Court Opinion

ID: 9893449
Source: CourtListenerOpinion
Date Created: 2023-10-27 06:08:07.731175+00
Date Added: 2024-06-11T09:03:40.244444
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                              COURT OF APPEALS

HEATHER MALONE,                                                      FOR PUBLICATION
                                                                     October 26, 2023
               Plaintiff-Appellant,                                  9:05 a.m.

v                                                                    No. 356416
                                                                     Livingston Circuit Court
CONOR THOMPSON MCRELL and ZHETMAN                                    LC No. 19-030275-NI
BRIGHTON, LC,

               Defendants-Appellees,

and

FARMERS INSURANCE EXCHANGE,

                 Defendant.

                                          ON REMAND

Before: SWARTZLE, P.J., and REDFORD and GARRETT, JJ.

SWARTZLE, P.J.

        This matter returns to this Court on remand from our Supreme Court with directions to
consider “whether the 1995 amendment of MCL 600.2925d(a) abrogated the common-law rule
that a valid release of an agent for tortious conduct operates to bar recovery against the principal
on a theory of vicarious liability, even though the release specifically reserves claims against the
principal.” Malone v McRell, 985 NW2d 526 (Mich, 2023). This Court was not presented with
this issue on plaintiff’s first appeal, in which we affirmed summary disposition for Zhetman
Brighton, LC. On remand, we again affirm.

                                       I. BACKGROUND

        The facts relevant to this remand are brief. Conor McRell was employed by Zhetman as a
pizza-delivery driver when he rear-ended plaintiff while he was delivering a pizza. McRell entered
into a settlement agreement with plaintiff, and Zhetman argued that it was entitled to summary

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disposition because it could not be vicariously liable for McRell since he had settled his liability.
The trial court granted Zhetman summary disposition.

        This Court held, in a split decision, that the settlement agreement released McRell from
further liability, and that our Supreme Court’s ruling in Theophelis v Lansing Gen Hosp, 430 Mich
473, 480; 424 NW2d 478 (1988) barred plaintiff’s recovery against Zhetman on the theory of
vicarious liability because “[a]t common law a valid release of an agent for tortious conduct
operates to bar recovery against the principal on a theory of vicarious liability, even though the
release specifically reserves claims against the principal.” Thus, we held that the trial court did
not err in granting Zhetman summary disposition.

        Plaintiff appealed in our Supreme Court, and this case was remanded to this Court with the
instruction as stated above.

                                          II. ANALYSIS

        The interpretation and application of statutes, rules, and legal doctrines are reviewed de
novo. Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008). The goal of statutory
interpretation is to determine and apply the intent of the Legislature. Mich Ed Ass’n v Secretary
of State (On Rehearing), 489 Mich 194, 217; 801 NW2d 35 (2011). The first step in determining
legislative intent is to examine the specific language of the statute. CG Automation & Fixture, Inc
v Autoform, Inc, 291 Mich App 333, 338; 804 NW2d 781 (2011).

        Under our Constitution of 1963, common-law principles remain in effect “until they expire
by their own limitations, or are changed, amended or repealed.” Const 1963 art 3, § 7; see also
Price v High Pointe Oil Co, Inc, 493 Mich 238, 258-259; 828 NW2d 660 (2013). “With respect
to questions involving a statute, this means that this Court must read the statutory language in light
of the common law except to the extent that the Legislature has abrogated or modified it.” Al-
Hajjaj v Hartford Accident & Indemnity Co, ___ Mich App ___, ___; ___ NW2d ___ (2023)
(Docket No. 359291); slip op. at 3.

        Our Legislature may alter or abrogate the common law through its legislative authority,
Rafaeli, LLC v Oakland Co, 505 Mich 429, 473; 952 NW2d 434 (2020), but “the mere existence
of a statute does not necessarily mean that the Legislature has exercised this authority,” Murphy v
Inman, 509 Mich 132, 144-145; 983 NW2d 354 (2022) (cleaned up). This Court “will not lightly
presume that the Legislature has abrogated the common law,” and “the overriding question is
whether the Legislature intended to abrogate the common law.” Id. at 153. Our Legislature
“should speak in no uncertain terms when it exercises its authority to modify the common law.”
Velez v Tuma, 492 Mich 1, 11; 821 NW2d 432 (2012) (cleaned up).

       Our Supreme Court has directed this Court to determine whether the 1995 amendment to
MCL 600.2925d(a) abrogated the common-law rule regarding vicarious liability. MCL 600.2925d
was enacted by 1974 PA 318, and before it was amended in 1995 it provided:

              When a release or a covenant not to sue or not to enforce judgment is given
       in good faith to 1 or 2 or more persons liable in tort for the same injury or the same
       wrongful death:

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               (a) It does not discharge any of the other tort-feasors from liability for the
       injury or wrongful death unless its terms so provide.

              (b) It reduces the claim against the other tort-feasors to the extent of any
       amount stipulated by the release or the covenant or to the extent of the amount of
       the consideration paid for it, whichever amount is greater.

              (c) It discharges the tort-feasor to whom it is given from all liability for
       contribution to any other tort-feasor.

Our Legislature last amended MCL 600.2925d with 1995 PA 161, and the statute currently
provides:

               If a release or a covenant not to sue or not to enforce judgment is given in
       good faith to 1 of 2 or more persons for the same injury or the same wrongful death,
       both of the following apply:

              (a) The release or covenant does not discharge 1 or more of the other
       persons from liability for the injury or wrongful death unless its terms so provide.

                (b) The release or covenant discharges the person to whom it is given from
       all liability for contribution to any other person for the injury or wrongful death.

For our purposes, the operative change made by our Legislature was to replace the term “tort-
feasors” to “persons” in subsection (a). Plaintiff argues that this change is significant because the
term “persons” implies that the statute encompasses all individuals and corporate bodies, MCL
8.3l, including those who would only be liable under a theory of respondeat superior.

        To begin, the plain language of subsection (a) itself says nothing about respondeat superior
or the common-law rule involving the release of a principal. Even though the term “persons”
implicitly could include principals whose agents released their liability, this Court will not “lightly
presume that the Legislature has abrogated the common law.” Velez, 492 Mich at 11. Rather, we
must read the entire statute, in both its immediate and broader context, as well as the statutory
history to determine whether our Legislature intended to abrogate the common-law rule with
respect to respondeat superior. See Soaring Pine Capital Real Estate and Debt Fund II, LLC v
Park Street Group Realty Servs, LLC, ___ Mich ___, ___; ___ NW2d ___ (2023) (Docket No.
163320); slip op. at 18.

        In Theophelis, our Supreme Court considered this same question in the context of an earlier
amendment added by our Legislature in 1974 PA 318. The Court focused on the historical
background of MCL 600.2925 and related sections. In so doing, our Supreme Court recognized
that “although enactment in 1941 of the Michigan’s contribution statute narrowed the scope of
concomitant doctrines applicable to contribution and release, this Court made clear in Geib v
Slater, 320 Mich 316; 31 NW2d 65 (1948) that the statute did not abrogate the common-law rule
that release of an agent discharges the principal.” Theophelis, 430 Mich at 483 (cleaned up). The
Theophelis Court explored in some detail the doctrinal distinction between contribution among
joint tortfeasors versus the liability of a principal for the actions of its agent. Id. at 483. When it

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enacted 1974 PA 318, the Legislature provided no signal that it intended to breach or dissolve that
doctrinal distinction, and, accordingly, the Court held that our Legislature did not, in fact,
“abrogate the common-law doctrine that release of an agent discharges the principal.” Id. at 483,
487.

         We similarly conclude that our Legislature still has not clearly signaled its intent to
abrogate this common-law rule, even with its enactment of 1995 PA 161. As mentioned already,
there is nothing in MCL 600.2925d itself, as amended by 1995 PA 161, that speaks to “principal”
or “agent,” nor is there any mention of those terms in the immediately surrounding sections. In
fact, MCL 600.2925a through 600.2925d all deal generally with matters involving contribution in
the context of joint-and-several liability. This makes sense, as other amendments made by our
Legislature with 1995 PA 161 similarly involve matters of contribution and joint-and-several
liability. See, e.g., MCL 600.2956 (“[T]he liability of each defendant for damages is several only
and is not joint.); MCL 600.2957 (“[T]he liability of each person shall be allocated under this
section by the trier of fact and…in direct proportion to the person’s percentage of fault.”); MCL
600.2958 (“[A] plaintiff’s contributory fault does not bar that plaintiff’s recovery of damages.”);
and MCL 600.2959 (“[T]he court shall reduce the damages by the percentage of comparative fault
of the person upon whose injury or death the damages are based.”).

       Although not directly on-point, our Supreme Court had occasion to consider whether the
Legislature intended to abrogate a common-law rule involving setoff when it amended MCL
600.2925d(b) in 1995 PA 161—i.e., the subsection directly following the one at issue in the present
case. The Court concluded in Velez that the common law had not been abrogated, as subsection
(b) “was but one part of comprehensive tort-reform legislation,” and there was no conflict between
1995 PA 161 and the common-law rule regarding setoff. Velez, 492 Mich at 12.

        Similar to subsection (b), subsection (a) of MCL 600.2925d does not abrogate the common-
law rule that the release of an agent acts as a release of the principal. The amendment that altered
subsection (a) was one part of a comprehensive tort-reform package focused on contribution and
joint-and-several liability, and the common-law rule regarding vicarious liability does not conflict
with that legislation. Although a myopic reading of subsection (a)—specifically, the change from
“tort-feasors” to “persons”—could implicitly encompass principals who are liable only under a
theory of respondeat superior, our Legislature must speak in no-uncertain terms when it intends to
abrogate the common law. Velez, 492 Mich at 11. It did not do so here, and we hold that 1995
PA 161 did not abrogate the common-law rule that a release of the agent acts as a release of the
principal when the theory of liability is respondeat superior.

                                       III. CONCLUSION

        Because the common law has not been abrogated, our prior holding in this case stands:
“[T]he settlement agreement released Malone’s claims against McRell. Because Zhetman could
only be liable through McRell’s actions, the release also released Malone’s claims against Zhetman
despite its attempt to do otherwise.” Malone v McRell, unpublished opinion of the Court of
Appeals, issued September 22, 2022 (Docket No. 356416), p 2.

       The parties also raise other arguments on remand regarding res judicata and whether the
settlement agreement was a covenant not to sue rather than a release. When our Supreme Court

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remands a case to this Court with a limited scope, however, it is improper for this Court to exceed
the scope of that remand order. Pontiac Police & Fire Retiree Prefunded Group Health & Ins Bd
of Trustees v Pontiac (On Remand), 317 Mich App 570, 588; 895 NW2d 206 (2016). Because the
remand order in this case specifically ordered this Court to reconsider whether the 1995
amendment abrogated the common law, we decline to address the parties’ other issues.

       Affirmed.

                                                            /s/ Brock A. Swartzle
                                                            /s/ James Robert Redford
                                                            /s/ Kristina Robinson Garrett

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