnity contract to be given effect, its terms must be unequivocal. Pritts v. J. I. Case Co., 108 Mich.App. 22, 29, 310 N.W.2d 261 (1981). In our opinion, the warranty clauses simply created no indemnity contract, let alone an unequivocal indemnity agreement. The trial court did not err in finding that there was no express contract of indemnity.

We also reject St. Clair Rubber's claim that it is entitled to common-law indemnity. Where the primary complaint alleges active negligence, as opposed to derivative liability, the defendant is not entitled to common-law indemnity. Peeples v. Detroit, 99 Mich.App. 285, 292-293, 297 N.W.2d 839 (1980); Brown v. Unit Products Corp., 105 Mich.App. 141, 145-147, 306 N.W.2d 425 (1981); Swindlehurst v. Resistance Welder Corp., 110 Mich.App. 693, 698, 313 N.W.2d 191 (1981).

Here, only one of the primary plaintiff's claims could conceivably be construed as alleging derivative liability, namely: plaintiff's assertion that St. Clair Rubber negligently entrusted Hoover with performing an inherently dangerous activity with the adhesive product. Whether a complaint pleading the inherently dangerous activity doctrine can be considered as alleging a species of vicarious liability currently splits this Court. See, Duhame v. Kaiser Engineering of Michigan, Inc., 102 Mich.App. 68, 72-75, 300 N.W.2d 737 (1980), lv.den. 411 Mich. 955 (1981), for citations. We believe, as did the Court in Duhame, that a claim of negligently entrusting the...