Cutter v. Massey-Ferguson, Inc

318 N.W.2d 554, 114 Mich. App. 28

• Court: Michigan Court of Appeals
• Decided: March 3, 1982
• Docket: Docket 57888
• Status: Published

Opinions

Beasley, J.

On December 6, 1977, while working on the farm of his employer, third-party defendant and appellant George Pardonnet, plaintiff, Lance Cutter, was severely injured when his legs became entangled in the intake area of an auger-feed conveyor system. Plaintiff sued Massey-Ferguson, Inc., its wholly-owned subsidiary and the designer and manufacturer of the conveyor system, defendant Badger-Northland, Inc., and others, claiming negligence in failing to instruct adequately as to safety requirements, to warn sufficiently regarding safe operation and to obtain and install necessary additional components for safe use. Defendant Badger moved to add Pardonnet as a third-party defendant. Over plaintiffs objection, the trial court added Pardonnet as a third-party defendant. Plaintiff filed with this Court a delayed application for leave to appeal from the order of the trial court adding Pardonnet as a third-party defendant. Leave to appeal was denied on June 16, 1981. Defendant Badger then filed a third-party complaint and, subsequently, an amended third-party complaint seeking indemnification from third-party defendant, Pardonnet, which latter pleading included the theory of implied contractual indemnification should defendant Badger be found liable to plaintiff. Pardonnet moved for summary judgment under GCR 1963, 117.2(1) on the basis that each count of defendant Badger’s amended third-party complaint failed to state a claim upon which relief could be granted. On March 16, 1981, the trial court denied the motion for summary judgment. Then, Pardonnet filed with this Court a petition for leave to appeal the order of the trial court denying his motion for summary judgment, and we granted leave.

On appeal, plaintiff joins with Pardonnet in seeking reversal of the trial court’s denial of Pardonnet’s motion for summary judgment.

Third-party defendant and appellant, Pardonnet, has paid workers’ compensation benefits to plaintiff for the subject injuries which occurred during the course of plaintiff’s employment. The workers’ compensation act furnishes the exclusive remedy against an employer for injuries to an employee.¹ Consequently, by virtue of the provisions of the workers’ compensation statute, plaintiff is prohibited from asserting a claim against his employer, Pardonnet, for any alleged negligence of Pardon-net.

Defendant and third-party plaintiff, BadgerNorthland, argues that an employer may be joined as a third-party defendant in this kind of products liability suit for the purpose of determining the percentage of causal negligence as between defendants (including third-party defendants) and, thus, reducing the primary defendant’s liability to the plaintiff.

In the third-party complaint, Badger claims that Pardonnet was negligent, which negligence was a direct and proximate cause of some or all of plaintiff’ s injuries. Accordingly, Badger seeks a determination of the percentage of Pardonnet’s causal negligence. Badger also alleges in its count three that there is an implied indemnity agreement that has arisen between itself and Pardonnet. Badger claims that, by acting negligently, Pardonnet violated the implied indemnity agreement.

In this case, plaintiff charges Badger with direct, active negligence in the following three particulars: (1) in failing to require purchasers to obtain and install necessary components for safe operation; (2) in negligently designing and manufacturing the auger-feed conveyor; and (3) in failing to instruct, warn, or supervise the unit’s safe installation and safe operation. Under these circumstances, Badger would not have any third-party cause of action on a theory of common-law indemnity against third-party defendant Pardonnet even if Badger had specifically so pled.

An action for common-law indemnity lies only where a claimant alleges and proves that he is without personal fault, that he is not the party best suited to insure preventative measures and that his negligence, if any, was only passive negligence.² Common-law indemnity is intended only to make whole again a party held vicariously liable to another through no fault of his own.³ Where the primary complaint alleges active negligence, as here, a defendant is not entitled to assert common-law indemnity.⁴

However, as indicated, in its first amended third-party complaint, Badger also seeks indemnification from plaintiffs employer, Pardonnet, on the basis of an implied indemnity contract. This basis has been recognized in Michigan.⁵

In undertaking to interpret the Michigan law, the federal cases are interesting and instructive. In Venters v Michigan Gas Utilities Co,⁶ which was essentially an appeal from a denial of a motion to dismiss a third-party complaint brought by a third-party defendant (employer), the court held that the third-party complaint stated an enforceable claim for indemnity against the third-party defendant as a matter of law. The Venters court reasoned that a jury might find defendant liable to plaintiff only as a passive tortfeasor and that a third-party defendant might be found liable as an active tortfeasor. Therefore, the court denied the motion for summary judgment and set the matter down for trial.

In Bullock v Black & Decker, Inc,7 the court discussed the limited circumstances in which a defendant in an action brought by another’s employee can sue the c employer for indemnity, namely, where an implied contract of indemnity exists between a defendant who is also a third-party plaintiff and a third-party defendant employer. The Bullock court denied that there was a basis for an implied contract of indemnity, holding that the manufacturer was attempting to build one implied agreement on top of another and that his theory of liability was too attenuated to fit in the narrow area authorized by the Michigan cases. ⁸

In the instant case, in denying the motion for summary judgment brought by third-party defendant, Pardonnet, the trial court appeared to rely upon Hill v Sullivan Equipment Co,9 where we held:

"In the case at bar, Sullivan alleged in its third-party complaint that Armen-Berry unqualifiedly rejected a proposed protective cover for the machine which injured plaintiff and advised Sullivan that the machinery would be situated and used so that it would be inaccessible to workers while in operation. We believe these allegations are sufficient to state a cause of action for indemnity. I.e., by expressly rejecting the proposed cover and undertaking to situate the conveyor so that it would be inaccessible, Armen-Berry may have impliedly agreed to indemnify Sullivan should Sullivan be held liable for Armen-Berry’s rejection of the cover or failure to use the machine as proposed.

"As the third-party complaint thus stated a cause of action for indemnity, summary judgment should not have been granted.”

In dissent, Judge Walsh reasoned that there could not be any recovery on an implied contract of indemnity theory unless the party seeking indemnification was free from active negligence. In view of our conclusions here, it is unnecessary for us to choose between the majority and dissent in Hill, supra.

As previously indicated, the federal cases¹⁰ interpreted Hill to require two prongs for an action based on an implied agreement of indemnification: a specific undertaking by the employer to perform some act or service for the manufacturer and an attempt by the employee to hold the manufacturer liable for the failure to perform the act which the employer had obligated itself to do.

In applying the Hill rule to the facts in the instant case, we distinguish the within case from Hill and hold that the trial court committed reversible error in denying Pardonnet’s motion for summary judgment.

In the first amended third-party complaint, Badger alleges that Pardonnet rejected an available hopper and integrated other components into the auger-feed system, causing it to be unsafe, and that Pardonnet, by accepting the component parts, impliedly warranted to follow the recommendations and instructions in the manuals of Badger. Unlike the facts in Hill, Pardonnet did not specifically undertake to perform some act for the manufacturer. That is, Pardonnet did not promise Badger that the machinery would be inaccessible to those employees who might otherwise be injured. It is on this basis that we distinguish the within case from Hill, supra. We hold that the amended third-party complaint does not state an enforceable cause of action in favor of third-party plaintiff, Badger, against third-party defendant, Pardonnet.¹¹

Further support for our conclusion that third-party defendant, Pardonnet, need not be included in this suit is our decision in Caldwell v Cleveland-Cliffs Iron Co.12 In Caldwell, the employer was dismissed from the suit under the applicable provisions of the workers’ compensation statute, but, nevertheless, the trial court sent the case to the jury with special instructions to allocate causal negligence between the parties in accordance with Placek v Sterling Heights.13

In spite of the fact that the Caldwell jury found 75% of the blame attributable to the employer and only 25% attributable to the joint venturers’ negligence, the trial court determined, and we affirmed, that the joint venturers were liable for the entire jury award._

In short, the present law in Michigan is that the concept of joint and several liability has not been abrogated by adoption of comparative negligence in Placek, supra. Caldwell, supra, is relevant in the within case as authority for denying third-party plaintiffs claim that Placek requires allocation of fault.¹⁴

Consequently, we hold that it was error for the trial court to deny Pardonnet’s motion for summary judgment on the third-party claim. Accordingly, we reverse and remand this case to the trial court for entry of a summary judgment in favor of Pardonnet, dismissing the amended third-party complaint filed by Badger.

Reversed and remanded.

M. F. Cavanagh, P.J., concurred.

1 MCL 418.131; MSA 17.237(131), Solakis v Roberts, 395 Mich 13, 20; 233 NW2d 1 (1975).

2 Minster Machine Co v Diamond Stamping Co, 72 Mich App 58; 248 NW2d 676 (1976), Provencal v Parker, 66 Mich App 431; 239 NW2d 623 (1975).

3 Dale v Whiteman, 388 Mich 698; 202 NW2d 797 (1972).

4 Brown v Unit Products Corp, 105 Mich App 141; 306 NW2d 425 (1981).

5 Hill v Sullivan Equipment Co, 86 Mich App 693; 273 NW2d 527 (1978), lv den 406 Mich 880 (1979), Pontious v EW Bliss Co, 102 Mich App 718, 722; 302 NW2d 293 (1981).

6 493 F Supp 345 (WD Mich, 1980).

7 502 F Supp 580 (ED Mich, 1980).

8 Proctor & Schwartz, Inc v United States Equipment Co, 624 F2d 771 (CA 6, 1980), Hill v Sullivan Equipment Co, supra.

9 Hill, supra, 698.

10 Bullock v Black & Decker, Inc, supra, Proctor & Schwartz, Inc v United States Equipment Co, supra.

11 GCR 1963, 117.2(1), Escobar v Brent General Hospital, 106 Mich App 828, 833; 308 NW2d 691 (1981).

12 111 Mich App 721; 315 NW2d 186 (1981).

13 405 Mich 638; 275 NW2d 511 (1979).

14 As in Caldwell, supra, we are concerned that in some cases negligent employers appear to escape responsibility at the expense of manufacturers whose product liability exposure is relatively less in terms of fault than that of the employer. These policy considerations await review by the Supreme Court.