Court Opinion

ID: 3206554
Source: CourtListenerOpinion
Date Created: 2016-05-25 13:04:54.167941+00
Date Added: 2024-06-11T14:28:53.774808
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

TRAVELERS INDEMNITY COMPANY, as                                      UNPUBLISHED
subrogee of DRG CLEARVIEW, L.L.C., d/b/a                             May 24, 2016
CLEARVIEW APARTMENT HOMES,

               Plaintiff-Appellant/Cross-Appellee,

v                                                                    No. 325934
                                                                     Ottawa Circuit Court
BARBARA PELLOW,                                                      LC No. 13-003524-CK

               Defendant-Appellee/Cross-
               Appellant.

Before: O’BRIEN, P.J., and K. F. KELLY and FORT HOOD, JJ.

PER CURIAM.

        In this breach-of-contract action, plaintiff, Travelers Indemnity Company, a subrogee of
DRG Clearview, L.L.C., d/b/a Clearview Apartment Homes, appeals, and defendant, Barbara
Pellow, cross-appeals, the trial court’s January 23, 2015 order granting summary disposition in
plaintiff’s favor pursuant to MCR 2.116(C)(10) and awarding plaintiff $15,421.08 in damages.
On appeal, plaintiff also challenges the trial court’s September 26, 2014 order granting summary
disposition in defendant’s favor pursuant to MCR 2.116(C)(10). We affirm in part, vacate in
part, and remand for further proceedings.

        Defendant and her boyfriend signed a lease agreement with Clearview Apartment Homes
in 2009. During the lease, defendant’s boyfriend used a torch on the apartment’s wooden deck to
burn the fur off of a squirrel. After doing so, defendant’s boyfriend left the torch on the deck and
entered the apartment. Approximately 15 minutes later, he realized that a fire had started near
where he had left the torch, and his attempts to extinguish that fire proved unsuccessful. It
appears undisputed that defendant’s boyfriend’s actions were the cause of the fire. The fire
resulted in substantial damage to the entire apartment complex. Travelers Indemnity Company,
as Clearview’s insurance provider, paid in excess of $2,000,000 to repair damage that occurred
to the apartment complex as a result of the fire. While it is undisputed that defendant was
sleeping during the fur-burning escapade, plaintiff sued defendant for the cost of the repairs at
issue. Plaintiff argued that defendant was contractually liable under the lease agreement, which
provided, in pertinent part, that defendant and her boyfriend were “liable . . . for any fire, water,
or other damage . . . negligently or intentionally caused by” defendant, her boyfriend, “or any
guests thereof[.]” The lease also provided that, if the apartment was “rendered un-tenantable by

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the negligent or intentional acts of [these individuals, then they] shall continue to be liable for
Rent in the amount provided in the Agreement.”1

        Defendant moved for summary disposition pursuant to MCR 2.116(C)(10). Relying on
MCL 600.2956’s purported abolishment of joint and several liability,2 she argued that the
provisions quoted above were void under MCL 554.633(1)(m)3 of the Michigan Truth in Renting
Act (MTRA), MCL 554.6531 et seq., because any provision purporting to render a party jointly
and severally liable violated MCL 445.903(1)(n) and (t)4 under the Michigan Consumer
Protection Act (MCPA), MCL 445.901 et seq. The trial court agreed. It concluded that, because
the lease agreement imposed liability for fire and water damage only according to fault, which
implicated tort standards, MCL 600.2956 applied. It therefore granted defendant’s motion. It
did, however, provide plaintiff with an opportunity to amend its complaint to include allegations
involving lost rent and repairs to the air conditioning equipment, heating equipment, and
appliances, explaining that the analysis described above did not apply to these specific damages
because there was not a specific level of fault required under the parties’ lease agreement.
Plaintiff did so, the parties stipulated that defendant suffered $15,421.08 in those specific
damages, and summary disposition in that amount was awarded to plaintiff pursuant to MCR
2.116(C)(10).

        On appeal, plaintiff argues that the trial court erred in granting defendant’s motion for
summary disposition because it erroneously concluded its lawsuit impermissibly implicated tort
theories. We agree. “[A] ‘tort’ is an act that has long been understood as a civil wrong that
arises from the breach of a legal duty other than the breach of a contractual duty.” In re Bradley
Estate, 494 Mich. 367, 381; 835 NW2d 545 (2013). “Michigan case law expressly provides that
an action in tort may not be maintained where a contractual agreement exists, unless a duty,
separate and distinct from the contractual obligation, is established.” Sherman v Sea Ray Boats,
Inc, 251 Mich. App. 41, 52; 649 NW2d 783 (2002). When a lawsuit arises from a breach of

1
  The lease agreement provided that the “Resident” was liable for the damages described above,
and, according to ¶ 26 of the agreement, “[i]f there shall be more than one Resident, they shall be
jointly and severally liable hereunder.”
2
  MCL 600.2956 provides that, “in an action based on tort or another legal theory seeking
damages for personal injury, property damage, or wrongful death, the liability of each defendant
for damages is several only and is not joint.”
3
  MCL 554.633(1)(m) provides that “[a] rental agreement shall not include a provision that”
“[v]iolates the Michigan consumer protection act[.]”
4
  MCL 445.901(1)(n) and (t) define “[u]nfair, unconscionable, or deceptive methods, acts, or
practices in the conduct of trade or commerce [that] are unlawful” as those that “[c]aus[e] a
probability of confusion or of misunderstanding with respect to the authority of a salesperson,
representative, or agent to negotiate the final terms of a transaction” or those where a consumer
“[e]nter[s] into a consumer transaction in which the consumer waives or purports to waive a
right, benefit, or immunity provided by law, unless the waiver is clearly stated and the consumer
has specifically consented to it.”

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promise, the lawsuit is a breach-of-contract lawsuit. Hart v Ludwig, 347 Mich. 559, 563; 79
NW2d 895 (1956).

        In Laurel Woods Apartments v Roumayah, 274 Mich. App. 631, 642; 734 NW2d 217
(2007), this Court expressly held that a lease agreement providing for joint and several liability
was “not precluded by MCL 600.2956.”5 The same is true here. Stated simply, plaintiff’s
lawsuit is a breach-of-contract lawsuit. Plaintiff’s claim, i.e., that defendant breached her
contractual duty to be held liable for fire and water damage resulting from her, her boyfriend’s,
or any of their guests’ conduct, is clearly a breach-of-contract claim. Plaintiff has not alleged
any breach of a duty that is “separate and distinct” from those duties that are contractually
imposed under the parties’ lease agreement. Contrary to the trial court’s conclusion, the fact that
the parties’ lease agreement mentioned negligence and intentional misconduct does not
automatically transform this breach-of-contract action into a tort action, nor does it create a
hybrid tort-contract lawsuit where MCL 600.2956 rewrites the agreement that the parties
voluntarily entered into as defendant suggests. As our Supreme Court has explained, “[t]o adopt
the position that MCL 600.2956 renders express contractual indemnification clauses
unenforceable would require that we negate the parties’ contract. We find no language in the
statute, nor any compelling public policy, that would require us to do so.” Zahn v Kroger Co of
Mich, 483 Mich. 34, 39; 764 NW2d 207 (2009).

         Defendant’s position before the trial court and before this Court is without merit. She
claims that, because she is immune from joint and several liability under MCL 600.2956, her
agreement to be jointly and severally liable in the parties’ lease agreement violated the MCPA
and is void under the MRTA. However, contrary to her argument and the trial court’s
conclusion, MCL 600.2956 is inapplicable because plaintiff’s breach-of-contract lawsuit is
precisely that—a breach-of-contract lawsuit for contract damages. Nothing in MCL 600.2956
precludes defendant from contractually agreeing to be jointly and severally liable for the damage
at issue. While defendant now takes issue with the fact that the provisions of the lease agreement
at issue were never “explained to her, nor was she ever told that there were provisions in the
lease which would attempt to impose liability on her for something else someone else did,” she
does not provide, and we are unable to find, any legal authority requiring someone else,
presumably plaintiff on its own initiative, to read and explain the lease agreement that she signed
to her in a manner that she later deems satisfactory. Indeed, because defendant signed the

5
  We reject defendant’s claim that “Laurel Woods has no applicability to the present appeal.” In
short, the holding in Laurel Woods Apartments—that MCL 600.2956 does not preclude the
imposition of contract-based joint and several liability—directly addresses the issue raised in this
case. While she, like the trial court, claims that the use of tort concepts, i.e., negligence and
intentional misconduct, transform this breach-of-contract action into a tort or hybrid tort-contract
action, we disagree for the reasons set forth in this opinion. Additionally, she claims that the fact
that she raised issues relating to the MTRA and the MCPA renders Laurel Woods Apartments
inapplicable. However, that argument relies on the trial court’s conclusions that this lawsuit
sounded, at least somewhat, in tort and that the lease agreement was apparently too confusing to
be understood, both of which are conclusions that we reject.

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parties’ lease agreement, she is presumed to have read and understood its contents. Watts v
Polaczyk, 242 Mich. App. 600, 604; 619 NW2d 714 (2000).

        Defendant also argues that joint and several liability does not apply in this situation
because only one person, her boyfriend, was at fault. Instead, she argues, plaintiff’s lawsuit
actually implicates vicarious liability. This position is without merit as well. Where a party
agrees to be jointly and severally liable for damage caused by another person, that party may be
held liable for that damage regardless of his or her fault. Laurel Woods Apartments, 274 Mich
App at 642. Thus, joint and several liability is precisely the form of liability that is at issue in
this case. Vicarious liability, on the other hand, is entirely inapplicable as it is premised on the
policy-based determination that one person should be liable for the actions of another due to their
relationship. Al-Shimmari v Detroit Med Ctr, 477 Mich. 280, 294; 731 NW2d 29 (2007). In
short, we are unaware of, and defendant does not indicate, any relationship between the parties,
other than the joint-and-several one, that imposes policy-based liability on defendant for her
boyfriend’s actions. Thus, we conclude that the trial court erred in granting summary disposition
in defendant’s favor.

        On cross-appeal, defendant argues that the trial court erred in concluding that she was
liable for lost rent and repairs to the air conditioning equipment, heating equipment, and
appliances. We disagree. “The goal of contract interpretation is to first determine, and then
enforce, the intent of the parties based on the plain language of the agreement.” Harbor Park
Market, Inc v Gronda, 277 Mich. App. 126, 130; 743 NW2d 585 (2007). “If the language of the
contract is unambiguous, we construe and enforce the contract as written.” Quality Prod &
Concepts Co v Nagel Precision, Inc, 469 Mich. 362, 375; 666 NW2d 251 (2003). And, as stated
above, where a party contractually agrees to be held jointly and severally liable for another’s
actions, he or she can, indeed, be held liable for the same. Laurel Woods Apartments, 274 Mich
App at 642.

        In this case, the plain language of the parties’ lease agreement unequivocally provides
that defendant and her boyfriend were liable for lost rent if the apartment were to become un-
tenantable due to their actions. It also unequivocally provides that defendant and her boyfriend
were liable for the repair cost to the heating equipment, air conditioning equipment, and
appliances where such repairs are necessary due to the same. While defendant claims that she
cannot be held liable because she was not at fault, the parties’ lease agreement, i.e., the
provisions imposing joint and several liability, expressly and unequivocally provide otherwise,
and, as stated above, we reject her argument that she is immune from the contractual liability that
she voluntarily agreed to.

        Accordingly, we reverse the trial court’s September 26, 2014 order granting defendant’s
motion for summary disposition. While we affirm the trial court’s January 23, 2015 order to the
extent that it holds defendant liable for lost rent and the repair costs to the air conditioning
equipment, heating equipment, and appliances, we vacate its January 23, 2015 order as to the
amount of damages awarded. On remand, the trial court is to enter an order granting summary
disposition in plaintiff’s favor in full and determine the appropriate amount of damages in light
of the entry of that order.

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        Affirmed in part, vacated in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction. Plaintiff, as the prevailing party, may tax costs
pursuant to MCR 7.219.

                                                          /s/ Colleen A. O’Brien
                                                          /s/ Kirsten Frank Kelly
                                                          /s/ Karen M. Fort Hood

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