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STATE OF MICHIGAN
COURT OF APPEALS


THE BAYBERRY GROUP, INC., d/b/a THE HOMESTEAD, Plaintiff-Appellee, v RONALD J. NOVAK, CLASSIC BUILDING SUPPLY, INC., and STEWART G. NUNNELLEY d/b/a NUNNELLEY HEATING, Defendants, and SCOTT EARL and STEVE SCHWARZ, Defendants-Appellants.

UNPUBLISHED March 22, 2007

No. 271463 Leelanau Circuit Court LC No. 05-006906-CH

Before: Sawyer, P.J., and Neff and White, JJ. PER CURIAM. Defendants Scott Earl & Steve Schwarz, building inspectors employed by Leelanau County, appeal as of right the circuit court's denial under MCR 2.116(C)(10) of their motion for partial summary disposition of plaintiff's gross negligence claim, asserting they were entitled to governmental immunity as a matter of law. We affirm. Plaintiff Bayberry Group, d/b/a The Homestead (a resort in Leelanau County), submitted a request for proposals (RFP) for gas fireplaces for its Fiddler's Pond Hotel, which RFP specified that the units would be "for commercial use in a sleeping area." Defendant Ronald Novak, owner of defendant Classic Building Supply, Inc. (CBS), a supplier of fireplaces, had previously worked with or for plaintiff on many contracts and subcontracts. Novak, who is not a licensed mechanical contractor, did preliminary research into gas fireplaces and reported back to Robert Kuras, plaintiff's president. Plaintiff ordered one B-vent fireplace unit from CBS, CBS installed it in one of plaintiff's Fiddler's Pond Hotel rooms in early March 2003, and Kuras "tested" the fireplace unit by placing inexpensive thermometers around the room. Kuras determined that guests would not be made uncomfortably warm by the fireplace. Later that month, plaintiff contracted with defendant CBS to remove all the wood-burning fireplaces at the Homestead's Fiddler's Pond Hotel and replace them with gas, B-vent fireplaces. CBS employee defendant -1-


Stewart Nunnelley, a licensed HVAC contractor, filed the applications for mechanical permits and installed the remaining (approximately fifteen) B-vent gas fireplaces at plaintiff's Fiddler's Pond hotel. The type of fireplace unit ordered and installed in plaintiff's Fiddler's Pond Hotel was a fuel-fired (propane) "B-Vent Decorative Gas Fireplace," manufactured by DESA, model P324. B-vent fireplaces have a glass door opening into the room in which they are installed, and draw combustion air from that room. Michigan's Building Code prohibits installation of such fireplaces in sleeping rooms: "fuel-fired appliances shall not obtain combustion air from . . . sleeping rooms." 2000 MRC M1701.4. The Building Code mandates that "Fuel burning appliances shall be vented to the outside in accordance with their listing and label and manufacturer's installation instructions. . . " 2000 MRC M1801.1. In April 2003, defendant inspectors Earl and Schwarz, performed initial inspections of the B-vent fireplaces--at the "rough-in" stage. Schwarz initially failed units he inspected. However, at the end of the rough-in inspections, which were conducted over a three-day period, Earl and Schwarz approved all the units. After Earl and Schwarz approved the B-vent fireplaces at the "rough-in" stage, Nunnelley went forward and completed installation of the B-vent fireplace units. Before defendant inspectors performed the final inspection, and before a certificate of occupancy was issued for the hotel rooms at issue, rooms were let to guests, and the B-vent fireplaces emitted smoke and soot into occupied hotel rooms.1 Defendants Earl and Schwarz conducted a final inspection in July 2004, and failed all the B-vent fireplaces for not being "sealed units." Plaintiff incurred approximately $260,000 in damages, including for having the fireplaces removed and replaced. Plaintiff's original complaint named as defendants Novak, CBS and Nunnelley, and alleged professional malpractice as to installation against Nunnelley and CBS, among other things.2 The original complaint did not name defendant inspectors Earl and Schwarz. The circuit court allowed defendants CBS, Novak and Nunnelley to file a late notice of non-party fault, which named inspectors Earl and Schwarz. Plaintiff then filed an amended complaint, which included a count entitled "Negligent Approval of Nonconforming Fireplaces" against defendants Earl and Schwarz only.3 The gross

No one was hurt, but plaintiff placed yellow police tape over the fireplaces to prevent guests from using them. Plaintiff maintained it was unaware when it let the rooms that no certificate of occupancy had issued. In any event, the damages plaintiff claims are not related to personal injury, but rather, are economic, including that it incurred expenses removing and replacing the B-vent fireplaces.
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Plaintiff's original complaint named Classic Stove and Spa, Inc., but that defendant was dismissed after plaintiff filed its amended complaint without naming it as a defendant. Plaintiff's amended complaint also alleged breach of warranty of fitness for intended use (CBS
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negligence count alleged that "Defendant-Inspectors Earl and Schwarz owed a duty to plaintiff only to: a. conduct a competent inspection of plaintiffs' commercial, hotel structure; b. approve the installation of such fireplaces at the rough inspection stage only if the fireplace units met all requirements of the 2000 Michigan Residential Code for use in Plaintiff's hotel rooms. Plaintiff further alleged that defendants Earl and Schwarz breached their duty owed to plaintiff and were grossly negligent "by approving these fireplaces at the rough inspection stage even though such units were prohibited by the Michigan Residential Code for hotel rooms and only direct vent units were permitted," and proximately caused plaintiff's damages. The parties filed cross-motions for summary disposition.4 Counsel for defendant inspectors, counsel for defendants Nunnelley, Novak and CBS, and counsel for plaintiff, argued at the hearing, at which the circuit court stated its opinion on the record and denied both motions, noting: . . . the claims against the county are legally weak, but not at the point where they can be resolved--the Court believes--as a matter of law. Clearly if there is any shared negligence

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