Opinion
Docket No. 82873.
Decided January 7, 1986. Leave to appeal applied for.
Kerr, Russell Weber (by James R. Case and Louis G. Corey), for third-party plaintiff.
Plunkett, Cooney, Rutt, Watters, Stanczyk Pedersen, P.C. (by Dwight G. Conger and Ernest R. Bazzana), for third-party defendants.
Defendant and third-party plaintiff Riise Engineering Company (hereinafter Riise) appeals as of right from the circuit court order granting summary judgment in favor of third-party defendants Jones Laughlin Steel, Inc., and Jones Laughlin Steel Corporation (hereinafter J L).
This case originated as a products liability action brought on behalf of the estate of Virgil Kirin, who was killed on April 23, 1978, after falling off an argon-oxygen decarbonization (AOD) platform manufactured by Riise. The fall occurred while Kirin was performing duties within the course of his employment with J L.
In its third-party complaint, Riise alleged that blueprints for the platform were supplied by J L. According to Riise, J L informed Riise that AOD operations would be fully automated and that no workers would be required or allowed on the platform during operations. Accordingly, Riise did not put safety railings around the perimeter of the platform. In its contract with Riise, J L agreed that it would be responsible for all safety devices for the AOD platform which were not incorporated in the Riise proposals. Riise expressly limited its warranty to the design of the platform, which was valid only if the platform was not modified or misused.
After J L approved the drawings and proposals, Riise constructed the platform and shipped it to J L's plant, where it was erected and placed into operation. According to Riise, approximately six months later J L modified the design and construction of the platform without the knowledge or approval of Riise. A work area and stairway were added to the west of the platform, providing human access. The engineering firm that provided the drawings and design specifications for these additions included in the design a guard railing which would be placed around the entire perimeter of the platform. Despite this recommendation, J L did not place a railing around approximately six feet of the platform's north side.
On April 26, 1978, the J L plant was extremely smoky and dusty due to plant activities. Although operations should have ceased under such conditions, J L supervisory personnel did not stop AOD work operations. Virgil Kirin was on top of the AOD platform attempting to assist the craneman in maneuvering a materials box into its proper position. While doing so, the crane malfunctioned, allegedly due to improper maintenance, and the craneman pulled the box off the platform. At the same time, Kirin's work glove became caught in the crane's hook and he was dragged off the north side of the platform, through the unguarded portion, to his death.
Laura Kirin, acting as the administratrix of the decedent's estate, filed suit against Riise, among others, claiming breach of implied warranties. This claim was settled for $300,000, and an order of judgment in favor of the estate was entered January 20, 1984. Riise filed a third-party complaint against J L seeking to recover the amount of the settlement on the theory of implied contractual indemnity. The complaint was dismissed pursuant to the trial court's order of January 16, 1985, which granted J L's motion for summary judgment. GCR 1963, 117.2(1). In an opinion dated January 8, 1985, the court held that Riise could not recover on a claim of implied contractual indemnity due to its inability to prove freedom from active fault. Riise appeals as of right.
The theory under which Riise seeks to recover was most recently outlined by this Court in Clark Equipment Co v Jones Lamson, 144 Mich. App. 91, 97; 373 N.W.2d 249 (1985).
"The basis for indemnification rests upon the equitable principle of a right to restitution. Dale v Whiteman, 388 Mich. 698, 704; 202 N.W.2d 797 (1972). In Michigan, a right to indemnity may arise from three sources: the common law, an implied contract, and an express contract. Skinner v D-M-E Corp, 124 Mich. App. 580, 584; 335 N.W.2d 90 (1983). Except where the right is based upon an express contract, a right to indemnity may be enforced only where liability arises vicariously or by operation of law from the wrongful acts of the party from whom indemnity is sought. Skinner v D-M-E, supra; Dale v Whiteman, supra. In other words, a right to indemnification based upon common law or implied contract is only available to a party who can plead and prove freedom from active fault. Skinner v D-M-E, supra. Furthermore, an implied contract to indemnify arises only if there is `a special relationship between the parties or a course of conduct whereby one party undertakes to perform a certain service and impliedly assures indemnification.' Palomba v East Detroit, 112 Mich. App. 209, 217; 315 N.W.2d 898 (1982)."
On appeal, Riise argues that the trial court erred in concluding that it could not prove freedom from active fault. Riise points out that the original plaintiff's complaint alleged only breach of implied warranties, rather than "active" negligence. This argument was rejected in Clark Equipment, supra, where it was noted that the Supreme Court in Prentis v Yale Manufacturing Co, 421 Mich. 670; 365 N.W.2d 176 (1984), held that "in an action against a manufacturer of a product based on an alleged defect in the design of the product, the theories of breach of implied warranty and negligence involve identical evidence and require proof of the same elements". Clark Equipment, supra, p 101. Therefore, in basing its claim against Riise on breach of implied warranties, the original plaintiff did in fact allege that Riise was guilty of active negligence.
The inquiry does not end here, however, because the allegations contained in Riise's third-party complaint require that we address a controversy which surrounds the case of Hill v Sullivan Equipment Co, 86 Mich. App. 693; 273 N.W.2d 527 (1978). In Hill, the original plaintiff brought suit against the designer and manufacturer of a screw conveyor for injuries sustained when his arm became caught in the conveyor. The manufacturer filed a third-party complaint against the original plaintiff's employer, alleging that the conveyor was originally designed with a protective cover, but that the employer explicitly rejected the design and insisted on installation of the machine without the cover. As in the case now before us, the third-party complaint alleged that the conveyor was to be inaccessible to workers while the machine was in operation. On these facts, the Hill majority found that the third-party plaintiff should have been permitted to proceed to trial on its implied contractual indemnity claim.
In subsequent cases, panels of this Court have construed Hill as standing for the proposition that freedom from active fault is not a precondition to an implied contractual indemnity claim, and on that basis have declined to follow the opinion. See Skinner v D-M-E Corp, 124 Mich. App. 580, 585; 335 N.W.2d 90 (1983); Johnson v Bundy, 129 Mich. App. 393, 399, fn 5; 342 N.W.2d 567 (1983); Feaster v Hous, 137 Mich. App. 783, 791; 359 N.W.2d 219 (1984). However, as noted in Reed v St Clair Rubber Co, 118 Mich. App. 1, 10; 324 N.W.2d 512 (1982), and Clark Equipment Co v Jones lamson, supra, p 99, Hill was unique in that the allegations of the third-party complaint, if proven, would establish that the sole cause of plaintiff's injury was the third-party defendant's negligence. Thus, in permitting the case to go to trial, the Hill majority did not conclude that freedom from active fault was not a precondition to recovery under an implied contractual indemnity theory. Rather, the majority held only that the third-party plaintiff should be given an opportunity to prove that it was in fact completely free of any active fault in bringing about the injury.
We believe that the third-party plaintiff in the case before us should be given the same opportunity. Taking the allegations contained in Riise's complaint as true, as we must when reviewing an appeal from an order granting summary judgment under GCR 1963, 117.2(1), Abel v Eli Lilly Co, 418 Mich. 311, 323-324; 343 N.W.2d 164 (1984), it would appear that Riise was completely without fault in connection with the death of Virgil Kirin. As in Hill, the employer ordered the construction of a product which was to be inaccessible to workers and specifically approved a design which did not include guardrails. Any fault on the part of Riise was even further removed by J L's modification of the platform to provide for human access, and then its rejection of a recommendation to completely enclose the platform's perimeter with guardrails. If Riise can successfully establish these facts at trial, the only conclusion which can reasonably follow is that Riise was free of active fault and cannot on that basis be denied recovery on its implied contractual indemnity claim.
Reversed and remanded for trial.