UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

CATLIN INDEMNITY COMPANY,

Case No. 14-13685 

Plaintiff,

HONORABLE DENISE PAGE HOOD

v.

WESTFIELD INSURANCE COMPANY,

Defendant.

______________________________________/

ORDER GRANTING MOTION TO DISMISS

AND DISMISSING CASE

I. BACKGROUND

On September 23, 2014, Plaintiff Catlin Indemnity Company filed the instant

action against Defendant Westfield Insurance Company alleging three counts:

Subrogation (Count I); Equitable Subrogation (Count II); and, Equitable

Contribution–In the Alternative (Count III).

The underlying matter arises from the drowning death on November 8, 2013

when KeAir Swift, a student at East Detroit High School, a part of the East Detroit

Public Schools, located in Macomb County, Michigan, drowned in the school’s pool. 

(Comp., ¶ 9) Lakisha Swift, KeAir Swift’s mother and personal representative of the

estate, filed a lawsuit in state court, Swift v. Sails, Case No. 14-550-NO (Macomb

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 1 of 7 Pg ID 686
County Circuit Court). (Comp., ¶ 3) Jonathan Sails was the substitute teacher on the

day KeAir Swift drowned. (Comp., ¶¶ 11, 26) The Professional Educational Service

Group, LLC (“PESG”) is a teacher staffing company that maintains a roster of

teachers, secretaries, lunch aids and custodians, assigning them to work at various

public schools throughout Michigan, including East Detroit High School. (Comp., ¶

13) In the underlying lawsuit, Swift alleged that Sails had applied and was hired and

paid through PESG, who assigned Sails to East Detroit High School. (Comp., ¶ 14) 

Catlin issued a policy of insurance to the East Detroit Public Schools. (Comp.,

¶ 1) Westfield is an insurance company that issued a policy of insurance to PESG. 

(Comp., ¶ 2) The underlying lawsuit was settled with a portion of the total settlement

amount being paid by Catlin and the remainder amount by Westfield. (Comp., ¶ 19) 

Catlin and Westfield agreed that the payments are subject fo a full and complete

reservation of rights as to each other for pursuing payments made to defend and/or

settle the underlying lawsuit. (Comp., ¶ 20)

In lieu of an Answer, Westfield filed the instant Motion to Dismiss, or

alternatively, Motion for Abstention pending issues raised in the underlying lawsuit

as to indemnity issues. A response, reply and supplemental briefs have been filed. A

hearing was held on the matter on May 6, 2015.

After the hearing was held, Westfield filed a supplemental brief noting that the

2

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 2 of 7 Pg ID 687
Macomb County Circuit Court had decided which of the two parties’ insured were

liable for the drowning death of the student. The Macomb County Circuit Court

found that East Detroit Public Schools (Catlin’s insured) was solely liable for the

death of the student because it made the decision, in violation of state laws, to place

a non-certified substitute teacher in charge of a swimming class in the absence of a

certified lifeguard, and because it did so without the knowledge or approval of the

contractor, PESG, that provided the substitute teacher (Westfield’s insured). The

Macomb County Circuit Court ruled that by virtue a mutual indemnity provision in

its written agreement with PESG that East Detroit Public Schools “automatically

accepts liability” for claims arising out of its use of a substitute teacher in a manner

not approved by the contractor, only East Detroit Public Schools was solely liable for

the death of the student. (Doc. No. 11-1, Opinion, Pg ID 679) Catlin did not respond

to Westfield’s supplemental brief. Westfield now moves for dismissal of the action

for subrogation. 

II. ANALYSIS

A. Motion to Dismiss Standard

Rule 12(b)(6) of the Rules of Civil Procedure provides for a motion to dismiss

based on failure to state a claim upon which relief can be granted. Fed. R. Civ. P.

12(b)(6). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court

3

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 3 of 7 Pg ID 688
explained that “a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment]

to relief’ requires more than labels and conclusions, and a formulaic recitation of the

elements of a cause of action will not do[.] Factual allegations must be enough to

raise a right to relief above the speculative level....” Id. at 555 (internal citations

omitted). Although not outright overruling the “notice pleading” requirement under

Rule 8(a)(2) entirely, Twombly concluded that the “no set of facts” standard “is best

forgotten as an incomplete negative gloss on an accepted pleading standard.” Id. at

563. To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at

570. A claim has facial plausibility when the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged. Id. at 556. The plausibility standard is not akin to a “probability

requirement,” but it asks for more than a sheer possibility that a defendant has acted

unlawfully. Ibid. Where a complaint pleads facts that are “merely consistent with” a

defendant's liability, it “stops short of the line between possibility and plausibility of

‘entitlement to relief.’” Id. at 557. Such allegations are not to be discounted because

they are “unrealistic or nonsensical,” but rather because they do nothing more than

state a legal conclusion–even if that conclusion is cast in the form of a factual

allegation. Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). To survive a motion to

4

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 4 of 7 Pg ID 689
dismiss, the non-conclusory “factual content” and the reasonable inferences from that

content, must be “plausibly suggestive” of a claim entitling a plaintiff to relief. Id. 

Where the well-pleaded facts do not permit the court to infer more than the mere

possibility of misconduct, the complaint has alleged, but it has not shown, that the

pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). The court primarily considers the

allegations in the complaint, although matters of public record, orders, items

appearing in the record of the case, and exhibits attached to the complaint may also

be taken into account. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001).

B. Subrogation (Count I)

In Michigan, “where an insurer, whose liability is arguably secondary to that

of a primary insurer, pays the claim, it becomes subrogated to the rights of the

insured.” Federal Kemper Ins. Co. v. Western Ins. Cos., 97 Mich. App. 204, 208

(1980). “A subrogee acquires no greater rights than those possessed by his subrogor

and the subrogated insurer is merely substituted for his insured.” Id. at 210 (quoting

Indemnity Ins. Co. of North America v. Otis Elevator Co., 315 Mich. 393 (1946)).

Based on the Macomb County Circuit Court’s May 12, 2015 decision finding

that East Detroit Public Schools is solely liable for the student’s death, Catlin, as the

school’s insurer, possess no rights against Westfield, PESG’s insurer. Catlin has

failed to state a subrogation claim against Westfield.

5

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 5 of 7 Pg ID 690
C. Equitable Subrogation (Count II)

Equitable subrogation is a legal fiction through which a person who pays a debt

for which another is primarily responsible is substituted or subrogated to all the rights

and remedies of the other. In re Lewis, 398 F.3d 735, 747 (6th Cir. 2005)(construing

Michigan law). For the same reasons set forth above, Catlin fails to state a claim upon

which relief may be granted since East Detroit Public Schools (Catlin’s insured) is

solely liable for the student’s death. Westfield’s insured, PESG, is not responsible for

the student’s death based on the Macomb County Circuit Court’s decision.

D. Equitable Contribution (Count III)

In Michigan, a party seeking equitable contribution must show (1) a “common

liability” owed by the wrongdoers to the injured plaintiff, and (2) payment or

satisfaction by the party seeking contribution of the entire obligation or more than his

share of the common obligation. Caldwell v. Fox, 394 Mich. 401, 419-20 (1975).

Based on the Macomb County Circuit Court’s decision, Westfield is not liable

to Catlin because there is no “common liability” between Westfield and Catlin where

Catlin’s insured, East Detroit Public Schools, was found to be solely liable for the

student’s death. 

III. CONCLUSION

For the reasons set forth above,

6

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 6 of 7 Pg ID 691
IT IS ORDERED that Defendant Westfield’s Motion to Dismiss (Doc. No. 4)

is GRANTED.

IT IS FURTHER ORDERED that this action is DISMISSED. 

 

S/Denise Page Hood 

Denise Page Hood

United States District Judge

Dated: September 30, 2015

I hereby certify that a copy of the foregoing document was served upon counsel of

record on September 30, 2015, by electronic and/or ordinary mail.

S/LaShawn R. Saulsberry 

Case Manager

7

2:14-cv-13685-DPH-RSW Doc # 12 Filed 09/30/15 Pg 7 of 7 Pg ID 692