In re ESTATE OF MICHAEL KOCH.
A. Z. SHMINA, INC, Defendant/Cross-Defendant-Appellee/Cross-Appellant, Estate of Michael Koch, by SUSAN KOCH, Personal Representative, Plaintiff and ORCHARD, HILTZ, & MCCLIMENT, INC. Defendant/Cross-Plaintiff/Third-Party Plaintiff-Appellant/Cross-Appellee, and REGAL RIGGING & DEMOLITION, LLC Defendant, and PLATINUM MECHANICAL, INC. Third-Party Defendant-Appellee.
Circuit Court LC No. 13-001066-NO
Before: Markey, P.J., and Ronayne Krause and Boonstra, JJ.
Defendant/Cross-Plaintiff/Third-Party Plaintiff, Orchard
Hiltz & McCliment, Inc. (OHM), appeals by right the trial
court's order dismissing this case, which plaintiff, the
Estate of Michael Koch, filed after its decedent was killed
in an explosion at the Village of Dexter's (Dexter)
Wastewater Treatment Plant. OHM was Dexter's engineer.
OHM filed a cross-complaint seeking indemnity from contractor
A. Z. Shmina, Inc. (Shmina) and subcontractor Platinum
Mechanical, Inc. (Platinum). The parties stipulated to
dismiss the case after the trial court denied OHM's
motion for summary disposition under MCR 2.116(C)(10) (no
genuine issue of material fact) and granted summary
disposition in favor of Shmina and Platinum under MCR
2.116(C)(10) on OHM's claims. We affirm with respect to
the trial court's denial of summary disposition in favor
of OHM. We vacate the trial court's grant of summary
disposition in favor of Shmina and Platinum and remand for
further proceedings consistent with this opinion.
PERTINENT FACTS AND PROCEDURAL HISTORY
initially contracted with Dexter in August 2011 to design
upgrades to the sludge handling process at Dexter's
wastewater treatment plant. The services included replacing
digester tank lids that had exceeded their design life. On
June 4, 2012, OHM again contracted with Dexter for services
including "contract administration, construction
engineering, construction observation, and construction
staking." OHM's contract incorporated a provision to
the effect that it had no responsibility for job-site safety.
hired Shmina as a contractor to improve the digester and
sludge storage tanks. Dexter's contract with Shmina
included general and supplementary terms, both of which
contained indemnification provisions. Shmina subcontracted
with Platinum, which agreed to provide labor and materials
for digester lid demolition and installation. Platinum's
contract incorporated the general, special, and supplementary
terms of Shmina's contract with Dexter. Platinum in turn
subcontracted with Regal Rigging & Demolition (Regal),
awarding Regal a contract to demolish, remove, and haul away
two digester tank lids.
to Jeremy Cook, Platinum's job foreman, there were weekly
progress meetings in OHM's job trailer. Cook stated that
Chris Nastally of OHM discussed "anything that had to do
with that job" at the meetings, including job safety.
Meeting minutes indicate that a progress meeting was held on
April 11, 2013, and that Nastally and Sherry Wright of OHM,
Cook and Kenneth Coon of Platinum, John Franklin of Shmina,
and Jeff LaFave of Regal were in attendance. The minutes
indicated that Regal planned to start demolishing the
digester lids on April 12 and that the primary lid would be
removed first. The minutes also indicated that the only
"hot" work would be to cut holes in the lids and
pull them out. Coon testified that at the meeting, Regal was
instructed that it could only cut holes in the primary
digester for rigging purposes and "[t]here was to be no
other cutting on that job site whatsoever." Coon stated
that anyone on the job site should have known that there
should be no cutting torches on the secondary digester.
April 22, 2013, the secondary digester exploded, resulting in
Koch's death. Wright, an environmental engineer,
testified that she was on the site the week before the
explosion because Nastally was on vacation. Wright testified
that on the morning of the explosion, she walked the site
with Nastally, talked about the areas that had been worked
on, and told Nastally that the secondary digester still
Shmina's project supervisor and site safety officer,
testified that the primary digester had been cleaned and
purged. Franklin also testified that OHM, Platinum, and
Nastally would have known that only one digester could be
worked on at a time. According to Franklin, David McBride of
Regal began cutting the side beams on the secondary digester
tank at around 10:00 or 10:30 a.m., and Franklin was
concerned about the methane in the digester.
testified that Franklin approached him at around 10:00 a.m.
and told him that "the guys from Regal [were] doing some
hot work and he was worried that they were blowing sparks on
the roof . . . ." Cook stated that he approached
McBride, told him that he was not supposed to be working on
the secondary digester, and specifically mentioned that there
could be methane gas. Cook testified that McBride was given
plywood to lean against the tank to finish cutting the rail
he was working on, which otherwise would have created a
testified that he did not see McBride cutting again that day.
However, Franklin testified that he saw McBride again cutting
at around 1:00 or 1:30 p.m. on the roof line. According to
Franklin, he went onto the roof and told McBride to stop
working and that it was dangerous to work there. Franklin
stated that McBride shut off his cutting torch and walked
over to the primary digester, at which point Franklin left to
have a conversation with Cook. McBride testified that Cook
told him to use a torch to remove the bolts and that if
someone had told him to stop cutting or to cut in a different
location, he would have moved.
testified that he was on the roof for about four minutes
before the explosion. Nastally stated that if he was looking
at someone who was cutting, he would have known they were
cutting, but he was not paying attention to whether there
were sparks. When asked whether he knew that the tanks
contained methane gas when they had sludge in them, Nastally
testified, "I guess I never thought about that."
Nastally also testified that it was not his responsibility to
know whether there was methane gas or to make sure the
digesters did not explode. Nastally testified that he took a
couple of pictures and then responded to an e-mail on his
phone, which he was looking down at when the explosion
testified that in one of the photographs Nastally had taken,
he can be seen cutting the center bolts of the digester, that
he had cut about thirty bolts, and that it took him about
five minutes to cut each bolt. McBride testified that when he
is cutting, he creates sparks, smoke, a loud noise, and a
burnt metal smell. Wright testified that if she had taken the
photograph, she would have been concerned for the safety of
everyone in the area, and that anyone onsite should have
informed Franklin about McBride's activities.
Estate sued Shmina and OHM,  alleging in pertinent part that
Dexter had warned Shmina and OHM not to work on any digester
until it was emptied and cleaned to reduce methane hazards,
the secondary digester had not been emptied, Shmina and OHM
knew the secondary digester still contained sludge, and that
McBride was photographed cutting bolts on the secondary
digester within minutes of the explosion. The Estate alleged
that McBride's cutting torch ignited methane in the
secondary digester, which launched the lid into the air and
caused Koch's death.
filed a cross-claim against Shmina, alleging in pertinent
part that Shmina had breached its contract with OHM by
refusing to indemnify and defend OHM against the Estate's
complaint and by failing to purchase project insurance that
would have protected OHM from claims against it. OHM also
filed a third-party complaint against Platinum, in which OHM
made the same allegations.
moved for summary disposition under MCR 2.116(C)(10) against
Platinum and Shmina, alleging that OHM was an intended
third-party beneficiary of Platinum's and Shmina's
contracts with Dexter and that Platinum and Shmina were
required to indemnify, defend, and hold harmless OHM.
Platinum responded in part that the contract's general
and supplemental provisions conflicted, creating an ambiguous
agreement that the trial court should construe against OHM.
Shmina responded that OHM could not reasonably observe
practices that its engineers knew to be dangerous and do
nothing. OHM replied that the parties' contracts required
them to defend and indemnify OHM regardless of the cause of
the accident and that the contracts' general and
supplemental provisions did not conflict.
April 22, 2015 motion hearing, the trial court asked counsel
if they were familiar with MCL 691.991, also known as the
indemnity invalidating act (the act), which no party had
cited. The trial court then read the statute. OHM argued that
it was not a public entity under the statute. The trial court
ultimately denied OHM's motion for summary disposition,
ruling that MCL 691.991 was clear and prohibited OHM from
seeking indemnification for its own negligence. The trial
court subsequently denied OHM's motion for
reconsideration, and reaffirmed its determination that MCL
691.991 applied retroactively. The court also stated, as an
alternate basis for its denial of summary disposition to OHM,
that the internally ...