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STATE OF MICHIGAN
COURT OF APPEALS


HARRY KNOTT Plaintiff-Appellant, v RON SLOAN, Defendant. and HOWARD LEE VANDERLAAN Defendant-Third-Party Plaintiff, v CITY OF SCOTTVILLE, Third-Party Defendant-Appellee.

UNPUBLISHED August 27, 1996

No. 181662 LC No. 94-001062

Before: Doctoroff, C.J., and Wahls and Smolenski, JJ. PER CURIAM. This case involves a slip and fall by plaintiff while entering the business of defendant Sloan. The fall occurred on a parking lot owned by defendant VanderLaan. In the circuit court, plaintiff sought leave to amend his complaint to add the City of Scottville, which leased the parking lot from VanderLaan. The trial court denied plaintiff's motion, finding that amendment would be futile. The trial court then granted defendant VanderLaan's motion for summary disposition, and plaintiff voluntarily dismissed defendant Sloan. Plaintiff now appeals the trial court's denial of his motion to amend his complaint and add Scottville as a defendant. We reverse.

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On March 18, 1993, plaintiff was walking on a parking lot toward the business of defendant Sloan when he slipped on an accumulation of ice, causing him to injure his right ankle. Plaintiff filed his negligence complaints against defendants on March 9, 1994. Subsequently, VanderLaan, the owner of the building which housed Sloan's business, filed a third-party complaint against the City of Scottville. The third-party complaint was based on a contract between VanderLaan and Scottville in which the city agreed to lease the parking lot from VanderLaan and further agreed to maintain the lot and hold VanderLaan harmless for all injuries that occurred in that parking lot for the duration of the lease. In addition to the third-party complaint, VanderLaan also filed a cross-claim against Sloan seeking indemnification. Scottville filed a motion for summary disposition which was originally denied by the circuit court because it found that, in leasing the parking lot, the city was engaging in a proprietary function, and had thus waived the defense of governmental immunity. Scottville filed a motion for reconsideration, pointing out that it paid VanderLaan no rent, it charged the public no fee for parking, it paid the taxes due on the parking lot, and it did not earn a monetary profit from the lease of the lot. The trial court took this motion under advisement. On October 31, 1994, plaintiff moved to file a first amended complaint to include Scottville as a defendant on counts of negligence and breach of contract. In the proposed breach of contract claim, plaintiff alleged that he was an intended third-party beneficiary of the lease contract between Scottville and VanderLaan. Scottville opposed the motion, arguing that Scottville was entitled to governmental immunity and that plaintiff was not an intended beneficiary of the lease. The trial court found that governmental immunity applied to Scottville and that plaintiff, as a customer of Sloan's business, was not an intended beneficiary of the lease contract. Thus, plaintiff's motion for leave to file his first amended complaint was denied on the basis of futility. Pursuant to MCL 600.1405; MSA 27A.1405, a third party that is an intended beneficiary of a contract can enforce the contract. The statute provides in relevant part: Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said promise had been made directly to him as the promisee. (1) A promise shall be construed to have been made for the benefit of a person whenever the promisor of said promise has undertaken to give or to do or refrain from doing something directly to or for said person. [MCL 600.1405; MSA 27A.1405] The lease contract between VanderLaan and Scottville provided, inter alia: The Lessee shall maintain, periodically sweep and clean, remove the snow and generally use the demised premises as it does the adjacent parking lot and to the benefit of the Lessor's business patrons and also those business patrons of other Scottville businesses similarly situated. -2

The lease also provided: The Lessee hereby agrees to assume all risks, incident to the use of the premises and to hold the Lessors, their officers, agents, and assigns, harmless from and indemnified against any loss, damage or expense resulting from injury to person or persons, or damage to or loss of property occurring upon or in any way related to the use of the said demised premises by the general public. The first issue we must decide, therefore, is whether the parties intended plaintiff to be a third party beneficiary of the contract under MCL 600.1405; MSA 27A.1405. The trial court found that "Lessor's [VanderLaan's] business patrons and also those business patrons of other Scottville businesses" included only the merchants which conducted their operations on VanderLaan's property, such as Sloan, but did not include patrons of those businesses such as plaintiff. We disagree with the trial court's analysis. The test to determine whether a third party is a third-party beneficiary is whether the promisor undertakes to do something directly to or for the party so that the party can be considered someone for whose benefit the promise was made. Alden State Bank v Old Kent Bank-Grand Traverse, 180 Mich App 40, 44; 446 NW2d 559 (1989). A court must objectively determine from the form and meaning of the contract itself whether a party is a third-party beneficiary as defined in MCL 600.1405; MSA 27A.1405. Kammer Asphalt Paving Co v East China Twp Schools, 443 Mich 176, 189; 504 NW2d 635 (1993). In the instant case, the lease between VanderLaan and Scottville obligates the city to "remove the snow and generally use the demised premises as it does the adjacent parking lot and to the benefit of the Lessor's [VanderLaan's] business patrons and also those business patrons of other Scottville businesses similarly situated." Contractual language is to be given its ordinary and plain meaning. Resort to a dictionary is permitted to determine a word's plain and ordinary meaning. Michigan Millers Ins v Bronson, 445 Mich 558, 568; 519 NW2d 864 (1994). A "patron" is defined as: a person who is a customer, client, or paying guest, esp. a regular one of a store, hotel or the like. [Random House Webster's College Dictionary (1995).] Plaintiff claims that he went to the premises to do business with Sloan. Under the definition, he thus qualifies as a business "patron" in the ordinary sense of the word. Accordingly, plaintiff is included within the class of beneficiaries specifically mentioned in the contract. Pursuant to MCL 600.1405; MSA 27A.1405, plaintiff thus qualifies as a third-party beneficiary of the lease contract who may seek to enforce that promise. Kammer, supra. The trial court's finding to the contrary was erroneous. Because we have established that plaintiff could enforce the contract as a third-party beneficiary, the next question before us is whether plaintiff sufficiently pleaded a breach of contract claim in his proposed amended complaint, such that amendment would not be futile. We find that plaintiff's proposed amended complaint properly set forth a claim for a breach of contract. -3

To plead a breach of contract as a third-party beneficiary, a plaintiff must allege: (1) that a valid contract existed; (2) that a contractual term was violated by defendant; (3) that the plaintiff was the third-party beneficiary; and (4) defendant's nonperformance resulted in damage to plaintiff. 2 Callaghan's Michigan Pleading & Practice,

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