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### STATE OF MICHIGAN

COURT OF APPEALS

TRAVELERS INDEMNITY COMPANY, as subrogee of DRG CLEARVIEW, L.L.C., d/b/a CLEARVIEW APARTMENT HOMES,

Plaintiff-Appellant/Cross-Appellee, UNPUBLISHED May 24, 2016

v No. 325934

Ottawa Circuit Court BARBARA PELLOW, LC No. 13-003524-CK

Defendant-Appellee/CrossAppellant.

Before: O’B RIEN , P.J., and K. F. K ELLY and F ORT H OOD , JJ.

P ER C URIAM

.

In this breach-of-contract acti on, plaintiff, Travelers Indemn ity Company, a subrogee of DRG Clearview, L.L.C., d/b/a Clearview Apartment Homes, appeals , and defendant, Barbara Pellow, cross-appeals, the trial court’s January 23, 2015 order granting summary disposition in plaintiff’s favor pursuant to M CR 2.116(C)(10) and awarding pla intiff $15,421.08 in damages. On appeal, plaintiff also challe nges the trial court’s Septembe r 26, 2014 order granting summary disposition in defendant’s favor pursuant to MCR 2.116(C)(10). We affirm in part, vacate in part, and remand for further proceedings.

Defendant and her boyfriend signed a lease agreement with Clea rview Apartment Homes in 2009. During the lease, defendant ’s boyfriend used a torch on the apartment’s wooden deck to burn the fur off of a squirre l. After doing so, defendant’s bo yfriend left the torch on the deck and entered the apartment. Approximately 15 minutes later, he real ized that a fire had started near where he had left the torch, and his attempts to extinguish tha t fire proved unsuccessful. It appears undisputed that defendant ’s boyfriend’s actions were th e cause of the fire. The fire resulted in substantial damage to the entire apartment complex. Travelers Indemnity Company, as Clearview’s insurance prov ider, paid in excess of $2,000,000 to repair damage that occurred to the apartment complex as a result of the fire. While it is undisputed that defendant was sleeping during the fur-burning es capade, plaintiff sued defend ant for the cost of the repairs at issue. Plaintiff argued that def endant was contractually liabl e under the lease agreement, which provided, in pertinent part, tha t defendant and her boyfriend w ere “liable . . . for any fire, water, or other damage . . . negligently o r intentionally caused by” d efendant, her boyfriend, “or any guests thereof[.]” The lease also provided that, if the apartm ent was “rendered un-tenantable by-2- the negligent or intentional act s of [these individuals, then t hey] shall continue to be liable for Rent in the amount provided in the Agreement.” 1

Defendant moved for summary disposition pursuant to MCR 2.116( C)(10). Relying on MCL 600.2956’s purported abolishment of joint and several liabi lity, 2 she argued that the provisions quoted above wer e void under MCL 554.633(1)(m) 3 of the Michigan Truth in Renting Act (MTRA), MCL 554.6531 et seq ., because any provision purporting to render a party jointly and severally liable violated MCL 445.903(1)(n) and (t) 4 under the Mich igan Consumer Protection Act (MCPA), MCL 445.901 et seq . The trial court agreed. I t concluded that, because the lease agreement imposed liability for fire and water damage only according to fault, which implicated tort standards, M CL 600.2956 applied. It therefore granted defendant’s motion. It did, however, provide plaintiff with an opportunity to amend it s complaint to include allegations involving lost rent and repairs to the air conditioning equipme nt, heating equipment, and appliances, explaining that the a nalysis described above did no t apply to these specific damages because there was not a specific level of fault required under the parties’ lease agreement. Plaintiff did so, the parties s tipulated that defendant suffere d $15,421.08 in those specific damages, and summary disposition in that amount was awarded to plaintiff pursuant to MCR 2.116(C)(10).

On appeal, plaintiff argues that the trial court erred in gran ting defendant’s motion for summary disposition because it erroneously concluded its lawsui t impermissibly implicated tort theories. We agree. “[A] ‘tort’ is an act that has long been understood as a civil wrong that arises from the breach of a legal duty other than the breach of a contractual duty.” In re Bradley

Estate , 494 Mich 367, 381; 835 NW2d 545 (2013). “Michigan case law e xpressly provides that an action in tort may not be maintained where a contractual agr eement exists, unless a duty, separate and distinct from the contractual obligation, is estab lished.” Sherman v Sea Ray Boats,

Inc , 251 Mich App 41, 52; 649 NW2d 783 (2002). When a lawsuit ari ses from a breach of

1 The lease agreement provided that the “Resident” was liable fo r the damages described above, and, according to ¶ 26 of the agree ment, “[i]f th ere shall be m ore than one Residen t, they shall be jointly and severally liable hereunder.”

2 MCL 600.2956 provides that, “in an action based on tort or ano ther legal theory seeking damages for personal injury, property damage, or wrongful death , the liability of each defendant for damages is several only and is not joint.”

3 MCL 554.633(1)(m) provides that “[a] rental agreement shall no t include a provision that” “[v]iolates the Michigan c onsumer protection act[.]”

4 MCL 445.901(1)(n) and (t) define “[u]nfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce [that] are unlawf ul” as those that “[c]aus[e] a probability of confusion or of misunderstanding with respect to the authority of a salesperson, representative, or agent to nego tiate the final terms of a tran saction” or those where a consumer “[e]nter[s] into a consumer transaction in which the consumer w aives or purports to waive a right, benefit, or immunity provided by law, unless the waiver is clearly stated and the consumer has specifically consented to it.”-3- promise, the lawsuit is a breach-of-contract lawsuit. Hart v Ludwig , 347 Mich 559, 563; 79 NW2d 895 (1956).

In Laurel Woods Apartments v Roumayah , 274 Mich App 631, 642; 734 NW2d 217 (2007), this Court expressly held that a lease agreement provid ing for joint and several liability was “not precluded by MCL 600.2956.” 5 The same is true here. Stated simply, plaintiff’s lawsuit is a breach-of-contract lawsuit. Plaintiff’s claim, i. e., that defendant breached her contractual duty to be held liable for fire and water damage re sulting from her, her boyfriend’s, or any of their guests’ conduct, is clearly a breach-of-contrac t claim. Plaintiff has not alleged any breach of a duty that is “sep arate and distinct” from those duties that are contractually imposed under the parties’ lease agreement. Contrary to the tr ial court’s conclusion, the fact that the parties’ lease agreement mentioned negligence and intention al misconduct does not automatically transform this breach-of-contract action into a t ort action, nor does it create a hybrid tort-contract lawsuit where MCL 600.2956 rewrites the ag reement that the parties voluntarily entered into as def endant suggests. As our Supreme Court has explained, “[t]o adopt the position that MCL 600.2956 re nders express contractual inde mnification clauses unenforceable would require that we negate the parties’ contrac t. We find no language in the statute, nor any compelling public policy, that would require u s to do so.” Zahn v Kroger Co of

Mich , 483 Mich 34, 39; 764 NW2d 207 (2009).

Defendant’s position before the trial court and before this C ourt is without merit. She claims that, because she is immune from joint and several liabi lity under MCL 600.2956, her agreement to be jointly and severally liable in the parties’ le ase agreement violated the MCPA and is void under the MRTA. However, contrary to her argument and the trial court’s conclusion, MCL 600.2956 is inapplicable because plaintiff’s br each-of-contract lawsuit is precisely that—a breach-of-contra ct lawsuit for contract damage s. Nothing in MCL 600.2956 precludes defendant from contract ually agreeing to be jointly a nd severally liable for the damage

at issue. While defendant now tak es issue with the fact that t he provisions of the lease agreement at issue were never “explained to her, nor was she ever told th at there were provisions in the lease which would attempt to impose liability on her for someth ing else someone else did,” she does not provide, and we are unable to find, any legal authorit y requiring someone else, presumably plaintiff on its own initiative, to read and explain the lease agreement that she signed to her in a manner that she later deems satisfactory. Indeed, because defendant signed the

5 We reject defendant’s claim that “ Laurel Woods has no applicability to the present appeal.” In short, the holding in Laurel Woods Apartments —that MCL 600.2956 does not preclude the imposition of contract-based joint and several liability—direct ly addresses the issue raised in this case. While she, like the trial court, claims that the use of tort concepts, i.e., negligence and intentional misconduct, transform this breach-of-contract actio n into a tort or hybrid tort-contract action, we disagree for the reas ons set forth in this opinion. Additionally, she claims that the fact that she raised issues relating to the MTRA and the MCPA render s Laurel Woods Apartments inapplicable. However, that argument relies on the trial court ’s conclusions that this lawsuit sounded, at least somewhat, in tort and that the lease agreemen t was apparently too confusing to be understood, both of which are con clusions that we reject.-4- parties’ lease agreement, she is presumed to have read and unde rstood its contents. Watts v Polaczyk , 242 Mich App 600, 604; 619 NW2d 714 (2000).

Defendant also argues that joint and several liability does no t apply in this situation because only one person, her boyfriend, was at fault. Instead, she argues, plaintiff’s lawsuit actually implicates vicarious liability. This position is with out merit as well. Where a party agrees to be jointly and severa lly liable for damage caused by another person, that party may be held liable for that damage regardless of his or her fault. Laurel Woods Apartments , 274 Mich App at 642. Thus, joint and several liability is precisely the form of liability that is at issue in

this case. Vicarious liability, on the oth er hand, is entirely inapplicable as it is premised on the policy-based determination that one person should be liable for the actions of a nother due to their relationship. Al-Shimmari v Detroit Med Ctr , 477 Mich 280, 294; 731 NW2d 29 (2007). In short, we are unaware of, and defendant does not indicate, any relationship between the parties, other than the joint-and-several one, that imposes policy-based liability on defendant for her boyfriend’s actions. Thus, we c onclude that the trial court er red in granting summary disposition

in defendant’s favor.

On cross-appeal, defendant argues that the trial court erred i n concluding that she was liable for lost rent and repairs to the air conditioning equipm ent, heating equipment, and appliances. We disagree. “The goal of contract interpretation is to first determine, and then enforce, the intent of the parties based on the plain language of the agreement.” Harbor Park
Market, Inc v Gronda , 277 Mich App 126, 130; 743 NW2d 585 (2007). “If the language of the contract is unambiguous, we construe and enforce the contract a s written.” Quality Prod & Concepts Co v Nagel Precision, Inc , 469 Mich 362, 375; 666 NW2d 251 (2003). And, as stated above, where a party contractuall y agrees to be held jointly an d severally liable for another’s actions, he or she can, indeed, be held liable for the same. Laurel Woods Apartments , 274 Mich App at 642.

In this case, the plain language of the parties’ lease agreeme nt unequivocally provides that defendant and her boyfriend were liable for lost rent if t he apartment were to become untenantable due to their actions. It also unequivocally provide s that defendant and her boyfriend were liable for the repair cost to the heating equipment, air c onditioning equipment, and appliances where such repairs are necessary due to the same. W hile defendant claims that she cannot be held liable because she was not at fault, the parties ’ lease agreement, i.e., the provisions imposing joint and se veral liability, expressly and unequivocally provide otherwise, and, as stated above, we reject her argument that she is immune from the contractual liability that she voluntarily agreed to.

Accordingly, we reverse the trial court’s September 26, 2014 o rder granting defendant’s motion for summary disposition. W hile we affirm the trial cour t’s January 23, 2015 order to the extent that it holds defendant liable for lost rent and the rep air costs to the air conditioning equipment, heating equipment, and appliances, we vacate its Jan uary 23, 2015 order as to the amount of damages awarded. On remand, the trial court is to en ter an order granting summary disposition in plaintiff’s favor in full and determine the appr opriate amount of damages in light of the entry of that order.-5- Affirmed in part, vacated in par t, and remanded for further pr oceedings consistent with this opinion. We do not retain jurisdiction. Plaintiff, as th e prevailing party, may tax costs pursuant to MCR 7.219.

/s/ Colleen A. O’Brien /s/ Kirsten Frank Kelly

/s/ Karen M. Fort Hood