text:
    ARNOLD TRANSIT COMPANY v CITY OF MACKINAC ISLAND
    Docket No. 78-4743.
    Submitted January 16, 1980, at Lansing.
    Decided August 11, 1980.
    Leave to appeal applied for.
    Arnold Transit Company, Straits Transit, Inc., Shepler’s, Inc., and Argosy Boatline Incorporated brought suit challenging the validity of defendant’s ferry boat code. Mackinac Circuit Court, Martin B. Breighner, J., granted defendant’s motion for partial summary judgment and, after trial on the unresolved issues, entered judgment for defendant, upholding the validity of its ferry boat code. Plaintiffs appeal. Held:

    1. Defendant, City of Mackinac Island, has the power to enact a ferry boat code prohibiting the operation of plaintiffs’ boats without a franchise by virtue of the power delegated to it by the state in its city charter.
    2. Defendant did not violate the requirements of the Open Meetings Act prior to the adoption of the ferry boat code, even though it failed to comply with all the technical requirements prescribed by the statute, since it substantially complied with the statute.
    Affirmed.
    1. Franchises — State — Municipalities — Ferry Boat Operators.
    State government has the exclusive power to franchise ferry boat operators, and power to franchise may be acquired by a municipality by delegation from the state.
    2. Franchises — Municipalities — Collection of Excess Monies — Authority to Franchise — Ferry Boat Operators.
    A municipality’s authority to collect monies in excess of those required to regulate a ferry boat operation must be derived from its authority to franchise.

      References for Points in Headnotes
    [1, 2, 5] 35 Am Jur 2d, Ferries § 4.
    56 Am Jur 2d, Municipal Corporations, Counties, and Other Political Subdivisions § 193.
    36 Am Jur 2d, Franchises § 11.
    [3, 6] 35 Am Jur 2d, Ferries §§ 8, 53.
    36 Am Jur 2d, Franchises § 25.
    [4] 35 Am Jur 2d, Ferries §§ 4, 6.
    [7, 8] 2 Am Jur 2d, Administrative Law §§ 228, 229.
    Validity, construction, and application of statutes making public proceedings open to the public. 38 ALR3d 1070.

      3. Franchises — Costs of Regulations — Excess Tolls — Rationale.
    The ability of the grantor of a franchise to exact from the franchisee more than the cost of regulating the franchised operation stems from the fact that a franchise is a right granted for a consideration.
    4. Franchises — Ferry Boat Operations — Establishment — Tolls — Definition.
    A ferry is by definition a franchise, as well as the privilege of establishing and operating a ferry and taking tolls for its use.
    5. Franchises — Licenses — Grant of Power — Assessment of Payment.
    The granting by the state of the power to license ferries along with the power to assess payment for such license amounts to the granting of the power to franchise.
    6. Franchises — Municipalities — Revenue — Subject of Grant — Rights Within the Public Domain.
    Whether or not a municipality may derive revenue from the granting to an individual of the right to do something turns not on the use of such words as license, authorize, establish, or franchise but on the subject of the grant, those grants of rights which are peculiarly in the public domain, such as public utilities, highways, bridges, and ferries, being considered grants of rights approaching property rights for which a consideration may be exacted.
    7. Statutes — Open Meetings Act — Requirements — Notice.
    The Open Meetings Act is designed to require public bodies to open their meetings to the public, with notice required to that end (MCL 15.261 et seq.; MSA 4.1800[11] et seq.).

    8. Statutes — Open Meetings Act.— Notice — Substantial Compliance Rule.
    The notice provisions of the Open Meetings Act are essentially procedural, and, while mandatory, rigid adherence is not required where it is clear that a substantial compliance provides realistic fulfillment of the purpose for which the mandate was incorporated (MCL 15.265-15.266; MSA 4.1800[14]-4.1800[16]).

      Lester N. Turner, P.C. (by Lester N. Turner and Steven M. Basha), for plaintiffs.

      Fraser, Trebilcock, Davis & Foster, P.C. (by Michael E. Cavanaugh and Joel E. Dowley), for defendant.
    Before: Beasley, P.J., and D. E. Holbrook, Jr., and R. E. Robinson, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   R. E. Robinson, J.

Plaintiffs appeal from a partial summary judgment and judgment following a bench trial upholding the validity of the City of Mackinac Island Ferry Boat Code.

Argosy Boatline Incorporated is no longer a party to this appeal, having terminated its operations. The other plaintiffs operate ferry boats between the City of St. Ignace and the City of Mackinac Island, and the Village of Mackinac City and the City of Mackinac Island.

Plaintiffs’ suit challenges the validity of the ferry boat code, adopted by defendant on June 29, 1977, which, among other things, imposes a fee based upon one and one-half percent of the gross receipts of each ferry boat operator, regulates the schedules, rates, tariffs, and safety standards of each operator, and imposes criminal sanctions, including a $500 per day fine, for violation of the ordinance. Plaintiffs’ challenge raises a variety of issues.

I

Does defendant city have power to enact a ferry boat code prohibiting the operation of plaintiffs' boats without a franchise?

We think it does.

None of the parties quarrel with the rule that state government has the exclusive power to franchise ferry boat operators, 12 McQuillin, Municipal Corporations (3d ed), § 34.14, p 45, nor do they quarrel with the rule that a municipality may acquire this power by delegation from the state. City of Niles v Michigan Gas & Electric Co, 273 Mich 255, 265; 262 NW 900 (1935).

The parties also agree that if defendant is to have the authority to collect monies in excess of those required to regulate the ferry boat operation, such authority must be derived from its authority to franchise.

At this point, agreement ends, plaintiffs contending that defendant does not have the power to franchise ferry boat operations and defendant contending that it does.

The ability of the grantor of a franchise to exact from the franchisee more than the cost of regulating the operation stems from the fact that a franchise is a right (sometimes referred to even as a property right) granted for a consideration.

"Kent says that the privilege of establishing a ferry and taking tolls for the use of the same is a franchise, and that 'an estate in such a franchise, and an estate in land, rest upon the same principle, being equally grants of a right or privilege for an adequate consideration’ ”. Louisville & Jeffersonville Ferry Co v Kentucky, 188 US 385, 394-395; 23 S Ct 463; 47 L Ed 513 (1902), quoting from 3 Kent, Com 458, 459.

Defendant claims its authority to franchise from the following legislative delegation in its city charter:

"Sec. 1. Said city of Mackinac Island shall, in addition to such other powers as are herein conferred, have the general powers and authority in this chapter mentioned; and the council may pass such ordinances in relation thereto and for the exercise of the same, as they may deem proper, namely:
"Thirteenth, To establish or authorize, license and regulate ferries to and from the city, or any place therein, or from one part of the city to another, and to regulate and prescribe from time to time the charges and prices for the transportation of persons and property thereon * *

Plaintiffs reply that, since municipal powers must be narrowly construed and that power cannot be inferred where the Legislature has not specifically bestowed such power, the failure of the Legislature to use the magic word "franchise” leaves defendant without such power. While we do not concede the validity of the narrow construction view espoused by plaintiffs, their argument overlooks the fact that a ferry is by definition a franchise:

"A ferry is a right or franchise.” 3 McQuillin, Municipal Corporations (3d ed), § 11.15, p 27.
"Ferry. * * * In law it is treated as a franchise.” Black’s Law Dictionary (4th ed), p 747.
"Now what is a ferry? It is a species of franchise.” Chilvers v The People, 11 Mich 42, 53 (1862).

Moreover, "establish” and "authorize” have been used interchangeably with franchise.

"[T]he privilege of establishing a ferry and taking tolls for the use of the same is a franchise.” Louisville & Jeffersonville Ferry Co, supra, 394.
"The right or privilege to establish and operate a public ferry is a franchise.” 35 Am Jur 2d, Ferries, § 6, p 449.
"No private pérson can establish a public highway, or a public ferry or railroad, or charge tolls for the use of the same, without authority from the legislature * * *. These are franchises.” California v Central Pacific R Co, 127 US 1, 40; 8 S Ct 1073; 32 L Ed 150 (1887).

And in Chilvers, supra, 49-50, our Supreme Court found that a charter provision giving the City of Detroit the power to license ferries and "to prescribe the sum of money to be paid therefor into the treasury of the corporation” gave the city the power to franchise ferries and to make such licenses a source of revenue for the city. The Court apparently found that the granting of the power to license along with the power to assess payment for such license amounted to the granting of the power to franchise. Compare such language with the provisions of § 21, Chapter XVI of defendant’s charter:

"Sec. 1. The council of said city may regulate and license ferries from such city or any place of landing therein to the opposite shore, or from one part of the city to another; and may require the payment of such reasonable sum for such license as to the council shall seem proper.” 1899 LA 437, chapter XVI.

It is apparent from a reading of the cases that whether a municipality may derive revenue from the granting to an individual of the right to do something turns not so much upon using the magic word among license, authorize, establish, franchise, etc., as it does upon the subject of the grant, those grants of rights which are peculiarly in the public domain, such as public utilities, highways, bridges, and ferries, being considered grants of rights at least approaching property rights for which a consideration can be exacted.

We find no merit in plaintiffs’ contention that their ferry boats have no contact with defendant’s mainland since they dock at terminals owned by plaintiffs. This argument overlooks the fact that the terminals do not rest in a vacuum but are firmly attached to defendant’s mainland.

While defendant failed to include in the purpose of its ferry boat code the raising of revenue, its validity has not been attacked on that ground, probably because Michigan does not hold ordinances to the same exacting one-object requirement as it does its statutes. Nor has anyone been misled by the defendant’s dereliction in this regard since it has been clear from the outset that all parties considered the power of defendant to raise revenue by means of this ordinance as the critical issue to be presented to the courts.

II

Did defendant council violate the requirements of the open meetings act prior to adoption of the ferry boat code?

We think not.

The pertinent sections of the act are:

"Section 2(b). 'Meeting’ means the convening of public body * * * for the purpose of deliberating toward or rendering a decision on a public policy.” MCL 15.262(b); MSA 4.1800(12)(b).
"Section 3(3). All deliberations of a public body constituting a quorum of its members shall take place at a meeting open to the public.” MCL 15.263(3); MSA 4.1800(13)(3).
"Section 4(b). A public notice for a public body shall always be posted at its principal office and any other locations considered appropriate by the public body”. MCL 15.264(b); MSA 4.1800(14)(b).
"Section 5(1). A meeting of a public body shall not be held unless public notice is given as provided in this section.” MCL 15.265(1); MSA 4.1800(15)(1).
"Section 5(4). For a rescheduled regular or a special meeting of a public body, a public notice stating the date, time, and place of the meeting shall be posted at least 18 hours before the meeting. The requirement of 18 hour notice shall not apply to special meetings of subcommittees of a public body.” MCL 15.265(4); MSA 4.1800(15)(4).
"Section 9(1). Each public body shall keep minutes of each meeting * * *.” MCL 15.269(1); MSA 4.1800(19)(1).
"Section 10(2). A decision made by a public body may be invalidated if the public body has not complied with the requirements of Section 3 * * * (3) in making the decision or if failure to give notice in accordance with Section 5 has interfered with substantial compliance with Section 3 * * * (3) and the court finds that the noncompliance or failure has impaired the rights of the public under this act.” MCL 15.270(2); MSA 4.1800(20)(2).

A chronology of events leading to adoption of the ferry boat code is a necessary preliminary to a discussion of this issue.

On March 30, 1977, defendant’s clerk wrote plaintiffs inviting them to discuss with defendant its proposal to levy a "franchise license fee” upon plaintiffs’ boats.

On May 25, 1977, defendant’s council met in regular session and discussed the proposed code. Plaintiffs were sent notice of this meeting.

On June 22, 1977, defendant’s council met in regular session and discussed the proposed code. Representatives of plaintiffs were present.

On June 27, 1977, a special meeting was held at which all members of the council were present, the purpose of the meeting being a discussion of the code. No representatives of plaintiffs were present at this meeting. The purpose of this meeting, its date, time, and place, was announced at the meeting on June 22.

On June 29, 1977, a regular meeting of defendant’s council was held and the ferry boat code was adopted.

Plaintiffs, pursuant to § 10(2) of the Open Meetings Act, challenge the validity of defendant’s action in adopting the code at its June 29th meeting for (1) failure of defendant to post notice of the June 27th meeting as required by § 5(1)(4) and §3(3) of the act, and (2) failure of the defendant council to keep minutes of the June 27th meeting.

The Open Meetings Act is a relatively new law in Michigan, consequently no body of case law has developed as a guide to its application. However, its short title and its expressed purpose make clear that the act is designed to require public bodies to open their meetings to the public, with notice required to that end.

It appears that defendant clearly violated the technical requirements of the Open Meetings Act by failing to post notice of the June 27th meeting at the City Hall 18 hours in advance and by failing to keep minutes of the meeting — at which deliberations were held directed toward adoption of a ferry boat code.

Defendant attempts to justify this dereliction by calling the June 27th meeting a meeting of a "committee of committees”, presumably another term for committee of the whole, since all of the council members were present. To permit this, however, would make it too easy for a public body to avoid the act by conveniently labeling its meetings "committee of committees”.

Nevertheless, it does not appear that there was any desire by defendant to conduct its meeting out of public sight or that it in fact did so. From the beginning of its deliberations in March 1977, it, with one exception, observed the notice requirements of the act; it invited input from plaintiffs; it sent plaintiffs notices not required by the act; at the June 22nd meeting which was attended by plaintiffs, it announced the time, place, and purpose of the June 27th meeting. Although apparently not requested by defendant, the date, time, and place of the meeting was published two full days before June 27 in the Town Crier, a weekly newspaper having general circulation in defendant city. The meeting was open to the public and was attended by a newspaper reporter. From the trial testimony, it is apparent that had notice been posted at City Hall pursuant to statute, none of the plaintiffs’ representatives would have seen it.

The Texas Court of Appeals, examining a notice requirement similar to Michigan’s appearing in Texas’ open meetings law, found that notice posted 34 hours prior to meeting when 72 hours was required, was substantial compliance with the statute.

"Even though provisions of the statute are mandatory, we hold that the 'notice’ provisions of the statute are subject to the substantial compliance rule * * * The rationale of the substantial compliance rule is that while the notice provisions in statutes are mandatory, they are essentially procedural; that rigid adherence to such a procedural mandate will not be required if it is clear that a substantial compliance provides realistic fulfillment of the purpose for which the mandate was incorporated in the statute.” Stelzer v Huddleston, 526 SW2d 710, 713 (Tex App, 1975).

Likewise do we find substantial compliance here.

Plaintiffs additionally complain that the code must fail because defendant council failed to keep minutes at the June 27th meeting, contrary to §9(1) of the Open Meetings Act. This is not a reason, under § 10(2) of the act, for invalidating the ordinance.

Ill

We have carefully reviewed plaintiffs’ other allegations of error and conclude that they are without merit.

IV

The City of Mackinac Island cross-appeals claiming that it should be granted a money judgment in the amount of the franchise fees owed from the effective date of the ferry boat code, July 19, 1977. At the conclusion of the proceedings below, the city prepared a final order for the consideration of the trial court purportedly effectuating the court’s opinion. However, the city unilaterally inserted language ordering plaintiffs to submit the information necessary to calculate the retroactive fees and indicating that, upon calculation, a money judgment will be entered. The trial court struck this language from the order.

We conclude that defendant is not entitled to the relief sought. This is a suit for declaratory relief in which plaintiffs challenge the validity of the ferry boat code. Defendant has prevailed in full because the ferry boat code has been upheld. Since there was no cross-complaint filed below, defendant is not entitled to affirmative relief in this proceeding. Therefore, defendant’s cross-appeal is hereby dismissed.

Affirmed. No costs, a public question being involved.


source: Caselaw Access Project

author: R. B. Burns, J.

license: Public Domain

text:
    McKENTRY v EMPLOYMENT SECURITY COMMISSION
    Docket No. 43884.
    Submitted February 6, 1980, at Grand Rapids.
    Decided August 11, 1980.
    Plaintiff, Bessie McKentry, sought review of a decision of the Michigan Employment Security Appeal Board which held that plaintiff was not entitled to unemployment compensation benefits from defendants Michigan Employment Security Commission, Muskegon Area Intermediate School District and Goodwill Industries. The Muskegon Circuit Court, John H. Piercey, J., affirmed that decision, stating that plaintiff was not physically able and available to continue working in her last job and that such ability and availability is required by the Michigan Employment Security Act. Plaintiff appeals. Held:

    The Michigan Employment Security Act does not require that a claimant must be able to perform her last job; rather, all that is required is that she is able and available to perform full-time work for which she has previously received wages.
    Reversed and remanded.
    Unemployment Compensation — Qualification — Ability and Availability to Perform Work — Statutes.
    The Michigan Employment Security Act does not require that a claimant be able to perform his last job in order to be entitled to unemployment compensation benefits; rather, all that is required is that the claimant be able and available to perform full-time work for which he has previously received wages (MCL 421.28[l][c]; MSA 17.530[l][c]).
    Reference for Points in Headnote
    [1] 76 Am Jur 2d, Unemployment Compensation §§ 32, 68.

      McCroskey, Libner, Van Leuven, Feldman, Kortering, Cochrane & Brock (by Robert O. Chessman), for plaintiff.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and James H. White, Assistant Attorney General, for defendants.

      Before: Danhof, C.J., and R. B. Burns and Mackenzie, JJ.
   R. B. Burns, J.

Plaintiff appeals a judgment of the circuit court which affirmed the decision of the Michigan Employment Security Appeal Board denying plaintiff benefits under the Michigan Employment Security Act, MCL 421.1 et seq.; MSA 17.501 et seq., for the period January 11, 1976, through August 18, 1976.

The plaintiff began working for defendant Goodwill Industries September 30, 1974. She worked for Goodwill until November 14, 1975, when she left to take a job with defendant Muskegon Area Intermediate School District. Plaintiff worked for the school district as a teacher’s aide. She had worked only two days when she had trouble with her knee. Plaintiff’s employment was terminated by defendant school district on November 19, 1975, due to her inability to appear for work. Plaintiff’s physician treated her for thrombophlebitis and released her for work January 8, 1976.

Plaintiff filed a claim for unemployment benefits on January 8, 1976. The claim was denied. On redetermination the referee stated, "[t]he record is clear in this matter that claimant is and has been unable to do her customary work since November 19, 1975”. Plaintiff was determined to be ineligible for benefits under subsection 28(l)(c) of the act. MCL 421.28(l)(c); MSA 17.530(l)(c). The appeal board and the circuit court judge affirmed the decision of the referee. In affirming the referee’s decision, the circuit court stated:

"Mrs. McKentry by her own admission has stated that due to her physical condition she is unable to continue full-time employment in the nature of the job she held at the Intermediate School District.”

Subsection 28(l)(c) of the act sets forth the criteria for determining a claimant’s ability and availability to perform full-time work. The subsection requires that a claiment be:

"able and available to perform suitable full-time work of a character which he is qualified to perform by past experience or training, and of a character generally similar to work for which he has previously received wages”. (Emphasis supplied.) MCL 421.28(l)(c); MSA 17.530(l)(c).

At the hearing before the referee, plaintiff testified that she could not return to work for defendant school district because she could not stand on her feet all day. However, she also testified that there was work which she had performed in the past which she could still do, such as working for the telephone company or for Misco Corporation. Both of these jobs gave plaintiff an opportunity to spend part of the day sitting down.

The lower court and the administrative agency focused on the fact that the plaintiff could not perform the job she last held with defendant school district in determining that plaintiff was not able and available to perform full-time work. A plain reading of the statute does not indicate that a claimant must be able to perform his last job but only that "[h]e is able and available to perform full-time work * * * for which he has previously received wages”.

Reversed and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.


author: Riley, J.

text:
    LARK v THE DETROIT EDISON COMPANY
    Docket Nos. 44253, 44254.
    Submitted June 11, 1980, at Detroit
    Decided August 11, 1980.
    Leave to appeal applied for.
    Lorraine Below and Martin Miller, administrators of the estate of Bernal Below, and Dennis Lark and Kathleen Lark, brought separate suits against defendant Detroit Edison Co., for negligence in failing to provide Dennis Lark and Bernal Below, now deceased, employees of Reliance Truck Company, with a safe place to work. Edison was allowed to file a third-party complaint against Reliance in both cases. Reliance moved for summary judgment on each third-party complaint. Edison did not oppose either motion. The motions were granted in separate orders, Wayne Circuit Court, Horace W. Gilmore, J. Edison subsequently separately moved to set aside both orders dismissing the third-party complaints, which motions were denied. Edison appeals. The cases were consolidated on appeal by the Court of Appeals. Held:

    Defendant’s failure to oppose the motions of the third-party defendant was due to lack of due diligence and will not be equated with the mistake or excusable neglect required under the court rule for setting aside a judgment. Further, defendant’s actions do not reflect the type of extraordinary circumstances which would justify relief. The trial judge’s denials of defendant’s motions to set aside the orders dismissing the third-party complaints were proper exercises of discretion.
    Affirmed.
    1. Judgments — Summary Judgment — Abuse of Discretion — Appeal.
    A trial court’s decision not to set aside a summary judgment is discretionary and will not be disturbed on appeal, absent a clear showing of an abuse of discretion.
    References for Points in Headnotes
    [1] 46 Am Jur 2d, Judgments § 676.
    [2] 46 Am Jur 2d, Judgments § 682.
    [3] 46 Am Jur 2d, Judgments §§ 708, 717, 718.
    [4] 46 Am Jur 2d, Judgments § 708 et seq.

      2. Judgments — General Court Rules — Relief from Judgment — Extraordinary Circumstances — Substantial Injustice.
    The court rule allowing relief from a judgment or order was not designed to relieve counsel of ill-advised or careless decisions, and application should be limited to extraordinary circumstances where failure to set aside a court’s final determination will result in substantial injustice (GCR 1963, 528.3).
    3. Judgments — General Court Rules — Mistake or Excusable Neglect — Lack of Due Diligence — Relief from Judgment.
    A party’s lack of due diligence will not be equated with the mistake or excusable neglect required under the court rule for setting aside a judgment (GCR 1963, 528.3).
    4. Judgments — General Court Rules — Relief from Judgment — Extraordinary Circumstances.
    Each case must be examined on its facts to determine whether relief from a judgment is necessary, and if such relief is not predicated on any grounds specified by the court rule and the substantial rights of the opposing party will not be detrimentally affected by a grant of relief, extraordinary circumstances must exist which mandate setting aside the judgment in order to achieve justice (GCR 1963, 528.3).

      Dice, Sweeney, Sullivan & Feikens, P.C. (by John L. Christensen), for defendant and third-party plaintiff.

      Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, P.C. (by Henry J. Maher and Christine D. Oldani), for third-party defendant.
    Before: Bashara, P.J., and D. C. Riley and E. A. Quinnell, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Riley, J.

These consolidated appeals arose out of two lawsuits brought against Detroit Edison Company (hereinafter Edison) for negligence in failing to provide two employees of Reliance Truck Company (hereafter Reliance) with a safe place to work._

In the fall of 1976, Edison was allowed to file third-party complaints against Reliance. Reliance subsequently filed motions for summary judgment on each third-party complaint. The motions were based on the fact that both Reliance and Edison were insured by Hartford Accident and Indemnity Company. Reliance argued that since it is impossible to sue oneself, the complaints should be dismissed. Edison believed that Reliance’s interpretation of the insurance policy was correct and did not oppose the motions. The motions for summary judgment were granted on March 22, 1978.

On February 2, 1979, Edison filed motions to set aside the orders dismissing the third-party complaints. Edison alleged that since the orders were entered, it had become aware of an exception in its insurance policy which would allow suit against Reliance. Edison argued that the lower court should set aside the summary judgments based on GCR 1963, 528.3. The lower court disagreed and denied Edison’s motions on March 7, 1979.

GCR 1963, 528.3 provides relief from a final judgment or order under certain limited circumstances. Two of these reasons have been alleged by Edison here:

"(1) mistake, inadvertence, surprise, or excusable neglect; [and] * * *
"(6) any other reason justifying relief from the operation of the judgment.”

The lower court found no reason to set aside the summary judgments. This was a discretionary decision, one which will not be disturbed on appeal absent a clear showing of an abuse of discretion. See O’Neill v O’Neill, 65 Mich App 332, 336; 237 NW2d 315 (1975), Freeman v Remley, 23 Mich App 441, 448; 178 NW2d 816 (1970).

Edison first claims that it made a mistake by not opposing the motions for summary judgment. We do not believe that GCR 1963, 528.3(1) was designed to relieve counsel of ill-advised or careless decisions. See Federal’s Inc v Edmonton Investment Co, 555 F2d 577 (CA 6, 1977), Hoffman v Celebrezze, 405 F2d 833 (CA 8, 1969). Its application should be limited to extraordinary circumstances where the failure to set aside the court’s final determination will result in substantial injustice.

In Kibby v Rhoads, 29 Mich App 261; 185 NW2d 117 (1970), plaintiff received a default judgment against the defendant for a slip and fall injury. Subsequently, plaintiff sued defendant’s insurer in a garnishment action. Even though it was properly served with notice of the suit, the insurer did not defend the original action, claiming that it thought the suit had been dropped. The insurer then tried to have the default judgment set aside under GCR 1963, 528.3(1). This Court agreed with the trial court’s conclusion that neither inadvertence, mistake, nor excusable neglect had been established. The Court found the insurer’s story to be "incredible”. Even if true, the Court stated, it was inexcusable that the insurer would not have investigated thoroughly whether the plaintiff had actually dropped the suit.

We find Edison’s actions to be equally indefensible. Edison consciously chose not to answer the summary judgment motions because it believed Reliance’s insurance contract covered the accidents. With diligence, Edison easily could have read the contract and discovered that the accidents were not covered; thus, Reliance could have been sued. We will not equate this lack of due diligence with the mistake or excusable neglect required under the rule for setting aside a judgment.

Edison also alleges that relief should be granted under GCR 1963, 528.3(6), for "any other reason justifying relief from the operation of the judgment”. As stated in Kaleal v Kaleal, 73 Mich App 181, 189-190; 250 NW2d 799 (1977), each case must be examined on its facts to determine whether this extraordinary relief is necessary. Three requirements must be satisfied: (I) the reason for setting aside the judgment must not fall under subrules (1) through (5), (II) the substantial rights of the opposing party must not be detrimentally affected if the motion is set aside, and (III) extraordinary circumstances must exist which mandate setting aside the judgment in order to achieve justice.

Edison’s claim fails on all three counts. First, Edison has failed to allege any reason for setting aside the judgment beyond the mistake or neglect which is encompassed in subrule (1). Furthermore, as the lower court recognized, Reliance has now been prejudiced by the ten-month lapse since the summary judgment was entered. For example, during the ten months, Reliance personnel freely gave information to Edison, thinking that Reliance was no longer liable. Finally, we do not believe that the instant facts reflect the type of extraordinary circumstances which would justify relief. We must conclude, therefore, that the trial judge did not abuse his discretion in denying Edison’s motions to set aside the judgment.

Affirmed.

Costs to third-party appellee.


author: R. M. Maher, P.J. R. M. Maher, P.J.

text:
    PEEPLES v CITY OF DETROIT
    Docket No. 44364.
    Submitted January 8, 1980, at Detroit.
    Decided April 2, 1980.
    Rehearing granted May 9, 1980.
    Opinion on rehearing filed August 11, 1980.
    Leandrew Peeples filed suit against the City of Detroit and Waterford Construction Company to recover for injuries sustained when he fell from a scaffold. Plaintiff’s complaint alleged negligence on the part of Waterford in failing to exercise due care, to observe safety precautions, to warn of hazards, failure to provide guardrails and other safety devices. At the time of the accident, plaintiff was employed by a subcontractor, Domar Systems, Inc. The accident occurred on premises owned by the City of Detroit with Waterford Construction Company acting as the general contractor. Defendants City of Detroit and Waterford filed a third-party complaint against Domar, alleging contractual and common-law indemnity. The City of Detroit was dismissed from the action on the ground of governmental immunity. Waterford filed a motion for summary judgment based on contractual and common-law indemnity with a separate ground for breach of contract based on Domar’s failure to provide the requisite insurance on hehalf of Waterford. Summary judgment granted. The trial court also allowed Waterford to amend its third-party complaint to include a breach of contract based on Domar’s failure to provide insurance, Wayne Circuit Court, Michael J. Talbot, J. A settlement with the plaintiff was reached but the rights between Domar, third-party defendant, and Waterford, third-party plaintiff, were preserved. Domar appeals. The issues on appeal deal primarily with common-law indemnity, contractual indemnity and breach of the alleged insurance agreement. Held:

      References for Points in Headnotes
    [I] 41 Am Jur 2d, Indemnity § 1.
    [2, 3] 41 Am Jur 2d, Indemnity §§ 1, 15.
    [4, 12] 73 Am Jur 2d, Summary Judgment § 27.
    [5, 6, 9] 41 Am Jur 2d, Indemnity § 13 et seq.

    [7, 12] 41 Am Jur 2d, Indemnity § 10.
    Liability of subcontractor upon bond or other agreement indemnifying general contractor against liability for damage to person or property. 68 ALR3d 7.
    [8] 41 Am Jur 2d, Indemnity § 15.
    [10] 61 Am Jur 2d, Pleading § 305 et seq.

    [II] 29 Am Jur 2d, Evidence §§ 452, 486.

      1. A party seeking common-law indemnity must be free from active or causal negligence. The record indicates disputed questions of fact regarding Waterford’s responsibility for' safety on the job site and whether Waterford undertook responsibility for supervision and safety inspections. Therefore, further factual development is needed to determine whether Waterford was actively negligent. The trial court erred in granting Waterford’s motion for summary judgment on its third-party action for common-law indemnification.
    2. A contract of indemnity will not be construed to indemnify the indemnitee against losses which are the result of his own negligence unless such intention is expressed in clear and unequivocal terms. The contractual indemnity provision does not unequivocally indemnify Waterford for its own acts of negligence, so the circumstances and intent of the parties must be further explored at trial.
    3. An indemnification provision in a construction contract governs, unless the contract clearly provides otherwise. The fact that there is an insurance requirement does not enlarge or alter the scope of the indemnity agreement where the insurance provisions do not contain an indemnification clause. The insurance provision in the general contract did not contain a separate promise of indemnity. The trial court erred in granting summary judgment on that basis, although it may be the basis for a separate claim for breach of contract.
    4. Domar’s contention that the trial court erred when it allowed Waterford to amend its pleadings on the first day of trial to include the additional count involving the insurance provision is unpersuasive. A motion to amend should ordinarily be granted, absent factors such as undue delay, bad faith, dilatory motives, or unless the opponent would be unduly prejudiced by the amendment. The record does not indicate that Domar was prejudiced or surprised as Domar was aware of the existence of this claim.
    5. Domar complains that the copy of the contract which Waterford submitted with its motion for summary judgment was not the original, nor was it properly authenticated. Copies are admissible unless a genuine question is raised as to the authenticity of the original or in circumstances where it would be unfair to admit the duplicate in lieu of the original. Domar never introduced any evidence questioning the authenticity of the contract or the copy submitted. Under these circumstances, admission of the copy was proper.
    Reversed and remanded.
    On Rehearing
    Subsequent to the release of the Court of Appeals opinion in this matter, but before publication of that opinion, Waterford Construction Company, Inc., filed a motion for rehearing. The Court of Appeals granted the motion for rehearing and, on its own motion, withheld publication of its opinion pending a determination on the rehearing. Upon the filing of the Court’s opinion on rehearing, the original opinion was released for publication.
    On rehearing, Waterford argued that: the trial court considered the breach by Domar Systems (Indiana), Inc., of its contractual obligation to provide liability insurance for the benefit of Waterford as an independent basis for granting Waterford’s motion for summary judgment; under the unambiguous terms of the insurance procurement agreement with Domar, Waterford’s measure of damages against Domar for Domar’s breach of its obligation to provide insurance is an amount equal to the insurance which Domar agreed to procure plus all defense costs and expenses; and, accordingly, summary judgment was properly granted by the trial court. On rehearing the Court of Appeals held:

    The Legislature has declared, as a matter of public policy, that any construction industry agreement which would absolve one party from liability for that party’s sole negligence is void and unenforceable. An agreement whereby a subcontractor must procure insurance for a general contractor’s sole negligence would contravene that expression of the public policy of this state; thus, such an agreement would be unenforceable. Since the question of the extent of Waterford’s negligence must be determined as a question of fact, summary judgment on the basis of any breach by Domar of the liability insurance agreement would not be an appropriate vehicle to dispose of the case. The Court of Appeals, therefore, adheres to its prior determination and remands the matter to the trial court for a trial.
    1. Indemnity — Equity — Right to Restitution — Innocent Parties — Wrongful Acts — Special Relationship — Recovery.
    Indemnification rests upon the equitable principle of a right to restitution; the theory of indemnity is that where the wrongful act of one results in liability being imposed upon another the innocent party may have indemnity from the person actually guilty of the wrong, and before recovery is permitted there must be a special relationship between the primary defendant and the third-party defendant, whether based on employment, bailment or other factual situation, that permits recovery.
    2. Indemnity — Common-Law Indemnity — Freedom From Negligence — Pleading.
    A party seeking common-law indemnity must plead and prove freedom on his part from personal fault; the party must be free from active or causal negligence and if the indemnitee’s own negligence played a role in an injury he may not recover.
    3. Indemnity — Common-Law Indemnity — Active Negligence — Primary Plaintiff’s Complaint — Derivative Liability.
    Common-law indemnity is available only if the party seeking it is not actively negligent; the court looks at the primary plaintiffs complaint in determining this, and if the complaint alleges active negligence, as opposed to derivative liability, the defendant is not entitled to common-law indemnity.
    4. Motions — Summary Judgment — Material Fact Issue — Evidence — Court Rules.
    A trial court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence in passing on a motion for summary judgment which is based on a lack of any genuine issue as to any material fact and before summary judgment may properly be granted, the court must be satisfied that it is impossible for the claim asserted to be supported by evidence at trial (GCR 1963, 117.2[3]).
    5. Contracts — Indemnity — Contractual Indemnity — Intent of Parties — Freedom From Fault.
    Indemnity contracts, like other contracts, are to be enforced so as to effectuate the intentions of the parties; freedom from fault, which is necessary in common-law indemnity, is not required for a recovery on the basis of contractual indemnity.
    6. Indemnity — Contracts — Construction of Contracts.
    Indemnity contracts are construed most strictly against the party who drafts them and against the party who is the indemnitee; in ascertaining the intentions of the parties not only the language used in the contract but also the situation of the parties and the circumstances surrounding the contract must be considered.

      7. Indemnity — Construction Contracts — Personal Liability — Property Damage — Public Policy — Statutes.
    An indemnity provision in a construction contract which seeks to protect the, promisee from liability for personal or property damage arising from the sole negligence of the promisee is void as against public policy (MCL 691.991; MSA 26.1146[1]).
    8. Indemnity — Contracts — Negligence — Construction of Clauses — Intent of Parties.
    A contract of indemnity will not be construed to indemnify the indemnitee against losses which are the result of his own negligence unless such intention is expressed in clear and unequivocal terms.
    9. Indemnity — Indemnity Provisions — Scope of Liability — Insurance — Independent Indemnification Clauses.
    The scope of liability in a construction contract containing an indemnification provision is governed by that provision, unless the contract clearly provides otherwise; the fact that there is an insurance requirement does not enlarge or alter the scope of the indemnity agreement where the insurance provisions do not contain an independent indemnification clause.
    10. Pleading — Amendments — Judge’s Discretion — Prejudice — Court Rules.
    A court rule provides that leave to amend pleadings shall be freely given when justice so requires; a trial court’s decision to allow or disallow an amendment to pleadings will not be reversed unless there has been an abuse of discretion; a motion to amend should ordinarily be granted absent factors such as undue delay, bad faith, dilatory motives on the part of the movant, or unless the opponent would be unduly prejudiced by the amendment (GCR 1963,118.1).
    11. Contracts — Duplicate Copies — Admissibility — Rules of Evidence.
    A copy of a contract is admissible in evidence to the same extent as the original unless a genuine question is raised as to the authenticity of the original or in circumstances where it would be unfair to admit the duplicate in lieu of the original (MRE 1003).
    On Rehearing
    12. Indemnity — Construction Contracts — Personal Liability — Public Policy — Insurance — Summary Judgment — Statutes.
    An agreement whereby a subcontractor must procure insurance for a general contractor’s sole negligence is contrary to the Legislature’s statutory expression of public policy that construction industry agreements which absolve a party from liability for its sole negligence are void and unenforceable; accordingly, where the extent of a contractor’s negligence remains to be determined as a question of fact, summary judgment based upon a subcontractor’s failure to procure insurance is not an appropriate vehicle by which to resolve the-question of whether the subcontractor must indemnify the contractor by reason of the failure to procure the insurance (MCL 691.991; MSA 26.146[1]).

      Harvey, Kruse & Westen, P.C. (by Richard A. Harvey and Michael F. Schmidt), for the City of Detroit and Waterford Construction Company, Inc.

      Vandeveer, Garzia, Tonkin, Kerr & Heaphy, P.C. (by James K. Thome), for Domar Systems (Indiana), Inc.
    Before: R. M. Maher, P.J., and M. F. Cavanagh and Cynar, JJ.
   R. M. Maher, P.J.

The plaintiff, Leandrew Peeples, filed suit against the City of Detroit and Waterford Construction Company to recover for injuries incurred on June 25, 1974. At the time of the accident, the plaintiff was employed by the third-party defendant, Domar Systems (Indiana), Inc., hereinafter Domar. The accident occurred on premises owned by the City of Detroit, with Waterford Construction Company (hereinafter Waterford) acting as the general contractor.

Domar, the subcontractor, was engaged in the construction of a Domar Salt Storage Unit on the property. Plaintiff’s alleged injury occurred when he fell from a scaffold which had been provided and assembled by Domar. Plaintiff’s complaint alleged negligence on the part of Waterford in failing to exercise due care for plaintiff’s safety; failure to observe safety precautions and statutes; failure to warn of hazards associated with the use of scaffolding; and failure to provide guardrails and other safety devices.

On April 7, 1975, the defendants City of Detroit and Waterford filed a third-party complaint against Domar, alleging contractual and common-law indemnity. On January 19, 1978, the City of Detroit was dismissed from this suit pursuant to a motion for summary judgment based on governmental immunity.

On May 1, 1978, Waterford brought a motion for summary judgment under GCR 1963, 117.2(3), based on contractual and common-law indemnity. The motion was denied on June 6, 1978, without prejudice, "there being factual issues to be determined upon further discovery”.

On February 21, 1979, the morning of the trial on the third-party action, Waterford renewed its motion for summary judgment alleging the same grounds as before. Additionally, Waterford alleged a separate ground of breach of contract based on Domar’s failure to provide the requisite insurance on behalf of Waterford. The trial court granted Waterford’s motion for summary judgment on the grounds of contractual indemnity, common-law indemnity, and the failure to provide insurance. The trial court also allowed Waterford to amend its third-party complaint to include the breach of contract allegation.

Domar filed an application to this Court for emergency appeal and superintending control, a motion for stay of proceedings, and a motion for immediate consideration. The motion for immediate consideration was granted on February 22, 1979, but the applications for emergency leave and for a stay of proceedings were denied.

A settlement with the primary plaintiff was reached on March 5, 1979, preserving the rights as between Domar and Waterford, which are the subjects of this appeal by Domar.

I. Common-Law Indemnity.

Indemnification rests upon the equitable principle of a right to restitution. The theory of indemnity is that where the wrongful act of one results in liability being imposed upon another, the innocent party may have indemnity from the person actually guilty of the wrong. Provencal v Parker, 66 Mich App 431, 435; 239 NW2d 623 (1976). There must be a special relationship between the primary defendant and the third-party defendant —whether based on employment, bailment or other factual situation — that permits recovery. Diekevers v SCM Corp, 73 Mich App 78, 81; 250 NW2d 548 (1976).

Common-law indemnity is intended only to make whole again a party held vicariously liable to another through no fault of his own. This has been referred to as "passive” rather than "causal” or "active” negligence. Dale v Whiteman, 388 Mich 698, 705; 202 NW2d 797 (1972). Thus, one seeking indemnification at common law is required to plead and prove freedom from personal fault. McLouth Steel Corp v A E Anderson Construction Corp, 48 Mich App 424, 430; 210 NW2d 448 (1973), Husted v Consumers Power Co, 376 Mich 41, 51; 135 NW2d 370 (1965). If the indemnitee’s own negligence played a role in the injury, he may not recover. Wilhelm v Detroit Edison Co, 56 Mich App 116, 157; 224 NW2d 289 (1974). The rationale for this requirement is that liability should fall on the party best situated to adopt preventive measures. Dale v Whiteman, supra.

In order to determine whether the indemnitee was "actively” or "passively” negligent, the Court looks to the primary plaintiffs complaint. If that complaint alleges "active” negligence, as opposed to derivative liability, the defendant is not entitled to common-law indemnity. Hill v Sullivan Equipment Co, 86 Mich App 693, 696-697; 273 NW2d 527 (1978), Minster Machine Co v Diamond Stamping Co, 72 Mich App 58, 63-64; 248 NW2d 676 (1976), Diekevers v SCM Corp, supra.

In the case at bar, the primary plaintiff alleged in his amended complaint that Waterford was negligent because it failed to provide safety equipment, failed to conform to industry standards of due care, and failed to warn of the hazards of using a scaffold without safety devices. These allegations, if true, would make Waterford actively negligent.

However, in passing on a motion which is based on GCR 1963, 117.2(3), the trial court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence then available to it. Before summary judgment may properly be granted, the court must be satisfied that it is impossible for the claim asserted to be supported by evidence at trial. Sullivan v The Thomas Organization, PC, 88 Mich App 77, 85-86; 276 NW2d 522 (1979), Rizzo v Kretschmer, 389 Mich 363; 207 NW2d 316 (1973). Thus, the trial court was not limited to considering the primary plaintiffs pleadings, and properly considered all of the evidence presented in order to decide Waterford’s motion.

In the instant case, in ruling on Waterford’s common-law indemnity claim, the trial court stated that there was no dispute on the facts presented, only a disagreement on questions of law. The trial court found that under the contract between Domar and Waterford, Domar had undertaken the responsibility for maintaining the premises in a reasonably safe condition. The scaffold in question was supplied by Domar. The work site was under Domar’s exclusive control. Waterford alleged that it did not undertake safety inspections, nor did it closely supervise Domar’s work site. Therefore, the trial court, concluded that Do-mar’s failure to take proper precautions caused the injury to the primary plaintiff, and Waterford was merely a passive tortfeasor in failing to discover Domar’s negligence.

We cannot say that there was no disputed question of fact as to Waterford’s responsibility for safety on the job site. In their depositions, two key Waterford employees acknowledged that Waterford held safety meetings for the other subcontractors and their employees. Furthermore, there is a disputed question of fact, based on the contract between Waterford and the City of Detroit, as to whether Waterford undertook responsibility for supervision and safety inspections. Therefore, we would find that summary judgment based on common-law indemnity was improper.

II. Contractual Indemnity.

Waterford has a separate claim for indemnity. In the instant case, an express indemnity clause was contained in the contract between Waterford and Domar. Freedom from fault is not required for a recovery on the basis of contractual indemnity. Nanasi v General Motors Corp, 56 Mich App 652, 659; 224 NW2d 914 (1974).

Indemnity contracts, like other contracts, are to be enforced so as to effectuate the intentions of the parties. Gartside v Young Men’s Christian Ass’n, 87 Mich App 335, 339; 274 NW2d 58 (1978). In ascertaining the intentions of the parties, one must consider not only the language used in the contract, but also the situation of the parties and the circumstances surrounding the contract. Gartside, supra. Indemnity contracts are construed most strictly against the party who drafts them, and against the party who is the indemnitee. Gartside, supra, Fireman’s Fund American Ins Cos v General Electric Co, 74 Mich App 318; 253 NW2d 748 (1977).

In the building and construction industry, public policy, as expressed by MCL 691.991; MSA 26.1146(1), prohibits an indemnitee from recovering for his sole negligence. This statute provides:

"Sec. 1. A covenant, promise, agreement or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition and excavating connected therewith, purporting to indemnify the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee or indemnitee, his agents or employees, is against public policy and is void and unenforceable.”

Thus, as a matter of public policy, the indemnitor is not liable even if the contract specifically provides for indemnity for the indemnitee’s negligence, unless the indemnitor is also negligent. Nanasi, supra, Robertson v Swindell-Dressler Co, 82 Mich App 382, 399; 267 NW2d 131 (1978). Apparently, however, this policy does not preclude clauses providing for indemnification for one’s sole negligence in other areas, such as in a lease or bailment situation. See Klann v Hess Cartage Co, 50 Mich App 703, 706; 214 NW2d 63 (1973), Gartside, supra.

A general rule of contract law is that a void section of an otherwise valid provision can be severed if it is not an essential part of the whole. 2 Restatement, Contracts, § 607, Robertson v Swindell-Dressler, supra. Thus, an indemnity provision which purported to indemnify a party for his sole negligence could be severed, and the remainder of the contract given its intended effect.

It is well-settled that a contract of indemnity will not be construed to indemnify the indemnitee against losses which are the result of his own negligence, unless such intention is expressed in clear and unequivocal terms. Fireman’s Fund American Ins Cos, supra, Hubbert v Acme Equipment Co, 55 Mich App 313, 315-316; 222 NW2d 224 (1974).

In Darin & Armstrong v Ben Agree Co, 88 Mich App 128, 135-136; 276 NW2d 869 (1979), the Court interpreted the following indemnification provision:

"You agree to protect, defend, indemnify and hold harmless Darin & Armstrong, Inc., from all liabilities, claims or demands for injury or damage to any person or property arising out of or occurring in connection with the performance of this order.”

The Court concluded that this language was not sufficiently clear to indemnify Darin & Armstrong against its own negligence.

In Gartside, supra, the school district made the following promise when it entered into a contract with the YMCA to use its camp facilities:_

"(0 To indemnify YMCA against, and to hold YMCA, its agents and employees harmless from, all claims, demands, costs or damages (including attorneys’ fees) because of bodily injury, including death, or property damage to any person or legal entity at any time arising out of or in any way connected with School’s use of the Camp and its facilities.”

The Court concluded that this language was equivocal, and the question of whether the contract was intended, in light of all of the circumstances, to indemnify the YMCA for its own negligence was a question for the trier of fact, and could not be resolved by the trial court by way of summary judgment.

In contrast, the Court in Tope v Waterford Hills Road Racing Corp, 81 Mich App 591, 594-595; 265 NW2d 761 (1978), upheld the following language as sufficient to indemnify the defendant from liability for his own negligence:

"1. HEREBY RELEASES, WAIVES, DISCHARGES AND COVENANTS NOT TO SUE the Promoter, Racing Association, Track Operator, Track Owner, Landowner, and each of them, their officers, and employees, all for purposes herein referred to as RELEASEES, from all liability to the Undersigned, his personal representatives, assigns, heirs and next of kin for all loss or damage, and any claim or demands therefor, on account of injury to the person or property or resulting in death of the Undersigned, whether caused by the negligence of Releasees or otherwise while the Undersigned is upon the Restricted Area.” (Emphasis added.)

In the cáse at bar, the subcontract between Waterford arid Domar contained the following indemnification provision:

"IX-LIABILITY
"1. Notwithstanding the carrying of insurance as hereinbefore provided, Subcontractor agrees to indemnify and hold harmless Contractor and the Owner, their successors and assigns, from all claims, liabilities, costs and expense whatsoever for injury or damage to any person or property arising out of the performance of this Subcontract, or arising or occurring by reason of the Work, or the use thereof, or any defect therein, or condition thereof.
"2. Without limiting the generality of the foregoing, Subcontractor hereby releases Contractor and the Owner from all claims and liabilities on account of, and does hereby agree to indemnify and hold harmless Contractor, and the Owner, their successors and assigns, ' from all claims, liabilities, costs and expense whatsoever for injury or damage to any person or property arising out of the use by Subcontractor or its employees of any equipment or facilities whether the same be owned or operated by Contractor, Subcontractor or others.”

We find that this language is not specific and clear enough to support an inference, as a matter of law, that it was intended to indemnify Waterford for its own negligence. See Darin & Armstrong, supra. The intent of the parties in light of the surrounding circumstances requires further factual development, and is a question to be resolved by the trier of fact. The trial court erred in granting summary judgment based on the contractual indemnification provision.

III. Insurance.

The trial court apparently found that Domar’s agreement to provide Waterford with liability insurance provided a separate and independent basis for indemnity.

The subcontract contained the following provision concerning insurance:

"VIII-INSURANCE
"1. Prior to commencement of the Work, Subcontractor shall obtain and thereafter maintain in effect, for the benefit of Contractor, Subcontractor and the Owner, such insurance coverage relating to the Work as Contractor is required to maintain under the agreement with the Owner or as is specified on the face of this Purchase Order.
"2. If no other coverage is required or specified, Subcontractor shall obtain and maintain in effect liability insurance for the benefit of Contractor, Subcontractor and the Owner with coverage and limits, not less than the following: Workmen’s Compensation and employers’ liability insurance as required by law; Contractors Public Liability insurance with limits of $50,000 and $100,000; Property damage insurance with limits of $25,000; Motor vehicle liability insurance with limits of $50,000 and $100,000; and Motor vehicle property damage insurance with limits of $25,000.
"3. Prior to commencement of the Work, Subcontractor shall deliver to Contractor the policies of insurance or certificates of the insurers to the effect that the foregoing insurance is in effect, and providing that the same may not be cancelled except upon not less than ten (10) days prior notice in writing to Contractor.”

Neither this provision, nor the insurance provision between Waterford and the city, contained an independent indemnification clause. Thus, the fact that insurance was required does not enlarge or alter the scope of the indemnification agreement. See generally, Hubbert v Acme Equipment Co, supra.

We would view the insurance requirement as a fund to pay those amounts for which the subcontractor becomes liable. The scope of the liability is governed by the indemnification provision, unless the contract clearly provides otherwise. Thus, the trial court erred in granting summary judgment based on Domar’s breach of the insurance requirement. However, Domar’s failure to obtain the requisite insurance may be the basis of a separate claim for breach of contract by Waterford.

IV. Miscellaneous.

We will briefly address the remaining issues which were raised by the appellant.

Domar contends that the trial court erred when it allowed Waterford to amend its pleadings on the first day of trial to include the additional count involving the insurance provision.

GCR 1963, 118.1, allows amendments by leave to be freely given "when justice so requires”. In Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 656-664; 213 NW2d 134 (1973), the Supreme Court said that a motion to amend should ordinarily be granted absent factors such as undue delay, bad faith, or dilatory motives on the part of the movant, or unless the opponent would be unduly "prejudiced” by the amendment. "Prejudice” was defined as a matter which would prevent a party from having a fair trial, or a matter which he could not properly contest, e.g. when surprised. This Court will not reverse a trial court’s decision to allow or disallow an amendment to pleadings unless there has been an abuse of discretion. Ball v Render, 64 Mich App 148, 151; 235 NW2d 90 (1975).

We do not find that Domar was "prejudiced” or "surprised” by the additional allegation, which was based on the contract between the parties, as Domar was aware of the existence of this claim. The fact that the request to amend was not in written form, as required by the court rule, does not invalidate the amendment. See Berg-Powell Steel Co v The Hartman Group, 89 Mich App 423, 426-427; 280 NW2d 557 (1979).

Finally, Domar contends that the copy of the contract which Waterford submitted with its motion for summary judgment was not the original, nor was it properly authenticated, as required by MRE 1002 and MRE 901.

However, under MRE 1003, a duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original.

Domar never introduced any evidence questioning the authenticity of the contract or of the copy submitted. While Domar asserts that the copy was illegible, the trial court apparently had no difficulty in reading it.

V. Summary.

In conclusion, we find that the trial court erred in granting Waterford’s motion for summary judgment on its third-party action for indemnification. Further factual development is needed in order to determine whether Waterford’s negligence was "active” or "passive”, which must be determined prior to granting a recovery on the basis of common-law indemnity. Similarly, the contractual indemnity provision does not unequivocally indemnify Waterford for its own acts of negligence, so the circumstances and intent of the parties must be further explored at trial.

We find that the insurance provision did not contain a separate promise for indemnity, and the trial court erred in granting summary judgment on that basis, although it may be the basis for a separate claim for breach of contract.

Reversed and remanded for a trial on the third-party action consistent with this opinion.

On Rehearing

R. M. Maher, P.J.

On rehearing, Waterford contends that, when Domar breached its contractual obligation to provide liability insurance on behalf of Waterford, Domar assumed the role of the insurer. Waterford further alleges that the trial court considered the breach of contract issue as an independent basis for granting Waterford’s motion for summary judgment, rather than as an adjunct to the indemnification agreement. Based on these allegations, Waterford contends that, under the unambiguous term of its contractual obligation with Domar, its measure of damages for the breach equals the amount of insurance which Domar agreed to procure, together with all defense costs and expenses.

We must reject Waterford’s contention that summary judgment was appropriate to dispose of the question of Domar’s breach of its obligation to procure insurance. Contracts which are in contravention of public policy are unenforceable. Mahoney v Lincoln Brick Co, 304 Mich 694; 8 NW2d 883 (1943). Contracts which violate a statute are contrary to public policy and cannot be enforced by the courts, even though actual injury does not result from the agreement. Skutt v Grand Rapids, 275 Mich 258; 266 NW 344 (1936), Jaenicke v Davidson, 290 Mich 298; 287 NW 472 (1939), Federoff v Ewing, 386 Mich 474, 481; 192 NW2d 242 (1971).

We have previously noted that the Legislature has declared it to be contrary to public policy in Michigan for anyone in the construction industry to make any agreement which would absolve him from liability for his sole negligence, declaring that any such agreement is void and unenforceable, MCL 691.991; MSA 26.1146(1). Any agreement whereby a subcontractor must procure insurance which includes coverage for the general contractor’s sole negligence would contravene Michigan public policy as expressed by the statute and would be unenforceable. Since the extent of Waterford’s negligence had to be determined as a question of fact, summary judgment was not the appropriate vehicle to dispose of the case. We therefore adhere to our earlier conclusion that the trial court erred in granting Waterford’s motion for summary judgment and would remand the matter for a trial.

      When we refer to the indemnitee’s "own negligence”, we do not refer to the situation where he is solely or 100 percent liable for the resulting injury. Instead, we refer to those situations involving concurrent negligence, where both the indemnitee and the indemnitor are negligent. The indemnitee’s "active” negligence can be anywhere from 1 percent to 99 percent.


author: Cynar, P.J.

text:
    PEOPLE v CZERWINSKI
    Docket Nos. 44434, 44435.

    Submitted May 7, 1980, at Lansing.
    Decided August 11, 1980.
    Leave to appeal applied for.
    Pursuant to a plea bargain, defendant, Jeffrey Czerwinski, pled guilty in the Bay Circuit Court to a charge of carrying a concealed weapon. He also tendered a plea of nolo contendere to a charge of assault with a dangerous weapon. Both pleas were accepted and defendant was sentenced to a term of 30 months to 5 years on the carrying a concealed weapon conviction and to a term of 30 months to 4 years on the assault charge, John X. Theiler, J. Defendant appeals, alleging that his carrying a concealed weapon conviction violated due process, that no factual basis sufficient to support a conviction was adduced and that the trial court improperly considered inaccurate information in the presentence report before sentencing defendant. Held:

    1. The fact that the possession of a knife statute makes possession of a switchblade knife a misdemeanor does not preclude the state from charging defendant with the greater offense of carrying a concealed weapon. The two statutes prohibit different conduct and different elements are necessary for a conviction under each. Since both statutes can be applied to conduct involving concealment of a switchblade on the person of a defendant, the prosecution may, in its discretion, properly institute prosecution under either.
    2. No showing that, a knife is a dangerous weapon per se or is carried for purposes of assault or defense is necessary to support a plea of guilty to a carrying a concealed weapon charge; rather, all that is necessary is that there be a sufficient recitation of facts from which the trier of fact can draw an inculpatory inference that the weapon is a dangerous weapon per se within the meaning of the statute.
    3. Defendant’s failure to object, at the trial level, to consideration by the trial court of information contained in the presentence report and now challenged as inaccurate precludes defendant from raising that issue on appeal.

      References for Points in Headnotes
    [1] 41 Am Jur 2d, Indictments and Informations §§ 97, 226.
    79 Am Jur 2d, Weapons and Firearms § 21.
    [2] 79 Am Jur 2d, Weapons and Firearms §§ 1, 2, 21.
    [3] 5 Am Jur 2d, Appeal and Error § 545 et seq.

    [3, 4] 21 Am Jur 2d, Criminal Law §§ 527 et seq., 583.5.

      4. Consideration by the trial court of any pertinent facts in the presentence report does not violate due process as long as defendant has an opportunity to explain or controvert such facts.
    Affirmed.
    1. Criminal Law — Prosecutor’s Discretion — Statutes.
    The existence of a statute making possession of a switchblade knife a misdemeanor does not preclude the prosecutor from charging a defendant with the greater offense of carrying a concealed weapon (MCL 750.226a, 750.227; MSA 28.423[1], 28.424).
    2. Criminal Law — Carrying a Concealed Weapon — Plea of Guilty — Inferences — Adequate Basis for Conviction.
    A showing that a knife is a dangerous weapon per se or is carried for purposes of assault or defense is not necessary to support a plea of guilty to a charge of carrying a concealed weapon; rather, all that is necessary is that there be a sufficient recitation of facts from which the trier of fact can draw an inculpatory inference that the weapon is a dangerous weapon per se within the meaning of the statute (MCL 750.227; MSA 28.424).
    3. Appeal — Criminal Law — Presentence Reports — Sentencing — Preserving Question.
    Failure to object at the time of sentencing to information in the presentence report precludes raising the issue on appeal.
    4. Criminal Law — Presentence Reports — Due Process.
    Consideration by the trial court of any pertinent facts in the presentence report does not violate due process as long as the defendant has an opportunity to explain or controvert such facts.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, George B. Mullison, Prosecuting Attorney, and David A. Hoort, Assistant Prosecuting Attorney, for the people.

      Richard B. Ginsberg, Assistant State Appellate Defender, for defendant on appeal.

      Before: Cynar, P.J., and M. J. Kelly and T. Gillespie, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Cynar, P.J.

Pursuant to a plea bargain, defendant pled guilty to carrying a concealed weapon (CCW), MCL 750.227; MSA 28.424, and also tendered a plea of nolo contendere to the charge of assault with a dangerous weapon, MCL 750.82; MSA 28.277. In exchange for defendant’s pleas, the prosecutor agreed to dismiss supplemental informations filed in both cases and to dismiss separate charges of assault with a dangerous weapon and assault with intent to do great bodily harm less than the crime of murder. Defendant was sentenced to 30 months to 5 years on the CCW conviction and to 30 months to 4 years on the assault charge, said sentences to run concurrently. Defendant now appeals as of right.

Defendant first contends that his CCW conviction was violative of due process and in contravention of GCR 1963, 785.7(3)(a), in that no factual basis sufficient to support a finding of guilt was adduced. We disagree.

Initially, we are unpersuaded by defendant’s argument that possession of a switchblade is, as a matter of law, a misdemeanor. Defendant claims that the Legislature intended that MCL 750.226a; MSA 28.423(1), a misdemeanor offense, would be the exclusive statute under which to charge a defendant in possession of a switchblade knife.

Assuming, arguendo, that mere possession is indeed a misdemeanor, the crime of carrying a concealed weapon as charged here requires proof of an additional element, namely concealment, over and above mere actual or constructive possession. See People v Kincade, 61 Mich App 498; 233 NW2d 54 (1975), inter alia. Thus, every concealed carrying of a switchblade constitutes commission of the lesser possessory offense, whereas the converse proposition is not true. As such, not every defendant found in possession of a switchblade can be charged with CCW. More importantly, there is nothing in the statute itself indicative of a legislative intent to make MCL 750.226a the exclusive statute under which to charge one in possession of a switchblade, where the facts support a different charge as well. Additionally, the two statutes in question do not prohibit the same conduct, given the different elements necessary for a conviction under each. See People v Sanford, 65 Mich App 101; 237 NW2d 201 (1975), afF'd 402 Mich 460; 265 NW2d 1 (1978).

Since both statutes can be applied to conduct involving concealment of a switchblade on the person of a defendant, the prosecution may, in its discretion, properly institute prosecution under either. Genesee Prosecutor v Genesee Circuit Judge, 386 Mich 672, 683; 194 NW2d 693 (1972).

In a related argument, defendant contends his conviction cannot stand, even assuming he was properly charged, where there was no showing the knife in question was a dangerous weapon per se or carried for purposes of assault or defense. At his plea-taking proceeding defendant admitted that the weapon which he was carrying was a switchblade, was concealed, had a 3-inch blade, and was a dangerous weapon capable of inflicting very serious injury to a person. This was a sufficient recitation of facts from which a trier of fact could draw an inculpatory inference that the weapon was per se a dangerous weapon within the meaning of the CCW statute. People v Haack, 396 Mich 367, 377; 240 NW2d 704 (1976), Guilty Plea Cases, 395 Mich 96, 130; 235 NW2d 132 (1975), People v Vaines, 310 Mich 500, 504-506; 17 NW2d 729 (1945), People v Brown, 406 Mich 215, 220-222; 277 NW2d 155 (1979). No more is required in this case. Accordingly, we find no infirmity in connection with defendant’s plea of guilty to the CCW charge.

Having so concluded, we may reject summarily defendant’s argument that, if we were to reverse his CCW conviction, he would be entitled to resentencing on the assault conviction.

Finally, defendant claims that he is entitled to resentencing because the trial court failed to adequately respond to defense challenges to information contained in the presentence report, and considered challenged inaccurate information in imposing sentence.

Defendant specifically takes exception to two letters contained in the presentence report, written at different times by two officers of the Bay City Police Department.

As to the letter written by officer Lochinski, no objection thereto was made at the time of sentencing, nor did defendant make a timely motion in the court below to have his sentence vacated. With regard to any claimed inaccuracies in this letter, defendant has failed to preserve the issue for appellate review. Guilty Plea Cases, 395 Mich 96, 137; 235 NW2d 132 (1975), People v Powell, 87 Mich App 192, 194; 274 NW2d 16 (1978).

Defendant did, however, object at the time of sentencing to the second letter contained in the presentence report. That letter had been written by detective Monville and contained statements that "the defendant has been a problem * * * for the past several years” and that "he has no regard for anyone or the law of the State of Michigan”. The detective indicated in the letter that he based his comments upon defendant’s extensive juvenile record. It is worth noting that the presentence report contains an independent reference to defendant’s extensive juvenile record which culminated in defendant’s being waived over to the jurisdiction of the "adult” court.

Defense counsel’s objection to the letter was that it contained, "certain conclusions regarding Mr. Czerwinski, without citing any basis for those conclusions”. In response, the court indicated that, "the opinion of a police officer * * *, like any opinion of the general public, is a matter that may be of some interest to a court”. The court went on to note that such opinions "have little direct impact” since the court ultimately has the obligation to determine what is a proper sentence.

We conclude that defendant was not denied due process as a result of this letter being contained in his presentence report. This case is controlled by People v Books, 95 Mich App 500, 503-504; 291 NW2d 94 (1980), where the Court stated:

"Information from agencies, including the police, with whom defendant has had contact in the past will be of assistance to the judge in determining the appropriate sentence to fit the individual offender as well as the offense. So long as a defendant has an opportunity to challenge the accuracy of the report and tell the court about any additional facts which might clarify or explain the information in the report, due process has been satisfied.
" 'GCR 1963, 785.12 is consistent with the procedure in other states permitting consideration of any pertinent facts in the presentence report if the defendant has an opportunity to explain or controvert such facts. We are of the conclusion that a reasonable view of Grimmett [People v Grimmett, 388 Mich 590; 202 NW2d 278 (1972)], in the light of Lee [People v Lee, 391 Mich 618, 636-639; 218 NW2d 655 (1974)] and Martin [People v Martin, 393 Mich 145; 224 NW2d 36 (1974)], is that reference to other criminal activity, for which no conviction has resulted, may be included in the presentence report and considered by the Court, provided the defendant does have the opportunity for refutation provided by GCR 1963, 785.12. This is consistent with the Federal standards of due process set forth in ork and the deWilliams v New Ycisions from other states.

Accordingly, we find no grounds for vacating defendant’s sentence, as it appears from the record that due process dictates were satisfied in this case.

We find no grounds for reversing defendant’s convictions and sentences and, therefore, affirm the same.

Affirmed.

        People v McIntosh, 62 Mich App 422, 445-446; 234 NW2d 157 (1975). Cases cited in the quotation are People v Grimmett, 388 Mich 590; 202 NW2d 278 (1972), People v Lee, footnote 2, supra, People v Martin, 393 Mich 145; 224 NW2d 36 (1974) and Williams v New York, 337 US 241; 69 S Ct 1079; 93 L Ed 1337 (1949).”