Court Opinion

ID: 6500133
Source: CourtListenerOpinion
Date Created: 2022-07-15 05:05:53.087949+00
Date Added: 2024-06-11T09:18:21.779332
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

RYAN SHAMI,                                                           UNPUBLISHED
                                                                      July 14, 2022
               Plaintiff-Appellee,

v                                                                     No. 356369
                                                                      Washtenaw Circuit Court
DENISE ANN RAMSEY, SPENCER LEO SMITH,                                 LC No. 19-000807-NI
and AUTO-OWNERS INSURANCE COMPANY,

               Defendants,
and

DTE ENERGY COMPANY,

               Defendant-Appellant.

Before: GLEICHER, C.J., and GADOLA and YATES, JJ.

PER CURIAM.

         To be held liable in negligence, a defendant must owe a legal duty to the plaintiff. Absent
a duty, there can be no breach and no causation. The circuit court in this case failed to answer this
critical introductory question. DTE Energy Company did not owe a duty to Ryan Shami to
maintain its streetlights. We reverse the court’s denial of DTE’s motion for summary disposition
and remand for dismissal of Shami’s complaint against it.

                                        I. BACKGROUND

        At approximately 10 p.m. on January 14, 2019, Spencer Smith struck Ryan Shami with his
vehicle as Shami crossed East Huron Street in a marked crosswalk. East Huron Street is a four-
lane road dividing the University of Michigan campus and a residential area. The crosswalk is not
at an intersection; it is intended as a safe passage for pedestrians between two cross streets. At the
crosswalk, there is a narrow, raised cement median. There are signs warning drivers of the
pedestrian crosswalk as well as reflective tape strips in the crosswalk.

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         Shami initially filed suit against Smith, Smith’s mother as the vehicle’s owner, and his own
no-fault insurer. On July 1, 2020, Shami filed an amended complaint adding a count against DTE
Energy Company. Shami alleged that DTE “owned and operated a certain streetlight located
adjacent to the crosswalk” that was not working at the time of the collision. Shami asserted that
the streetlights along East Huron Street “had a lengthy history of problems and a poor record of
reliability, leaving the subject light and others in the area frequently out of service,” a problem that
DTE “was aware of.” “DTE had a duty to promptly repair its streetlights,” Shami urged, a duty
which it breached. The failure to repair the subject streetlight “burdened” pedestrians “with an
unreasonable risk of being struck by motor vehicles.”

        During discovery, documentary evidence was presented supporting that DTE was on notice
that certain streetlights along East Huron Street were out of service. Smith and another driver,
Emma Abouksam, were deposed and described the dark condition of the area at the time of the
accident. Smith had “noticed the general dark condition of that area prior to the night of this
incident.” Abouksam described the area as “poorly lit.” The streetlight “hovering over the
crosswalk on the eastbound lanes” was illuminated, but there was no corresponding streetlight on
the westbound side where Shami was struck. The streetlight that was out of service was
approximately “seven car lengths away, so about 35 yards from that crosswalk.” Police
photographs of the area on the night of the collision were also presented. However, Smith asserted
that the photographs were “much brighter” than the actual conditions on the night in question,
implying that an auto-adjust feature on the camera enhanced the illumination.

         DTE subsequently sought summary disposition under MCR 2.116(C)(10). DTE contended
that it did not owe a common-law duty to pedestrians to fix streetlights; rather, it owed a contractual
duty to the city. Third parties could not file tort actions for a failure to perform under that contract,
DTE asserted. Rather, to support a tort action, Shami would have to show that DTE created a new
and dangerous condition during the performance of its contractual duties. DTE further asserted
that other jurisdictions had addressed the issue and found no duty to third parties in relation to
nonfunctional street lights. See Vaughan v Eastern Edison Co, 48 Mass App Ct 225; 719 NE2d
520 (1999) (compiling cases). And even if DTE owed Shami a duty of care, DTE contended that
there were no factual questions regarding notice and causation to send to the jury.

        Shami retorted that DTE did owe a common-law duty to him. “[O]nce Defendant
undertook the duty to illuminate the roadway and crosswalk for the safety and protection of the
public . . . it had an obligation to do so with due care,” Shami asserted. Shami noted that DTE’s
Community Lighting Manager of Operations, Christopher Hartley, testified that DTE’s own
policies required repairs to be made within five days of a customer report. And Shami presented
documentation that the city had notified DTE in mid-December 2018 that several streetlights along
the relevant stretch of East Huron Street were out and were not repaired until well after this
collision.

        Shami continued by claiming that the Michigan Supreme Court “has stated that utility
companies . . . owe a general duty to the public to maintain equipment in a reasonably safe
condition. This would include maintaining lighting for public safety.” Shami specifically cited
Schultz v Consumers Power Co, 443 Mich 445; 506 NW2d 175 (1993), and Laney v Consumers
Power Co, 418 Mich 180; 341 NW2d 106 (1983). Shami then cited administrative rules setting
utility company standards of care in rectifying outages. Finally, Shami contended that DTE

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misinterpreted caselaw limiting a third-party’s cause of action against a defendant operating under
a contract with another entity.

        At the summary disposition hearing, DTE asserted that any duty it bore arose from its
contract with the city of Ann Arbor and not from the common law. “The only question,” DTE
posited, was whether the contractual duty to maintain the streetlights “extends to the plaintiff.”
Shami, on the other hand, argued that there is “a common-law duty . . . when undertaking a task,
to do so reasonably.” The circuit court did not address the issue of duty, jumping instead to notice
and causation. And the court found triable questions of fact on those issues:

        I think there is a material factual dispute, and I think I honed in on just that
        testimony and the fact that there was notice on it.

                As to you argument that a jury would have to speculate[,] I am, most of the
        time, the finder of fact, but I’m also with juries the finders of fact. We have to
        speculate all the time . . . . [W]e have to look at that evidence, circumstantial
        evidence, try to weigh it . . . .

Accordingly, the court ruled, “We’ll let the jury decide.”

       This Court granted DTE’s interlocutory application for leave to appeal. Shami v Ramsey,
unpublished order of the Court of Appeals, entered May 17, 2021 (Docket No. 356369).

                                            II. ANALYSIS

        We review de novo the circuit court’s denial of DTE’s summary disposition motion. West
v Gen Motors Corp, 469 Mich 117, 183; 665 NW2d 468 (2003). Here, the circuit court erred by
failing to make a crucial legal finding—whether DTE owed a legal duty to Shami—before
addressing whether Shami created triable questions of fact regarding notice and causation. And
as DTE did not owe a duty to Shami, the circuit court erred in failing to dismiss Shami’s complaint
against the utility company.

        “It is axiomatic that there can be no tort liability unless defendants owed a duty to plaintiff.”
Beaty v Hertzberg & Golden, PC, 456 Mich 247, 262; 571 NW2d 716 (1997). “Whether a duty
of care exists because of the relationship between the parties is a question of law that is solely for
the court to decide.” Id. (cleaned up).

        Every person engaged in the performance of an undertaking has a duty to use due
        care or to not unreasonably endanger the person or property of others. However,
        as a general rule, there is no duty that obligates one person to aid or protect another.
        Generally, the duty that arises when a person actively engages in certain conduct
        may arise from a statute, a contractual relationship, or by operation of the common
        law . . . . [Hill v Sears, Roebuck & Co, 492 Mich 651, 660-661; 822 NW2d 190
        (2012) (quotation marks and citations omitted).]

Thus, a tort duty to an injured plaintiff may exist under any of three distinct scenarios: by statute,
by contract intended to benefit the plaintiff specifically, and under the common law. None of those
scenarios are present here.

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        Shami has cited no statutory duty owed by DTE to maintain the street lighting system in
question. DTE undertook to provide street lighting in Ann Arbor under a contract with the city.
The July 25, 2018 Master Agreement for Municipal Street Lighting provided that DTE would
“furnish, install, operate and/or maintain street lighting equipment for Customer.” The contract
continues that DTE “shall provide the necessary maintenance of the Equipment, including such
replacement material and equipment as may be necessary,” and that “[u]pon installation of the
Equipment, [DTE] will provide street lighting service to Customer under Option 1 of the Municipal
Street Lighting Rate” tariff. Option 1 of the Municipal Street Lighting Rate tariff provides: “The
Company will clean, inspect, operate and maintain street lighting equipment and furnish lamp
replacements. Non-functional lights must be reported by the customer and the Company will
replace the lights as soon as possible during regular working hours.” (Cleaned up.)

        Shami is not a party to the contract between DTE and the city. However, “ ‘accompanying
every contract is a common-law duty to perform with ordinary care the thing agreed to be done,
and that a negligent performance constitutes a tort as well as a breach of contract.’ ” Fultz v Union-
Commerce Assocs, 470 Mich 460, 465; 683 NW2d 587 (2004), quoting Clark v Dalman, 379 Mich
251, 260-261; 150 NW2d 755 (1967). In Fultz, the Supreme Court outlined when a duty exists
between a defendant and a plaintiff who is not a party to the contract: “the threshold question is
whether the defendant owed a duty to the plaintiff that is separate and distinct from the defendant’s
contractual obligations. If no independent duty exists, no tort action based on a contract will lie.”
Fultz, 470 Mich at 467.

        In determining whether an independent duty exists, the Fultz Court explained that “our
courts have drawn a distinction between misfeasance (action) and nonfeasance (inaction) for tort
claims based on a defendant’s contractual obligations. We have held that a tort action will not lie
when based solely on the nonperformance of a contractual duty.” Id. at 465-466 (citations
omitted). Fultz, 470 Mich at 466, turned to Williams v Cunningham Drug Stores, Inc, 429 Mich
495, 498-499; 418 NW2d 381 (1988), to describe “the nonfeasance/misfeasance dichotomy”:

               “In determining standards of conduct in the area of negligence, the courts
       have made a distinction between misfeasance, or active misconduct causing
       personal injury, and nonfeasance, which is passive inaction or the failure to actively
       protect others from harm. The common law has been slow in recognizing liability
       for nonfeasance because the courts are reluctant to force persons to help one another
       and because such conduct does not create a new risk of harm to a potential plaintiff.
       Thus, as a general rule, there is no duty that obligates one person to aid or protect
       another.” [Emphasis added.]

      Answering the duty question has presented pitfalls for the courts of this state. In Loweke v
Ann Arbor Ceiling & Partition Co, LLC, 489 Mich 157, 165-166; 809 NW2d 553 (2011), the
Supreme Court provided further clarification:

               This Court . . . has recognized that determining whether an action in tort can
       arise out of a contractual promise is often largely semantic and difficult to discern.
       Rinaldo’s Constr [v Mich Bell Tel Co, 454 Mich 65, 83; 559 NW2d 647 (1997)];
       Hart [v Ludwig, 347 Mich 559, 564-565; 79 NW2d 895 (1956]. In Fultz, a majority
       of this Court recognized the often “slippery distinction” between misfeasance and

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       nonfeasance of contractual obligations and attempted to disentangle the
       misfeasance/nonfeasance dichotomy by shifting the focus to whether the particular
       defendant owed a duty to the plaintiff. Fultz, 470 Mich at 467 (quotation marks
       and citation omitted). Noting that this Court had described a tort action arising
       from the misfeasance of contractual obligations as a “ ‘violation of a legal duty
       separate and distinct from the contractual obligation,’ ” the Fultz majority
       explained that this “ ‘separate and distinct’ definition of misfeasance” offered better
       guidance in determining whether a negligence action based on a contract and
       brought by a third party could lie. Id., quoting Rinaldo’s Constr, 454 Mich at 84.
       Accordingly, after Fultz, courts were to forgo the misfeasance/nonfeasance
       distinction and, instead, employ a “ ‘separate and distinct’ mode of analysis” to
       determine the threshold question: “whether the defendant owed a duty to the
       plaintiff that is separate and distinct from the defendant’s contractual obligations.”
       Fultz, 470 Mich at 467; see, also, 1 Torts: Michigan Law and Practice (2d ed), §
       10.18, p 10-24. Under this analysis, an action would lie in contract if it was based
       solely on a defendant’s failure or refusal to perform a contractual promise. In
       contrast, an action could lie in either contract or in tort if a “defendant negligently
       performs a contractual duty or breaches a duty arising by implication from the
       relation of the parties created by the contract . . . .” Fultz, 470 Mich at 469. In the
       latter category of cases, however, no tort liability would arise “for failing to fulfill
       a promise in the absence of a duty to act that is separate and distinct from the
       promise made.” Id. at 470.

The take-away from the Fultz/Loweke duet is that an injured plaintiff may pursue a tort claim
arising out of a contractual promise if the defendant engages in a wrongful action. By acting, a
negligent defendant assumes a duty of care. That is not the case here.

         Shami’s complaint against DTE sounds in nonfeasance. He alleged that DTE failed to
repair streetlights as required by its contract with the city. There is no precedent for imposing a
general common-law duty on utility companies for the failure to repair a nonoperational
streetlight.1 Rather, to impose a common-law duty on a defendant to protect an unrelated third
party, the defendant must have “create[d] a new risk of harm,” Williams, 429 Mich at 499, or “a
situation of peril has been created” by the defendant. Hart, 347 Mich at 565. This was the scenario

1
 In fact, the vast majority of jurisdictions that have addressed this issue have found no duty. See
Turbe v Gov’t of the Virgin Islands, 938 F2d 427 (CA 3, 1991); Laprocina v Lourie, 250 A3d 1281
(RI, 2021); Estate of Flygare v Ogden City, 2017 UT App 189; 405 P3d 970 (2017); Louisville
Gas & Elec Co v Roberson, 212 SW3d 107 (Ky, 2006); Blake v Pub Serv Co, 134 NM 789; 82
P3d 960 (2003); Vaughan, 48 Mass App Ct 225; White v Southern California Edison Co, 25 Cal
App 4th 442; 30 Cal Rptr 2d 431 (1994); Kimmitt v Horton, 26 Va Cir 462 (1990); Shafouk v
Bourgeois, 493 So 2d 112 (LA Ct App, 1986); East Coast Freight Lines, Inc v Gas, Electric Light
& Power Co, 187 Md 385; 50 A2d 246 (1946); Quinn v Georgia Power Co, 51 Ga App 291; 180
SE 246 (1935); Cochran v Pub Serv Elec Co, 97 NJL 480; 117 A 620 (1922). But see Clay Elec
Coop, Inc v Johnson, 873 So 2d 1182, 1184 (Fla, 2003); Todd v Northeast Utilities, 40 Conn Supp
159, 159; 484 A2d 247 (1984).

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in the cases cited by Shami—Schultz, 443 Mich 445, and Laney, 418 Mich 180. In Schultz, 443
Mich at 448-449, the plaintiff was injured while painting a house. The plaintiff alleged that
Consumers Power Co “installed the wire dangerously close to” the home and that a “frayed wire
allowed the electric current to ‘arc’ from the wire to the nearby ladder.” Id. In Laney, 418 Mich
at 181-182, the plaintiff alleged that Consumers Power Co failed to properly trim trees along the
course of the power lines it installed. A child was fatally electrocuted when he climbed a tree and
came into contact with an uninsulated power line. In both these cases, the defendant utility
company owed a duty to third parties because it created a situation of peril—either actively
improperly installing dangerous electrical lines or failing to properly maintain lines that carry a
fatal electrical current.

         Had Shami been electrocuted by streetlight equipment, there may be grounds to find a duty
in this case. But there is nothing inherently dangerous about a streetlight. And DTE did not create
a new peril by installing the streetlights or by failing to repair them. Absent a duty, no court could
find DTE liable to Shami and the circuit court was required to dismiss Shami’s negligence
complaint against DTE.

        We reverse and remand for dismissal of Shami’s claim against DTE. We do not retain
jurisdiction.

                                                              /s/ Elizabeth L. Gleicher
                                                              /s/ Michael F. Gadola
                                                              /s/ Christopher P. Yates

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