Deborah Bennett v. Carrie Russell , 322 Mich. App. 638 ( 2018 )

STATE OF MICHIGAN
COURT OF APPEALS
DEBORAH BENNETT and MARSHA FOR PUBLICATION
CHRISTINE WILSON, January 16, 2018
9:10 a.m.
Plaintiffs-Appellants,
and
AMERICAN ANESTHESIA ASSOCIATES LLC,
Intervening Plaintiff,
v No. 334859
Wayne Circuit Court
CARRIE RUSSELL, LIBERTY MUTUAL LC No. 14-013716-NI
INSURANCE COMPANY, ENTERPRISE
LEASING COMPANY OF DETROIT, also
known as ENTERPRISE RENT-A-CAR,
Defendants,
and
DENNIS HOGGE,
Defendant-Appellee.
Before: TALBOT, C.J., and MURRAY and O’BRIEN, JJ.
TALBOT, C.J.
Plaintiffs Deborah Bennett and Marsha Christine Wilson initiated this action following a
motor vehicle accident that occurred on November 16, 2013. The trial court granted summary
disposition in favor of defendant Dennis Hogge under MCR 2.116(C)(10). Plaintiffs appeal by
right. We conclude that the trial court erred by dismissing plaintiffs’ claim against Hogge
because liability under a negligent entrustment theory is not limited to the owner of the vehicle
negligently operated. We therefore reverse the trial court’s order granting Hogge’s motion for
summary disposition and remand this matter to the trial court for further proceedings.
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I. BACKGROUND
At approximately 8:30 a.m. on November 16, 2013, plaintiffs were stopped at a traffic
light at the intersection of Chalmers and Vernor in the city of Detroit when their vehicle was
struck by a white Chrysler 300 attempting to turn onto Chalmers. According to the traffic crash
report, the Chrysler 300 was driven by defendant Carrie Russell. During the course of discovery,
plaintiffs learned that Russell was not involved in the accident and that the actual driver, Latasha
Phillips, had falsely identified herself as Russell when she spoke with the police. Moreover, the
Chrysler 300 was owned by Enterprise Leasing Company of Detroit (Enterprise) and leased to
Hogge at the time of the accident. Shortly after acquiring the vehicle from Enterprise, Hogge
turned it over to Latasha.1 Plaintiffs amended their complaint to add Enterprise and Hogge as
defendants to their negligence claim, averring that they were liable for injuries plaintiffs
sustained in the accident under the owner’s liability statute, MCL 257.401.
Hogge moved for summary disposition, arguing that he could not be held liable for
Latasha’s negligence because he was not an “owner” of the rental vehicle, as that term is defined
in the Michigan Vehicle Code, MCL 257.1 et seq. In pertinent part, plaintiffs asserted that
questions of fact remained as to whether Hogge negligently entrusted the vehicle to Latasha.
During oral argument, plaintiffs’ counsel essentially conceded that plaintiffs’ complaint did not
allege a negligent entrustment cause of action against Hogge, but maintained that there was
ample evidence to support that theory and concluded that “the pleadings should conform to the
proofs . . . .” The trial court found that Hogge did not meet the statutory definition of an owner
set forth in MCL 257.37 and granted summary disposition in Hogge’s favor, reasoning that his
lack of ownership was fatal to plaintiffs’ claim under the owner’s liability statute or a negligent
entrustment theory.
On appeal, plaintiffs argue that the trial court erred by granting Hogge’s motion for
summary disposition because the common-law tort of negligent entrustment imposes liability on
one who negligently supplies a chattel to another and, as such, whether Hogge met the statutory
definition of an owner was not dispositive.
II. STANDARD OF REVIEW
This Court generally reviews a trial court’s rulings on summary disposition motions de
novo.2 A trial court deciding a motion for summary disposition under MCR 2.116(C)(10)
considers “the affidavits, pleadings, depositions, admissions, and other evidence submitted by
the parties . . . .”3 “Summary disposition is appropriate . . . if there is no genuine issue regarding
any material fact and the moving party is entitled to judgment as a matter of law. A genuine
1
Hogge knew Latasha as “Latasha Dawson.” However, Russell recognized the surname
Dawson as belonging to the father of Latasha’s children and stated that “Latasha Dawson” was
actually Latasha Phillips.
2
Gorman v American Honda Motor Co, Inc, 302 Mich App 113, 115; 839 NW2d 223 (2013).
3
Joseph v Auto Club Ins Ass’n, 491 Mich 200, 206; 815 NW2d 412 (2012).
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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.”4
However, when a party presses a claim of error that was not raised in, and addressed and
decided by, the trial court, it is not properly preserved for appellate review.5 Although plaintiffs
asserted before the trial court that Hogge’s lack of ownership was irrelevant, the basis of their
argument was that Hogge’s insurance policy provided liability coverage for the rented vehicle.
Accordingly, this issue is unpreserved and this Court’s review is limited to plain error affecting
substantial rights.6 “To avoid forfeiture under the plain error rule, three requirements must be
met: 1) the error must have occurred, 2) the error was plain, i.e., clear or obvious, 3) and the
plain error affected substantial rights.”7
III. ANALYSIS
The common-law tort of negligent entrustment “imposes liability on one who supplies a
chattel for the use of another whom the supplier knows or has reason to know is, because of
youth, inexperience, or otherwise, likely to use it in a manner involving unreasonable risk of
physical harm.”8 A negligent entrustment claim can arise from the use of a motor vehicle, as
long as the action falls within the scope of the residual liability allowed by the no-fault statutory
scheme.9 In this context, courts have sometimes referred to the liability of an “owner” of the
vehicle. For instance, in Perin v Peuler (On Rehearing), the Supreme Court explained that the
plaintiff in a negligent entrustment action has the burden of proving
that the motor vehicle was driven with the permission and authority of the owner;
that the entrustee was in fact an incompetent driver; and that the owner knew at
the time of the entrustment that the entrustee was incompetent or unqualified to
4
Gorman, 302 Mich App at 116, quoting West v Gen Motors Corp, 469 Mich 177, 183; 665
NW2d 468 (2003).
5
Hines v Volkswagen of America, Inc, 265 Mich App 432, 443; 695 NW2d 84 (2005).
6
In re Smith Trust, 274 Mich App 283, 285; 731 NW2d 810 (2007), aff’d 480 Mich 19 (2008).
7
Id. at 285-286 (quotation marks and citation omitted).
8
Eason v Coggins Mem Christian Methodist Episcopal Church, 210 Mich App 261, 265; 532
NW2d 882 (1995).
9
Travelers Ins v U-Haul of Mich, Inc, 235 Mich App 273, 288-289; 597 NW2d 235 (1999). See
also Roberts v Vaughn, 214 Mich App 625, 631; 543 NW2d 79 (1996) (“A claim for negligent
entrustment may be based on the use of a motor vehicle.”), rev’d on other grounds 459 Mich 282(1998).
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operate the vehicle, or had knowledge of such facts and circumstances as would
imply knowledge on the part of the owner of such incompetency.[10]
This passage from Perin has since been quoted in other cases11 and, indeed, plaintiffs themselves
relied on the above in opposing Hogge’s motion for summary disposition in the lower court.
However, a full reading of Perin makes it clear that the tort of negligent entrustment
imposes liability on the basis of the defendant’s negligence in permitting the use of a chattel by a
person who is likely to handle it in a manner that will cause harm to others.12 Thus, as noted in
Perin, liability can arise regardless of “whether the entrusting person is [the] ‘owner’ of the
entrusted chattel or not.”13 In other words, it is the defendant’s identity as the supplier of the
chattel, rather than as its owner, that is central to a negligent entrustment theory. Accordingly,
while we are reluctant to fault the trial court for relying on plaintiffs’ misleading statement of
law, we must conclude that the trial court’s decision to summarily dismiss plaintiffs’ claim based
solely on Hogge’s lack of ownership constituted plain error.
Hogge testified that he rented the Chrysler 300 from Enterprise’s Lucas Street location
near the airport on November 16, 2013. The rental agreement indicated that the transaction took
place at 7:24 a.m., and Hogge agreed that the time sounded accurate. Hogge drove to his Taylor
home, where he gave the keys to Latasha. Hogge stated that he believed Latasha was going to
return the vehicle to Enterprise by the end of the following day. Thus, it is evident and
undisputed that Hogge supplied the Chrysler 300 to Latasha. However, the parties disagree on
appeal as to whether the evidence demonstrated that Hogge knew or should have known that
Latasha would be likely to operate the rented vehicle in an unsafe manner. Plaintiffs argue that it
can be inferred from the timeline of events that Hogge rented the Chrysler 300 specifically for
Latasha’s use. Plaintiffs further contend that Hogge’s failure to include Latasha as an additional
driver in the rental agreement under these circumstances suggests that he knew she was an unfit
driver.
Plaintiffs presented evidence suggesting that Latasha did not have a valid driver’s license
and may have been intoxicated at the time of the accident. The accident occurred approximately
one hour after Hogge rented the vehicle from Enterprise, which supports plaintiffs’ contention
that Hogge entrusted the vehicle to Latasha almost immediately after he rented it and before he
could make any significant use of it himself. Hogge understood that he was the only person who
was supposed to drive the vehicle under the terms of the rental agreement and he testified that he
only allowed Latasha to drive it because she needed to get home and he was felling poorly.
10
Perin v Peuler (On Rehearing), 373 Mich 531, 538-539; 130 NW2d 4 (1964) (emphasis
added) (citation omitted), overruled on other grounds by McDougall v Schanz, 461 Mich 15(1999).
11
See, e.g., Hendershott v Rhein, 61 Mich App 83, 89; 232 NW2d 312 (1975).
12
Perin (On Rehearing), 373 Mich at 536-537.
13
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However, Hogge’s assertions were contradicted by other evidence. Hogge had known Latasha
for several months before the accident and, according to Russell, Latasha bragged that Hogge
rented the vehicle for her. Russell also recalled that when Latasha informed Hogge about the
accident and assured him that the vehicle was not totaled, he said, “[W]ell, drive it, baby.”
Hogge’s response suggests that he was neither surprised nor concerned that Latasha did not use
the vehicle solely to return home. Viewing the evidence in the light most favorable to plaintiffs,
the circumstances were such that reasonable minds could differ as to whether Hogge knew or
should have known that Latasha was not licensed or fit to drive. Moreover, given the brief time
frame in which the relevant events occurred and Russell’s observation that Latasha was visibly
intoxicated by 8:00 a.m.—almost immediately after Latasha acquired the vehicle from Hogge—a
fact-finder could also infer that Hogge knew Latasha had been drinking and that she was
therefore unfit to safely operate a vehicle at the time. Accordingly, Hogge was not entitled to
judgment as a matter of law with respect to a negligent entrustment cause of action.
That being said, we recognize that plaintiffs’ first amended complaint alleges a single
count of negligence against Hogge, which is unambiguously premised on the statutory liability of
an owner under MCL 257.401. During oral argument, plaintiffs’ counsel seemingly
acknowledged the deficiency in plaintiffs’ pleadings before saying: “[T]he pleadings should
conform to the proofs . . . and the negligent entrustment theory does not prejudice Mr. Hogge . . .
in any way. The, the [sic] facts have been discovered.” To the extent that this statement is
construed as a request for leave to amend plaintiffs’ complaint, the trial court implicitly denied
the request when it concluded that Hogge’s lack of ownership was fatal to plaintiffs’ claim as
pleaded in their complaint and under a negligent entrustment theory.
When a summary disposition motion is brought under MCR 2.116(C)(10), “the court
shall give the parties an opportunity to amend their pleadings as provided by MCR 2.118, unless
the evidence then before the court shows that amendment would not be justified.”14 The court
rules further provide that leave to amend should be “freely granted when justice so requires,”15
and this Court has explained that leave to amend is “generally a matter of right rather than of
grace.”16 Thus, leave to amend “should ordinarily be denied only for particularized reasons such
as undue delay, bad faith or dilatory motive, repeated failures to cure by amendments previously
allowed, or futility.”17 Here, because the trial court’s decision to grant Hogge’s motion was
based on a mistake of law, it is unclear whether the court would have otherwise granted plaintiffs
leave to further amend their complaint. Moreover, because plaintiffs’ oral request to amend their
complaint was not a proper motion to amend, filed in compliance with MCR 2.118, Hogge did
not have a full opportunity to present his arguments in opposition to the proposed amendment.
Accordingly, whether plaintiffs should be allowed to further amend their complaint is a matter
best left to the discretion of the trial court on remand.
14
MCR 2.116(I)(5).
15
MCR 2.118(A)(2).
16
In re Kostin, 278 Mich App 47, 52; 748 NW2d 583 (2008).
17
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IV. CONCLUSION
For the reasons stated, we reverse the trial court’s order granting summary disposition in
Hogge’s favor and remand this matter to the trial court for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Michael J. Talbot
/s/ Christopher M. Murray
/s/ Colleen A. O’Brien
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