Court of Appeals addresses common law duty to perform contract requirements with reasonable care
In Price v. City of Royal Oak, et al., the Court of Appeals this week unanimously overturned the lower court's dismissal of an injury case brought by Frederick and Stella Price. The Prices had sued over a missing section of sidewalk left unbarricaded during construction. They maintained that Pamar Enterprises, the contractor, owed them a duty to warn of, or eliminate, the hazardous missing section of sidewalk.
The lower courts applied the Fultz decision, authored by the Republican majority of Michigan's Supreme Court, and held that even if Pamar was negligent, it owed no duty to the Prices or the public, because it was acting pursuant to a contract. The Fultz decision had been consistently interpreted by lower courts to immunize from liability any negligent actor who was acting pursuant to a contract with a third-party.The Fultz decision was widely criticized, even by insurance defense attorneys, and a number of lower court judges wrote stinging rebukes of the suggestion that signing a contract to perform a task should eliminate the common law duty of all persons to act with reasonable care. In a rare display of open-mindedness, the Republican majority "re-analyzed" Fultz in the Loweke case and "clarified" its opinion. It denied that it intended to grant "contract immunity" to persons failing to exercise due care and limited the application of Fultz to those situations where no common law duty of due care existed or was allegedly breached---only a "higher" duty imposed by contract.
In a footnote to its opinion, the Court of Appeals pointed out that the bare language of Fultz would (and had) led to the absurd conclusion that a delivery driver would not be responsible for traffic violations if he was making a delivery pursuant to contract with a third party. Applying the more appropriate Loweke standard to the instant case, the Court of Appeals unanimously overturned the summary disposition and resinstated the case.