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STATE OF MICHIGAN COURT OF APPEALS

DAVID E. TOWNSEND, HEIDI A. TOWNSEND, LINDSAY R. TOWNSEND, HEATHER M. TOWNSEND and DAVID J. TOWNSEND, Plaintiffs-Appellants/CrossAppellees, v KASLE STEEL CORPORATION, Defendant/Third-Party PlaintiffAppellee/Cross-Appellant, and KERRY STEEL, INC., Third-Party Defendant.

UNPUBLISHED February 24, 2009

No. 278645 Wayne Circuit Court LC No. 02-218218-NO

Before: Talbot, P.J., and Bandstra and Gleicher, JJ. PER CURIAM. In this action seeking recovery for work-related injuries sustained by plaintiff David Townsend, plaintiffs1 appeal as of right from a circuit court order entering a judgment of no cause of action in favor of defendant Kasle Steel Corporation. We affirm in part, reverse in part, and remand.

Plaintiff Heidi Townsend is David Townsend's wife, and the remaining plaintiffs are their children. Because the claims of Heidi and the children are derivative of David Townsend's claims, this opinion's references to the singular "plaintiff" refer solely to David Townsend.

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I. Underlying Facts & Procedure On March 1, 2000, plaintiff sustained head and back injuries while working as a "slitter helper" on a steel processing line operated by his employer, Kerry Steel, Inc. Kasle Steel Corporation owned the Dearborn facility and equipment Kerry personnel used to process steel. Kasle leased a portion of the facility and its steel processing equipment to Kerry pursuant to an "Industrial Facility Lease." Plaintiff's injury occurred as he attempted to insert slit steel into a recoiler, the final component of a slitter. A slitter comprises a complex line of machines that uncoils large coils of steel, slits the steel into strips or ribbons, and recoils it. The slitter involved here processed coils of steel as wide as 72 inches. On the day of plaintiff's injury, the shear, a component of the slitter line, was not working. The shear creates smooth, straight 90-degree square ends on the leading edges of the cut steel strips. At the end of the slitting process, two "slitter helpers" manually lift the sheared leading edges of the steel and direct them into slots in the recoiler. This task requires the helpers to hoist the steel over their heads, perfectly position the leading edges in the slots, and to clamp the edges in place before recoiling begins. Because the shear did not work on the day of the accident, plaintiff and Rubin Williams, a coworker, manually cut the edges of the steel with a device called a nibbler. After they "nibbled" the leading edges of the steel, Williams successfully guided one strip of steel into the recoiler slot. As plaintiff picked up the second strip, the first strip came down and hit him on the head, knocking him to the floor. Plaintiffs theorized that the steel fell from the recoiler because its leading edge was not perfectly square, and could not be properly positioned in the slot. Plaintiffs filed a complaint setting forth two primary counts: "Negligence" and "Breach of Contract." According to the complaint, For some time prior to March 1, 2000, the slitter had been malfunctioning. The slitter cuts lengths of steel as the steel is uncoiled. The cut lengths of steel are then rerolled on a recoiling machine. Kerry was experiencing problems with the recoiling machine because the edges of the steel segments could not be clamped into the recoiler. The complaint further alleged that [t]wo or more employees of Kasle were assigned by Kasle to carry out and conduct inspections, testing, repairs, and maintenance of the slitter. Employees of Kasle were also supposed to train and instruct employees of Kerry in the safe and proper method of operating, inspecting, testing, repairing, and maintaining the slitter and other machinery and equipment leased to Kerry by Kasle. Count I asserted that Kasle employees performing "inspection, maintenance and repair services" on the slitter "failed to act with reasonable care and increased the risk of harm" to plaintiff. Count II, the breach of contract claim, averred that a contract obligated Kasle to provide Kerry's employees with "a reasonably safe place to work," and that plaintiff qualified as a third-party beneficiary of the contract.

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In October 2002, the trial court (Judge James Rashid) granted Kasle leave to file a thirdparty complaint naming Kerry as a third-party defendant. The third-party complaint averred that the industrial facility lease required Kerry to defend and indemnify Kasle regarding the events alleged in plaintiffs' complaint. In 2003, Kasle and Kerry filed motions for summary disposition, and in October 2003 Judge Rashid granted Kerry's motion and dismissed Kerry with prejudice. In June 2004, Judge Rashid entered an order permitting plaintiffs to file a first amended complaint adding allegations that (1) "Prior to leasing the slitter to Kerry, Kasle made significant modifications and/or repairs to the slitter and its related tooling and equipment," and (2) Kasle's "modifications and repairs to the slitter and its related tooling and equipment ... adversely affected the slitter's functioning, configuration, and safe operation, and created an unreasonable risk of harm . . . ." The first amended complaint also pleaded the same negligence and breach of contract count contained in the original complaint. In March 2005, Judge MacDonald allowed plaintiffs to file a second amended complaint. The second amended complaint alleged that in 1983, Kasle purchased the 72-inch slitter as used equipment, and in 1989 or 1990, Kasle decided to increase the capacity of the slitter. Plaintiffs averred that Kasle "performed and/or furnished the design for a modified 72"-slitter line based upon Kasle's own formulation of a new system," and "specially selected" components supplied by "Braner/Coil-Tech Corporation, a Chicago based manufacturer that also served as the contractor making the improvements to Kasle's 72"-slitter line." The second amended complaint asserted that Kasle incorporated a new "tension stand" and a new "re-coiler" into the modified slitter line, but neglected to incorporate a "`feeder table'--a device allowing the safe and stable passage of the leading edge of the cut steel out from the tension stand and onto the re-coiler . . . ." Plaintiffs averred that the presence of a feeder table would have eliminated the need for a slitter helper to manually lift and position the steel in the recoiler slot. Count I of the second amended complaint, entitled "Negligence/Gross Negligence by Kasle Steel Corporation in the Design and Formulation of the 72"-steel slitter line," averred that Kasle undertook "to design and to formulate a new system of interrelated equipment," and knew or should have known that the new system "was defective and unreasonably dangerous" because it did not incorporate a "feeder table" or another safety device "so as to allow the safe and stable passage of the leading edge of the cut steel . . . ." This allegation further explained that as configured, the slitter "required slitter workers to position themselves at points of potential energy release, beneath the cut steel coils, in order to perform their job functions." Count II of the second amended complaint, entitled "Negligence/Gross Negligence by Kasle Steel Corporation in its inspection, maintenance, repair, and training on the 72"-steel slitter line," alleged that Kasle "undertook to assign two or more Kasle employees" to inspect, test, repair and maintain the slitter. Plaintiffs further maintained that pursuant to its lease with Kerry, Kasle provided personnel "to train and instruct employees of Kerry in the safe and proper method of operating, inspecting, testing, repairing, and maintaining" the slitter, and that plaintiff sustained his injuries "while employees of Kasle Steel were present inspecting, maintaining, and/or repairing" the slitter. The second amended complaint asserted that Kasle negligently failed to perform the training, inspection, maintenance and repair functions it had undertaken. Count III, entitled "Nuisance in Fact," alleged that because the slitter line did not incorporate a

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feeder table or other guard, it qualified as a nuisance in fact. Count IV repeated the same breach of contract allegations as pleaded in the previous complaints.2 In July 2005, Kasle filed a motion for summary disposition, contending that (1) Count I set forth a product liability claim, but Kasle "was not involved in the `production of a product' as that term is defined in the [product liability] statute"; (2) Kasle bore no duty to repair or maintain the premises, or to train Kerry's personnel; (3) because Kasle had no duty to repair or maintain the slitter, plaintiffs could not demonstrate a nuisance in fact; and (4) plaintiff did not qualify as a third-party beneficiary of the lease. In support of Kasle's motion regarding Count II (negligent inspection, maintenance, repair and training), Kasle provided the trial court with a copy of the lease, and nothing more. Notably, Kasle did not challenge the sufficiency of the evidence supporting any of plaintiffs' negligence claims. Plaintiffs responded that regardless of the lease provisions, Kasle had undertaken to provide training, repair and maintenance services to Kerry personnel, thereby giving rise to a duty of care. Plaintiffs pointed out that their complaint specifically identified Bruce Davis as the Kasle employee who provided maintenance and training services. Kasle filed a reply brief alleging that no evidence supported that it had maintained or repaired the slitter, and that "[w]ith regard to training, the training provided by Mr. Davis to Kerry Steel employees was verbal instruction only because Kerry was a non-union shop and Defendant's union employee--Bruce Davis--was barred by union rules from operating any machinery or performing any work at Kerry Steel." At a summary disposition hearing conducted in January 2006, the trial court denied summary disposition regarding Count I (negligent/grossly negligent design or formulation), and granted it as to Counts II (negligent "inspection, maintenance, repair and training"), III (nuisance in fact) and IV (breach of contract). In January 2007, a jury trial occurred concerning Count I, and the jury returned a verdict finding no negligence on the part of Kasle. II. Analysis of Summary Disposition Rulings Plaintiffs first challenge the trial court's decision to grant Kasle summary disposition of second amended complaint Count II, which alleged negligent repair and negligent training by Kasle. This Court reviews de novo a circuit court's summary disposition ruling. Walsh v Taylor, 263 Mich App 618, 621; 689 NW2d 506 (2004). Kasle moved for summary disposition pursuant to MCR 2.116(C)(10). "Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law." West v General Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003). "In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissions, affidavits, and other relevant

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After answering the complaint, Kasle filed a notice of nonparty fault, naming Kerry, Braner USA, Edgecomb Corporation, which purchased the slitter as new equipment in 1980, and sold it to Kasle in 1983, and Coil Tech Corporation.

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documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial." Walsh, supra at 621. "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." West, supra at 183. A. Negligent Training (Count II) After reviewing the record, we find that the trial court erred by summarily dismissing plaintiffs' negligent training claim. The Kasle-Kerry lease specifically contemplated that Kasle would train Kerry employees. Furthermore, viewed in the light most favorable to plaintiffs, the record evidence demonstrated that (1) Kasle undertook to train Kerry employees, and (2) Bruce Davis, a Kasle employee, trained plaintiff in slitter operation. The industrial facility lease between Kasle (the landlord) and Kerry (the tenant) commenced on July 1, 1999. Section 3.02 of the lease provided in part, Commencing on or about June 1, 1999, Tenant shall have the right to enter upon the Premises for the purpose of obtaining training of Tenant's employees in the use of the Equipment located in the Premises by Landlord's employees. ... In addition, Tenant acknowledges that such training shall be at Tenant's sole risk and Tenant further agrees to indemnify and hold Landlord harmless from and against any and all claims for loss or damage, including personal injury, which may arise in connection with such training. [Emphasis supplied.] Bruce Davis testified at his deposition that he worked for Kasle for 17-

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