Third-party plaintiffs Morgan-Heller & Associates, Inc. and Ben Heller (collectively the Morgan-Heller appellants) appeal as of right the March 26, 2008 final judgment. Specifically, the Morgan-Heller appellants contend that the trial court erred in granting summary disposition to third-party defendant Tartan Plumbing, LLC (Tartan) on their third-party complaint for common-law indemnification and contribution. Because we conclude that the trial court did not err in granting summary disposition to Tartan, we affirm.
I. Basic Facts and Procedural History
Morgan-Heller & Associates, Inc. (Morgan-Heller)
Plaintiffs sued the Morgan-Heller appellants for breach of contract, fraudulent misrepresentation and concealment, innocent misrepresentation, negligent misrepresentation and concealment, breach of fiduciary duty, promissory estoppel, and negligence. Plaintiffs also asserted claims for violations of the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq., and the Magnuson-Moss Warranty Act (Magnuson-Moss), 15 USC 2301 et seq. Because of the problems resulting from the cut floor joist, the Morgan-Heller appellants subsequently filed a third-party complaint against Tartan, asserting claims of common-law indemnification and contribution.
Tartan moved for summary disposition on the third-party claims for indemnification and contribution. It argued that the only claim in plaintiffs' complaint that could support the third-party claims for indemnification and contribution was the negligence claim. Because the negligence count only alleged "active" negligence by the Morgan-Heller appellants, Tartan argued that the Morgan-Heller appellants could not sustain a claim for common-law indemnification. In addition, Tartan argued that the Morgan-Heller appellants had failed to state a claim for contribution because, pursuant to MCR 600.6304, a defendant cannot be held liable for more than its pro rata share of the damages. In response, the Morgan-Heller appellants argued that a party is entitled to common-law indemnification where its liability arises by operation of law. Relying on its claim that the cut floor joist was the cause of the damage to plaintiffs' home, the Morgan-Heller appellants argued that its liability for breach of contract, breach of express and implied warranties,
The trial court granted Tartan's motion for summary disposition. According to the trial court, Tartan was entitled to summary disposition on the indemnification claim because the allegations in plaintiffs' complaint against the Morgan-Heller appellants sounded in active negligence. The trial court also held that because, under Michigan law, the Morgan-Heller appellants could not be obligated to pay for more than their own pro rata share of liability, the Morgan-Heller appellants were not entitled to contribution.
II. Standard of Review
We review a trial court's decision on a motion for summary disposition de novo. Tenneco Inc v Amerisure Mut Ins Co, 281 Mich.App. 429, 443; 761 N.W.2d 846 (2008). Summary disposition is proper under MCR 2.116(C)(8)
The Morgan-Heller appellants argue that the trial court erred in granting summary disposition to Tartan on their indemnification claim because plaintiffs, to establish their claims for breach of contract, breach of express and implied warranties, and violations of the MCPA and Magnuson-Moss, do not need to prove that the Morgan-Heller appellants were negligent in performing the renovation of the home. Thus, according to the Morgan-Heller appellants, their liability arises by operation of law and, therefore, they are entitled to common-law indemnification from Tartan.
"`The right to common-law indemnification is based on the equitable principle that where the wrongful act of one party results in another being held liable, the latter party is entitled to restitution.'" North Community Healthcare, Inc v Telford, 219 Mich.App. 225, 227; 556 N.W.2d 180 (1996), quoting Cameron v Monroe Co Probate Court, 214 Mich.App. 681, 689; 543 N.W.2d 71 (1995), rev'd on other grounds 457 Mich. 423 (1998). A party is entitled to common-law indemnity when it is held liable through no fault of its own, Wilhelm v Detroit Edison Co, 56 Mich.App. 116, 157; 224 N.W.2d 289 (1974); its liability arises vicariously or through operation of law, Latimer v William Mueller & Son, Inc, 149 Mich. 620, 638; 386 N.W.2d 618 (1986). The party must be free from any active negligence. Paul v Bogle, 193 Mich.App. 479, 491; 484 N.W.2d 728 (1992); see also St Luke's Hosp v Giertz, 458 Mich. 448, 456; 581 N.W.2d 665 (1998) ("An indemnification action cannot lie where the plaintiff was even .01 percent actively at fault."). "If a party breaches a direct duty owed to another and this breach is the proximate cause of the other party's injury, that is active negligence. Where the active negligence is attributable solely to another and the liability arises by operation of law, that is passive negligence." Langley v Harris Corp, 413 Mich. 592, 597-598; 321 N.W.2d 662 (1982). We must look primarily at plaintiffs' complaint to determine whether plaintiffs are seeking to hold the Morgan-Heller appellants liable for active negligence or fault. See Proassurance Corp v Nefcy, 480 Mich. 916; 739 N.W.2d 870 (2007).
The Morgan-Heller appellants claim that the damage to plaintiffs' home was caused by Tartan's alleged improper cutting of the floor joist. Thus, we must determine whether plaintiffs, in their claims for breach of contract and breach of warranty and violations of the MCPA and the Magnuson-Moss, are seeking to hold the Morgan-Heller appellants liable for Tartan's improper cutting of the floor joist.
In their claim for a violation of the MCPA, plaintiffs allege that Morgan-Heller made numerous false representations and nondisclosures. In the claim for a violation of Magnuson-Moss, plaintiffs allege that the Morgan-Heller appellants were required to remedy any defect in the home renovation within a reasonable time and that the Morgan-Heller appellants failed to do so. Reviewing the allegations of the two statutory violation claims, it is clear that in the claims plaintiffs are seeking to hold the Morgan-Heller appellants liable for their own active fault, i.e., the false representations and nondisclosures and the failure to remedy defects in the home renovation.
In their claim for breach of contract, plaintiffs make numerous allegations regarding how the Morgan-Heller appellants breached the contract, including the express and implied warranties contained therein. There are allegations, among others, that the Morgan-Heller appellants failed to renovate the home in accordance with the applicable building codes, failed to repair and correct structural defects, failed to use and select the building materials of the highest standard, concealed material and workmanship defects, and damaged HVAC duct work beneath the master suite. Only one of the 23 allegations specifically mentions the cut floor joist, and that allegation claims that the Morgan-Heller appellants breached the contract by failing to oversee the work of the subcontractors. Reviewing the allegations of the breach of contract claim, plaintiffs are seeking to hold the Morgan-Heller appellants liable for their own active fault in performing the home renovation. Because plaintiffs sought to hold the Morgan-Heller appellants liable for their active fault, the trial court did not err in granting summary disposition to Tartan on the Morgan-Heller appellants' claim for indemnification.
The Morgan-Heller appellants also argue that the trial court erred in granting summary disposition to Tartan on their claim for contribution. Specifically, the Morgan-Heller appellants assert that they are entitled to receive contribution from Tartan on plaintiffs' claims for breach of contract, breach of warranty, and violations of the MCPA and Magnuson-Moss because their liability on these claims arises by operation of law without any consideration of their fault.
"[W]hen 2 or more persons become jointly or severally liable in tort for the same injury to a person or property . . . there is a right of contribution among them even though the judgment has not been recovered against all or any of them." MCL 600.2925a(1). "[C]ontribution is the partial payment made by each or any of jointly or severally liable tortfeasors who share a common liability to an injured party.... [I]t distributes the loss among all tortfeasors, each bearing his pro-rata share." St Luke's Hosp, supra at 453 (internal citation omitted).
However, 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." Similarly, MCL 600.2957(1) mandates that "[i]n an action based on tort or another legal theory seeking damages for personal injury, property damage, or wrongful death, the liability of each person shall be allocated . . . in direct proportion to the person's percentage of fault." In addition, MCL 600.6304(4) provides that "[l]iability in an action to which this section applies is several only and not joint. . . . [A] person shall not be required to pay damages in an amount greater than his or her percentage of fault . . .."
The only case that the Morgan-Heller appellants cite to argue that their contribution claim survives the tort reform legislation is Laurel Woods Apartments v Roumayah, 274 Mich.App. 631; 734 N.W.2d 217 (2007). In Laurel Woods Apartments, the two defendants leased an apartment from the plaintiff. The lease agreement contained a provision that the "Tenant," defined as "(jointly severally) Najah Roumayah & Rebecca Roumayah," would be "liable for any damage to the Premises . . . that is caused by the acts or omissions of Tenant." A kitchen fire, which started after Rebecca Roumayah left the kitchen after doing some cooking, caused substantial damage to the apartment. The plaintiff sued the defendants for breach of contract, and subsequently moved for summary disposition, arguing that there was no question of fact that Rebecca Roumayah caused the fire and that, pursuant to the lease agreement, the defendants were jointly and severally liable for the damage to the apartment. Najah Roumayah argued that the claim against him should be dismissed because there was no evidence that he caused the fire and, pursuant to MCL 600.2956, he could not be held liable. This Court disagreed:
The Morgan-Heller appellants claim that because the Court concluded that Najah Roumayah could be held liable without any consideration of his fault, MCL 600.2956 does not preclude their claim for contribution on the claims for which they could be held liable by operation of law and without consideration of their fault. However, in Laurel Woods Apartments, it was because Najah Roumayah had expressly agreed in the lease agreement to be jointly and severally liable for any damage to the apartment that he could be held liable for the fire damage without consideration of his fault. Here, however, there is no allegation that Tartan expressly agreed in any contract to be jointly and severally liable for any damage to plaintiffs' home. Accordingly, the Morgan-Heller appellants' reliance on Laurel Woods Apartments is unavailing, and they have not established that the trial court erred in granting summary disposition to Tartan on their claim for contribution.