Real Property

Issues: Disputes related to a lease agreement and an indemnity agreement; Whether third-party defendant-Dan's Excavating was directly liable to plaintiff-Hubbell Foley Properties, LLC (HFP) (the landlord); Jimkoski v. Shupe; Indemnity contract; Miller-Davis Co. v. Ahrens Constr., Inc.; Travelers Prop. Cas. Co. of Am. v. Peaker Servs, Inc.; Cliffs Forest Prods. Co. v. Al Disdero Lumber Co.; Sanctions for violating a court order; Vicencio v. Ramirez; Lavey v. Mills; Entry of a default against the non-complying party; MCR 2.504(B)(1); Woods v. SLB Prop. Mgmt., LLC; Whether HFP was an intended third-party beneficiary; Indemnification obligations; Zahn v. Kroger Co. of MI; Badiee v. Brighton Area Sch.; "Arise" defined; Attorney fees and costs; Haliw v. Sterling Heights; Hayes v. General Motors Corp.; Redfern v. RE Dailey & Co.; Beaudin v. Michigan Bell Tel. Co.; HFP's cross-appeal that the trial court erred when it declined to impose liability against both Dan's Excavating and defendant-Williams & Williams II LLC (W&W); Breach of contract; Chelsea Inv. Group LLC v. Chelsea; City of Jackson v. Thompson-McCully Co., LLC; W&Ws' cross-appeal of the trial court's order dismissing its common-law indemnity claim; Botsford Continuing Care Corp. v. Intelistaf Healthcare, Inc.; Lakeside Oakland Dev., LC v. H & J Beef Co.; Property Use Agreement (PUA)

Court: Michigan Court of Appeals (Unpublished)

Case Name: Hubbell Foley Prop. LLC v. Williams & Williams II LLC

e-Journal Number: 58469

Judge(s): Per Curiam – Stephens, Talbot, and Beckering

 

The court affirmed the trial court's judgment to the extent it imposed liability on third-party defendant-Dan's Excavating for repairing damage to the stone surface of plaintiff-HFP's property. It also affirmed the trial court's order dismissing defendant-W&Ws' common law indemnity claim, and the order denying HFP's request to hold both W&W and Dan's Excavating liable for any judgment entered in HFP's favor. In light of the undisputed facts and those found by the trial court, and the plain language of the PUA's indemnity clause, it reversed the trial court's judgment imposing liability and assessing damages against Dan's Excavating for unpaid rent, HFP's costs incurred in maintaining the soil pile, W&W's costs incurred in removing and testing the soil, and the award of costs and attorney fees in favor of HFP and W&W. The court also reversed the trial court's imposition of court costs and interest against Dan's Excavating. The case involved a lease agreement between HEP and W&W, as well as an indemnity agreement between W&W (the indemnitee) and Dan's Excavating (the indemnitor). Dan's Excavating appealed the trial court's opinion and order finding it liable to HFP and W&W for W&W's unpaid rent under its lease with HFP, the costs of removing soil from certain real property, the cost of repairing the real property, as well as certain fees, including, but not limited to, W&W's and HFP's attorney fees. The court held that the trial court erred when it found Dan's Excavating directly liable to HFP for HFP's claims against W&W. The only theories of liability asserted by HFP were against W&W, not against Dan's Excavating. There were "no contractual agreements between HFP and Dan's Excavating, namely because HFP refused to enter into one when Dan's Excavating learned that HFP was the true property owner and sought to enter into" a PUA with HFP. Thus, there was nothing to support the trial court's decision to find Dan's Excavating directly liable to HFP for all of its claims against W&W. The trial court appeared to support, at least in part, its imposition of liability against Dan's Excavating based on the indemnification provision contained in the PUA between W&W and Dan's Excavating. The court held that the trial court erred by imposing direct liability on Dan's Excavating for HFP's claims against W&W. The indemnity agreement here operated to create direct liability between Dan's Excavating and W&W. It did not create direct liability between Dan's Excavating and HFP. Rather, it required Dan's Excavating to assume certain liability incurred by W&W. Remanded for further proceedings.

 

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