James a Smail v. Mercedes-Benz USA LLC

STATE OF MICHIGAN
COURT OF APPEALS
JAMES A SMAIL, UNPUBLISHED
July 24, 2018
Plaintiff-Appellee,
v No. 337709
Wayne Circuit
MERCEDES-BENZ USA, LLC, LC No. 16-004402-NO
Defendant-Appellant.
JAMES A SMAIL,
Plaintiff-Appellant,
v No. 338326
Wayne Circuit
MERCEDES-BENZ USA, LLC, LC No. 16-004402-NO
Defendant-Appellee.
Before: SWARTZLE, P.J., and SHAPIRO and BOONSTRA, JJ.
PER CURIAM.
In Docket No. 338326, plaintiff James Smail appeals by leave granted1 the trial court’s
order granting defendant Mercedes-Benz, USA’s first motion for summary disposition and
dismissing plaintiff’s premises-liability claim. In Docket No. 337709, defendant appeals by
leave granted2 the trial court’s order denying defendant’s second motion for summary
disposition, concluding that questions of fact remained that prevented dismissal of plaintiff’s
claims for contractual and vicarious liability. The appeals in these dockets were consolidated by
1
Smail v Mercedes-Benz, USA, unpublished order of the Court of Appeals, issued July 10, 2017
(Docket No. 338326).
2
Smail v Mercedes-Benz, USA, unpublished order of the Court of Appeals, issued July 10, 2017
(Docket No. 337709).
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administrative order. In Docket No. 338326, we affirm the trial court’s order granting
defendant’s first motion for summary disposition on plaintiff’s premises-liability claim. In
Docket No. 337709, we reverse the trial court’s order denying defendant’s second motion for
summary disposition and remand for entry of an order granting summary disposition in
defendant’s favor on plaintiff’s contractual- and vicarious-liability claims.
I. BACKGROUND
Plaintiff is an auto dealer from Pennsylvania. Over the last several decades, plaintiff
regularly attended the North American International Auto Show (NAIAS), held in Cobo Hall in
the City of Detroit. As relevant to this appeal, the NAIAS has two phases: the press days and the
public days. During the press days, auto companies hold press conferences and invite media and
industry professionals to view the vehicles and displays before the public. During the public
days, the exhibits are open to the public at large.
Defendant entered into a contract with the NAIAS for Cobo Hall floor space at the 2015
show. Defendant agreed to follow the NAIAS exhibition rules and further agreed to be bound by
Cobo Hall’s rules, including that defendant could not make structural changes without Cobo Hall
management’s approval. The contract also included an indemnity clause that read:
Exhibitor [defendant] must protect machinery, equipment and exhibits so that no
injury will result to the public, visitors, guests, employees or any person or
property. Exhibitor agrees to indemnify, protect and hold harmless Show
Management, including its officials, against all claims for damages which may be
made as a result of injury, loss or damage arising from the exhibit used by
Exhibitor regardless of whether such injury, loss or damage was the result of
negligence of Exhibitor, its agents or employees, independent contractors or
security personnel acting on behalf of Exhibitor. Such Indemnification shall
include but is not limited to all losses and damage as well as all costs and
expenses, including attorney fees incurred by Show Management to defend
against any claims made against or litigation commenced against it by third
parties. Exhibitor shall maintain such insurance as will protect Show
Management, the Detroit Regional Convention Facility Authority, and contractors
and consultants engaged by them from any claim for damages which may arise
from use of Exhibitor’s space.
Defendant’s parent company, Daimler Auto Group, then contracted with Display
International, a German entity, to construct an exhibit for defendant’s floorspace. Defendant’s
representative attended the press days along with another of defendant’s employees to oversee
defendant’s presence at the 2015 NAIAS. In her deposition, defendant’s representative testified
that two groups of people staffed the exhibit. First, defendant hired a company called Engine
Shop that staffed the exhibit with “product specialists.” The product specialists were tasked with
answering questions about defendant’s vehicles and all wore Mercedes-Benz insignia. Second,
Display International staffed the exhibit with its own employees. Display International
employees were tasked with constructing the exhibit and making any changes or repairs to the
exhibit as necessary. Display International employees wore polo shirts that bore either the
Mercedes-Benz insignia or the Display International logo.
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Plaintiff attended the two press days of the 2015 NAIAS with his two nephews, who are
also auto dealers in plaintiff’s auto group. Shortly before the show, plaintiff had surgery on his
right shoulder to repair a rotator-cuff tear, after which he was required to use a sling designed to
keep his arm close to his body. On the morning of the first press day, defendant and his two
nephews attended defendant’s press conference. During the press conference, the presenter rode
an autonomous vehicle onto the stage and, after the press conference, the vehicle was left open
for attendees to look inside. Plaintiff saw the car from a distance on the first press day but was
unable to view it up close because of the large crowd at the exhibit.
According to defendant’s representative, the exhibit was changed between the first and
second press days. Defendant’s representative testified that, at Daimler Auto Group’s
instruction, Display International erected a small plexi-glass barricade around the autonomous
vehicle. In the various deposition testimonies, estimates of the barrier’s height ranged from “12
inches” to “shin level” to “knee high.” According to defendant’s representative, an auto industry
“rule of thumb” for displaying vehicles at auto shows was to erect unobtrusive barriers that
would protect the vehicle from attendees while still allowing attendees a full view of the vehicle.
Plaintiff and his nephews returned to the show for the second press day. After visiting
other exhibits, the three men were headed out of Cobo Hall when defendant decided to take a
detour to get a better view of defendant’s autonomous vehicle. Plaintiff was looking at the
autonomous vehicle, walked around another attendee, tripped over the plexi-glass barricade, and
landed on his right shoulder. Plaintiff admitted in his deposition that, had he been looking down,
he possibly could have seen the barrier. According to plaintiff, he felt pain immediately upon
landing on his shoulder. Plaintiff testified that two men, whom he believed to be defendant’s
employees, attempted to help him up and began pulling on his arm that was in a sling. Plaintiff
yelled at the men to leave him alone and they obliged. Plaintiff testified that, after he fell, he
noticed pieces of the barricade that had been separated or broken by the fall. According to
plaintiff, the two men put the barricade back together, his nephews helped him up, and plaintiff
and his nephews left the show. When plaintiff returned to Pennsylvania that afternoon, he was
seen by his shoulder surgeon, who eventually determined that plaintiff had retorn his right rotator
cuff, requiring a second shoulder surgery.
Plaintiff sued defendant seeking compensation for the injuries he incurred in the fall.
Plaintiff made three separate claims in an original and then amended complaint. First, plaintiff
pleaded a negligence claim, arguing that defendant’s erection of the plexi-glass barrier breached
the duty of care it owed to plaintiff as a guest at its exhibit. Second, plaintiff pleaded a third-
party-beneficiary claim, arguing that defendant breached the portion of its contract with the
NAIAS that required it to make its exhibit safe for NAIAS guests. Finally, plaintiff pleaded a
vicarious-liability claim, arguing that the two men that helped plaintiff after his fall were
defendant’s agents or ostensible agents and that defendant was liable for the two men’s
negligence in pulling on plaintiff’s arm, thereby re-injuring plaintiff’s shoulder.
Defendant sought dismissal of plaintiff’s amended complaint in two separate motions for
summary disposition under MCR 2.116(C)(10). In its first motion, defendant argued that it was
entitled to summary disposition on plaintiff’s negligence claim because plaintiff’s claim was for
premises-liability and the barrier was an open-and-obvious hazard. Plaintiff responded that his
claim was for ordinary negligence, not premises-liability, and that the open-and-obvious doctrine
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did not apply. Alternatively, plaintiff argued that the hazard was not open-and-obvious because
the hazard was essentially invisible and was not present on the first press day. Plaintiff attached
to his response the affidavit of a specialist in “human factors applications,” who averred that the
barrier was not open and obvious because, in a crowded architecturally constructed environment,
plaintiff’s focus would be on avoiding other people, rather than looking at his feet. The trial
court concluded that plaintiff’s claim was for premises-liability and that the plexi-glass barrier
was an open-and-obvious hazard. Accordingly, the trial court granted defendant’s first motion
for summary disposition and dismissed plaintiff’s premises-liability claim.
Defendant addressed plaintiff’s contractual- and vicarious-liability claims in its second
motion for summary disposition. Regarding plaintiff’s contractual-liability claim, defendant
argued that plaintiff could not be a third-party beneficiary to the contract because the provision at
issue applied to the public generally, rather than a designated group. Plaintiff responded that the
contract’s use of the term “guests” identified a specific group of intended beneficiaries. Plaintiff
argued that, because he was an invited guest at the show, he was entitled to enforce the contract
as an intended third-party beneficiary. The trial court concluded that a question of material fact
existed on whether plaintiff was an intended third-party beneficiary and denied defendant’s
request to dismiss plaintiff’s contractual-liability claim.
Regarding plaintiff’s vicarious-liability claim, defendant argued that it was entitled to
summary disposition on several grounds. First, defendant argued that the men who helped
plaintiff after his fall were not product specialists, though defendant agreed that the two men
could have been Display International employees. Defendant contended that no direct agency
relationship existed between it and Display International employees. Next, defendant argued
that, even assuming that the two men were product specialists, assisting plaintiff after his fall
was outside of any agency relationship defendant had with them, which was limited to answering
questions about defendant’s vehicles. Finally, defendant argued that plaintiff could not show
that the two men caused his injuries, noting plaintiff’s testimony that he felt pain immediately
upon landing on his shoulder. Plaintiff responded that the two men were, at the very least,
defendant’s ostensible agents because it was reasonable for him to believe that the people who
staffed the exhibit were defendant’s employees. Plaintiff argued that a question of fact existed
on whether the two men created or aggravated the tear in his rotator cuff by pulling on him. The
trial court agreed with plaintiff that a question of fact existed on whether the two men caused his
injuries and denied defendant’s request to dismiss plaintiff’s vicarious-liability claims.
Accordingly, the trial court denied defendant’s second motion for summary disposition in its
entirety.
These appeals followed.
II. ANALYSIS
This Court reviews a grant of summary disposition under MCR 2.116(C)(10) de novo.
Peters v Department of Corrections, 215 Mich. App. 485, 486; 546 NW2d 668 (1996). A party is
entitled to dismissal of a claim when, “[e]xcept as to the amount of damages, there is no genuine
issue concerning any material fact, and the moving party is entitled to judgment or partial
judgment as a matter of law.” MCR 2.116(C)(10). When reviewing a motion for summary
disposition under MCR 2.116(C)(10), this Court considers “the pleadings, admissions, and other
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evidence submitted by the parties in the light most favorable to the nonmoving party.” Latham v
Barton Malow Co, 480 Mich. 105, 111; 746 NW2d 868 (2008).
A. Docket No. 338326
In Docket No. 338326, plaintiff challenges the trial court’s dismissal of his negligence
claim. Plaintiff’s challenge is two-fold. Primarily, plaintiff argues that his claim was for
ordinary negligence, rather than premises liability, and that the open-and-obvious doctrine
therefore did not apply to his claim. Alternatively, plaintiff argues that, even if his claim was for
premises liability, the plexi-glass barrier was not an open-and-obvious hazard. We take each
argument in turn.
1. Plaintiff’s Claim Was For Premises Liability
“Michigan law distinguishes between claims arising from ordinary negligence and claims
premised on a condition of the land.” Lymon v Freedland, 314 Mich. App. 746, 756; 887 NW2d
456 (2016) (internal quotation marks and citation omitted). “It is well settled that the gravamen
of an action is determined by reading the complaint as a whole, and by looking beyond mere
procedural labels to determine the exact nature of the claim.” Adams v Adams (On
Reconsideration), 276 Mich. App. 704, 710-711; 742 NW2d 399 (2007). This Court is not bound
by the labels the parties attached to their claims. Jahnke v Allen, 308 Mich. App. 472, 475; 865
NW2d 49 (2014).
A plaintiff alleging a premises-liability claim must establish that (1) the defendant owed
him a duty, (2) the defendant breached that duty, (3) the breach proximately caused the
plaintiff’s injuries, and (4) the plaintiff suffered damages. Sanders v Perfecting Church, 303
Mich. App. 1, 4; 840 NW2d 401 (2013). With respect to a premises-liability claim, “liability
arises solely from the defendant’s duty as an owner, possessor, or occupier of land.” Buhalis v
Trinity Continuing Care Servs, 296 Mich. App. 685, 692; 822 NW2d 254 (2012). Both
possession of and control over the premises must be present to give rise to a duty of care
regarding the premises. Sholberg v Truman, 496 Mich. 1, 7-8; 852 NW2d 89 (2014).
“Possession” is defined as “the right under which one may exercise control over something to the
exclusion of all others.” Derbabian v S & C Snowplowing, Inc, 249 Mich. App. 695, 703; 644
NW2d 779 (2002) (internal citation, quotation marks, and emphasis omitted). “[P]ossession for
purposes of premises liability does not turn on a theoretical or impending right of possession, but
instead depends on the actual exercise of dominion and control over the property.” Kubczak v
Chemical Bank & Trust Co, 456 Mich. 653, 661; 575 NW2d 745 (1998). In turn, “control”
means the power to “manage, direct, or oversee” the property. Derbabian, 249 Mich. App. at
703-704 (internal citation and quotation marks omitted).
Defendant Was a Premises Possessor. Both parties argue that defendant did not possess
the premises at which plaintiff was injured. Plaintiff argues that Cobo Hall and the NAIAS
possessed the premises to defendant’s exclusion. Defendant argues that it did not possess the
premises because Display International possessed the exhibit to defendant’s exclusion. We
disagree with both parties.
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Possession and control of a single piece of property may be divided among multiple
parties. See Bailey v Schaaf, 494 Mich. 595, 604–606; 835 NW2d 413 (2013). Indeed, this is
often the case with multi-tenant rental properties, where each tenant enjoys possession and
control over their individual unit to the exclusion of the landlord and the landlord retains
possession and control over the common areas. Id. at 604-605. Where two or more parties retain
some possession and control over the same portion of the premises, the parties have “coextensive
duties to protect invitees . . . from physical hazards on the premises.” Id. at 607.
The record confirms that possession and control of the premises here was split among
multiple parties and that defendant was one of the premises possessors. To begin with, the rules
promulgated by the NAIAS and Cobo Hall’s management evidence an intent to retain control
over the permanent structures of Cobo Hall. Indeed, defendant could not structurally alter Cobo
Hall without Cobo Hall’s management’s approval. Subject to these rules, however, defendant
enjoyed possession and control over a portion of floor space. Although defendant claims that
Display International controlled the exhibit, defendant is the only party to whom the space was
leased. By way of that lease, defendant enjoyed the power to erect an exhibit, invite patrons to
its exhibit, and manage the exhibit. Defendant granted the right to construct and repair the
exhibit on its floor space to Daimler Auto Group, who in turn granted the right to Display
International. Even assuming that Display International possessed and controlled the exhibit by
way of this grant, it is clear that Display International’s possession and control was not to the
exclusion of defendant. Defendant performed a press conference at the exhibit, staffed the
exhibit with its own employees and third-party product specialists, and invited NAIAS attendees
into its space. In doing so, defendant possessed and controlled the exhibit space. Whether this
possession and control was exclusive or shared with Display International is immaterial to the
claims on appeal.
Therefore, because defendant possessed and controlled the premises on which plaintiff
was injured, we need not address the parties’ arguments regarding whether a premises-liability
claim transforms into an ordinary negligence claim when the defendant is not the premises
possessor. To determine whether plaintiff’s claim is for premises liability, the only remaining
question is whether the injury was allegedly caused by a condition on the land.
The Injury Was Allegedly Caused By a Condition on the Land. “Ordinary negligence
claims are grounded on the underlying premise that a person has a duty to conform his or her
conduct to an applicable standard of care when undertaking an activity.” Lymon, 314 Mich. App.
at 756. Comparatively, in a premises-liability claim, “liability arises solely from the defendant’s
duty as an owner, possessor, or occupier of land.” Buhalis, 296 Mich. App. at 692. Nevertheless,
“that does not preclude a separate claim grounded on an independent theory of liability based on
the defendant’s conduct.” Laier v Kitchen, 266 Mich. App. 482, 493; 702 NW2d 199 (2005).
Still, if “the plaintiff’s injury arose from an allegedly dangerous condition on the land, the action
sounds in premises liability rather than ordinary negligence; this is true even when the plaintiff
alleges that the premises possessor created the condition giving rise to the plaintiff’s injury.”
Buhalis, 296 Mich. App. at 692.
Here, plaintiff argues that he was injured when he fell over a small plexi-glass barrier
erected on defendant’s exhibit. Plaintiff asserts that defendant was negligent in erecting the
barrier or causing it to be erected. Plaintiff has therefore alleged that defendant’s creation of a
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condition on the premises caused his injury. For the purposes of his claims involving the plexi-
glass barrier, plaintiff has not alleged any negligent conduct on behalf of defendant or anyone
defendant controls, apart from a negligent design or placement of the barrier. Because plaintiff
alleges that defendant created a dangerous condition on the premises that caused plaintiff’s
injury, we conclude that plaintiff’s claim sounds exclusively in premises liability.
2. The Hazard Was Open and Obvious
A possessor of property owes an invitee a duty “to exercise reasonable care to protect
the invitee from an unreasonable risk of harm caused by a dangerous condition on the land.”
Buhalis, 296 Mich. App. at 693 (internal citation and quotation marks omitted). The possessor is
“not an absolute insurer of the safety of an invitee,” however, and thus the possessor’s “duty
does not extend to open and obvious dangers” Id. (internal citations and quotation marks
omitted). Specifically, the possessor “owes no duty to protect or warn of dangers that are open
and obvious because such dangers, by their nature, apprise an invitee of the potential hazard.”
Lymon, 314 Mich. App. at 757-758 (internal citation and quotation marks omitted). “Whether a
danger is open and obvious involves an objective inquiry to determine whether it is reasonable to
expect that an average person with ordinary intelligence would have discovered the danger upon
casual inspection.” Id. at 758 (internal citation and notation omitted). When “the dangers are
known to the invitee or are so obvious that the invitee might reasonably be expected to discover
them, an invitor owes no duty to protect or warn the invitee unless he should anticipate the harm
despite knowledge of it on behalf of the invitee.” Buhalis, 296 Mich. App. at 693 (internal
citation and quotation marks omitted). The open-and-obvious doctrine is not an exception to the
duty owed by a premises possessor, but is instead an integral part of that duty, and its application
is a question of law for the court to decide. Id.
Plaintiff claims that the barrier was not an open-and-obvious hazard because it was
transparent and short. This Court has concluded that a floor-level hazard is not open and obvious
when it is small and, given its location, would not be visible upon the plaintiff’s casual
inspection. See Price v Kroger Co of Michigan, 284 Mich. App. 496, 502; 773 NW2d 739
(2009). When the floor-level hazard is larger and in an area where it would be expected,
however, the floor-level hazard is open and obvious. See Garret v WS Butterfield Theatres, 261
Mich. 262, 263-264; 246 N.W. 57 (1933); Kennedy v Great Atlantic & Pacific Tea Co, 274 Mich
App 710, 717; 737 NW2d 179 (2007). Both parties provided pictures of the barrier to the trial
court. In each of these pictures, there is no structural element blocking the barrier that surrounds
the vehicle at a distance of a few feet. Indeed, the barrier was clearly visible from the pictures in
the record. Moreover, plaintiff acknowledged that he could have seen the barrier if he had been
looking down and, after his fall, plaintiff was able to see pieces of the barrier, despite their
transparency. Accordingly, we conclude that the barrier was not so inconspicuous that, had
plaintiff been looking down, he would have seen the barrier upon casual inspection.
Citing his expert’s testimony, plaintiff argues that an ordinary person would not be
looking down at the NAIAS, but would rather be looking up at the vehicles and people in the
crowd. Whether plaintiff was distracted by people, cars, or anything else at the NAIAS,
however, is not the appropriate inquiry. See Kennedy, 274 Mich. App. at 717. Rather, the
relevant inquiry is “whether there was anything ‘unusual’ about the plaintiff’s distraction that
would preclude application of the open and obvious danger doctrine.” Id., citing Lugo v
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Ameritech Corp, Inc, 464 Mich. 512, 522; 629 NW2d 384 (2001). Crowds and vehicles are to be
expected at an auto show as plaintiff no doubt experienced during his many years of attendance
at prior shows. There was nothing “unusual” about the distraction posed by these crowds and
vehicles that would have precluded application of the open-and-obvious-danger doctrine.
Finally, plaintiff argues that the barrier was not open and obvious because it was erected
between the first and second press days. Yet, plaintiff has not pointed to any evidence to suggest
that it is unusual for an auto-show display to change from one day to the next. More importantly,
the record makes clear that, even though the hazard may have been new, had defendant been
looking down, he would have seen the plexi-glass barrier. Accordingly, the trial court did not err
in concluding that the barrier was an open-and-obvious danger. Because plaintiff has not argued
that any exception to the open-and-obvious-danger doctrine applied, Lymon, 314 Mich. App. at
758, defendant was entitled to summary disposition on plaintiff’s premises-liability claim.
B. Docket No. 337709
In Docket No. 337709, defendant challenges the trial court’s denial of its second motion
for summary disposition. We agree with defendant that plaintiff is not a third-party beneficiary
of defendant’s contract with the NAIAS and that plaintiff’s vicarious-liability claim fails apart
from any question regarding causation. Accordingly, we reverse the trial court’s denial of
defendant’s second motion for summary disposition.
1. Defendant Was Entitled to Dismissal of Plaintiff’s Contractual-Liability Claim
In Michigan, third-party beneficiary claims are statutory in nature. The third-party
beneficiary statute, MCL 600.1405, provides, “Any person for whose benefit a promise is made
by way of contract . . . has the same right to enforce said promise that he would have had if the
said promise had been made directly to him as the promisee.” The statute continues, “A promise
shall be construed to have been made for the benefit of a person whenever the promisor of said
promise has undertaken to give or to do or refrain from doing something directly to or for said
person.” MCL 600.1405(1). “[A] person who qualifies under the third-party-beneficiary statute
gains the right to sue to enforce the contract.” Shay v Aldrich, 487 Mich. 648, 666; 790 NW2d
629 (2010).
While seemingly encompassing a wide breadth of beneficiaries, in actuality “the plain
language of this statute reflects that not every person incidentally benefitted by a contractual
promise has a right to sue for breach of that promise.” Schmalfeldt v North Pointe Ins Co, 469
Mich. 422, 427; 670 NW2d 651 (2003) (internal citation and quotation marks omitted). By using
the modifier “directly,” the statute makes clear that only expressly intended beneficiaries may
enforce the promise as a statutory third-party beneficiary. Id.; Koenig v City of South Haven,
460 Mich. 667, 676-677; 597 NW2d 99 (1999). Thus, the statutory language “indicates the
Legislature’s intent to assure that contracting parties are clearly aware that the scope of their
contractual undertakings encompasses a third party, directly referred to in the contract, before the
third party is able to enforce the contract.” Koenig, 460 Mich. at 677. We look to the objective
“form and meaning of the contract itself to determine whether a party is an intended third-party
beneficiary.” Id. (internal quotation marks omitted).
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It is common for contracts to refer to classes of people or entities rather than a specific
person or entity. A covered “third-party beneficiary may be a member of a class, but the class
must be sufficiently described.” Id. at 680. “[T]his of course means that the class must be
something less than the entire universe, e.g., ‘the public.’ ” Id. “The rationale would appear to
be that a contracting party can only be held to have knowingly undertaken an obligation directly
for the benefit of a class of persons if the class is reasonably identified.” Id. And, “the public as
a whole is too expansive a group to be considered ‘directly’ benefitted by a contractual promise.”
Brunsell, 467 Mich. at 298.
Plaintiff contends that the first sentence of the indemnity clause renders him a covered
third-party beneficiary. As noted earlier, the sentence reads: “Exhibitor must protect machinery,
equipment and exhibits so that no injury will result to the public, visitors, guests, employees or
any person or property.”
Plaintiff draws the reasonable inference that he was a “guest” of the NAIAS show. Had
the indemnity clause included only that category, plaintiff would be on solid footing. Yet, the
clause goes on and includes several other terms that give the clause meaning and context.
Bloomfield Estates Improvement Ass’n v City of Birmingham, 479 Mich. 206, 215; 737 NW2d
670 (2007). Specifically, the clause includes the terms “the public” and “any person or
property.” Both are quintessential terms that encompass the “entire universe” of potential
beneficiaries. Koenig, 460 Mich. at 680. Put simply, there is no person or entity that the clause
does not cover. Thus, despite its use of the term “guests,” the clause is insufficient to evidence
an intent to directly benefit plaintiff as a member of a well-defined group.
Reading the indemnity clause as a whole supports this conclusion. The clause stands
within a paragraph in which defendant agreed to hold the NAIAS harmless for “all losses and
damage as well as costs and expenses” for “any claims” made by third parties against the
NAIAS. As a whole, the indemnity clause confirms the parties’ intent that defendant would
indemnify the NAIAS against any potential claim caused by defendant or its agents. The
purpose of this clause is to allocate liability between defendant and the NAIAS, not to grant any
rights to any third parties. See Paul v Bogle, 193 Mich. App. 479, 492; 484 NW2d 728 (1992).
Plaintiff argues that he was not a member of “the public,” but rather an invited guest at
the exclusive, invitation-only press days. According to plaintiff, the relevant class is therefore
not the public, but rather the limited group of invited press-day guests. Plaintiff’s argument,
however, improperly proceeds backwards from the injury to create a class. See Koenig, 460
Mich. at 683. The clause at issue makes no distinction between the press days and the public
days of the NAIAS. On its face, the contract language applies equally to the press days, the
public days, and the remainder of the time the floorspace was in defendant’s control. As noted
already, the contract must be read in light of its intent to encompass any potential claimant
against the NAIAS and, because the NAIAS is an event open to the public at large, the potential
class involved is “the public” or “any person or property.”
For these reasons, the contract does not “specifically designate” a potential class of
intended beneficiaries. Because plaintiff was not an intended third-party beneficiary to the
contract, defendant was entitled to summary disposition on plaintiff’s contractual-liability claim.
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2. Defendant Was Entitled to Dismissal of Plaintiff’s Vicarious-Liability Claims
The doctrine of vicarious liability allocates the risk of an agent’s negligent acts to the
principal by creating a practical identity between the principal and its agents. Rogers v JB Hunt
Transp, Inc, 466 Mich. 645, 653; 649 NW2d 23 (2002); Nippa v Botsford Gen Hosp, 257 Mich
App 387, 391; 668 NW2d 628 (2003). “An agency is defined as a fiduciary relationship created
by express or implied contract or by law, in which one party (the agent) may act on behalf of
another party (the principal) and bind that other party by words or actions.” Logan v Manpower
of Lansing, Inc, 304 Mich. App. 550, 559; 847 NW2d 679 (2014) (internal citation and quotation
marks omitted). “It is a fundamental principle of hornbook agency law that an agency
relationship arises only where the principal has the right to control the conduct of the agent with
respect to matters entrusted to him.” St. Clair Intermediate School Dist v Intermediate Ed
Ass’n/Michigan Ed Ass’n, 458 Mich. 540, 558 n 18; 581 NW2d 707 (1998) (internal citations and
notation omitted).
“It is a longstanding legal principle that a duly authorized agent has the power to act and
bind the principal to the same extent as if the principal acted.” In re Estate of Capuzzi, 470 Mich.
399, 402; 684 NW2d 677 (2004). Thus, the law imputes the agent’s negligent actions to the
principal so long as those actions were taken within the boundaries of the principal-agency
relationship. Rogers, 466 Mich. at 650-651; Nippa, 257 Mich. App. at 391. The principal “stands
in the shoes of its agents” and “is held to have done what the agent has done.” Nippa, 257 Mich
App at 391. The principal, however, is not vicariously liable for acts committed by the agent
outside of the scope of the agency, because in that circumstance the agent is “not acting for the
[principal] or under the [principal’s] control.” Rogers, 466 Mich. at 651.
The Identity of the Two Men. The record is clear that the two men who tried to help
plaintiff after he fell were not the product specialists defendant hired. Defendant’s representative
testified that all of the product specialists wore Mercedes-Benz insignia, and plaintiff testified
that neither man wore a shirt with that insignia. Plaintiff points to no record evidence to question
the testimony of defendant’s representative on this question.
Plaintiff also testified, however, that the two men who helped him repaired the portions
of the plexi-glass barrier that came apart during plaintiff’s fall. Given this, the two men’s actions
were consistent with that of a Display International employee. Although these are also
consistent with that of a Good Samaritan, defendant agrees that a question of fact exists on
whether the two men were Display International employees.
Plaintiff’s Direct-Agency Claim. Even assuming that the two men were Display
International employees, we conclude that defendant was entitled to summary disposition on
plaintiff’s direct-agency claim because there was no agency relationship between defendant and
Display International employees.
According to defendant’s documentation, Display International was hired by defendant’s
parent company, Daimler Auto Group, to build the exhibit at the NAIAS. According to
defendant’s representative, Daimler Auto Group controlled the changing of the exhibit and
Display International controlled its employees’ conduct at the exhibit. There is nothing in
defendant’s representative’s testimony that indicates that defendant had any right to control
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Display International employees. Accordingly, defendant met its initial burden to show that no
agency relationship existed between defendant and Display International employees. See St.
Clair, 458 Mich. at 558.
When a motion under MCR 2.116(C)(10) is made and supported by sufficient
documentation, “an adverse party may not rest upon the mere allegations or denials of his or her
pleading, but must, by affidavits or [other documentary evidence], set forth specific facts
showing that there is a genuine issue for trial.” MCR 2.116(G)(4). Thus, the burden shifted to
plaintiff to show that there was a material question of fact on whether an agency relationship
existed between defendant and the two men who helped plaintiff after his fall. Plaintiff did not
present any evidence showing that defendant controlled Display International employees.
Instead, plaintiff appears to have assumed that the two men who helped him were product
specialists, which, as shown above, is not supported in the record. Accordingly, plaintiff did not
meet his burden to show that a material question of fact existed on whether the two men were
defendant’s direct agents.
Plaintiff’s Ostensible-Agency Claim. Lastly, plaintiff attempts to show that defendant is
liable under an ostensible-agency theory. “An agency is ostensible when the principal
intentionally or by want of ordinary care, causes a third person to believe another to be his agent
who is not really employed by him.” Grewe v Mt Clemens Gen Hosp, 404 Mich. 240, 252; 273
NW2d 429 (1978) (internal quotation marks and citation omitted). “[A]n ostensible agency
arises when circumstances are such as to cause a third party to reasonably rely upon the existence
of an agency relationship so as to estop the alleged principal or agent from denying the agency.”
Sasseen v Cmty Hosp Found, 159 Mich. App. 231, 239; 406 NW2d 193 (1986) (internal citation
and notation omitted).
Here, even assuming that plaintiff reasonably believed that Display International
employees were defendant’s agents, plaintiff has not shown that he relied on the purported
agency relationship to his detriment. First, the purported agency relationship did not cause
defendant to trip over the barrier. Rather, according to plaintiff, he tripped over the barrier
because he did not see it, i.e., the barrier was negligently designed or placed. Second, plaintiff
has not shown that the purported agency relationship led him to seek help from the two men.
Rather, the record shows that the two men helped plaintiff on their own accord and that plaintiff
did not seek or even want their assistance.
For these reasons, defendant was entitled to summary disposition on plaintiff’s
ostensible-agency vicarious-liability claim. Because defendant was otherwise entitled to
summary disposition on plaintiff’s vicarious-liability claims, we need not address defendant’s
arguments that plaintiff cannot show causation or that assisting plaintiff was outside of any
agency relationship defendant may have had with the two men.
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III. CONCLUSION
In Docket No. 338326, we affirm the trial court’s order granting defendant’s first motion
for summary disposition. In Docket No. 337709, we reverse the trial court’s order denying
defendant’s second motion for summary disposition and remand for entry of an order granting in
full defendant’s second motion for summary disposition. We do not retain jurisdiction.
/s/ Brock A. Swartzle
/s/ Mark T. Boonstra
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