Merritt v. Nickelson

407 Mich. 544 (1980) 287 N.W.2d 178

MERRITT
v.
NICKELSON

Docket No. 60940, (Calendar No. 13).

Supreme Court of Michigan.

Argued December 6, 1978. Decided February 1, 1980.

Donald G. Jennings for plaintiff.

Zerafa & Zerafa, P.C., for defendant Marie Ledford.

KAVANAGH, J.

We granted leave to appeal in this case to determine "whether a co-owner of land on which a drag-strip race track is operated by the other co-owner is responsible for injuries occurring on that land to a spectator of the races". We hold that such co-owner is not, and affirm the Court of Appeals.

Prior to May 6, 1970, defendant Marie Ledford was the sole owner of approximately 25 acres of land. On that day she executed a quitclaim deed to the property to herself and her son, defendant James Ledford, as tenants in common. The consideration recited was $500. For some time James Ledford had been planning to operate a race track on the property.

On the day the race track opened, May 30, 1970, the flywheel on a car driven by defendant Howard Nickelson exploded, throwing steel fragments into the crowd. Plaintiff Alan Merritt, a spectator, was struck and killed by one of the fragments.

Plaintiff, administratrix of Alan Merritt's estate, brought suit for wrongful death against Nickelson and Marie and James Ledford. Nickelson's insurance company settled the claim on his behalf for $8,500 and the cause continued to trial against the Ledfords.

The basis for plaintiff's complaint against the Ledfords was that as owners and operators of the race track, they were negligent in failing to make a safety inspection of the cars and in failing to require that the cars be equipped with a scatter shield for the flywheel, pursuant to the recommendations of the National Hot Rod Association.

The trial court, sitting without a jury, gave judgment for plaintiff against both defendants Ledford for $137,000.

Marie Ledford appealed, arguing that she was not negligent and that there was no basis upon which her son's negligence could be imputed to her. Although she did not testify at trial, the record reveals that James Ledford was the sole owner and proprietor of the business. He testified that his mother neither invested money in the business, participated in its formation or operation, nor shared in its profits. Plaintiff offered no evidence to contradict this testimony.

The Court of Appeals reversed judgment against Marie Ledford, holding that mere co-ownership in land, without a showing of possession or control, was an insufficient basis upon which to impose liability for the defective condition of the premises. Merritt v Nickelson, 80 Mich App 663; 264 NW2d 89 (1978).

As a business invitee on the property, Alan Merritt had the right to expect that the premises would be maintained and the business conducted in a reasonably safe manner. Quinlivan v Great Atlantic & Pacific Tea Co, Inc, 395 Mich 244; 235 NW2d 732 (1975); McIntyre v Pfaudler Vacuum Fermentation Co, 133 Mich 552; 95 NW 527 (1903). This duty of care was owed to him both by the invitor who solicited his business and by the possessors of the premises. See, e.g., Bluemer v Saginaw Central Oil & Gas Service, Inc, 356 Mich 399, 408; 97 NW2d 90 (1959).

Invitors are liable for known dangerous conditions of property and for dangerous conditions which might be discovered with reasonable care, regardless of whether they have legal title or control over the premises. District of Columbia v Thomas, 130 US App DC 365, 367; 401 F2d 430, 432 (1968); Danisan v Cardinal Grocery Stores, Inc, 155 Cal App 2d 833; 318 P2d 681 (1957). From this record it does not appear that Marie Ledford was an invitor. James Ledford, as sole operator of the business, expected to derive an economic benefit from the public's presence, and he alone impliedly warranted the premises' safe condition in his invitation. Prosser, Torts (4th ed), § 61, pp 386, 388.

Plaintiff asserts, however, that Marie Ledford is jointly liable for her son's negligent acts because she was the co-owner of the property on which he, the invitor, conducted his business.

We disagree.

Premises liability is conditioned upon the presence of both possession and control over the land. This is so because

"[T]he man in possession is in a position of control, and normally best able to prevent any harm to others." Prosser, supra, § 57, p 351.

Michigan has consistently applied this principle in imposing liability for defective premises. Quinlivan, supra, 267; Bluemer, supra, 408; Nezworski v Mazanec, 301 Mich 43, 56; 2 NW2d 912 (1942) (landlord-tenant cases); Bauer v Saginaw County Agricultural Society, 349 Mich 616, 623; 84 NW2d 827 (1957) (amusement park/concessionaire case); Dombrowski v Gorecki, 291 Mich 678, 681; 289 NW 293 (1939) (tenancy by entireties case).

Our application of this principle is in accordance with the Restatement of Torts. The Restatement imposes liability for injuries occurring to trespassers, licensees, and invitees upon those who are "possessors" of the land. 2 Restatement Torts, 2d, §§ 333-350, pp 183-233. A "possessor" is defined as:

"(a) a person who is in occupation of the land with intent to control it or

"(b) a person who has been in occupation of land with intent to control it, if no other person has subsequently occupied it with intent to control it, or

"(c) a person who is entitled to immediate occupation of the land, if no other person is in possession under Clauses (a) and (b)." Id., § 328 E, p 170.

Ownership alone is not dispositive. Possession and control are certainly incidents of title ownership, but these possessory rights can be "loaned" to another, thereby conferring the duty to make the premises safe while simultaneously absolving oneself of responsibility. Quinlivan, supra, 269.

The mere fact that Marie Ledford was a tenant in common with her son did not place her in occupancy of the land with the intent of controlling it. As a tenant in common, she was entitled to enter upon every part of the land and to occupy and enjoy the whole, DesRoches v McCrary, 315 Mich 611; 24 NW2d 511 (1946); it does not appear here that she chose to do so. Her freehold was separate and distinct from that of her son. His occupancy of the land was under his own right, not hers. Everts v Beach, 31 Mich 136 (1875). He was not her agent by the mere fact of their joint ownership nor were the acts performed by him transformed into a joint venture. 20 Am Jur 2d, Cotenancy and Joint Ownership, § 2, p 93.

Plaintiff argues that the obligation to keep one's premises reasonably safe for use of business visitors is a liability that an owner may not avoid. She cites fairground and amusement park cases where owners of property were held liable for the negligent acts of concessionaires or third parties whom the owners allowed to use the premises. She asserts:

"There is no reason to believe that a non-operating co-owner of land should be relieved from liability for the negligent condition and operation carried on by the active co-owner when a non-operating sole owner is not relieved from liability for a condition or activity carried out on the owner's premises by an independent third party."

This misperceives the issue. Again, it is the unity of possession and control that is dispositive. A "possessor" of property must exercise reasonable care in avoiding harm to others on his property from the negligent acts of third persons because he is in possession and control of the premises and in a position to exercise the power of control or expulsion. Prosser, supra, § 61, p 395. See, also, 2 Restatement, supra, § 344, p 223; § 383, p 287. In no case cited by plaintiff did the owner of the property give up control of the premises.^[1]

When one co-owner of land cedes possession and control of the premises to her co-owners, the law is satisfied to look to those co-owners actually in control for liability for injuries to third persons. The record in the present case does not establish that Marie Ledford exercised her right to possession and control over the property. Insofar as James Ledford became the sole "possessor" of the land within the meaning of the Restatement, supra, he alone owed a duty of care to the invitees who entered the premises. Id., § 344, p 223; § 341 A, p 209.

We find the Court of Appeals disposition of this case appropriate. Accordingly, we remand this cause to the trial court for the disposition set forth at 80 Mich App 668-669.

Affirmed.

COLEMAN, C.J., and LEVIN, FITZGERALD, and RYAN, JJ., concurred with KAVANAGH, J.

BLAIR MOODY, JR., J. (concurring in the result).

I concur with the result reached by Justice KAVANAGH. This matter should be remanded to the trial court to permit plaintiff to present evidence of defendant Marie Ledford's involvement and participation in the establishment and operation of the drag strip. I write separately to delineate certain classic principles of real property law which are applicable to this case and to outline certain essential elements which should be considered on remand.

I

This case presents a unique, hybrid situation. We are asked to determine the effect of tortious activity upon the relationship of two persons who own property as tenants in common. Any analysis, therefore, must focus on the exact nature of the relationship of those who hold land as tenants in common.

Tenancy in common as distinguished from other types of concurrent ownership, such as joint tenancy or tenancy by the entireties, is a type of co-ownership whereby each of the cotenants has a separate and distinct interest in property; but the right of possession is common to all the cotenants. Unity of possession is the essential dynamic present in all tenancies in common. Unity of possession means that each cotenant is entitled to possession of the whole property and every part thereof, subject to the same right in the other cotenants. Moynihan, Introduction to the Law of Real Property, ch 10, § 4, p 224.

Although it is well recognized that the right of possession of the whole property is vested in each tenant in common, situations often arise where one tenant in common takes possession of the whole or conducts an activity which would preclude possession by the other tenants in common. Such situations may develop because of the consent or acquiescence of the other tenants in common or when one tenant in common claims exclusive possession of the land in a fashion adverse to the interest of the other tenants in common.

Because of the relative frequency of exclusive possession by one tenant in common, courts have been called upon to fashion remedies when the other tenants in common are aggrieved by the exclusive possession. An action in ejectment will lie when there is exclusive, adverse and hostile possession and the court may order partition of the property. Fenton v Miller, 116 Mich 45; 74 NW 384 (1898). The result differs when the exclusive possession is by consent or acquiescence.

In Zwergel v Zwergel, 224 Mich 31; 194 NW 505 (1923), an action was brought by one cotenant against a second cotenant for rents and profits for the operation of a store on property owned by both cotenants.^[1] The facts in Zwergel were that plaintiff did not participate in the establishment or operation of the store and that all the stock in trade of the business was owned solely by defendant. Further, defendant occupied the store with the assent of plaintiff. This Court rejected plaintiff's claims for defendant's occupancy and profits, reflecting that if mere ownership were the standard an inequity would result. Plaintiff had neither participated in the establishment nor in the operation of the store and any award to plaintiff would be inappropriate. Zwergel, supra, 35.

The converse of the Zwergel holding is represented by Walton v Walton, 287 Mich 557; 283 NW 687 (1939). In Walton, defendant and plaintiff were formerly husband and wife who jointly owned and operated a business.^[2] Subsequent to the divorce, defendant husband had exclusive control of the operation of the business. Upon dissolution of the business, plaintiff brought suit against defendant for an accounting and division of all profits from the business. The Walton Court held that defendant must account to his cotenant for her share of the profits. Even though plaintiff was not an active participant in the business, she was entitled to share in the profits because of her interest in the stock in trade of the business. Walton, supra, 562.

There is a common thread between the Zwergel and Walton cases. Mere ownership of property is an insufficient basis for an award of damages in favor of one tenant in common for the exclusive possession and operation of a business on the common property by another cotenant. More is required. There must be some participation by the aggrieved cotenant in the venture on jointly held property before damages will be awarded.

The Zwergel and Walton holdings also have a bearing, by analogy at least, in the context of the instant case. If fundamental fairness dictates that a tenant in common, as in Zwergel, who has exclusive possession of common property by the consent or acquiescence of his cotenants retain all the profits from a venture on the property, fundamental fairness should also dictate that the exclusive possessor be responsible for any and all liabilities which result from the possessor's activities on the property. It would decry logic to allow an exclusive possessor to retain all profits but require his or her cotenants to share in the liabilities.

However, as in Walton, a different result would pertain if the non-possessory cotenant actually participated in the venture. Whether this involvement or participation occurred through ownership of stock, subsidy of the venture, or actual management, the cotenant would have a basis to participate in profits and, likewise, would be liable both to his cotenant and to third parties for tortious activity that resulted from the venture. Thus, it is the very relationship between the tenants in common which dictates whether the parties will share in the advantages and liabilities of their ventures.

II

The pertinent facts in the instant case are the following: In early 1970, defendant James Ledford entered into construction contracts for a drag strip race track to be built on a parcel of land then owned solely by defendant Marie Ledford. On May 6, 1970, for the sum of $500, Marie Ledford executed a quitclaim deed for the 25-acre parcel of land upon which the drag strip was built to herself and James Ledford as tenants in common. On May 30, 1970, plaintiff's decedent, a spectator, was fatally injured in an automobile mishap at the drag strip.

At trial, James Ledford testified that he was the sole manager and operator of the drag strip and that Marie Ledford played no part in the management of the track. Marie Ledford did not testify at trial. When judgment was rendered against both defendants, Marie Ledford brought a motion for new trial. In her motion, Marie Ledford pled that she had no involvement whatsoever in the management and operation of the drag strip and received no profits from its operation.

From this factual backdrop, it would be arguable on one level that defendant Marie Ledford should bear no responsibility and therefore no liability for the death that occurred, because she had no "control" over the day-to-day operation of the drag strip. But as the Walton case so vividly demonstrates, control is not the exclusive governing principle. Liability of a tenant in common is not only predicated upon the tort concept of control but is also predicated on the property concept of involvement, of participation in the venture.

Although, admittedly, the factual development of this case as regards defendant Marie Ledford is rather scant, even from these facts there appears to be evidence that might be considered by a jury to find her potentially liable. For instance, the jury might consider that Marie Ledford, by selling James Ledford an undivided one-half interest in a 25-acre parcel of land for $500, in effect subsidized the creation of the drag strip. If it were determined that she was a participant in the establishment of the drag strip, her liability would follow.

The chief problem with this argument and the major problem with the entire case, for that matter, is the lack of factual information on which to base a firm conclusion concerning Marie Ledford's participation in the drag-strip operation. A myriad of questions remain unanswered. For example, we do not know whether Marie Ledford subsidized the establishment of the drag strip by direct capital outlays. Further, we have no information about who paid the property taxes on the parcel of land or, if it were necessary to sell or partition the land to satisfy the judgment in this case, how the profits would have been divided.

III

Because the instant factual setting presents a true hybrid situation, encompassing tort concepts of control and property concepts of involvement and participation in a venture, this matter should be remanded to the trial court not only to allow plaintiff the opportunity to present evidence of Marie Ledford's control over the operation of the drag strip but also to allow plaintiff to present evidence of her involvement and participation, as a co-owner of the real estate, in the establishment and operation of the drag strip.

WILLIAMS, J., concurred with BLAIR MOODY, JR., J.

NOTES

[1] Rockwell v Hillcrest Country Club, Inc, 25 Mich App 276; 181 NW2d 290 (1970); McCarron v Upper Peninsula Hauling Ass'n, 13 Mich App 168; 163 NW2d 805 (1968); Arnold v State, 163 App Div 253; 148 NYS 479 (1914); Virginia State Fair Ass'n v Burton, 182 Va 365; 28 SE2d 716 (1944); Bauer v Saginaw County Agricultural Society, 349 Mich 616; 84 NW2d 827 (1957).

[1] In Zwergel, the cotenants were a brother and sister who held the land as joint tenants with the right of survivorship. Generally speaking, there is a certain risk in comparing fact situations and legal analyses involving joint tenancies with tenancies in common because the legal principles involved may differ. However, it is readily apparent from Walton v Walton, 287 Mich 557; 283 NW 687 (1939), that the legal principles enunciated in Zwergel are equally applicable to situations involving tenants in common.

[2] By statute, in Michigan, a husband and wife who own real estate as joint tenants or as tenants by entireties become tenants in common upon being divorced, unless otherwise provided by the judgment of divorce. MCL 552.102; MSA 25.132.