Interpretation of an indemnity contract; Auto-Owners Ins Co v Campbell-Durocher Group Painting & Gen Contracting, LLC; “Arising out of”; Kochoian v Allstate Ins Co; Notice of non-party fault under MCL 600.2957 et seq

The court held that the trial court erred by denying defendants-third-party plaintiffs’ (Brodock and Dunigan) motion for summary disposition and granting defendant-third-party defendant’s (Michigan Paving) motion for summary disposition. Plaintiff in the underlying action sued Brodock and Dunigan, who in turn filed a notice of non-party fault against Michigan Paving. Plaintiff then amended his complaint to include negligence claims against Michigan Paving. Dunigan then filed a third-party complaint against Michigan Paving asserting a contractual breach for failing to assume its defense against plaintiff and for indemnification under the subcontract. Michigan Paving denied it had any obligation to indemnify or defend Dunigan because Michigan Paving was not performing covered work at the time of incident. The trial court found Michigan Paving was only required to indemnify Dunigan and its employees for claims that arose out of or were the result of its work and that under the subcontract it was only required to provide traffic regulator control when it was engaged in top course paving. It also found the evidence showed Michigan Paving was not engaged in such activity at the site of the accident and thus, was not required to indemnify Dunigan and Brodock. On appeal, the court agreed with Dunigan and Brodock that the trial court erred by finding Michigan Paving was not required to indemnify and defend them. It concluded that, based on a plain reading of the subcontract and an exhibit, the trial court erred by finding that Michigan Paving’s duties under the subcontract only arose when it was engaged in top course paving. “There was record evidence which created a material question of fact as to whether Michigan Paving was engaged in contractual work at the time of the collision between Brodock” and plaintiff. The court also concluded that Dunigan and Brodock were entitled to indemnification. Finally, it ordered the trial court on remand to address and decide the merits of Dunigan’s and Brodock’s breach of contract claim. Reversed and remanded.