GREGORY HALL V WOLVERINE BANK
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STATE OF MICHIGAN
COURT OF APPEALS
GREGORY HALL and LISA HALL,
UNPUBLISHED
June 17, 2008
Plaintiffs-Appellees,
v
No. 276471
Bay Circuit Court
LC No. 06-003341-CH
WOLVERINE BANK,
Defendant,
and
RONALD ROBBINS and ANDREW J.
NEUMANN,
Defendants-Appellants.
Before: Bandstra, P.J., and Talbot and Schuette, JJ.
PER CURIAM.
Defendants, Ronald Robbins and Andrew J. Neumann, appeal as of right from the trial
court’s denial of their motion for summary disposition based on their assertion of governmental
immunity. We affirm in part and reverse in part.
This action arises from flooding, which occurred on residential property owned by
plaintiffs, Gregory and Lisa Hall. Plaintiffs purchased a 13.73-acre parcel in Beaver Township
in March 2002 with the intent of building a home. Plaintiffs hired a builder, Kent Russell of
Russell Log Homes to construct the residence1 and obtained financing from defendant,
Wolverine Bank.2 Purportedly, in August 2002, a flood determination was conducted and
1
Russell Homes, while not a party to this appeal, was named a non-party at fault by stipulation
of the parties in accordance with MCR 2.112(K).
2
Defendant, Wolverine Bank, was granted summary disposition on February 7, 2007, and is not
a party to this appeal.
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provided to plaintiffs by Wolverine Bank, which represented that their property was not located
in a flood zone.
Russell oversaw construction of the home from July through October 2002 and procured
all building permits for the construction, with the exception of permits for installation of a septic
system and well, which plaintiffs obtained. In order to procure the building permit, Russell met
with Neumann, the building inspector for Beaver Township, on two or three separate occasions.
Neumann completed and signed the building permit, inspected the home site and sporadically
monitored the construction of the residence.
Plaintiffs alleged that their property began to experience repetitive annual flooding
beginning in March 2004. Plaintiffs further indicated that a FEMA National Flood Insurance
Program Evaluation Certificate, issued during the summer of 2004, noted their home was located
within a flood plain. Plaintiffs filed a complaint alleging, in relevant part, that Robbins, as the
zoning administrator, and Neumann, as the building inspector for Beaver Township were grossly
negligent in failing to ascertain that plaintiffs’ home was located in a flood zone before the
issuance of the building permit. Specifically, plaintiffs argued that both Robbins and Neumann
failed to properly apprise themselves of their job responsibilities and the existence of ordinances
and maps requiring their identification of flood zones prior to issuance of a building permit.
Although plaintiffs acknowledged Robbins’ status as a Township employee, they also asserted
an alternative claim for ordinary negligence against Neumann, claiming he was acting as an
independent contractor. Plaintiffs contended that the damage suffered encompassed not only the
flooding and resultant harm to their residence, but also their subsequent inability to sell the home
because of its location in a flood zone. In plaintiffs’ appellate brief they indicate their attempt to
sell their home, two years following its construction, in 2004 was precluded when a potential
purchaser was required to obtain a survey of the property and an independent flood plain
determination. Noteworthy is plaintiffs’ contention that it was the use of this survey, combined
with use of the Township’s FEMA maps that “pinpointed [the home] as being located in a
floodplain.”
Defendants filed a motion for summary disposition, pursuant to MCR 2.116(C)(7), (C)(8)
and (C)(10), and asserted, as a defense, their preclusion from liability based on governmental
immunity. Defendants denied that any errors or omissions on their part were sufficient to
comprise gross negligence. Finally, defendants contended that any acts or omissions on their
part were not the proximate cause of plaintiffs’ alleged injuries. The trial court denied
defendants’ motion, stating in relevant part:
I think that one, there are questions of fact here that need to be resolved and that
it’s the jury’s responsibility to determine them. There are issues as to question of
fact as to Mr. Neuman’s [sic] status, is he a contractor, an employee, what’s the
standard that applies to him, gross negligence or ordinary negligence, questions of
fact of whether the conduct of these two Defendants in failing to be cognizance
[sic] of their responsibilities and issuing a permit that obviously shouldn’t [sic]
been issued whether that constitutes negligence, ordinary negligence, or gross
negligence and those are material issues of fact for the jury to look at . . . .
[L]ooking at the evidence in light most favorable to the – to the plaintiff here, you
know there is substantial compelling evidence of gross negligence on behalf of
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both Defendants in not being aware of their responsibilities in issuing a permit
without care of the consequence.
***
[T]here’s a question of fact that the jury is going to have to sort out what was the
proximate cause whether it was the flood or the fact that the permit was issued
and the house ended up being placed where it is . . . . I agree with the Plaintiffs’
argument myself that the harm here is the house is placed where it is and the
proximate cause of it being placed there is the issuance of the building permit that
should not have been issued. But for that, the house never would have been built
there. It would have been illegal to build it there and the only way it would have
happened was the responsibility of the two Defendants to see that the house was
not built there and they abdicated that responsibility.
A trial court’s decision to grant or deny summary disposition is reviewed de novo on
appeal. Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). A motion brought
pursuant to “MCR 2.116(C)(7) tests whether a claim is barred because of immunity granted by
law, and requires consideration of all documentary evidence filed or submitted by the parties.”
Glancy v Roseville, 457 Mich 580, 583; 577 NW2d 897 (1998). The applicability of
governmental immunity also comprises a question of law that we review de novo. Baker v
Waste Mgt of Michigan, Inc, 208 Mich App 602, 605; 528 NW2d 835 (1995). In addition, a
motion for summary disposition submitted pursuant to “MCR 2.116(C)(8) tests the legal
sufficiency of the complaint on the basis of the pleadings alone.” Beaudrie v Henderson, 465
Mich 124, 129; 631 NW2d 308 (2001). The grant of summary disposition in accordance with
MCR 2.116(C)(10) is proper when, “[e]xcept as to the amount of damages, there is no genuine
issue as to any material fact, and the moving party is entitled to judgment or partial judgment as
a matter of law.”
In evaluating the trial court’s denial of summary disposition with regard to Robbins, we
note that neither party disputes his status as an employee of Beaver Township as the zoning
administrator. Consequently, he is entitled to governmental immunity absent a demonstration of
gross negligence. MCL 691.1407(2)(c). Specifically, a governmental employee, who is acting
within the scope of his authority, is immune from tort liability unless he was grossly negligent
and his gross negligence was the proximate cause of the alleged injury. MCL 691.1407(2)(a)(c). Gross negligence is statutorily defined to comprise “conduct so reckless as to demonstrate a
substantial lack of concern for whether an injury results.” MCL 691.1407(7)(a). “Simply
alleging that an actor could have done more is insufficient [to establish gross negligence] under
Michigan law, because, with the benefit of hindsight, a claim can always be made that extra
precautions could have influenced the result.” Tarlea v Crabtree, 263 Mich App 80, 90; 687
NW2d 333 (2004). Rather, an assertion of gross negligence implies a willful disregard of
precautions or efforts to assure safety and an exceptional disregard of the substantial risks
entailed. Id.
Plaintiffs contend, and the trial court concurred, that a question of fact existed, which
would permit a reasonable jury to conclude that Robbins’ failure to know his job responsibilities
and to educate himself regarding existing ordinances, particularly with regard to zoning and
flood plain determinations, comprised gross negligence. Plaintiffs contend the position of zoning
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administrator and building inspector were linked and were to be performed by one individual.
Robbins had exceptionally limited experience in the building trades and little to no training in
zoning administration. Robbins testified that he understood his duties as zoning administrator as
primarily involving enforcement of the anti-blight ordinance and issuance of special use permits
pertaining to excavations and land splits. Robbins typically would await a query regarding
zoning and would then read the relevant ordinances to respond to the question but was not
generally knowledgeable regarding existing ordinances. He was allegedly unaware of any
additional responsibilities as zoning administrator and did not believe it was within the scope of
his duties to assure that individuals did not build in the flood zone, contrary to the content of a
Township resolution and corresponding ordinance, which indicated the building inspector was
responsible for the review of all building permits to ascertain whether a building would be
reasonably safe from flooding. When deposed, Robbins acknowledged that he did not review or
sign building permit applications, was unaware of the existence of flood plain maps for the area,
and was not familiar with the Township’s ordinance procedure, which indicated that the zoning
administrator was the building inspector and was responsible for evaluating building permits.
Defendants responded by noting that plaintiffs acknowledged they had little to no contact
with Robbins regarding the construction of their home. Notably, defendants contend Robbins
did not issue the building permit and did not review the permit application. While
acknowledging that Robbins’ failure to educate himself regarding the responsibilities and duties
of his position may demonstrate a level of incompetence and ordinary negligence, we agree with
defendants’ contention that it is insufficient to find the existence of gross negligence. As
previously noted by this Court, “[e]vidence of ordinary negligence does not create a question of
fact regarding gross negligence.” Xu v Gay, 257 Mich App 263, 271; 668 NW2d 166 (2003).
“[D]efendant’s mere ignorance does not constitute conduct so reckless as to demonstrate a
substantial lack of concern for whether an injury resulted.” Id. Consequently, the trial court
erred in failing to grant Robbins’ motion for summary disposition based on his claim of
governmental immunity.
Our review of the trial court’s denial of Neumann’s request for summary disposition must
initially address concerns regarding whether this defendant enjoys the status of an employee of
Beaver Township or is merely an independent contractor before considering what level of
negligence must be demonstrated for liability to ensue. An independent contractor is defined as
“one who, carrying on an independent business, contracts to do work without being subject to the
right of control by the employer as to the method of work but only as to the result to be
accomplished.” Candelaria v BC Gen Contractors, Inc, 236 Mich App 67, 73; 600 NW2d 348
(1999) (citations omitted). Typically, the economic reality test is used to determine an
individual’s status as an employee or independent contractor. Rakowski v Sarb, 269 Mich App
619, 625; 713 NW2d 787 (2006). The following factors have been identified as relevant to the
economic reality test: (a) control of the duties performed by the worker; (b) the payment of
wages; (c) the right to hire, fire and discipline the worker, (d) the worker’s performance of duties
directed toward the achievement of a common goal; (e) whether the worker provides his own
tools, materials or equipment to perform his duties; and (f) whether the worker holds himself out
to the public as ready and capable of performing certain tasks. Coblentz v City of Novi, 475
Mich 558, 578-579; 719 NW2d 73 (2006). In making this determination, no single factor is
controlling. Rather, it is the totality of the circumstances that must be considered. Id. at 579.
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Neumann asserted he understood that he was an employee of the Township and did not
recall having signed any agreement as an independent contractor to function as the Township’s
building inspector. Neumann was paid a monthly fee of $200 by the Township and received
additional monies for each permit issued once the construction was completed. He asserted that
the Township controlled his assignments and maintained authority to fire him at any time.
Neumann, while acknowledging having received little training or instruction when he began as
the building inspector, indicated that when questions arose he sought out the guidance of
Robbins and others in positions of authority.
In contrast, plaintiffs assert Neumann was an independent contractor because he worked
only part-time and determined his own schedule in performing building inspections for the
Township while simultaneously working for other employers. Although Neumann was uncertain
whether the Township paid him on a W-2 or 1099 form, he acknowledged the Township did not
withhold taxes. Neumann indicated he received minimal training before assuming his position,
as the Township’s building inspector, and implied oversight was limited, as he did not routinely
seek supervisory approval of the building permits issued. This suggests a commonality of
purpose only in the outcome to be achieved regarding the completion of necessary inspections
for issuance of building permits, while leaving Neumann with a high level of autonomy in
determining how the actual work was to be performed and resulting in a commensurate
relinquishment of control or oversight by the Township.
Because each party provided evidence pertaining to different factors relevant to the
economic reality test, we concur with the trial court’s finding that a genuine issue of material fact
existed regarding Neumann’s employment status with the Township and the denial of summary
disposition with regard to this defendant. Because an issue of fact exists regarding Neumann’s
employment status, we need not determine whether his actions or omissions constituted ordinary
or gross negligence or address the issue of proximate cause.
We affirm in part and reverse in part. We do not retain jurisdiction.
/s/ Richard A. Bandstra
/s/ Michael J. Talbot
/s/ Bill Schuette
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