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Michigan Supreme Court Lansing, Michigan

Opinion
TIMOTHY ZAHN, Plaintiff, v KROGER COMPANY OF MICHIGAN, Defendant/Cross-Plaintiff-Appellee, and F.H. MARTIN CONSTRUCTION COMPANY, Defendant/Cross-Defendant/ Third-Party Plaintiff-Appellee, and CIMARRON SERVICES, INC., Third-Party Defendant-Appellant.

Chief Justice:

Justices:

Marilyn Kelly

Michael F. Cavanagh Elizabeth A. Weaver Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman Diane M. Hathaway

FILED APRIL 1, 2009

No. 136382

BEFORE THE ENTIRE BENCH HATHAWAY, J. Cimarron Services, Inc.,1 appeals from a judgment in favor of F.H. Martin

1

Cimarron was the third-party defendant below.

Construction Company2 requiring Cimarron to indemnify Martin for a share of a settlement that Martin had paid as the result of an injury to an employee in a construction accident. Cimarron alleges that the language of the contract does not control. Instead, Cimarron contends that MCL 600.2956 effectively limits the application of express contractual indemnification clauses, because the statute mandates that parties may only be held responsible for their own pro rata share of the negligence.3 The Court of Appeals rejected this argument and, in an

unpublished opinion, held that MCL 600.2956 does not apply to contracts.4 We granted leave to appeal to review this issue and asked the parties to also address whether the exclusive remedy provision of the Worker's Disability Compensation Act (WCDA), MCL 418.131(1), in any way precludes a third-party defendant employer from voluntarily subjecting itself to liability for negligence to an employee by virtue of an indemnification contract.5 We affirm the judgment of

2 3

Martin was a defendant, cross-defendant, and third-party plaintiff below. MCL 600.2956 provides:

Except as provided in [MCL 600.6304], in an action based on tort or another legal theory seeking damages for personal injury, property damage, or wrongful death, the liability of each defendant for damages is several only and is not joint. However, this section does not abolish an employer's vicarious liability for an act or omission of the employer's employee. Zahn v Kroger Co of Michigan, unpublished opinion per curiam of the Court of Appeals, issued March 27, 2008 (Docket No. 274994).
5 4

Zahn v Kroger Co of Michigan, 482 Mich 993 (2008).

2

the Court of Appeals in favor of Martin and hold that MCL 600.2956 does not apply to contract actions, and that an employer may voluntarily subject itself to liability for damages to employees from which it would otherwise be insulated. We write briefly to address these issues and to clarify the law regarding indemnification contracts. The underlying case arose from a construction site accident during the renovation of a Kroger store. Martin was the general contractor and Cimarron was a subcontractor for the project. A Cimarron employee, Timothy Zahn, was injured when he fell from scaffolding while installing drywall. Zahn brought a negligence action against the Kroger Company of Michigan and Martin. Kroger filed a thirdparty action against Martin for indemnification. Martin, in turn, filed a third-party action against Cimarron seeking indemnification pursuant to their subcontract agreement. Martin entered into a settlement with Zahn for $225,000 and resolved claims for indemnification with Kroger for $12,489.45. Martin then asked the trial court to enforce the terms of the indemnification clause in the subcontract agreement with Cimarron. This appeal addresses the indemnification clauses in that subcontract. The pertinent contract clauses provide: 3. . . . By acceptance of this subcontract, Subcontractor assumes every duty imposed upon Martin, to the extent related to the subject matter of this Subcontract. ***

3

17. Indemnity

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Michigan Law