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STATE OF MICHIGAN
COURT OF APPEALS


LOLA MELBOURNE, Plaintiff-Appellee, v LAWN WORKS, Defendant, and WAYNE BOWLING AND RECREATION, INC., Defendant/Garnishee Defendant-Appellant.

UNPUBLISHED March 6, 2007

No. 263783 LC No. 00-010650-NO

LOLA MELBOURNE, Plaintiff-Appellee, v WAYNE BOWLING AND RECREATION, INC., Defendant-Appellant. No. 263819 LC No. 03-314738-CK

Before: Borrello, P.J., and Jansen and Cooper, JJ. PER CURIAM. Defendant appeals the trial court's ruling, following a bench trial, that plaintiff was entitled to recover from defendant on the basis of an indemnity provision in a contract between defendant Wayne Bowling and assignor Lawn Works. We affirm.

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I. Facts and Procedural History On December 3, 1996, Wayne Bowling entered into a written contract for snow removal services with Lawn Works.1 The contract included this provision: "Customer agrees to defend and hold contractor harmless from any and all liability, including attorney fees, which the contractor may accrue resulting from the contractor's work on the customers [sic] property." The written contract expired on May 1, 1997. In the fall of 1997, Wayne Bowling and Lawn Works agreed orally to renew the contract for snow plowing for the 1997-1998 season. On January 15, 1998, plaintiff Lola Melbourne slipped and fell in the parking lot of Wayne Bowling. Melbourne filed suit against Wayne Bowling on April 3, 2000. Wayne Bowling named Lawn Works as a non-party at fault, and on July 25, 2000, plaintiff amended her complaint to add Lawn Works as a defendant. Lawn Works, however, had ceased business operations in early 2000. The trial court entered an order on October 20, 2000, allowing alternate service of the complaint on Brian Shelton as Lawn Works. Shelton failed to contact Wayne Bowling to claim his right to defense under the indemnity provision in the contract, to consult an attorney on his own, or to reply to the complaint in any way. On September 7, 2001, on plaintiff's motion, a default judgment was entered against Lawn Works in the amount of $646,400.2 Wayne Bowling, the remaining defendant, and Melbourne agreed to binding arbitration. An arbitration award was entered against Wayne Bowling on February 12, 2002, in the amount of $650,000. Wayne Bowling paid this award. On October 29, 2002, plaintiff served a writ of garnishment on Wayne Bowling, claiming the right to garnish the contractual obligation to indemnify allegedly owed to Lawn Works by Wayne Bowling (Docket No. 263819). Wayne Bowling denied liability. While the garnishment action was proceeding, on January 28, 2003, plaintiff obtained an assignment from Thomas Scott, former partner of Shelton3; on April 23, 2003, plaintiff brought an action against Wayne Bowling as assignee of Scott for Lawn Works (Docket No. 263783).

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On December 7, 1994, Lawn Works was created as a DBA by Brian Shelton and Thomas Scott. Scott withdrew from the business within a week, and Shelton continued as sole owner and operator. Only Shelton signed the Wayne Bowling contract for Lawn Works, identifying himself as "Owner."

Plaintiff's injuries were such that she would be permanently unable to work and would require home care. Net income loss was calculated at $288,000. The cost of home care services was calculated at $218,400. Plaintiff's counsel requested an additional $400,000 in non-economic damages. The trial judge accepted the figure of $506,400 in total economic damages, and granted $150,000 in non-economic damages, for a total of $646,400.
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2

On January 12, 2004, plaintiff obtained an assignment from Shelton. However, plaintiff did not
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The trial court consolidated the two pending actions, and Wayne Bowling filed for summary disposition of the consolidated matter on December 17, 2003. Wayne Bowling alleged that plaintiff had no right to double recover, that there was no valid indemnity provision in the oral contract, that Lawn Works had failed to defend or tender the defense to Wayne Bowling, that Lawn Works was insolvent and had suffered no loss that obliged indemnification, and that as a matter of law, an indemnity contract cannot be enforced by garnishment. The trial court denied the motion in an opinion issued on May 11, 2004, rejecting all arguments as a matter of law except the claim that there was no enforceable indemnity provision in the contract for the second plowing season, reasoning that a question of fact remained as to the terms of the contract in force at the time of the slip and fall. To address this question, a four-day bench trial was held on March 16, March 21, June 2, and June 8, 2005. The testimony of Kenneth Roth, general manager of Wayne Bowling, confirmed that Wayne Bowling had admitted the written contract controlled at the time of the accident. Plaintiff's counsel elicited from Roth the fact that in Wayne Bowling's Answer to Melbourne's First Amended Complaint, in response to the allegation that "Lawn Works, by contract, had a duty to salt and clear the area where Lola Melbourne slipped and fell," Wayne Bowling admitted that "Wayne Bowling and Lawn Works entered into a `snow plowing contract' dated December 3, 1996." The trial judge, as trier of fact, concluded: The dispute is whether or not the contract continued as written. But no matter how it's couched in terms of language, clearly to this Court, the intention of both Lawn Works and Mr. Shelton and Mr. Roth and Wayne Bowling was that the terms of the contract from December 3rd of 1996 continue as written. The court found that "the provision of indemnification was in effect at the time of Ms. Melbourne's injury, and the Court finds in favor of the Plaintiff." Defendant raises many issues on appeal, the two most important being the terms of the contract and the viability of double recovery in this case. We agree with the trial court as to both. Although we find these two issues dispositive of defendant's claims, so as to resolve all of the issues raised by defendant, we will also briefly address the issues related to the operation of the indemnification clause, the applicability of garnishment to plaintiff's claim, and the validity of the assignment plaintiff obtained. II. The Contract Defendant first argues that the oral agreement between Wayne Bowling and Lawn Works did not include all of the terms of the precursor written contract, and that the trial court clearly

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move to amend her complaint to add the assignment from Shelton until opening arguments on the first day of trial. The trial judge nonetheless allowed the amendment to the complaint at that time.

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erred in finding that the indemnity provision was therefore still in effect after the written contract expired. "Findings of fact by the trial court may not be set aside unless clearly erroneous." MCR 2.613(C). "A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been committed." Walters v Snyder, 239 Mich App 453, 456; 608 NW2d 97 (2000). Here, we find there is no error, let alone clear error. The trial court stated, at the close of the proofs at trial: "The Court is of the opinion that based upon all of the testimony that it has heard, that the contract was in fact extended with all of its provisions until the 1998 snow season ended." Upon review of the record, there is no evidence to support a definite and firm conviction that this finding was clear error. In any case, the issue may more easily be resolved by reference to Wayne Bowling's own admissions in prior pleadings. Wayne Bowling made an admission in a prior pleading that the December 3, 1996 contract was in effect at the time of plaintiff's fall, and Wayne Bowling is bound by that admission. Lola Melbourne alleged in her First Amended Complaint that "at all times relevant hereto, Lawn Works, [sic] was contracted by Wayne Bowling to provide the winter maintenance of the parking lot owned by Wayne Bowling." In its Answer, Wayne Bowling admitted "Wayne Bowling and Lawn Works entered into a `snow plowing contract' dated December 3, 1996." This admission is dispositive of the issue of which contract terms control. The trial court did not err in finding that Wayne Bowling had a contractual obligation to indemnify Lawn Works at the time of Melbourne's fall. III. Double Recovery Defendant next argues that in Michigan, a plaintiff may not double recover for the same injury; a prior award must be deducted from a subsequent award if for an identical injury. Grace v Grace, 253 Mich App 357; 655 NW2d 595 (2003). We note first that plaintiff's claim for damages, at the time of the arbitration hearing, exceeded 1.6 million dollars in combined economic and non-economic damages. Given that, we would find a question as to whether the two damage awards are indeed duplicative, but we need not explore that question for the following reasons. While defendant is clearly correct that double recovery is in general not allowed,4 we agree with the trial court that the stipulation signed by defense counsel is dispositive of this issue. Defendant stipulated, in an order entered by the court on September 7, 2001:

Great Northern Packaging, Inc v General Tire & Rubber Co, 154 Mich App 777, 781; 399 NW2d 408 (1986).

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[S]hould a default judgment be entered against Brian Shelton, Lawn Works, and/or Brian Shelton d/b/a Lawn Works, then Wayne Bowling & Recreation, Inc., shall not be entitled to a set-off of said default judgment, from any verdict, judgment, or settlement against Wayne Bowling & Recreation, Inc., in this matter. In addition, in the arbitration between Wayne Bowling and Melbourne, counsel for both parties read the arbitration agreement into the record on October 22, 2001. That agreement included this provision: This arbitration agreement, the arbitration, the dismissal and the satisfaction of arbitration shall not in any fashion affect or limit Plaintiff's rights to collect the previously entered judgment against Lawnworks [sic], which was formerly a defendant in this matter. Wayne Bowling is therefore precluded from arguing that the judgment against Lawn Works must be set-off against the amount already paid by Wayne Bowling as a result of the arbitration judgment; defendant cannot now argue that plaintiff cannot double recover for the same damages. As to defendant's argument that the economic damages were calculated incorrectly, we note that these factual findings were not challenged in the court below; the damages were determined on September 7, 2001 (default judgment) and February 12, 2002 (arbitration award). This unpreserved claim of error is not properly appealable now before this Court, and our discretionary review is limited to clear error apparent on the record. Upon review of the record, it appears that while the income figures were not adjusted for present value, neither were they adjusted for inflation, which could serve as offsetting adjustments. We note also that at the time the default judgment was rendered, there was no request or argument for either adjustment. We find no clear error. IV. Operation of Indemnification Clause Defendant argues that Lawn Works is not entitled to indemnification for several reasons: Lawn Works neither tendered the defense to Wayne Bowling nor did anything at all to defend the claim, but rather allowed a default judgment to enter; Lawn Works did not enter into a "reasonable settlement"; Lawn Works has not paid anything on the judgment and therefore has suffered no loss. Defendant argues that tender is the essential first step to trigger the right of indemnity, and that absent tender, the right is forfeit. Because failure to tender precludes the indemnitor from defending claim, the indemnitor should not be bound by a default judgment against the indemnitee.5

Defendant cites Ford v Clark Equipment Company, 87 Mich App 270, 277; 274 NW2d 33 (1978), for this proposition.

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In the hearing on Wayne Bowling's motion for summary disposition, the trial court noted both that the indemnification clause in the contract did not include a notice-of-suit provision, and that in any case Wayne Bowling did have notice of the claim against Lawn Works. As the trial court stated, notice to an indemnitor is not required where the indemnitor is a party to the action. Detroit v Grant, 135 Mich 626, 629; 98 NW 405 (1904). The trial court also correctly noted that the cases relied on by Wayne Bowling for the argument that tender is required to invoke the right to indemnity are factually distinguishable, as they involve insurance contracts, rather than contractual indemnity outside the insurance context. At the close of the trial, the trial court briefly re-addressed the issue of tender, stating: [T]he court is ever mindful of the fact that there would've been no necessity for Lawn Works to do anything had they been

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