Eller v. Metro Industrial Contracting, Inc.

683 N.W.2d 242
Michigan Court of Appeals·Decided July 7, 2004·No. 241903·Published·Cited by 18 cases

Opinion

683 N.W.2d 242 (2004)
261 Mich.App. 569

James ELLER, Individually and as Next Friend of James Eller, III, a Minor, Plaintiff,
v.
METRO INDUSTRIAL CONTRACTING, INC., Defendant/Third-Party Plaintiff-Appellee/Cross-Appellant, and
Power Process Piping, Inc., and McLouth Steel Products Corporation, d/b/a McLouth Steel, Defendants,
v.
Mid-American Gunite, Inc., Third-Party Defendant-Appellant/Cross-Appellee.

Docket No. 241903.

Court of Appeals of Michigan.

Submitted January 6, 2004, at Detroit.
Decided March 9, 2004.
Approved for Publication April 15, 2004, at 9:00 a.m.
Released for Publication July 7, 2004.

*244 Vandeveer Garzia (by Hal O. Carroll), Troy, for Metro Industrial Contracting, Inc.

Secrest, Wardle, Lynch, Hampton, Truex & Morley PC (by Janet Callahan Barnes), Farmington Hills, for Mid-American Gunite, Inc.

Before: HOEKSTRA, P.J., and SAWYER and GAGE, JJ.

PER CURIAM.

This case involves Metro Industrial Contracting, Inc.'s (Metro), third-party action for indemnification against third-party defendant Mid-American Gunite, Inc. (Gunite), arising out of an accident at a construction site. In a prior appeal, this Court reversed the trial court's order dismissing Metro's third-party complaint against Gunite, concluding that, under the broad language of the indemnity contract between Metro and Gunite, "Metro is entitled to indemnification from Gunite." Eller v. McLouth Steel, unpublished opinion per curiam of the Court of Appeals, issued June 29, 2001, 2001 WL 738424 (Docket No. 220337). On remand, the trial court determined that Gunite was liable for the indemnification amount of $249,379.12, and entered judgment in that amount. Additionally, it awarded Metro statutory prejudgment interest under MCL 600.6013, but abated the accrual of interest while the case was previously pending on appeal and further directed that interest on the judgment was to be abated pending this appeal. Gunite now appeals as of right. Metro cross-appeals, challenging the trial court's computation of interest. We affirm in part, reverse in part, and remand.

Gunite first argues that the trial court erred in denying its motion for summary disposition and in entering judgment in favor of Metro where Metro already had been fully indemnified by Power Process Piping, Inc. (PPP), a co-indemnitor. Additionally, Gunite argues that Metro's indemnification claim was rendered moot by PPP's satisfaction of the full judgment amount against Metro. We disagree.

A trial court's decision concerning equitable issues is reviewed de novo, although its findings of fact supporting the decision are reviewed for clear error. Webb v. Smith (After Remand), 204 Mich.App. 564, 568, 516 N.W.2d 124 (1994). A trial court's decision to grant or deny summary disposition is also reviewed de novo. Allen v. Keating, 205 Mich.App. 560, 562, 517 N.W.2d 830 (1994).

An issue is moot and should not be reached if a court can no longer fashion a remedy.[1] See In re Contempt of Dudzinski, 257 Mich.App. 96, 112, 667 N.W.2d 68 (2003). In this case, the remedy sought by Metro is indemnification. Gunite's mootness argument is predicated on its claim that, because Metro has been fully indemnified by PPP, Metro may no longer pursue an independent claim for indemnification *245 against Gunite. As to be discussed later, however, because PPP is equitably subrogated to Metro's claim against Gunite, and because it was not necessary that PPP be formally substituted for Metro, the trial court was not precluded from fashioning the remedy of indemnification in favor of Metro against Gunite.

Initially, we note that PPP and Gunite were both potentially liable to indemnify Metro under the terms of their respective written subcontract agreements with Metro that contained identical indemnification clauses. Where two or more insurance companies are in the same tier of priority — for example, both are primarily liable or both contain irreconcilable escape clauses — an insured's loss is to be apportioned or prorated among the insurance companies on the basis of policy limits. Pioneer State Mut. Ins. Co. v. TIG Ins. Co., 229 Mich.App. 406, 415-416, 581 N.W.2d 802 (1998); Secura Ins. Co. v. Cincinnati Ins. Co., 198 Mich.App. 243, 246-247, 497 N.W.2d 230 (1993). By analogy, it follows that where PPP and Gunite signed identical indemnity provisions, both are equally liable to indemnify Metro as provided in the agreements, and the cost of doing so should be shared equally by both.

Furthermore, we observe that PPP's indemnification of Metro in full did not necessarily extinguish Gunite's "otherwise proven obligation of indemnity." See Skinner v. D-M-E Corp., 124 Mich.App. 580, 589, 335 N.W.2d 90 (1983) (settlement of underlying claim did not discharge indemnity obligation); see also Lieberman v. Solomon, 24 Mich.App. 495, 501, 180 N.W.2d 324 (1970) (where partner paid debt of corporation with understanding that his partners would reimburse him a percentage of what he paid, acceptance of corporation's promissory note did not discharge indemnity obligation). Exposure to legal defense costs and liability on a judgment triggered Gunite's indemnity obligation, even if Metro was indemnified by PPP. But PPP's indemnification of Metro does mean that Metro will receive a windfall by being indemnified twice.

By satisfying Gunite's indemnification obligation, PPP became subrogated to Metro's rights against Gunite. As our Supreme Court explained,

[e]quitable subrogation is a legal fiction through which a person who pays a debt for which another is primarily responsible is substituted or subrogated to all the rights and remedies of the other. It is well-established that the subrogee acquires no greater rights than those possessed by the subrogor, and that the subrogee may not be a "mere volunteer." [Auto-Owners Ins. Co. v. Amoco Production Co., 468 Mich. 53, 59, 658 N.W.2d 460 (2003), quoting Commercial Union Ins. Co. v. Medical Protective Co., 426 Mich. 109, 117, 393 N.W.2d 479 (1986) (opinion by Williams, C.J.) (citations omitted).]

"Equitable subrogation is a flexible, elastic doctrine of equity." Hartford Accident & Indemnity Co. v. Used Car Factory, Inc., 461 Mich. 210, 215, 600 N.W.2d 630 (1999). Its application is to be determined on a case-by-case basis. Id. It has been applied to allow a no-fault insurance company to collect worker's compensation benefits from a self-insured employer, Auto-Owners Ins Co, supra at 55, 658 N.W.2d 460

Free access — add to your briefcase to read the full text and ask questions with AI

Eller v. Metro Industrial Contracting, Inc., 683 N.W.2d 242 (Mich. Ct. App. 2004).

683 N.W.2d 242 (Eller v. Metro Industrial Contracting, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

20251114_C371115_29_371115.Opn.Pdf
Michigan Court of Appeals, 2025
Shaun Finn v. Ricky Marsh
Michigan Court of Appeals, 2022
Janet Hauanio v. Alvin Smith
Michigan Court of Appeals, 2021
in Re Jacobson Estate
Michigan Court of Appeals, 2020
Audrey Leigh Andrus v. Celeste Dunn
Michigan Court of Appeals, 2020
Lucretia D Holliday v. Christopher Mullett
Michigan Court of Appeals, 2017
Michael Alan Schwartz v. Sara Oltarz-Schwartz
Michigan Court of Appeals, 2016
Ameriquest Mortgage Co. v. Alton
731 N.W.2d 99 (Michigan Court of Appeals, 2007)
46th Circuit Trial Court v. Crawford County
702 N.W.2d 588 (Michigan Court of Appeals, 2005)
Detroit Edison Co. v. Public Service Commission
691 N.W.2d 61 (Michigan Court of Appeals, 2005)