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Michigan Tooling Association Workers Compensation Fund v. Farmington Insurance Agency12/7/2004
UNPUBLISHED
Defendant Farmington Insurance Agency ("Farmington") appeals as of right from an order holding it liable for breaching a standard of care owed to a party who relied on an erroneous certificate of insurance. Plaintiff Michigan Tooling Association Workers Compensation Fund ("Michigan Tooling") cross-appeals from the trial court's decision to allow Farmington to amend its pleadings near the end of the trial. We affirm.
On March 6, 1998, Farmington issued a certificate of insurance certifying that Michigan Maintenance Specialists, Inc. (MMS) was covered by workers compensation insurance provided by Wausau. However, Wausau had cancelled that coverage on February 20. Although the named "certificate holder" on the face of the certificate was David Friedman, Inc., Distel Tool & Machine Company ("Distel") obtained a copy of the certificate and, in reliance on its accuracy, allowed an MMS employee to perform work on Distel's premises. The employee was injured, and Michigan Tooling, on behalf of Distel, paid the employee's worker's compensation award.
I.
Farmington argues on appeal that it owed no duty to Distel. We disagree. This Court reviews de novo questions of law and reviews for clear error a trial court's findings of fact. Meredith Corp v Flint, 256 Mich App 703, 711-712; 671 NW2d 101 (2003). Whether a duty exists is a question of law. Harts v Farmers Ins Exchange, 461 Mich 1, 6; 597 NW2d 47 (1999). However, whether circumstances exist giving rise to that duty is a question of fact. Howe v Detroit Free Press, 219 Mich App 150, 156; 555 NW2d 738 (1996).
As the trial court correctly recognized, the duty issue hinges on foreseeability. Although the courts consider a number of factors to determine whether a legal duty exists, "the lowest threshold requirement that the harm incurred was foreseeable." Valcaniant v Detroit Edison Co, 470 Mich 82, 86-87; 679 NW2d 689 (2004).
The trial court's written opinion found that:
Here, the risk of foreseeability of harm to employers such as Distel would be one of reasonable certainty. The Court finds it would be foreseeable that a party such as Distel would in fact rely on the Certificate of Insurance issued to Arnold Primak, [the owner of MMS] even though they were not the Certificate holder. It is not unreasonable to assume that parties other than the Certificate holder Freedman would accept the Certificate of Insurance as evidence that insurance was, in fact, in effect for MMS; thus, allowing MSS's employees to enter their premises for work purposes. It is not unreasonable to then expect that thereafter an injury could occur on the premises of a company such as Distel.
Moreover, the Court finds there was, in fact, a relationship between the parties, although not a direct one. Their relationship exists through the Michigan Worker's Compensation Act. Plaintiff was considered a statutory employer for purposes of the Act, and Defendant FIA [Farmington] was an agency providing insurance to employers through the Worker's Compensation Placement Facility. Plaintiffs were in a class of parties who could reasonably rely on Certificates of Insurance issued through agencies such as FIA. As a direct result of Defendant's actions, Plaintiff suffered damages for which it would not have otherwise been responsible.
Farmington apparently did not deal with Distel and was not aware Distel existed until after the injury, so Farmington argues that Distel was unforeseeable. However, a party who renders a service to another "which he should recognize as necessary for the protection of a third person or his things" may be liable for harm that befalls the third person if
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