Opinion ID: 1693667
Heading Depth: 2
Heading Rank: 4

Heading: V. Federal Pier Regulations:

Text: The public shall be restricted from the North and South Federal piers in the City of South Haven during periods of inclement weather and when great danger to persons or property exists, said times to be determined by the City Manager, or a person designated by him. Gates will be locked during each emergency and reopened immediately thereafter. In an October 6, 1972, letter, the corps provided keys to the fence and gate structures it had recently completed and stated: We appreciate the cooperation you have expressed in the operation of these safety features on an annual basis, including their placement, removal, and storage. As the reason the structures are removed is to avoid damage by the winter ice, they need to be removed only for that period. However, we ask that they be removed no earlier than Labor Day and placed no later than Memorial Day. On the day of the incident, South Haven had not yet placed the fence and gate structures for the summer season. Plaintiffs filed a two-count complaint. They sued South Haven for breach of contract, alleging that the memorandum of understanding (MOU) was a contract that required South Haven to preclude access to the piers under dangerous conditions. They contended that their daughter was an intended third-party beneficiary of the MOU and that she had suffered damages from South Haven's breach of its duties under this contract. Plaintiffs also sued individual defendants under the gross negligence exception to governmental immunity established in MCL § 691.1407; MSA § 3.996(107). Defendants moved for summary disposition under MCR 2.116(C)(7), (8), and (10). The trial court granted South Haven's motion, finding that plaintiffs' daughter was not an intended third-party beneficiary of the MOU. It stated that it need not decide whether the MOU was a contract. It concluded that South Haven merely undertook responsibility for managing the operation of the fence under the MOU; thus, the corps and South Haven made promises to each other in the MOU, not promises to every person who visits the piers. The trial court denied the motion for summary disposition with respect to the individual defendants, concluding that whether they engaged in gross negligence was an issue for the jury. [1] Pursuant to the jury's verdict, the trial court issued a judgment of no cause of action in favor of the individual defendants. Both parties appealed in the Court of Appeals, which reversed the grant of summary disposition for South Haven on the breach of contract claim and affirmed the jury verdict on the gross negligence claim. 221 Mich.App. 711, 562 N.W.2d 509 (1997). In its opinion, the Court noted that the third-party beneficiary statute does not restrict potential third-party beneficiaries to limited groups and concluded that the law does not prohibit a class consisting of virtually any member of the public who used the government pier during times of inclement weather from being intended third-party beneficiaries of the MOU. Id. at 719, 562 N.W.2d 509. It also found that the clear intention of the MOU was to protect the safety of individuals who would attempt to use the pier during times of dangerous weather. Id. at 719, 562 N.W.2d 509. This led it to conclude that plaintiffs' daughter was an intended third-party beneficiary of the MOU and that the trial court accordingly erred in granting summary disposition for South Haven on this count. Finally, it found that genuine factual issues remained regarding whether South Haven received consideration under the MOU to the extent that the MOU could constitute a contract. Id. at 722, 562 N.W.2d 509. Thus, it remanded this matter for trial of the breach of contract count. Regarding the gross negligence count against the individual defendants, the Court affirmed the jury's verdict and further agreed with South Haven's contention that the gross negligence count was barred by the public duty doctrine. [2] Id. at 729, 562 N.W.2d 509. This Court granted leave to determine whether South Haven was entitled to summary disposition of plaintiffs' breach of contract claim. 458 Mich. 864, 582 N.W.2d 836 (1998).