Court Opinion

ID: 4107281
Source: CourtListenerOpinion
Date Created: 2016-12-14 21:07:44.229287+00
Date Added: 2024-06-11T14:07:20.104831
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

CAMERON WIGGINS, a Minor, by his Next                            UNPUBLISHED
Friends, DAVID WIGGINS and BROOK                                 December 13, 2016
WIGGINS, and DAVID WIGGINS and BROOK
WIGGINS, Individually,

              Plaintiffs,

v                                                                No. 328027
                                                                 Calhoun Circuit Court
HORROCKS NURSERY FARMS, INC.,                                    LC No. 2011-003222-NI

              Defendant/Cross-Defendant-
              Appellee/Cross-Appellant,

and

SKANSKA-SCHWEITZER CONSTRUCTION,
also known as SKANSKA-SCHWEITZER, A
JOINT VENTURE,

              Defendant/Cross-Plaintiff-
              Appellant/Cross-Appellee.

Before: M. J. KELLY, P.J., and O’CONNELL and BECKERING, JJ.

PER CURIAM.

        Cross-plaintiff Skanska-Schweitzer Construction (Skanska) appeals as of right the trial
court’s order granting summary disposition to cross-defendant, Horrocks Nursery Farms, Inc.,
(Horrocks) on Skanska’s cross-claims for indemnification. Skanska was the construction
manager of a project to renovate the playground of plaintiff Cameron Wiggins’s elementary
school when a piece of playground equipment that Horrocks was in the process of moving fell on
Wiggins. We affirm.

                    I. FACTUAL AND PROCEDURAL BACKGROUND

       In August 2009, Horrocks and Battle Creek Public Schools (the school) entered into a
landscaping services contract for an elementary school. The contract named Skanska as
construction manager for the project. The contract provided that the parties could only modify

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the contract in specific ways, including by issuance of a “change order.” The contract also
include a provision under which Horrocks agreed to indemnify the school and Skanska for any
claims “arising out of or resulting from performance of the Work . . . to the extent caused in
whole or in part by the negligent acts or omissions of [Horrocks].”

        In late September 2009, the school asked Skanska to obtain a price quote to remove a
teeter totter. Skanska’s representative Thomas Beuchler testified at deposition that removing the
teeter totter was not part of the original contract. Beuchler forwarded the request to Horrocks,
who informed Skanska that it could do the work for $1,000. Beuchler informed the school of the
price, and the school told Beuchler to have the work done. Beuchler then told Horrocks to
proceed with the work and that Skanska would submit a change order shortly.

         As Horrocks removed the teeter totter, an employee left the unmoored teeter totter
unattended. The school released children onto the playground where Horrocks was working, and
several children climbed onto the unmoored teeter totter, which fell on Wiggins and broke his
leg. On October 5, Horrocks submitted a “Request Change Order” to add removal of the teeter
totter to the parties’ contract, but Skanska refused to authorize the change order.

       Wiggins subsequently sued Horrocks and Skanska for negligence. Skanska filed a cross-
claim against Horrocks, alleging that Horrocks was obligated to indemnify Skanska under the
contract. A case evaluation panel awarded claims to Wiggins from Horrocks and to Wiggins
from Skanska without any mention of Skanska’s cross-claim. Both Horrocks and Skanska
accepted the claims. Ultimately, both parties settled with Wiggins.

       In November 2014, Horrocks requested that the trial court dismiss Skanska’s cross-
claims, asserting that Skanska’s acceptance of the case evaluation award precluded it from
continuing to litigate its cross-claims. The trial court denied the request, concluding that
Horrocks was asking it “to find something within the evaluators’ decision that really isn’t there”
and reasoning that it was just as likely that the evaluators ignored the cross-claim or forgot to
make an award.

        On April 19, 2015, the trial court entered findings and an order in a case that Skanska-
Schweitzer had filed against Horrocks’s insurer, Farm Bureau General Insurance Company of
Michigan (Farm Bureau), in which Skanska alleged that Farm Bureau was required to defend
and indemnify it because Skanska was an insured under Horrocks’s policy with Farm Bureau.1
In its opinion in the declaratory action, the trial court concluded that the teeter totter removal was
not part of the landscape contract.

        Following the order in the declaratory action case, Horrocks filed a motion for summary
disposition under MCR 2.116(C)(8) and (10), asserting that the declaratory action collaterally
estopped Skanska from asserting contractual indemnification. Horrocks also sought summary
disposition on Skanska’s claims for implied and common law indemnification because
Wiggins’s complaint alleged that Skanska was actively negligent. The trial court concluded that

1
    This panel is concurrently deciding an appeal from that case.

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the declaratory action case collaterally estopped Skanska from asserting express contractual
indemnification in this case, and it concluded that Wiggins’s allegations of active negligence
precluded Skanska’s claims for implied and common law indemnification.

        Skanska and Horrocks both appeal. Skanska appeals the trial court’s rulings on
indemnification and Horrocks cross-appeals the trial court’s refusal to dismiss Skanska’s claims
on the basis of Skanska’s acceptance of the case evaluation award.

                                II. STANDARDS OF REVIEW

        This Court reviews de novo the trial court’s decision on a motion for summary
disposition. Gorman v American Honda Motor Co, Inc, 302 Mich App 113, 115; 839 NW2d 223
(2013). When a party moves the trial court for summary disposition under MCR 2.116(C)(8)
and (10) and the trial court considered documents outside the pleadings when deciding the
motion, we review the trial court’s decision under MCR 2.116(C)(10). Hughes v Region VII
Area Agency on Aging, 277 Mich App 268, 273; 744 NW2d 10 (2007). A party is entitled to
summary disposition under MCR 2.116(C)(10) if “there is no genuine issue as to any material
fact, and the moving party is entitled to judgment . . . as a matter of law.” A genuine issue of
material fact exists if, when viewing the record in the light most favorable to the nonmoving
party, reasonable minds could differ on the issue. Gorman, 302 Mich App at 116.

        This Court reviews de novo the proper interpretation of a contract, Klapp v United Ins
Group Agency, Inc, 468 Mich 459, 469; 663 NW2d 447 (2003), and the legal effect of a
contractual provision, DeFrain v State Farm Mut Auto Ins Co, 491 Mich 359, 366-367; 817
NW2d 504 (2012). This Court applies the same principles to contractual interpretation as to
statutory interpretation, with the purpose of determining and enforcing the parties’ intent. See
Klapp, 468 Mich at 468. The goal of contractual interpretation is to honor the parties’ intent and
to enforce the contract’s plain terms. Davis v LaFontaine Motors, Inc, 271 Mich App 68, 73;
719 NW2d 890 (2006). We discern the parties’ intent from the contract’s language. Id.

                                         III. ANALYSIS

                    A. EXPRESS CONTRACTUAL INDEMNIFICATION

        Skanska contends that the trial court improperly relied on the doctrine of collateral
estoppel. Skanska further argues that the trial court improperly determined that the landscaping
contract’s indemnification provision did not apply because the teeter totter removal was part of
the parties’ contract. While the trial court improperly relied on the doctrine of collateral
estoppel, we conclude that it properly granted summary disposition where the parties’ contract
did not include the teeter totter removal.

        “Collateral estoppel precludes relitigation of an issue in a subsequent, different cause of
action between the same parties when the prior proceeding culminated in a valid final judgment
and the issue was actually and necessarily determined in the prior proceeding.” Porter v City of
Royal Oak, 214 Mich App 478, 485; 542 NW2d 905 (1995) (emphasis added). A decision
becomes final for purposes of collateral estoppel when “all appeals have been exhausted or when
the time available for an appeal has passed.” Leahy v Orion Twp, 269 Mich App 527, 530; 711

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NW2d 438 (2006). In this case, Skanska had not exhausted its appeals in its case involving Farm
Bureau. Thus, the trial court improperly applied the doctrine of collateral estoppel.

        However, we conclude that the trial court properly granted summary disposition. The
indemnification provision required Horrocks to indemnify Skanska-Schweitzer for injuries or
damages arising out of “the Work.” The contract specifically defined “the Work” as the
landscaping and irrigation services, and it did not include the teeter totter removal. The
contract’s modification clause provided that the scope of the contract could only be changed in
specified ways, including through a change of work order. Horrocks submitted such an order
regarding the teeter totter, but Skanska denied it. Accordingly, we conclude that the teeter totter
removal was not part of the parties’ contract, and the trial court properly concluded that the
contractual indemnification provision did not apply.

                  B. IMPLIED AND COMMON-LAW INDEMNIFICATION

      Skanska contends that the trial court improperly granted summary disposition because
Horrocks’s performance of work after a request by Skanska created an implied contractual
indemnification. We disagree.

        “In order to establish an implied contract to indemnify, there must be a special
relationship between the parties or a course of conduct whereby one party undertakes to perform
certain services and impliedly assures indemnification.” Palomba v East Detroit, 112 Mich App
209, 217; 315 NW2d 898 (1982). Common-law indemnification “is based on the equitable
principle that where the wrongful act of one results in another being held liable, the latter party is
entitled to restitution from the wrongdoer.” Hill v Sullivan Equip Co, 86 Mich App 693, 696;
273 NW2d 527 (1978).             The party seeking implied identification or common-law
indemnification must be free of active negligence. Dale v Whiteman, 388 Mich 698, 705; 202
NW2d 797 (1972); Botsford Continuing Care Corp v Intelistaf Healthcare, Inc, 292 Mich App
51, 62-63; 807 NW2d 354 (2011). To determine whether a party is actively negligent, the court
must examine the plaintiff’s complaint, and if the complaint alleges active negligence (rather
than derivative liability), neither implied contractual indemnification nor common-law
indemnification apply. Hill, 86 Mich App at 696-697; Botsford, 292 Mich App at 63.

       In this case, Wiggins alleged that both Horrocks and Skanska failed to disclose the
existence of the hazard, failed to inspect and maintain the jobsite in a safe condition, failed to
warn Wiggins of the danger, and failed to establish a safety program. These were allegations of
direct negligence on Skanska’s part, not claims that Skanska was vicariously liable for
Horrocks’s negligence. Because Wiggins’s complaint involved allegations of active negligence,
Skanska’s claims of implied and common-law indemnification necessarily failed.

       Skanska contends that this Court should look beyond Wiggins’s complaint to the
evidence to determine whether actual active negligence existed. Skanska relies on this Court’s
decisions in Peeples v Detroit, 99 Mich App 285, 293; 297 NW2d 839 (1980), and Botsford, 292
Mich App at 63. Botsford is easily distinguishable from this case because in Botsford, this Court
held that the underlying allegations of the plaintiff’s complaint control unless the underlying
action has already been tried by a jury, in which case “the nature of the claims must be
determined by examining not only the primary plaintiff’s complaint, but also the issues actually

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submitted to and decided by the jury.” Id. at 63. Because the present action did not proceed to a
jury trial on the underlying action, Botsford is inapplicable.

        In Peeples, this Court looked to the responsibilities outlined in the parties’ contract to
determine whether the party seeking indemnification was actively negligent. Peeples, 99 Mich
App at 293-294. However, subsequent to Peeples, the Michigan Supreme Court made it clear
that in cases in which parties have settled with the plaintiff, it is the claims remaining on the
underlying complaint that control:

       [W]ithout first seeking summary disposition in regard to its active fault, plaintiff
       may not seek indemnification from third-party defendant where it settled the
       underlying complaint for both active and passive fault and did not provide
       defendant with the opportunity to participate in settlement negotiations. Of
       course, if the plaintiff were to be successful at the summary disposition stage
       regarding its active negligence, only a claim for passive negligence would remain
       and it would be entitled to settle the claim and seek indemnification from the
       defendant, even without providing the defendant the opportunity to participate in
       the settlement negotiations. [St Luke’s Hosp v Giertz, 458 Mich 448, 457-458;
       581 NW2d 665 (1998).]

Because the Supreme Court held that a party who faced allegations of both active and passive
negligence was required to achieve summary disposition on its claims of active negligence
before it could seek identification for a settlement on claims of passive negligence, it is clear that
the Supreme Court concluded that the allegations in the complaint control when resolving
indemnification after a settlement agreement.

        In this case, all Wiggins’s allegations against Skanska were for active negligence, and
Skanska is seeking indemnification for their settlement. Skanska’s settlement with Wiggins
could not have been based in passive negligence because there were no allegations of passive
negligence against it. Because the only allegations concerned active negligence, the trial court
did not need to look beyond Wiggins’s complaint to resolve this issue. We conclude that the trial
court properly granted summary disposition on Skanska’s cross-claims of implied and common-
law indemnification.

       Because the trial court properly dismissed Skanska’s cross-appeal on the basis of
indemnification, we decline to reach Skanska’s assertions regarding the trial court’s ruling on the
case evaluation. An issue is moot when it can have no practical legal effect on the controversy.
Gen Motors Corp v Dep’t of Treasury, 290 Mich App 355, 386; 803 NW2d 698 (2010). Because
the trial court properly dismissed Skanska’s claims on indemnification grounds, any
determination of whether the trial court should have earlier dismissed Skanska’s claims can have
no practical legal effect on this controversy.

       We affirm.

                                                              /s/ Michael J. Kelly
                                                              /s/ Peter D. O’Connell
                                                              /s/ Jane M. Beckering

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