MARKET DEVELOPMENT CORP V STATE MUTUAL INSUR
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STATE OF MICHIGAN
COURT OF APPEALS
MARKET DEVELOPMENT CORPORATION,
SPARTAN STORES, and NATIONAL UNION
FIRE INSURANCE COMPANY,
UNPUBLISHED
November 9, 2001
Plaintiffs-Appellees,
v
STATE MUTUAL INSURANCE COMPANY,
No. 225439
Kent Circuit Court
LC No. 98-009206-CK
Defendant-Appellant.
Before: Gage, P.J., and Jansen and O’Connell, JJ.
PER CURIAM.
Defendant appeals as of right from the trial court’s order granting summary disposition in
favor of plaintiffs in this declaratory judgment action. We affirm.
On January 14, 1996, Marjorie Baima slipped and fell on an icy sidewalk at the Three
Rivers Shopping Center and injured her elbow. She was in front of a store called Dancers, Inc.,
which was closed at the time, and was on her way to shop at D & W Food Center, a grocery store
next door to Dancers.
Plaintiff Market Development Corporation, a wholly-owned subsidiary of Spartan Stores,
Inc., owns the Three Rivers Shopping Center. D & W and Dancers both had leases with Market
Development, which required the stores to keep the sidewalks in front of them to be free from ice
and snow. The leases also required the stores (tenants) to maintain premises liability insurance
and list Market Development as an additional named insured. Dancers had its insurance through
defendant State Mutual Insurance Company, and D & W and Spartan Stores had their insurance
through plaintiff National Union Fire Insurance Company (NUFIC).
In September 1997, Spartan Stores and NUFIC settled Baima’s premises liability claim
for $100,000 and Baima also signed a release. On September 4, 1998, plaintiffs filed their
complaint seeking a declaratory judgment and alleging that under the lease between Market
Development and Dancers, Dancers agreed to list Market Development as an additional named
insured under Dancers’ insurance policy for any premises liability action associated with the
tenancy. Consequently, Market Development sought to be reimbursed from defendant the
amount that was paid to Baima.
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Both plaintiffs and defendant filed motions for summary disposition. A hearing was held
on November 19, 1999, and the trial court issued its opinion and order on January 25, 2000,
granting summary disposition in favor of plaintiffs. The trial court ruled that the insurance
policy issued by defendant clearly and unambiguously required defendant to reimburse to Market
Development the amount paid to Baima for her premises liability action. As noted by the trial
court, the policy states that defendant would pay those sums that the insured becomes legally
obligated to pay as damages because of bodily injury, property damage, personal injury, or
advertising injury caused by an occurrence. The trial court reasoned that Market Development
was an additional named insured under the insurance policy issued by defendant and was legally
obligated to pay Baima as a result of an occurrence under the policy; therefore, Market
Development was entitled to reimbursement.
Defendant first argues that the trial court erred in granting summary disposition to
plaintiffs because the terms of the lease agreement expressly waived any claim for subrogation or
recovery. This action, however, is a declaratory judgment action in which plaintiffs seek
indemnification. Market Development is not standing in someone else’s stead seeking
reimbursement for monies paid on that person’s behalf. See Yerkovich v AAA, 461 Mich 732,
737; 610 NW2d 542 (2000) (subrogation is traditionally defined as the substitution of one person
in the place of another with reference to a lawful claim, demand, or right so that the person who
is substituted succeeds to the rights of the other). Here, Market Development is asserting its own
contractual right as an additional named insured under the insurance policy issued by defendant
for Dancers.
Accordingly, this case does not involve a subrogation claim and the subrogation waiver
in the lease agreement does not affect plaintiffs’ cause of action in any way.
Defendant next argues that the trial court erred in granting summary disposition to
plaintiffs because the settlement and release did not extinguish defendant’s liability or that of its
insureds. We agree with the trial court that the release did extinguish Market Development’s
liability because the release explicitly released Spartan Stores, Inc. and its “agents, insurers, or
assigns from any and all claims” associated with Baima’s slip and fall.
Market Development is a wholly owned subsidiary of Spartan Stores, Inc. Evidence
submitted by plaintiffs indicated that Market Development has no employees and no payroll, and
that “all or almost all” of the directors and officers of Market Development are directors and
officers of Spartan Stores, Inc. Further, evidence in the record indicates that Market
Development acts as the agent of Spartan Stores, Inc. in owning certain real property, including
the Three Rivers Shopping Center. Defendant has not refuted this evidence. As held by our
Supreme Court, if a subsidiary is a mere instrumentality of the parent, its separate corporate
existence will be disregarded. Seasword v Hilti, Inc (After Remand), 449 Mich 542, 548; 537
NW2d 221 (1995). Additionally, an agency may arise when there is a manifestation by the
principal that the agent may act on the principal’s account. Meretta v Peach, 195 Mich App 695,
697; 491 NW2d 278 (1992). The test whether an agency has been created is whether the
principal has a right to control the actions of the agent. Id.
The trial court’s conclusion that Market Development is an agent of Spartan Stores, Inc.
is supported by the evidence and defendant has not refuted this evidence. Accordingly, the trial
court did not err in determining that Market Development was released from liability as an agent
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of Spartan Stores, Inc. from any further claims thereby obligating defendant to reimburse Market
Development.
Lastly, defendant argues that the trial court erred in granting summary disposition to
plaintiffs because a question of fact exists regarding the proportionate fault of the parties. This
issue is waived for appellate review because it was not raised in the motion for summary
disposition, and as a result, the trial court never ruled on it. Booth Newspapers, Inc v Univ of
Michigan Bd of Regents, 444 Mich 211, 234; 507 NW2d 422 (1993). The only mention of this
issue occurred at the hearing on the motion for summary disposition where defendant’s counsel
stated that if the trial court disagreed with defendant’s arguments, then there was a factual issue
relating to the proportionate liability of the parties to the underlying suit.
In any event, defendant has merely asserted that there are factual issues regarding the
circumstances of Baima’s fall and the parties’ proportionate fault, but cites no facts or evidence
in support of this argument. Because defendant has failed to set forth any evidence to show that
a genuine issue of a material fact exists, Quinto v Cross & Peters Co, 451 Mich 358, 362-363;
547 NW2d 314 (1996), we need not remand for further proceedings to determine the
proportionate fault of the parties as requested by defendant.
Affirmed.
/s/ Hilda R. Gage
/s/ Kathleen Jansen
/s/ Peter D. O’Connell
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