RAFAEL ENRIQUEZ V NEW DIMENSION DEVELOPMENT INC
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STATE OF MICHIGAN
COURT OF APPEALS
RAFAEL ENRIQUEZ and MARY ENRIQUEZ,
UNPUBLISHED
February 27, 2001
Plaintiffs-Appellees,
v
No. 216929
Wayne Circuit Court
LC No. 96-632584-CK
NEW DIMENSION DEVELOPMENT,
Defendant-Third-Party PlaintiffAppellant,
and
TITANUS CEMENT WALL COMPANY,
Third-Party Defendant-Appellee.
Before: Zahra, P.J., and Hood and McDonald, JJ.
PER CURIAM.
Defendant-third-party plaintiff New Dimension Development (New Dimension) appeals
as of right from a post bench trial order of judgment. We affirm in part and reverse in part.
Plaintiffs contracted with New Dimension for construction of a house. New Dimension
agreed to provide an eighteen-month home warranty. During the construction, New Dimension
hired third-party defendant Titanus Cement Wall Company (Titanus) to pour the home’s concrete
footings, basement walls and basement floor. Approximately six months after taking possession
of the house, plaintiffs complained to New Dimension that there were numerous construction
defects. Among the defects were cracks and rod holes in the basement walls that caused water
leakage.
Plaintiffs filed suit, alleging breach of contract, breach of warranty, negligence and
violations of the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq.; MSA
19.418(1) et seq. New Dimension filed a third-party complaint against Titanus, alleging breach
of warranty and negligence and seeking indemnity. At trial, plaintiffs asserted that significant
structural repairs were needed to properly repair the defects to the basement. The trial court
found New Dimension liable for breach of contract and breach of warranty and awarded
plaintiffs $33,085 as damages for below-ground-level structural defects. The court ruled in favor
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of New Dimension on plaintiffs’ negligence and MCPA claims and rendered a judgment of nocause in regard to New Dimension’s indemnity claim against Titanus after finding that New
Dimension engaged in “tortious wrong-doing.”
On appeal, New Dimension first argues that the trial court erred in denying its claim for
common law indemnity.1 New Dimension contends that because the trial court found that it is
not liable on plaintiffs’ negligence claim, it was error to find that New Dimension engaged in
tortious conduct that bars indemnity.
A trial court’s factual findings are reviewed for clear error. Christiansen v Gerrish Twp,
239 Mich App 380, 387; 608 NW2d 83 (2000). A finding is clearly erroneous if, although there
is evidence to support it, a reviewing court is left with the definite and firm conviction that a
mistake was made. Id. Questions of law are reviewed de novo. Oakland Co Prosecutor v
Beckwith, 242 Mich App 579, 581; 619 NW2d 172 (2000).
“Generally, indemnification is an equitable doctrine that shifts the entire burden of
judgment from one tortfeasor who has been compelled to pay it, to another whose active
negligence is the primary cause of the harm.” St Luke’s Hospital v Giertz, 458 Mich 448, 453;
581 NW2d 665 (1998). Common law indemnity requires that the party seeking indemnification
must be free of active negligence or fault. Id. at 454; Williams v Litton Systems, Inc, 433 Mich
755, 760; 449 NW2d 669 (1989). A party seeking indemnity at common law must plead and
prove freedom from personal fault. Peeples v Detroit, 99 Mich App 285, 292; 297 NW2d 839
(1980), citing Husted v Consumers Power Co, 376 Mich 41, 51; 135 NW2d 370 (1965) and
McLouth Steel Corp v A E Anderson Construction Corp, 48 Mich App 424, 430; 210 NW2d 448
(1973). To determine whether the party seeking indemnification was “actively” or “passively”
negligent, the court examines the primary plaintiff’s complaint. Feaster v Hous, 137 Mich App
783, 787; 359 NW2d 219 (1984). “If the complaint alleges ‘active’ negligence, as opposed to
derivative liability, the defendant is not entitled to common-law indemnity.” Id. at 787-788,
quoting Peeples, supra at 293.
Here, plaintiffs’ complaint did not allege a theory of derivative liability or passive
negligence against New Dimension. New Dimension’s third-party complaint did not plead
1
There are three possible sources of a right to indemnification: the common law, an implied
contract and an express contract. Williams v Litton Systems, Inc, 433 Mich 755, 760; 449 NW2d
669 (1989); Dep’t of Transportation v Christensen, 229 Mich App 417, 425; 581 NW2d 807
(1998). In its statement of questions presented on appeal and the ensuing argument in its brief on
appeal, New Dimension asserts that the trial court erred in dismissing its claim for common law
indemnity. In an opinion and order issued after trial, the trial court specified that New
Dimension is not entitled to common law indemnity. While New Dimension suggests in its reply
brief on appeal that it is entitled to both common law indemnity and “implied indemnification,”
we decline to address argument regarding “implied indemnity” not contained in New
Dimension’s statement of questions presented and not considered below, see Caldwell v
Chapman, 240 Mich App 124, 132; 610 NW2d 264 (2000); Check Reporting Services, Inc v
Michigan Nat’l Bank, 191 Mich App 614, 628; 478 NW2d 893 (1991); see also MCR
7.212(C)(5) and (G), and restrict our analysis to the merit of New Dimension’s argument
regarding common law indemnity.
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freedom from personal fault, but instead generally sought indemnity based on Titanus’
negligence and breach of warranty. See Peeples, supra at 292. As noted supra, the trial court
found for New Dimension on plaintiffs’ negligence claim. However, the failure of plaintiffs’
negligence claim is not dispositive of whether New Dimension proved freedom from personal
fault as is required to collect on a theory of common law indemnity. See id. The trial court
found New Dimension liable for breach of contract and breach of warranty. The dispositive
question is whether the conduct that formed the bases of those claims supports the trial court’s
finding that New Dimension engaged in “tortious wrong-doing” and, therefore, is not entitled to
indemnity.
New Dimensions does not challenge the following findings regarding plaintiffs’ breach of
contract and warranty claims:
5 . . . New Dimension, both expressly and impliedly warranted that Plaintiff’s
home would be fit for its purpose as a residence.
6. The Court finds that Defendant, New Dimension had a duty to provide
Plaintiffs with a home construed [sic] to Industry Standards.
* * *
8. The Court finds by a preponderance of evidence that the Defendant failed to
provide Plaintiffs with a home construed [sic] to industry standards, failed to
remedy the defects previously referred to and breached the express and implied
warranties provided to Plaintiffs.
9. The failure of the Defendant to provide a home constructed to industry
standards and to remedy the defects previously referred to constitute breach of
contract, breach of express and implied warranties.
10. As a result of Defendant’s breach of contract, and breach of express and
implied warranties, the total amount of damages awarded to the Plaintiff for repair
of Plaintiff’s home below ground is $33,085.00.
Those findings as they relate to New Dimension’s breach of warranty suggest personal fault on
the part of New Dimension. See Feaster, supra at 789-790. Evidence at trial supports the
conclusion that the house in question was not constructed to industry standards. Under these
circumstances, we cannot say that the trial court clearly erred in finding that New Dimension
engaged in tortious wrong-doing. Christiansen, supra. Where New Dimension has failed to
plead or prove freedom from fault, there is no reason in equity to allow indemnification. See St
Luke’s Hospital, supra and Peeples, supra. Consequently, the trial court properly concluded that
New Dimension is not entitled to indemnity from Titanus. Oakland Co Prosecutor, supra.
New Dimension also challenges the trial court’s damage award. First, New Dimension
claims that the court clearly erred in awarding damages based on exterior excavation to repair
cracks and rod holes in the basement walls. There was conflicting testimony regarding whether
the basement walls needed to be repaired from the exterior. Plaintiffs’ expert, William Callahan,
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testified at deposition that exterior excavation was necessary to repair floating sections of the
foundation. Other experts opined that the structural integrity of the basement was not at risk and
that the walls could be repaired from the interior using epoxy injections. Given testimony that
exterior repair is an accepted method of repair and, in one expert’s opinion, the best method of
repair under the circumstances, we cannot say that the trial court’s finding of damages of $10,575
for exterior repair and restoration was clearly erroneous.
New Dimension also challenges the damage award for costs related to fastening the
superstructure of the house to the foundation using foundations straps or anchor bolts. The trial
court found that the house did not have the necessary fasteners, apparently based on engineer
Kenneth Winters’ and Callahan’s statements that they did not observe foundation straps upon
inspection of the interior of the basement. Titanus’ expert John Lamb testified that he, in fact,
observed foundation straps on the house, but that they were only visible from the exterior of the
house, and not inside the basement. Callahan clarified that he could not say with certainty that
no anchor straps were present, just that he did not see any based on his observations in the
basement. Under these circumstances, where one expert testified that the required hardware was,
in fact, already present and other expert testimony on the subject was speculative, the trial court’s
finding that straps or anchor bolts were necessary was clearly erroneous. Therefore, on remand,
the court shall deduct the amount of damages awarded to plaintiffs in connection with the
addition of foundation straps or anchor bolts.
New Dimension further claims that the trial court erred in awarding damages for
alternative methods of repair. The trial court adopted plaintiffs’ proposed findings regarding the
repairs necessary to support the top of the basement walls. Those findings were based on
Callahan’s recommendations. Callahan specified that he relied on Winters’ report and
recommendations. Regardless of the fact that Winters’ report states that anchoring the floor
joists and sill-plate to the top of the basement walls and placing steel posts vertically against the
walls anchored into the basement floor and floor framing above are alternative methods of repair,
the trial court considered both repairs when calculating damages. Including the cost for
alternative methods of repair under these circumstances was clearly erroneous. On remand, the
trial court shall determine which method of repair is proper and award damages accordingly.
Affirmed in part, reversed in part and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Brian K. Zahra
/s/ Harold Hood
/s/ Gary R. McDonald
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