Opinion ID: 848711
Heading Depth: 1
Heading Rank: 6

Heading: helpful hypothetical example

Text: By way of example, assume that a building owner hires a contractor to patch the building's crumbling facade to avoid injury to those passing near it. The contract explicitly states that the purpose of the contract is to protect the public from harm and that the contractor undertakes this duty. Nevertheless, the contractor misjudges the extent of the building's deterioration and uses inadequate repair methods that, although not increasing the risk of falling materials, do not make the facade safe. Assume, moreover, that a member of the public sues the contractor, claiming harm from a failure to protect after being injured when a portion of the facade falls on him. To satisfy the majority's test, the contractor must owe a duty to the plaintiff that is separate and distinct from his contractual obligations. In this hypothetical case, application of the majority's test would result in a finding of no cause of action for the member of the general public. This is incongruous because it is the general public that the contract was designed to protect. It could be argued that a member of the public might still sue as a third-party beneficiary of the contract. However, this Court has recently stated that Michigan law does not empower incidental beneficiaries to enforce a contract. Koenig v. South Haven, 460 Mich. 667, 679-680, 597 N.W.2d 99 (1999) (opinion by Taylor, J.); Schmalfeldt v. North Pointe Ins. Co., 469 Mich. 422, 427-428, 670 N.W.2d 651 (2003); MCL 600.1405. Rather, a person can be a third-party beneficiary of a contract only when the promisor undertakes an obligation directly to or for that person. Koenig, supra ; Schmalfeldt, supra . In Koenig, the author of the lead opinion wrote: [T]his Court has adopted the persuasive rule that a third-party beneficiary `may be one of a class of persons, if the class is sufficiently described or designated.' Koenig, supra at 680, 597 N.W.2d 99 (citations and emphasis omitted). But the benefit of such a contract cannot run to a member of the general public. Id.; Schmalfeldt, supra at 428, 670 N.W.2d 651. Therefore, in the hypothetical case, a third-party member of the public could not recover from the actual tortfeasor either under the contract or in tort. I do not agree with this proposition. It is particularly distressing because the majority's new analysis of these claims could leave innocent persons without recourse to redress their injuries. Such persons may be precluded from recovering either from the tortfeasor or from the tortfeasor's employer. In cases in which the jury assigns one hundred percent of the fault to the contractor, plaintiffs will have no recovery. MCL 600.2957(1) requires the jury to assess the percentage of fault by consider[ing] the fault of each person, regardless of whether the person is, or could have been, named as a party to the action. Thus, while the contractor does not owe any duty to the plaintiff, the premises owner's liability will be determined according to the jury's allocation of fault. So, an innocent plaintiff, whose injury results entirely from the negligence of a contractor, will recover nothing from the premises owner. She will also have no cause of action against the contractor because the contractor owes no duty to the plaintiff. Rather than adopt the majority's new test, I would recognize that in certain circumstances a duty under tort can arise solely from a contractual obligation. The facts of this case, as noted by the majority, are distinct from those in Osman v. Summer Lawn Care, Inc., 209 Mich.App. 703, 532 N.W.2d 186 (1995). Ante, p. 593. In Osman, the defendant created a hazard by placing snow on a sidewalk, walkway, and steps where it should have known snow would melt and freeze into ice. However, the defendant's actions there gave rise to a tort claim under the theory embodied in Restatement Torts, 2d § 324A(a), not under the theory in § 324A(b). The latter subsection contemplates a situation in which the defendant assumes the duty owed by the other contracting party. The majority ignores this subsection in its decision to require a duty separate and distinct from the contract.