UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

MT. TAI ASSET MANAGEMENT CORP.,

Plaintiff, Case No. 09-10685

v. Hon. Gerald E. Rosen

METRO EQUITY GROUP, LLC, COREY

HOWARD, EXCEL ESCROW SERVICES, LLC,

EXCEL TITLE AGENCY, LLC, JANEL CHIPMAN,

JUDITH A. STIRNEMANN, and JENNY KINNAIRD,

Defendants.

____________________________________/

OPINION AND ORDER DENYING DEFENDANTS’ MOTION FOR

SUMMARY JUDGMENT ON CROSS-CLAIM AGAINST CO-DEFENDANTS

At a session of said Court, held in

the U.S. Courthouse, Detroit, Michigan

on February 11, 2011 

 PRESENT: Honorable Gerald E. Rosen

 Chief Judge, United States District Court

I. INTRODUCTION

By opinion and order dated January 10, 2011, the Court addressed and resolved

cross-motions for summary judgment brought by Plaintiff Mt. Tai Asset Management

Corp. and Defendants Excel Escrow Services, LLC (“EES”), Excel Title Agency, LLC

(“ETA”), and Janel Chipman. In the wake of this ruling, only one motion remains

pending before the Court: namely, a motion brought by Defendants EES and Chipman

seeking an award of summary judgment in their favor on their cross-claim for

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Plaintiff’s claims against Defendants MEG and Howard have been resolved through the

entry of a consent judgment, and its claims against Defendants Judith Stirnemann and Jenny

Kinnaird were dismissed through a February 2, 2010 stipulated order.

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indemnification asserted against Defendants Metro Equity Group, LLC (“MEG”) and

Corey Howard.1

 Specifically, Defendants EES and Chipman contend that they have

established as a matter of law that Defendants MEG and Howard are obligated to

indemnify them for any award of damages they are ordered to pay to Plaintiff.

This motion has been fully briefed by the pertinent parties. Having reviewed this

motion, the response in opposition, and the accompanying briefs and exhibits, as well as

the remainder of the record, the Court finds that the relevant allegations, facts, and legal

arguments are adequately presented in these written submissions, and that oral argument

would not aid the decisional process. Accordingly, the Court will decide Defendants’

motion “on the briefs.” See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of

Michigan. As discussed below, the Court readily concludes that this motion must be

denied.

II. ANALYSIS

The pertinent facts of this case are set forth at length in the Court’s January 10,

2011 opinion, and need not be repeated here. As noted, the present motion concerns a

cross-claim for implied or common-law indemnification asserted by Defendants EES and

Janel Chipman against Defendants MEG and Corey Howard. In support of this crossclaim, Defendants EES and Chipman allege that to the extent they are held liable to

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Plaintiff under the claims asserted against them in Plaintiff’s second amended complaint,

any such liability would be properly attributable to Defendants MEG and Howard, as EES

and Chipman allegedly acted solely at the direction of MEG and Howard in taking the

actions giving rise to Plaintiff’s claims. Through their present motion, EES and Chipman

argue that this entitlement to indemnity is established as a matter of law.

The form of indemnity claimed by EES and Chipman in this case is not based upon

any contract, but instead is alleged to have arisen by implication from the parties’

conduct. Under Michigan law, this form of “indemnification is an equitable doctrine that

shifts the entire burden of judgment from one tortfeasor who has been compelled to pay

it, to another whose active negligence is the primary cause of the harm.” St. Luke’s

Hospital v. Giertz, 458 Mich. 448, 581 N.W.2d 665, 668 (1998). As EES and Chipman

recognize in their motion, common-law or implied indemnification is available only to a

party “who is guilty of only passive negligence or vicarious liability,” St. Luke’s Hospital,

581 N.W.2d at 668, and a party who seeks this form of indemnification must be “free

from any active negligence,” Paul v. Bogle, 193 Mich. App. 479, 484 N.W.2d 728, 734

(1992). Thus, “[w]here two or more joint tortfeasors have been actively negligent in

contributing to an injury, neither is entitled to indemnification from the other.” St. Luke’s

Hospital, 581 N.W.2d at 668. In determining whether the party seeking indemnification

is free from active negligence, the Court looks to the allegations of Plaintiff’s complaint. 

See Feaster v. Hous, 137 Mich. App. 783, 359 N.W.2d 219, 222 (1984).

Applying these standards here, the Court readily concludes that Defendants EES

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In a single line in their response to EES’s and Chipman’s motion, MEG and Howard

request not only that this motion be denied, but that summary judgment be awarded in their favor

on EES’s and Chipman’s cross-claim for indemnification. The Sixth Circuit has instructed that a

court should act “with great caution” in awarding summary judgment to a non-moving party, and

should do so only if the parties are “on notice” and “have a reasonable opportunity to address”

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and Chipman have failed to establish — and certainly not as a matter of law — that they

are entitled to common-law or implied indemnification from Defendants MEG and

Howard. In Count II of Plaintiff’s second amended complaint, Defendants EES and

Chipman are charged with negligence and/or breaches of fiduciary duties they allegedly

owed to Plaintiff. Notably, Defendants MEG and Howard are not even named in this

count of the complaint. As discussed in the Court’s January 10, 2011 opinion and order,

the claim in Count II arises from separate duties allegedly owed to Plaintiff by

Defendants EES and Chipman, without regard for whether the actions that constituted

breaches of these tort-based and fiduciary duties were undertaken at the direction of

Defendants MEG or Howard. (See 1/10/2011 Op. at 23-25.)

Indeed, in this prior ruling, the Court found that Plaintiff established as a matter of

law that Defendants EES and Chipman breached these duties owed to Plaintiff. In so

concluding, the Court expressly rejected EES’s and Chipman’s contention that they owed

duties only to MEG, and that any actions they took with respect to Plaintiff’s funds were

attributable to (and undertaken at the direction of) MEG and Howard. (See id. at 20-21,

24.) In light of Plaintiff’s allegations of EES’s and Chipman’s active negligence —

allegations which have now been established as a matter of law — EES’s and Chipman’s

cross-claim of implied or common-law indemnification must fail.2

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the propriety of such an award. Shelby County Health Care Corp. v. Southern Council of

Industrial Workers Health & Welfare Trust Fund, 203 F.3d 926, 932-33 (6th Cir. 2000) (internal

quotation marks and citation omitted); see also NL Industries, Inc. v. GHR Energy Corp., 940

F.2d 957, 965 (5th Cir. 1991). Indeed, the recently amended version of Fed. R. Civ. P. 56 now

makes this explicit, providing that a court may grant summary judgment to a non-moving party

only “[a]fter giving notice and a reasonable opportunity to respond.” Fed. R. Civ. P. 56(f). The

Court does not view the terse, passing mention in MEG’s and Howard’s response brief as

providing the requisite notice to EES and Chipman that they faced the prospect of an award of

summary judgment against them. Accordingly, the Court declines to decide at the present

juncture whether such an award might be warranted.

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III. CONCLUSION

For the reasons set forth above,

NOW, THEREFORE, IT IS HEREBY ORDERED that the amended motion for

summary judgment brought by Defendants Excel Escrow Services, LLC and Janel

Chipman (docket #78) is DENIED.

s/Gerald E. Rosen 

Chief Judge, United States District Court

Dated: February 11, 2011

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

on February 11, 2011, by electronic and/or ordinary mail.

s/Ruth A. Gunther 

Case Manager

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