Court Opinion

ID: 4564733
Source: CourtListenerOpinion
Date Created: 2020-09-11 09:05:47.373609+00
Date Added: 2024-06-11T12:32:37.533542
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

ANGELA A. COOKE, Personal Representative of                        FOR PUBLICATION
the ESTATE OF MADISON C. COOKE, MEGAN                              September 10, 2020
E. OCKERMAN, and GINA M. BADIA,                                    9:10 a.m.

               Plaintiffs-Appellees,

v                                                                  No. 346091
                                                                   Ingham Circuit Court
FORD MOTOR COMPANY,                                                LC No. 17-000061-NI

               Defendant-Appellant.

Before: CAVANAGH, P.J., and BORRELLO and TUKEL, JJ.

CAVANAGH, P.J.

       Defendant, Ford Motor Company, appeals by leave granted1 an order denying its motion
for summary disposition in this motor vehicle negligence action raising wrongful death and
personal injury claims under two theories of liability: Michigan’s owner’s liability statute, MCL
257.401, and common-law vicarious liability. We reverse and remand for entry of an order
granting summary disposition in favor of Ford Motor.

                                   I. BACKGROUND FACTS

       This action arose from a single-vehicle accident in which the driver, Tariq Y. Strong, Jr.,
and a passenger, Madison C. Cooke, were killed, and two other passengers, Megan E. Ockerman
and Gina M. Badia, were seriously injured. The facts are generally undisputed. Strong was driving
a 2015 Lincoln MKS Sedan that had been leased by Debra Ockerman through a Ford Motor
program that allowed certain management-level employees and retirees to lease Ford vehicles from
Ford Motor. In June 2015, Ockerman allowed her 18-year-old daughter, Megan,2 to use the vehicle

1
 Estate of Madison C Cooke, unpublished order of the Court of Appeals, entered March 28, 2019
(Docket No. 346091).
2
 Megan Ockerman will be referred to by her first name to distinguish her from her mother, Debra
Ockerman, who will be referred to as Ockerman.

                                               -1-
to go to a music festival with Strong, Cooke, and Badia. Megan and her friends attended the music
festival and began driving home after midnight. Megan asked Strong to drive. While Strong was
driving, he lost control of the car and hit a tree. The collision killed Strong and Cooke. Megan
and Badia survived but were seriously injured.

        Cooke’s estate, Megan, and Badia sued Ford Motor, alleging that as a statutory owner of
the vehicle, Ford Motor was liable for Strong’s negligent operation of that vehicle under
Michigan’s owner’s liability statute, MCL 257.401. Plaintiffs also named Strong’s estate as a
defendant. Plaintiffs later filed an amended complaint adding the allegation that Ford Motor was
vicariously liable for Strong’s negligent operation of the vehicle as the employer of the vehicle’s
lessee, relying on Montgomery v State Farm Mut Auto Ins Co, unpublished per curiam opinion of
the Court of Appeals, issued May 22, 2007 (Docket No. 272862). Plaintiffs filed a second
amended complaint reasserting its previous claims and adding defendant Ford Motor Credit
Company (Ford Credit), alleging that it too was liable under the owner’s liability statute.3

        Ford Credit purchased the vehicle from Ford Motor, and then leased the vehicle back to
Ford Motor, which in turn leased the vehicle to Ockerman. Ford Credit leased the vehicle to Ford
Motor pursuant to a “Master Vehicle Agreement.” Ford Credit is the title owner. The lease
between Ford Motor and Ockerman4 is entitled “Product Testing and Evaluation Vehicle Lease
Agreement.” The lessee’s monthly payment for the lease of the vehicle was $438. The minimum
term of the lease was nine months. The lease provided that Ford Motor could, “[f]rom time to
time,” “request reasonable inspection and evaluation of the vehicle” and could request the lessee
to “produce the vehicle for inspection or provide the Company with evaluation reports concerning
the quality and performance of the vehicle.” The lease allowed Ford Motor to terminate the
lessee’s participation in the lease program if the lessee failed to submit evaluation reports upon
request, or if Ford Motor determined that the lessee’s participation “would be inappropriate as not
serving the Company’s interest.” The lease included a provision that encouraged the lessee to
allow others to drive the car for up to three days:
       To further the Company’s interests by promoting its products, Lessee is encouraged
       to permit others to drive the vehicle for demonstration purposes. However, regular
       continuous assignment (herein defined as greater than 3 days) of the vehicle during
       the term of this lease is restricted to the Lessee and members of the Lessee’s family.

       After discovery, Ford Motor moved for summary disposition under MCR 2.116(C)(10),
arguing that in light of the undisputed facts and this Court’s interpretation of “engaged in the
business of leasing” set forth in Ball v Chrysler Corp, 225 Mich. App. 284; 570 NW2d 481 (1997),
Ford Motor was not a statutory owner of the vehicle. It argued that even if Ford Motor was
somehow a statutory owner, Michigan’s owner’s liability statute is preempted by the federal
Graves Amendment, which prohibits the imposition of ownership liability on long-term lessors.

3
 Ford Credit was subsequently dismissed on their motion for summary disposition and that order
has not been appealed. Thus, we do not further address that matter.
4
  The lease provides that use of the term “lessee” in the lease refers to the employee or retiree—in
this case, Ockerman—who is leasing the vehicle.

                                                -2-
Lastly, Ford Motor argued that it could not be held vicariously liable for Strong’s negligence under
Montgomery, or any other theory of respondeat superior liability, because Strong was not Ford
Motor’s employee.

        In response, plaintiffs argued that Ford Motor is a statutory owner of the vehicle involved
in the accident because it leased the vehicle from Ford Credit. Even though Ford Motor
subsequently leased the vehicle to Ockerman, plaintiffs argued, Ford Motor is considered a
nonexempt lessor under the owner’s liability statute because it is not in the business of leasing
motor vehicles. Plaintiffs asserted that the phrase “engaged in the business of leasing” should not
be interpreted under Ball, but instead under Catalina Mktg Sales Corp v Dep’t of Treasury, 470
Mich. 13; 678 NW2d 619 (2004), a tax case interpreting the General Sales Tax Act, to determine
whether, under the “incidental to service test,” a business is “engaged in the business of” selling
products in addition to services. Plaintiffs argued that Ford Motor’s employee/retiree lease
program is “incidental” to Ford Motor’s primary business of selling cars. Plaintiffs also argued
that Ford Motor was vicariously liable under the common law principles identified in Montgomery
because these principles were not limited to the context of the employer-employee relationship if
the lease benefited the employer. Plaintiffs argued that under the reasoning in Montgomery,
vicarious employer liability for contractually-rendered benefits will attach when (1) a contract is
entered into between the employer and the employee within the employment relationship; (2) the
contract is for the rendition of services that benefit the employer; and (3) the injury occurs in the
course of rendering those services. Lastly, plaintiffs argued that the Graves Amendment should
be interpreted in accordance with Catalina.

         Following oral arguments on defendant’s motion, the trial court issued its ruling from the
bench. The trial court concluded that Ford Motor is not a lessor because Ford Motor is not “in the
business of leasing motor vehicles” within the meaning of the lessor exemption in the owner’s
liability statute, MCL 257.401a. Rather, the court noted, this activity was incidental to its business
of developing and manufacturing motor vehicles. Ford Motor benefited by providing leased
vehicles to certain executives in its employment, possibly as an incentive or as compensation, but
also for the promotion of its vehicles to the public, as well as for purposes of product testing and
evaluation. Thus, Ford Motor was a lessee, not a lessor, and subject to liability under MCL
257.401(1) as an owner of the motor vehicle at issue.

        Further, the trial court concluded, plaintiffs presented a viable theory of vicarious liability
against Ford Motor. Specifically, the trial court stated:
                As to the second theory, the separate theory, which is one of vicarious
       liability, I’m not specifically relying on the Montgomery case because, obviously,
       it’s not binding precedent. It’s an unpublished decision. But it does—it does
       highlight what I think applies here, and that is common law vicarious liability
       potential that would apply here, as far as the use of this—this vehicle and the
       purposes of having the executive lease program.

               So I’m going to deny Ford Motor Company’s motion for summary
       disposition as to both of those theories. The ownership liability or lessor—the issue
       as to ownership liability and to vicarious liability.

                                                 -3-
               But I’m not going to rule in favor, as far as a factual determination, in favor
       of the Plaintiffs. I think there is a fact question here. . . .

       The trial court granted Ford Motor’s motion for stay pending this interlocutory appeal.
Thereafter, this Court granted Ford Motor’s application for leave to appeal. Estate of Madison C
Cooke, unpublished order of the Court of Appeals, entered March 28, 2019 (Docket No. 346091).

                               II. OWNER’S LIABILITY STATUTE

        Ford Motor argues that the trial court erred in concluding that it could be held liable as a
statutory owner under Michigan’s owner’s liability statute, MCL 257.401, because as a long-term
lessor of over 15,000 vehicles it is exempt from owner’s liability for plaintiffs’ wrongful death and
personal injury claims. We agree.

                                   A. STANDARD OF REVIEW

        We review de novo a trial court’s decision on a motion for summary disposition. Sullivan
v Michigan, 328 Mich. App. 74, 80; 935 NW2d 413 (2019). A motion for summary disposition
under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Joseph v Auto Club Ins
Ass’n, 491 Mich. 200, 206; 815 NW2d 412 (2012). “In evaluating a motion for summary
disposition brought under this subsection, a trial court considers affidavits, pleadings, depositions,
admissions, and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most
favorable to the party opposing the motion.” Maiden v Rozwood, 461 Mich. 109, 120; 597 NW2d
817 (1999). Where there is a genuine issue of material fact, summary disposition is not proper.
Id. “A genuine issue of material fact exists when reasonable minds could differ on an issue after
viewing the record in the light most favorable to the nonmoving party.” Auto-Owners Ins Co v
Campbell-Durocher Group Painting & Gen Contracting, LLC, 322 Mich. App. 218, 224; 911
NW2d 493 (2017) (quotation marks and citation omitted).

         This Court reviews questions of statutory interpretation de novo and a trial court’s factual
findings for clear error. Ross v Auto Club Group, 481 Mich. 1, 7; 748 NW2d 552 (2008). A finding
of fact “is clearly erroneous when the reviewing court is left with a definite and firm conviction
that a mistake has been made.” Id. (quotation marks and citation omitted). When interpreting a
statute, our goal is to ascertain and effectuate the meaning intended by the Legislature. Briggs Tax
Serv, LLC v Detroit Pub Sch, 485 Mich. 69, 76; 780 NW2d 753 (2010). First, we review the
language of the statute. If the statutory language is clear and unambiguous, the plain meaning of
the statute reflects the Legislature’s intent. Id. In such cases, judicial construction is not permitted
and this Court will apply the statute as written. Turner v Auto Club Ins Ass’n, 448 Mich. 22, 27;
528 NW2d 681 (1995).

                                           B. ANALYSIS

         Plaintiffs sought damages from Ford Motor under the owner’s liability statute of the civil
liability act, MCL 257.401. That act is part of the Michigan Vehicle Code (MVC), MCL 257.1 et
seq., and for purposes of the MVC, the term “owner” is defined by MCL 257.37:
               “Owner” means any of the following:

                                                  -4-
               (a) Any person, firm, association, or corporation renting a motor vehicle or
       having the exclusive use thereof, under a lease or otherwise, for a period that is
       greater than 30 days.

                (b) Except as otherwise provided in section 401a, a person who holds the
       legal title of a vehicle.

               (c) A person who has the immediate right of possession of a vehicle under
       an installment sale contract.

       The owner’s liability statute, MCL 257.401, generally imposes liability on owners of motor
vehicles for injuries caused by the negligent operation of that motor vehicle:
                (1) This section shall not be construed to limit the right of a person to bring
       a civil action for damages for injuries to either person or property resulting from a
       violation of this act by the owner or operator of a motor vehicle or his or her agent
       or servant. The owner of a motor vehicle is liable for an injury caused by the
       negligent operation of the motor vehicle whether the negligence consists of a
       violation of a statute of this state or the ordinary care standard required by common
       law. The owner is not liable unless the motor vehicle is being driven with his or
       her express or implied consent or knowledge. It is presumed that the motor vehicle
       is being driven with the knowledge and consent of the owner if it is driven at the
       time of the injury by his or her spouse, father, mother, brother, sister, son, daughter,
       or other immediate member of the family. [MCL 257.401(1).]

“The purpose of the statute is to place the risk of damage or injury on the person who has the
ultimate control of the motor vehicle, as well as on the person who is in immediate control.” North
v Kolomyjec, 199 Mich. App. 724, 726; 502 NW2d 765 (1993). However, the owner’s liability
statute exempts long-term lessors from liability:
               A person engaged in the business of leasing motor vehicles who is the lessor
       of a motor vehicle under a lease providing for the use of the motor vehicle by the
       lessee for a period that is greater than 30 days, or a dealer acting as agent for that
       lessor, is not liable at common law for damages for injuries to either person or
       property resulting from the operation of the leased motor vehicle, including
       damages occurring after the expiration of the lease if the vehicle is in the possession
       of the lessee. [MCL 257.401(2).]

The civil liability act does not consider such a lessor an “owner” for purposes of owner’s liability,
stating:
               As used in this chapter, “owner” does not include a person engaged in the
       business of leasing motor vehicles who is the lessor of a motor vehicle pursuant to
       a lease providing for the use of the motor vehicle by the lessee for a period that is
       greater than 30 days. [MCL 257.401a.]

                                                 -5-
Ford Motor argues that as a long-term lessor engaged in the business of leasing motor vehicles, it
is excluded from the statutory definition of “owner” and exempt from both statutory and common
law liability for negligent operation of the motor vehicle under MCL 257.401(2) and MCL
257.401a. Ford Motor maintains that Ball v Chrysler Corp, 225 Mich. App. 284; 570 NW2d 481
(1997), is on point both factually and legally, requiring judgment for Ford Motor.
        In Ball, the plaintiff was injured while a passenger in a vehicle that was leased to a Chrysler
employee through Chrysler’s employee/retiree lease program as part of its normal business
operations. Id. at 285. The lease was for two years, and as part of the lease agreement the
employee was required to complete surveys regarding the vehicle at certain mileage intervals. Id.
The driver at the time of the accident was the employee’s stepson. The stepson lost control of the
vehicle, which rolled over, injuring the plaintiff passenger. Id. The plaintiff sued Chrysler, the
employee, and the employee’s stepson. Id. Chrysler sought summary disposition under MCR
2.116(C)(10), arguing that as a lessor, it was excluded from owner’s liability. Chrysler noted that
it was uncontested that it leased cars as part of its business and that the lease for the employee’s
car was for two years. Id. at 286. Chrysler presented an affidavit indicating that Chrysler was in
the business of leasing motor vehicles. Id. at 289. The plaintiff argued that “the vehicle lease was
not a true lease, but more like a vehicle-testing agreement, because the lessee had an obligation to
make reports and provide information to Chrysler.” Id. at 286. The trial court agreed that a
question of fact existed as to whether the lease between the employee and Chrysler was in fact a
“lease” or was more akin to a vehicle-testing agreement or fringe benefit, and thus, denied
Chrysler’s motion for summary disposition. Id.

        On appeal, Chrysler argued that the trial court had erred by not determining that it was “in
the business of leasing motor vehicles” under MCL 257.401(2) and MCL 257.401a, and therefore,
was not an “owner” subject to liability under MCL 257.401(1). Ball, 225 Mich. App. at 287-288.
This Court agreed, holding:
               Turning to the record before us, plaintiff presented no evidence to counter
       the affidavit that Chrysler was in the business of leasing motor vehicles. Rather,
       plaintiff argued that the agreement between Chrysler and [the employee], under
       Chrysler’s employee/retiree lease program, was not a true lease. We disagree.
       Although the program presumably gave [the employee] a discount lease rate and
       required that he fill out questionnaires from time to time, there is no question that
       the agreement between Chrysler and [the employee] was an automobile lease.
       Nothing in the statute requires that the lessor’s primary business be retail leasing,
       or, for that matter, that the lease be profitable. There is no issue of material fact
       that Chrysler was “in the business of leasing motor vehicles.”

                                               * * *

               In sum, there is no question of material fact that Chrysler is in the business
       of leasing vehicles . . . . Accordingly, under the plain and unambiguous language
       of the owner’s liability statute, Chrysler is not the “owner” of the vehicle involved
       in the instant case. MCL 257.401, 257.401a. The circuit court erred in denying
       Chrysler’s motion for summary disposition pursuant to MCR 2.116(C)(10). [Id. at
       289-290.]

                                                 -6-
        In the present case, plaintiffs argued that Ball is not dispositive. Plaintiffs agreed that this
Court held that Chrysler was entitled to summary disposition on the question of whether it was in
the business of leasing motor vehicles. Plaintiffs asserted, however, that the holding was not based
on the interpretation of the phrase “engaged in the business of leasing motor vehicles” but, rather,
was solely based on the fact that Chrysler averred in an affidavit that it was engaged in the business
of leasing vehicles and the plaintiff did not present any evidence to rebut that fact. Plaintiffs
acknowledged that in the present case Ford Motor similarly relied on an affidavit to establish that
it was engaged in the business of leasing motor vehicles, but argued that the present case is
distinguishable from Ball because plaintiffs refuted the affidavit with deposition testimony and
other documentary evidence. Plaintiffs relied on the testimony of Ford Motor’s vehicle program
manager, David Smith, who testified that Ford Motor does not make a profit from the lease
program and that the Ford employee benefits from participating in the lease program in the form
of a cheaper lease rate that merely offsets the costs of the program. Plaintiffs maintained that the
lease in this case was merely “incidental” to Ford Motor’s primary business of designing,
manufacturing, and selling automobiles and was intended to benefit Ford Motor by: (1) providing
a fleet of vehicles that it could use to evaluate known problems with the vehicles, (2) advancing
Ford Motor’s marketing efforts, and (3) providing a cost-effective fringe benefit to Ford Motor
executives.

        The trial court was persuaded by plaintiffs’ argument, concluding that Ford Motor is not a
lessor for purposes of MCL 257.401a and MCL 257.401(2) because it is not engaged in the
business of leasing motor vehicles. The court stated that Ford Motor’s lease program
       is incidental to Ford Motor Company’s business of developing, however you want
       to describe that, manufacturing motor vehicles, and that the leasing is used as a
       benefit both in terms of a reward or compensation or incentive to a certain level of
       executive at Ford Motor Company and use[d] for promotion of vehicles for the
       public and to engage in product testing and evaluation as is described by the lease
       that’s applicable here.

        Ford Motor argues that the trial court’s decision is contrary to Ball. In support, Ford Motor
notes that Smith attested that Ford Motor “is in the practice of leasing vehicles to its management-
level employees for period of greater than 30 days.” Smith also testified that Ford Motor leased
the vehicle involved in this case to Ockerman on September 23, 2014, for a period greater than 30
days.

        On review of the record, it appears that the employee/retiree lease program in this case is
similar to the lease program in Ball. Smith testified that the management lease program “is a perk
for what we call LL6 management-level employees and above. And then certain retirees, if they’re
at the LL4 level and above.” Smith explained that “making money” on the leased cars was not
really the goal of the program; rather, the goal was to provide a perk to certain employees and that
perk was also considered a tool to attract and retain employees. But Ford Motor does benefit
merely by putting vehicles on the road. Smith said that Ford Motor had approximately 15,000
vehicles in the program, with 10,000 to 12,000 of them in Michigan. Because most of these
vehicles are in southeast Michigan, the program has very little promotional value to Ford Motor.
Smith explained that Ford Motor secures automobile liability coverage that is prorated for all lease

                                                  -7-
vehicles in the fleet and that the prorated cost of insurance is paid by each employee. The employee
is also responsible for a $250 repair fee for each accident.

        While the leased vehicle is a fringe benefit to the lessee Ford Motor employee, and Ford
Motor does not necessarily derive a monetary profit from its lease program, we nevertheless reach
the same conclusion as the Ball Court: “Nothing in the statute requires that the lessor’s primary
business be retail leasing, or, for that matter, that the lease be profitable.” Ball, 225 Mich. App. at
289. Ford Motor presented evidence that it leases approximately 15,000 vehicles a year under its
employee/retiree lease program pursuant to a lease agreement for a term of no less than nine
months. According to the plain terms of the statutes, Ford Motor was “engaged in the business of
leasing motor vehicles” as contemplated by MCL 257.401(2) and MCL 257.401a and is exempt
from liability under the owner’s liability statute.5

        And we agree with Ford Motor’s contention that the trial court erroneously applied the
“incidental to service” test set forth in Catalina Mktg Sales Corp v Dep’t of Treasury, 470 Mich.
13, 24; 678 NW2d 619 (2004), when it determined that Ford Motor was not engaged in the business
of leasing motor vehicles. In Catalina, the issue was whether a grocery store coupon checkout
program was a retail sale for purposes of the retail sales tax statute, MCL 205.52. Id. at 14. The
Court considered the proper test for categorizing business relationships involving both the
provision of services and the transfer of tangible property as either a service or a retail sale,
generating either use tax or sales tax, and adopted the “incidental to service” test. Id. at 14-15, 19,
24. Catalina involved a tax statute, with a different purpose, and its own definition of “business.”6

         Here, neither the trial court nor plaintiffs cited any case that applies the incidental activity
test to the owner’s liability statute. And neither the trial court nor plaintiffs cite anything in the
owner’s liability statute or related caselaw that requires a lessor to demonstrate that its leasing
program is undertaken for profit, or that it be the lessor’s primary business. The Catalina factors
are relevant to “whether the transfer of tangible property was incidental to the rendering of . . .
services[.]” Id. at 26. There is nothing to support plaintiffs’ suggestion that Catalina “overrules
by implication” cases interpreting a different phrase in a different statute with a different purpose.
The Catalina factors are inapplicable in this case, and the trial court erred by implicitly applying
those factors.

       In summary, the trial court erred by denying Ford Motor’s motion for summary disposition
because Ford Motor is a lessor engaged in the long-term leasing of motor vehicles and is exempt

5
  See also Joe Panian Chevrolet, Inc v Young, 239 Mich. App. 227, 228, 231; 608 NW2d 89 (2000)
(a dealership that rented a vehicle for four days, at a rate of $30 a day, to a customer whose vehicle
was in the dealership for repair was “engaged in the business of leasing motor vehicles” for
purposes of MCL 257.401(5) of the owner’s liability statute, which sets forth the circumstances
when a short-term lessor will be liable for injuries caused by the negligent operation of the motor
vehicle that it leased).
6
  For purposes of the sales tax act, “ ‘Business’ includes an activity engaged in by a person or
caused to be engaged in by that person with the object of gain, benefit, or advantage, either direct
or indirect.” MCL 205.51(1)(e).

                                                  -8-
from civil liability for the negligent use of the leased motor vehicles. In light of our conclusion,
we decline to address as moot Ford Motor’s alternative argument that the Graves Amendment to
the Federal Transportation Equity Act of 2005, 49 USC 30106, preempts any liability that would
be imposed against Ford Motor under the owner’s liability statute.

                                    III. VICARIOUS LIABILITY

       Next, Ford Motor argues that the trial court erred in concluding that it could be held
vicariously liable for a nonemployee’s negligent operation of a leased vehicle. We agree.

                                   A. STANDARD OF REVIEW

        We review a trial court’s decision on a motion for summary disposition de novo. Sullivan,
328 Mich. App. at 80. A motion brought under MCR 2.116(C)(10) tests the factual support of a
plaintiff’s claim and should be granted if, after consideration of the evidence submitted by the
parties in the light most favorable to the nonmoving party, no genuine issue regarding any material
fact exists. Joseph, 491 Mich. at 206; Maiden, 461 Mich. at 120.

                                            B. ANALYSIS

        Plaintiffs sought to hold Ford Motor liable for Strong’s negligent operation of the leased
vehicle under a common law theory of vicarious liability. In general, vicarious liability arises from
a relationship between a principal and an agent. Rogers v JB Hunt Transp, Inc, 466 Mich. 645,
650; 649 NW2d 23 (2002). In Rogers, the Court stated:
        [A] master is responsible for the wrongful acts of his servant committed while
        performing some duty within the scope of his employment. An employer is not
        vicariously liable for acts committed by its employees outside the scope of
        employment, because the employee is not acting for the employer or under the
        employee’s control. For example, it is well established that an employee’s
        negligence committed while on frolic or detour, or after hours, is not imputed to the
        employer. In addition, even where an employee is working, vicarious liability is
        not without its limits. . . . [Id. at 651 (quotation marks and citations omitted).]

“[A] master’s liability is derivative of the servant’s”—that is the central tenet of vicarious liability.
Id. at 652. This agency relationship can be created in law or by contract. Logan v Manpower of
Lansing, Inc, 304 Mich. App. 550, 559; 847 NW2d 679 (2014) (citations omitted). As has been
explained:
        The modern basis for vicarious liability is that, as a matter of public policy, an
        enterprise or an activity should bear the risk of a tort—committed or resulting from
        omission—of those who, in fact, carry on the enterprise, activity or operation. It is
        a part of the cost of doing business or carrying on various activities . . . . [57B Am
        Jur 2d, Negligence, § 1753, pp 447-448.]

        In this case, the trial court determined that Ford Motor could be liable to plaintiffs on a
vicarious liability theory. Although recognizing that it was not binding authority, the trial court
relied on Montgomery v State Farm Mut Auto Ins Co, unpublished per curiam opinion of the Court

                                                  -9-
of Appeals, issued May 22, 2007 (Docket No. 272862), as persuasive. However, the facts in that
case are dissimilar to the facts in this case on critical points. While the vehicle involved in an
automobile accident in Montgomery was also a vehicle leased through a product testing and
evaluation lease agreement, the person driving the vehicle at the time of the accident was the
lessee-employee and she was on her way to work. Id. at 2. Further, the lease in Montgomery
directed that the employee must “primarily . . . use the car for product testing and evaluation
purposes.” Id. The Montgomery employee testified that she was always evaluating the vehicle
while driving it and submitted vehicle evaluations regularly to Ford Motor. Id. Under those unique
circumstances, Ford Motor was deemed vicariously liable for its employee’s negligence because
the employee’s operation of the vehicle at the time of the accident conferred a benefit on Ford
Motor. Id. at 3. That is, at the time of the accident, the employee’s operation of the vehicle was
“related to her employment with Ford, and she was engaged in the service of the master (Ford) by
driving and evaluating the vehicle.” Id. Clearly, that is not the case here.

        Strong, who was driving the vehicle at the time of this accident, was not the lessee of the
vehicle, he was not a Ford Motor employee conceivably acting within the scope of such
employment when the accident occurred, the lease did not direct the lessee-employee to primarily
use the car for Ford Motor’s testing and evaluation purposes, Strong was not driving the vehicle
for the purpose of evaluating it at the behest of Ford Motor, and Ford Motor derived no benefit
from Strong driving the leased vehicle at the time of the accident. Vicarious liability simply has
no application under these circumstances. Therefore, the trial court erred by denying Ford Motor’s
motion for summary disposition with respect to plaintiffs’ claims under the common-law doctrine
of vicarious liability.

                                       IV. CONCLUSION

       The trial court’s order denying Ford Motor’s motion for summary disposition is reversed
because (1) Ford Motor is exempt from owner’s liability for plaintiffs’ wrongful death and
personal injury claims, and (2) Ford Motor is not vicariously liable for the negligence of Strong.
This matter is remanded for entry of an order granting summary disposition in favor of Ford Motor.

       Reversed and remanded for entry of an order granting summary disposition in favor of
defendant, Ford Motor Company. We do not retain jurisdiction.

                                                            /s/ Mark J. Cavanagh
                                                            /s/ Stephen L. Borrello
                                                            /s/ Jonathan Tukel

                                               -10-