Court Opinion

ID: 4297372
Source: CourtListenerOpinion
Date Created: 2018-07-25 09:07:37.220437+00
Date Added: 2024-06-11T14:41:20.152871
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

JAMES A SMAIL,                                                       UNPUBLISHED
                                                                     July 24, 2018
               Plaintiff-Appellee,

v                                                                    No. 337709
                                                                     Wayne Circuit
MERCEDES-BENZ USA, LLC,                                              LC No. 16-004402-NO

               Defendant-Appellant.

JAMES A SMAIL,

               Plaintiff-Appellant,

v                                                                    No. 338326
                                                                     Wayne Circuit
MERCEDES-BENZ USA, LLC,                                              LC No. 16-004402-NO

               Defendant-Appellee.

Before: SWARTZLE, P.J., and SHAPIRO and BOONSTRA, JJ.

SHAPIRO, J. (dissenting).

        I respectfully dissent from the majority’s affirmance of the dismissal of plaintiff’s third-
party beneficiary claim. The majority agrees that defendant was a guest, and agrees that “[h]ad
the indemnity clause included only that category, plaintiff would be on solid footing.” The
majority goes on to conclude that because the clause also lists much broader terms such as “the
public” and “any person,” its specific reference to guests has no meaning. I cannot agree. It is
well settled that “Every word, phrase, and clause in a contract must be given effect and [an]
interpretation that would render any part of the contract surplusage or nugatory must be

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avoided.” McCoig Materials, LLC v Galui Constr, Inc, 295 Mich. App. 684, 694; 818 NW2d 410
(2012).1

        The category of “guests” has a clear meaning regardless of the presence of other
categories. It is one in a list of various categories, not a subset of one of the others. The majority
states that these other categories provide “context,” but its ultimate conclusion goes well beyond
such an assertion. It treats the term “guest” as mere surplusage, i.e. under its analysis, it has no
meaning. The majority asserts that the broader terms in the provision swallow this more specific
term, but fails to explain why the more specific term was included in the contract if it was
intended to have no meaning or, if it has a meaning, what the majority believes it is. In my view
this approach is inconsistent with the well-established rule that we may neither rewrite contracts
nor ignore the words contained in them. As stated in Reicher v SET Enterprises, Inc, 283 Mich
App 657, 664-665; 770 NW2d 902 (2009):

       We enforce contracts according to their terms, as a corollary to the parties[’]
       liberty to enter into a contract. We examine contractual language and give words
       their plain and ordinary meanings. An unambiguous contractual provision
       reflects the parties[’] intent as a matter of law, and [i]f the language of the
       contract is unambiguous, we construe and enforce the contract as written. Courts
       may not create ambiguity when contract language is clear. Rather, this Court
       must honor the parties’ contract, and not rewrite it. [Quotation marks and
       citations omitted.]

Simply because the contract refers to other categories too broad to define third-party
beneficiaries themselves, does not lead to the conclusion that the word “guest” is a nullity. By
such reasoning, even if the contract identified plaintiff by name, the inclusion of the more
general categories would vitiate his third-party beneficiary status.

        Because the contract controls, and because plaintiff was indisputably a “guest,” he was a
third-party beneficiary of this provision in the contract. Accordingly, I would reinstate that claim
and remand for further proceedings.

                                                              /s/ Douglas B. Shapiro

1
  As noted in Williston on Contracts, “Emphasis will be placed upon interpretations that give
effect to each and every word of a contract, on the theory that the parties never intend to insert
superfluous language.” 22 Williston on Contracts § 58:10 (4th ed.)

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