Court Opinion

ID: 6329009
Source: CourtListenerOpinion
Date Created: 2022-04-01 06:07:01.699961+00
Date Added: 2024-06-11T09:22:46.876423
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

FCA US, LLC,                                                          UNPUBLISHED
                                                                      March 31, 2022
               Plaintiff-Appellant,

v                                                                     No. 356009
                                                                      Oakland Circuit Court
FAURECIA AUTOMOTIVE SEATING, LLC,                                     LC No. 2019-174160-CB

               Defendant/Third-Party Plaintiff-
               Appellee,

and

ADIENT US, LLC,

               Third-Party Defendant-Appellee.

Before: O’BRIEN, P.J., and SHAPIRO and BOONSTRA, JJ.

PER CURIAM.

        Plaintiff FCA US, LLC (“FCA”), filed this indemnification action against defendant
Faurecia Automotive Seating, LLC (“Faurecia”), after FCA was sued in two separate lawsuits in
Texas involving claims that seats on FCA’s automobiles were defective. Faurecia had supplied
the completed seats to FCA. Faurecia filed a third-party complaint against Adient US, LLC
(“Adient”), which had supplied the seat structure for the seats. FCA and Faurecia both filed
motions for summary disposition under MCR 2.116(C)(10) on the issue of Faurecia’s obligation
to indemnify plaintiff. The trial court denied FCA’s motion and granted Faurecia’s motion in
relation to one of the Texas cases (the “Gutierrez lawsuit”), and ruled that there were issues of fact
that precluded summary disposition for either party in relation to the second Texas case (the Lewis
lawsuit). Faurecia thereafter filed a renewed motion for summary disposition related to the Lewis
lawsuit, which the trial court granted. FCA now appeals as of right, challenging the dismissal of
its indemnification claims against Faurecia in relation to both the Gutierrez and Lewis lawsuits.
For the reasons stated in this opinion, we affirm the grant of summary disposition to Faurecia.

                                                 -1-
                                        I. BACKGROUND

        FCA manufactures various lines of vehicles, including Dodge Avengers. In 2003, FCA
contracted with Adient to work on the design and development of a common seat structure, i.e.,
“SCS-II,” that would be used in all of FCA’s vehicles.1 Around the same time, FCA contracted
with Faurecia to manufacture the complete seats to be used in Dodge Avengers, i.e., “JS Seat Set
Complete,” which included adding foam, trim, seatbelts, head restraints, and similar items to the
seat structure designed by Adient. The Dodge Avenger launched in 2010.

        FCA’s complaint for indemnification alleged that the Gutierrez and Lewis lawsuits were
filed against it in Texas for injuries allegedly caused by defects in the driver’s seat of a 2014 Dodge
Avenger and a 2013 Dodge Avenger, respectively. In each of the underlying Texas cases, the
driver’s seat reclined nearly fully backwards after a high-speed rear-end collision, causing
catastrophic injury to the driver. FCA alleged that Faurecia, as the supplier of the completed seats,
was required to indemnify and defend FCA in relation to both lawsuits pursuant to an
indemnification agreement in the parties’ contract. Faurecia had rejected FCA’s request for
indemnification in the Gutierrez lawsuit, which FCA settled in May 2019, and refused to respond
to FCA’s tender letter with regard to the Lewis litigation, which is ongoing.

        FCA moved for summary disposition under MCR 2.116(C)(10), arguing that there was no
genuine issue of material fact regarding Faurecia’s liability for indemnification in relation to both
underlying lawsuits. Faurecia filed its own motion for summary disposition, arguing that it was
not contractually liable for indemnification because the alleged seat defects involved component
parts made by Adient under FCA’s guidance and specifications. Faurecia acknowledged that it
supplied the completed seats used in the vehicles, but claimed that Adient designed the seat
structure, including the components that allegedly caused the injuries in the underlying lawsuits.
Therefore, Faurecia argued, the indemnification clause in its agreement with FCA was not
triggered with regard to the Texas lawsuits.

         The trial court agreed with Faurecia with respect to the Gutierrez lawsuit because the
alleged injuries in that case were not related to Faurecia’s work, and Adient was not a subcontractor
for Faurecia. However, the trial court found that a question of fact existed regarding Faurecia’s
indemnification obligation in the Lewis lawsuit because an engineer for Adient, William Tighe,
claimed that Faurecia made changes to the design of the seat’s lumbar suspension mat. Faurecia
later filed a renewed motion for summary disposition because that theory was not actually raised
by the plaintiff in the Lewis lawsuit. Further, FCA had named Faurecia as a “responsible third
party” in the Lewis lawsuit. Faurecia argued that, under Texas law, this designation prevented
FCA from being held liable for any acts by Faurecia, thereby precluding the indemnification clause
in the parties’ agreement from being triggered. The trial court agreed and granted Faurecia’s
renewed motion for summary disposition under MCR 2.116(C)(10).

1
  The agreement was actually between Chrysler (FCA’s predecessor) and Johnson Controls
International (Adient’s predecessor). For simplicity, we refer to FCA and Adient rather than their
predecessors.

                                                 -2-
                                           II. ANALYSIS

        FCA argues that the trial court erred by granting Faurecia’s motion for summary
disposition with regard to the Gutierrez and Lewis lawsuits because there is at least a question fact
whether the situation of either lawsuit is subject to the parties’ indemnification agreement. We
disagree.2

         “All contracts, including indemnity contracts, should be construed to ascertain and give
effect to the intentions of the parties and should be interpreted to give a reasonable meaning to all
of its provisions.” Zahn v Kroger Co of Mich, 483 Mich 34, 40-41; 764 NW2d 207 (2009). “The
extent of the duty must be determined from the language of the contract, itself.” Id. at 40. A court
may not rewrite unambiguous contract language. Id. “[T]he threshold question whether a
contract’s indemnity clause applies to a set of facts [is determined] by a ‘straightforward analysis
of the facts and the contract terms.’ ” Miller-Davis Co v Ahrens Const, Inc, 495 Mich 161, 174;
848 NW2d 95 (2014), quoting Grand Trunk W RR, Inc v Auto Warehousing Co, 262 Mich App
345, 356-357; 686 NW2d 756 (2004).3

       The parties’ indemnification agreement contained in the purchase orders for the JS Seat
Sets provides in pertinent part:

                (b) Indemnification. [Faurecia] will defend, indemnify, and hold [FCA]]
       and its subsidiaries, including their respective employees, officers, directors, agents
       or representatives harmless against all claims, suits, actions or proceedings
       (“Claims”) and pay (i) all liabilities, losses, damages (including without limitation
       judgments, amounts paid in settlement and other recoveries), (ii) fees and expenses
       (including without limitation fees of counsel and experts) and (iii) other costs

2
  We review de novo a trial court’s decision on a motion for summary disposition. See Spiek v
Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998). The trial court granted Faurecia’s
motion for summary disposition under MCR 2.116(C)(10), which tests the factual support for a
claim. A court must consider the pleadings, affidavits, depositions, admissions, and any other
documentary evidence submitted by the parties, and view that evidence in the light most favorable
to the nonmoving party to determine if a genuine issue of material fact exists. MCR 2.116(G)(5);
Maiden v Rozwood, 461 Mich 109, 118-120; 597 NW2d 817 (1999). Summary disposition should
be granted if, except as to the amount of damages, there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Babula v Robertson, 212 Mich App
45, 48; 536 NW2d 834 (1995).
3
  We recognize that there has been a settlement in Gutierrez while Lewis remains pending. In
Grand Trunk W RR, Inc, 262 Mich App 345, we explained that a settling indemnitee need only
show “potential liability” as opposed to “actual liability” if the indemnitor had notice of the claim
and refused to defend. Id. at 355. However, even under this standard, the indemnitee must show
that the fact situation of the original complaint is covered by the indemnity contract. See id. at 356-
357. For the reasons discussed in this opinion, there is not a genuine issue of material fact that the
fact situation in either Texas lawsuit is covered by the indemnification contract.

                                                 -3-
       (collectively, “Expenses”) in connection with any breach or nonperformance by
       Seller of the Order, or for injury or death of any person and damage or loss of any
       property allegedly or actually resulting from or arising out of any act, omission or
       negligent work of Seller or its employees, agents, or subcontractors in connection
       with performing the Order . . . . [Emphasis added.]

       Thus, indemnification is limited to claims arising from (1) “any breach or nonperformance
by [Faurecia] of the Order,” or (2) “any act, omission or negligent work of [Faurecia] or its
employees, agents, or subcontractors in connection with performing the Order.” At issue here is
whether Gutierrez’s or Lewis’s injuries were caused or allegedly caused by any act, omission, or
negligence of Faurecia or its employees, agents, or subcontractors.

        As an initial matter, we agree with FCA that Gutierrez and Lewis concern the same alleged
defect in the seating system. The amended complaint in the Gutierrez lawsuit alleged that
Gutierrez’s injuries were caused by a design or manufacturing defect in the seat. Specifically, the
amended complaint alleged that “[t]he front seat of the Vehicle in Question was designed in such
a way that the seatback would yield in the event of a rear-impact collision.” The Gutierrez
complaint also alleged a design defect claim against Adient’s predecessor, Johnson Controls
International. Similarly, the complaint in the Lewis alleged in pertinent part that the vehicle in
question “contained a defect in the design of the occupant restraint system, of which the driver’s
seat assembly is an integral part, which failed to restrain Mr. Lewis in the driver’s seat area during
the subject crash.” An amended complaint added a claim against Johnson Controls.

        In both Gutierrez and Lewis, the plaintiff retained the same expert, mechanical engineer
Steven Meyer, to inspect the respective vehicle. Meyer’s reports in each case are virtually identical
as to the purported defect that caused the driver’s seat to nearly fully recline in the rear-end
collision. Meyer concluded in part:

       [T]he recliners mechanically and catastrophically failed due to unintended
       actuation of the recliners via occupant loading to the connector rod. Once failure
       of the recliners occurred, the seat reclined to its near full recline position without
       substantial energy absorption, and as such, failed to provide any further occupant
       ride down to [Gutierrez/Lewis.]

                                                ***

       The driver’s seat failure in the subject vehicle was due to and/or associated with a
       failure of the recliner mechanisms to remain engaged.

Meyer stated that testing by Chrysler (FCA’s predecessor) did or should have put it on notice that
the seat was defective. Meyer discussed the testing performed by Chrysler and Johnson Controls,
which identified defects during testing of the seat design in 2008. In his report, Meyer did not

                                                 -4-
attribute the seat’s failure to Faurecia’s work. Thus, through their expert, the plaintiffs in both
Gutierrez and Lewis allege the same defect in the SCS-II seat structure.4

        FCA first takes issue with the trial court’s finding that Faurecia was not involved in the
design of the seat structure. The court ruled that the evidence showed that Adient provided the
seat structure to Faurecia, which merely incorporated the seat structure into the completed seat.

         There is no dispute that Adient designed, tested and manufactured the seat structure. FCA
argues, however, that the design drawings designated Faurecia as the “original designer” and
“original checker” for all seating subcomponents, including the seat structure. FCA also asserts
that as part of the design drawings Faurecia agreed to comply with certain engineering standards
regarding the seat’s performance, including the seat structure. FCA concludes from these
documents that Faurecia adopted Adient’s seat structure and assumed responsibility for it.
Faurecia maintains that FCA reads too much into these initial documents and there is no evidence
that it agreed to be bound by Adient’s seat structure or otherwise adopted it.

       However, we need not resolve this issue because even if we were to conclude that Faurecia
assumed responsibility for the seat structure or agreed to comply with engineering standards
regarding the seat structure, that has no bearing on whether the fact situations of the underlying
lawsuits come within the indemnification clause. This appeal concerns a narrow question, which
is whether the injuries at issue in the underlying lawsuits resulted from “any act, omission or
negligent work” of Faurecia or its subcontractor such that the indemnification agreement applies.
General assertions regarding Faurecia’s responsibility for the seat structure do not establish that
FCA is entitled to indemnification. Rather, FCA must identify an act, omission or negligent work
by Faurecia or its subcontractor relating to the alleged defect to trigger the indemnification
agreement.

        FCA also contends that Faurecia, along with other “Tier I” suppliers, were involved in the
design of the common seat structure. But according to the deposition testimony of those involved
in the design process for the seat structure, Faurecia, at most, provided input on the design, but it
did not have design responsibility. For example, Patrick Stanton, a senior program manager for
Adient, testified at his deposition that Faurecia could not make a change to the seat structure
without FCA’s approval. Stanton also testified that Adient was required to design the seat structure
to meet certain performance standards and specifications from FCA, not Faurecia. Thus, although
other seat designers, including Faurecia, were consulted and had input into design issues, the
design responsibility for the seat structure was solely with Adient. Further, FCA does not assert

4
  FCA maintains that Meyer’s reports concerned the performance of the JS seating system as a
whole, not merely the seat structure. The isolated statement in Meyer’s reports that FCA quotes
in support of this position was made in the context of a discussion of safer alternative seat designs.
First, it is not clear to us that Meyer is referring to non-structural changes to the seat design.
Regardless, immediately before the statement relied on by FCA, Meyer reiterates that the cause of
the Texas plaintiffs’ injuries was a recliner mechanism failure in the seat structure.

                                                 -5-
that any suggestion or change request made by Faurecia regarding the seat structure related to the
alleged defect at issue in Gutierrez and Lewis.

         FCA also argues that the trial court erroneously held that Faurecia had no testing
responsibility for the seat structure. Both Adient’s and Faurecia’s engineers described Adient
performing its own testing on the seat structure. Specifically, Adient performed the testing to
adequately ensure that the recliners did not unintentionally actuate in the event of a rear-end
collision. It was also established that Faurecia was not duplicating Adient’s testing of the seat
structure alone. Thus, even though Faurecia was responsible for testing the completed seat, there
is no evidence that Faurecia was responsible for testing the seat structure. Moreover, FCA has not
shown that testing of the completed seat was somehow deficient or would have revealed the defect
at issue in Gutierrez and Lewis. Because the evidence showed that Adient was responsible for
testing the seat structure, and FCA has not shown that any testing by Faurecia should have led to
discovery of the claimed defect at issue, the trial court did not err by granting summary disposition
for Faurecia on the basis that there was no genuine issue of material fact regarding its responsibility
for testing the defective parts at issue.

        FCA also argues that the trial court erroneously held that the evidence showed that Faurecia
did not have authority to modify the seat structure. To support its argument, FCA first cites two
instances in which Faurecia requested changes to the seat structure in 2007 involving the deletion
of the suspension springs and moving the TPS shunt bracket. However, there is no evidence that
these changes related to the allegations made in Gutierrez or Lewis. Further, as discussed, the fact
that Faurecia requested changes to the seat structure design does not demonstrate that Faurecia had
design control. Rather, this evidence was consistent with the process by which Tier I contractors
such as Faurecia could provide input on seating designs, but Adient was still responsible for the
final design, which was subject to FCA’s approval.

        FCA also argues that there was evidence that Faurecia made unilateral changes to the
lumbar support in the seat structure. The trial court initially ruled that summary disposition was
inappropriate in the Lewis litigation because there was evidence related to Faurecia’s design work
on the lumbar suspension. The court stated:

               In contrast, Plaintiff presents the expert report of William R. Tighe, P.E.,
       Adient US LLC’s expert in the Lewis lawsuit, who stated that “starting in 2011,
       with the [sic] Faurecia introduced softer lumbar suspension and other changes noted
       above, the Faurecia supplied Dodge Avenger and Chrysler 200 seats featured
       substantial changes and alterations.” See Exhibit E of Plaintiff’s Response. The
       Court notes for the record that it has reviewed Mr. Tighe’s report, which has been
       filed under seal.

                With regard to Plaintiff’s indemnification claim against Defendant as it
       relates to the Lewis lawsuit, the Court has reviewed the evidence presented,
       including, but not limited to, the expert reports of both Mr. Meyer and Mr. Tighe,
       and finds that there are sufficient questions concerning the underlying, material
       facts involved in the Lewis lawsuit such that summary disposition is not appropriate
       at this time.

                                                 -6-
        In the Lewis litigation,5 an opinion letter from Tighe, who works as an engineer for Adient,
was produced. In this letter, dated June 25, 2020, Tighe explained that he worked for Johnson
Controls for many years and continued to work for Adient designing seat structures. Tighe
primarily defended Adient’s work and placed much of the blame for inadequate testing of the
finished seat product on FCA. But Tighe also asserted that reported problems with the seat
structure did not occur until Faurecia began to make changes to the seat structure in 2011. Tighe
asserted that, before then, seat structures designed by Johnson Controls/Adient were not found to
be defective. According to Tighe, the seats at issue in Lewis, Gutierrez, and another case all
contained redesigned lumbar supports that Faurecia incorporated into the seats it supplied to FCA.
Tighe then detailed the specific changes that Faurecia made to the lumbar suspension and
concluded that the Faurecia-supplied seats contained substantial changes and alterations to the seat
structure originally designed by Johnson Controls years earlier.

        However, in neither Gutierrez nor Lewis did the plaintiff allege that the seat failed because
of Faurecia’s changes to the lumbar suspension; indeed, Faurecia is not a defendant in either
lawsuit.6 Again, the plaintiffs in the Texas suits retained the same expert, Meyer, who did not
attribute the cause of injuries in either case to the lumbar suspension designed by Faurecia. Nor
is there is any other evidence attributing the recliner mechanism failure to the changes made by
Faurecia. Although Tighe attempts to insinuate that these changes were the cause of the recliner
mechanism defects, he never expressly makes that assertion, let alone provides a basis to accept
it. And in the absence of evidence tying Faurecia’s modifications to the alleged defect, it is mere
speculation that the recliner mechanism failure resulted from these changes. See Sniecinski v Blue
Cross & Blue Shield of Mich, 469 Mich 124, 140; 666 NW2d 186 (2003) (“Mere speculation or
conjecture is insufficient to establish reasonable inferences of causation.”).

       In sum, viewing the evidence in a light most favorable to FCA,7 there is not a genuine issue
of material fact that the injuries in underlying lawsuits resulted or allegedly resulted from an act,

5
  We agree with FCA that, for purposes of this indemnification action, Tighe’s report should also
be considered with respect to the Gutierrez lawsuit. The pertinent part of Tighe’s report concerns
both Gutierrez and Lewis and thus is equally relevant to both cases. Although the report was
authored for purposes of the Lewis litigation after the Gutierrez lawsuit settled, it is unclear why
this evidence should not be considered with respect to Gutierrez in this indemnification action
pertaining to both lawsuits.

6
  A third amended petition in Lewis that would have added Faurecia as a defendant was never
actually filed.
7
  FCA argues that the trial court improperly weighed the evidence and evaluated credibility when
granting summary disposition for Faurecia. FCA also contends that the trial court failed to consider
all of the submitted evidence, including design documents and other technical information. We
disagree with FCA’s characterizations of the trial court’s ruling. In any event, on de novo review,
we conclude that Faurecia was entitled to summary disposition on FCA’s indemnification claims
with respect to both underlying lawsuits for the reasons stated in this opinion.

                                                -7-
omission, or negligent work of Faurecia. The trial court did not err by granting summary
disposition for Faurecia with regard to FCA’s claim for indemnification with respect to the
Gutierrez and Lewis lawsuits.8

        FCA also argues that to the extent that the plaintiffs’ injuries in the underlying lawsuits
arose from an act, omission, or negligence of Adient, Faurecia is liable for indemnification to FCA
because Adient was Faurecia’s subcontractor. We disagree.

       As FCA correctly observes, the scope of the indemnification provision in the parties’
agreement extends not only to losses arising from acts, omissions, or negligence by Faurecia, but
also any losses arising from acts, omissions, or negligence by Faurecia’s “subcontractors in
connection with performing the Order.” FCA relies on the following definition of “subcontractor”:

       The question of what constitutes one a subcontractor has been before this court
       many times, and there runs through all the cases the idea that a subcontractor is one
       undertaking the performance of the whole or a part of an existing contract under
       which another, with whom he contracts, is obligated to perform some specified
       work, and agrees, not only to do the work, but to do it in accordance with the pre-
       existing agreement of which he must, in the very nature of undertaking the
       performance of the undertaking of another, have knowledge of its terms and
       provisions. There must be brought into the subcontract, by reference at least, the
       agreement that the original contract shall be the standard by which the performance
       of the subcontract shall be judged. People for use of Westover-Kamm Co v Valley
       Mantel & Tile Co, [200 Mich 554, 555; 166 NW 839 (1918)]. To be a subcontractor
       one must become an under contractor, taking under the original contract and
       agreeing to perform in accordance therewith. People for use of Towner Hardware
       Co v Morrison, [228 Mich 216; 199 NW 689 (1924)]. [People for Use of McDonell
       v Fidelity & Deposit Co of Maryland, 232 Mich 238, 243-244; 205 NW 157
       (1925).]

        The trial court correctly analyzed and summarized the evidence regarding Adient’s
relationship to Faurecia. Adient performed its work on the seat structures pursuant to a direct
contract with FCA and then merely supplied the structures to Faurecia, who completed the seats
for FCA. Faurecia had no direct control over Adient, and had to go through FCA if there were
changes that needed to be made to Adient’s work. FCA worked directly with Adient independent
of its contract with Faurecia to adopt the seat-structure design, and Faurecia’s contract with FCA
required it to incorporate the seat structure from Adient without making any unilateral changes. In
sum, Adient supplied a component part to Faurecia, not pursuant to any contract with Faurecia,
but pursuant to a contract with FCA, which Faurecia then used to complete the seat assembly.

8
  As noted, the trial court granted summary disposition to Faurecia with respect to Lewis on the
basis of Faurecia being designated as a “responsible third party” in that lawsuit. However, we may
affirm a lower court when it reaches the correct result for different reasons. See Sabbagh v
Hamilton Psychological Servs, PLC, 329 Mich App 324, 345; 941 NW2d 685 (2019). And given
our ruling, we need not address whether the trial court erred by granting summary disposition on
the basis of Texas apportionment laws.

                                               -8-
Faurecia had no direct contractual relationship with Adient with regard to specifications for the
seat structure.

       Accordingly, the trial court did not err by ruling that Adient was not a subcontractor of
Faurecia, and thus, Faurecia could not be held liable under the indemnification clause provision
making it liable for indemnification for an act, omission, or negligent work of a subcontractor.

       Affirmed.

                                                           /s/ Colleen A. O’Brien
                                                           /s/ Douglas B. Shapiro
                                                           /s/ Mark T. Boonstra

                                               -9-