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Date: 06-26-2018

Case Style:

Flippo Leone and Anna Leone v. BMI Refractory Services, Inc.

Eastern District of Michigan Federal Courthouse - Detroit, Michigan

Case Number: 17-1632

Judge: Cook

Court: United States Court of Appeals for the Sixth Circuit on appeal from the Eastern District of Michigan (Wayne County)

Plaintiff's Attorney: Mark Granzotto, Justin Hakala and Jeffrey Meyers

Defendant's Attorney: Michael D. Bryant

Description: This appeal concerns the duty of care a contractor owes to a third party under Michigan tort law. When a piece of scrap metal seriously injured Filippo Leone
No. 17-1632 Leone, et al. v. BMI Refractory Servs., Inc. Page 2
while he was on the job, he sued the contractor that his employer had hired to clear the debris.
Sitting in diversity, the district court granted summary judgment to the contractor, deciding that
the contractor owed no duty of care to Leone because it created no new hazard. Leone and his
wife timely appeal, arguing that the court interpreted Michigan law too narrowly. We agree, and
A. Facts
The events giving rise to this suit transpired inside a degasser, a large vat that Leone’s
employer, A.K. Steel, used to extract gas impurities from molten steel. Over twenty-four feet
deep, with an interior diameter greater than eight feet, it was lined with layers of brick; the
innermost layer—called the face brick—deteriorates with use and requires occasional
replacement. The degasser’s components include an alloy chute near the top of the vat that
allows ingredients to be added to the molten steel during processing.
A.K. Steel hired BMI Refractory Services to perform a “tearout” of the degasser’s
deteriorated face brick. Although the contract did not include any work on the alloy chute, a
BMI employee testified that his team would dislodge loose bricks or slag1 from the vat’s
interior—including the chute—to ensure that nothing could fall on workers. He did not notice
any loose slag on the chute during the tearout.
After BMI finished the tearout, A.K. Steel supervisors assigned Leone to reline the
degasser with new face brick. For several days, Leone and his work crew frequently climbed
ladders near the alloy chute. They never spotted any loose slag on the chute.
Nonetheless, twenty-one days after BMI completed its one-day job, a forty-pound piece
of slag fell and struck Leone, injuring his back and right knee. Leone claims that the slag
detached from the alloy chute, although he has no reason to believe that the slag was loose when
BMI conducted its tearout. BMI theorizes that the slag may have been secure when BMI left the
site but that a variety of “vibrational forces from within the AK Steel mill” may have shaken it
1Slag is scrap metal that accumulates inside the degasser after extended use.
No. 17-1632 Leone, et al. v. BMI Refractory Servs., Inc. Page 3
loose afterwards. Because no molten metal could have created new slag between the end of
BMI’s tearout and the accident, the district court concluded (and the parties do not contest) that
the offending slag must have existed when BMI’s employees finished.
B. Procedural History
Arguing that BMI negligently failed to remove the slag that struck him, Leone sued for
his injuries; his wife asserted a derivative claim for loss of consortium. The district court
concluded that BMI owed Leone no duty of care under Michigan law and granted it summary
judgment. This appeal followed.
We review a district court’s grant of summary judgment de novo, “view[ing] the
evidence, all facts, and any inferences that may be drawn from the facts in the light most
favorable to the nonmoving party.” Skousen v. Brighton High Sch., 305 F.3d 520, 526 (6th Cir.
A. Whether a Michigan Contractor-Defendant Must Create a “New Hazard” to be
Liable to a Third Party in Tort
In Michigan, as elsewhere, a prima facie negligence claim requires a plaintiff to show
that “(1) the defendant owed the plaintiff a legal duty, (2) the defendant breached the legal duty,
(3) the plaintiff suffered damages, and (4) the defendant’s breach was a proximate cause of the
plaintiff’s damages.” Loweke v. Ann Arbor Ceiling & Partition Co., 809 N.W.2d 553, 556
(Mich. 2011). Additionally, a contractor can be liable to a third party in tort only if it owed the
third party a duty “separate and distinct from the defendant’s contractual obligations. If no
independent duty exists, no tort action based on a contract will lie.” Fultz v. Union-Commerce
Assocs., 683 N.W.2d 587, 592 (Mich. 2004). This “‘separate and distinct’ mode of analysis”
replaced Michigan’s prior emphasis on whether a contractor’s actions amount to “misfeasance”
or “nonfeasance” of a contractual obligation. Id. at 592; Loweke, 809 N.W.2d at 558 (“[A]fter
Fultz, courts were to forgo the misfeasance/nonfeasance distinction and, instead, employ a
‘separate and distinct mode of analysis.’” (internal quotation marks omitted) (quoting Fultz,
683 N.W.2d at 592)).
No. 17-1632 Leone, et al. v. BMI Refractory Servs., Inc. Page 4
So, did BMI owe Leone a duty “separate and distinct” from its contractual obligations to
A.K. Steel? BMI maintains that it had no duty because it neither created a “new hazard” in the
degasser nor exacerbated a pre-existing risk. BMI highlights Fultz, where the Michigan
Supreme Court held that a contractor owes a third party plaintiff no duty of care when the
plaintiff’s claim is rooted entirely in the contractor’s non-performance of its contractual
obligations. 683 N.W.2d at 591–92. Thus, a woman who fell on an icy parking lot could not
assert a negligence claim against the snow-plow company that completely failed to clear the lot,
breaching its contract with the lot’s owner. Id. at 589. Fultz distinguished another snow removal
slip-and-fall case, Osman v. Summer Green Lawn Care, Inc., 532 N.W.2d 186 (Mich. App.
1995), overruled on other grounds by Smith v. Globe Life Ins. Co., 597 N.W.2d 28 (Mich. 1999).
There, the contractor “breached a duty separate and distinct from its contractual duty when it
created a new hazard” due to how it moved snow on the premises. Fultz, 683 N.W.2d at 593; see
also Osman, 532 N.W.2d at 187.
In Fultz’s wake, Michigan-law cases where courts found that a contractor owed a
“separate and distinct duty” also happened to involve contractors creating new hazards. See
Loweke, 809 N.W.2d at 555, 561 (holding contractor could owe a duty to plaintiff after it created
a new hazard by stacking heavy boards that fell on plaintiff); Davis v. Venture One Constr., Inc.,
568 F.3d 570, 571 (6th Cir. 2009) (finding a duty where contractor created a new hazard in
propping up a door that fell on plaintiff).
The district court considered these authorities and reasoned that “[i]n order to fall on the
Loweke/Osman side of the line, Plaintiff would have to establish that BMI created some situation
of peril that did not previously exist inside the vessel.” Because Leone’s claim focuses only on
BMI’s failure to remove pre-existing slag, the court concluded that his negligence claim was
actually a claim that BMI shirked its contractual obligations, and that BMI owed Leone no
“separate and distinct” duty. BMI’s brief echoes the district court’s analysis, advancing no other
arguments in defense of the court’s grant of summary judgment.
Leone suggests the district court erroneously interpreted Michigan precedent. He argues
that the court “t[ook] one example of how a contracting party may be said to create a duty in
tort—by acting in such a way as to create a new hazard or a new situation of peril—and it made
No. 17-1632 Leone, et al. v. BMI Refractory Servs., Inc. Page 5
that one example an absolute essential [element] of the plaintiffs’ claim.” In the process, he
asserts that “the district court overlooked the long-established common law principles under
which a party owes a duty of due care to a third party while performing on a contract.”
We agree. The district court mistook a common feature of Osman, Davis, and Loweke—
the defendant’s creation of a new hazard—for a requirement. Although a contractor’s creation of
a new hazard can trigger a duty to third parties, the Michigan cases nowhere state that it is the
only way that such a duty might arise. Instead, a contractor can be liable to a third party if “any
legal duty independent of the contract existed.” Loweke, 809 N.W.2d at 560 (emphasis added).
Leone aptly posits that, even if BMI created no new hazard, it could still owe him a duty on
some other basis.
B. Whether BMI Owed Leone Any Duty
Michigan common law provides ample foundation for such a duty. In Clark v. Dalman,
the Michigan Supreme Court described “the basic rule of the common law, which imposes on
every person engaged in the prosecution of any undertaking an obligation to use due care, or to
so govern his actions as not to unreasonably endanger the person or property of others.”
150 N.W.2d 755, 760 (Mich. 1967). Fultz reaffirmed this principle, declaring that “[i]f one
voluntarily undertakes to perform an act, having no prior obligation to do so, a duty may arise to
perform the act in a nonnegligent manner.” 683 N.W.2d at 591. Likewise, Loweke stated the
matter clearly: “under the ‘separate and distinct mode of analysis,’ ‘[e]ntering into a contract
with another pursuant to which one party promises to do something does not alter the fact that
there [exists] a preexisting obligation or duty to avoid harm when one acts.’” 809 N.W.2d at 561
(alterations in Loweke) (quoting Rinaldo’s Constr. Corp. v. Mich. Bell Tel. Co., 559 N.W.2d 647,
658 (Mich. 1997)).
In other words, Michigan law incorporates the voluntary-assumption-of-duty doctrine, a
“simple idea that is embedded deep within the American common law of torts . . . : if one
‘having assumed to act, does so negligently,’ then liability exists as to a third party for ‘failure of
the defendant to exercise care and skill in the performance itself.’” Id. (alteration in Loweke)
(quoting Davis, 568 F.3d at 575).
No. 17-1632 Leone, et al. v. BMI Refractory Servs., Inc. Page 6
When BMI performed on its contract—especially when it inspected the alloy chute for
any loose slag—it “assumed to act.” See id. It thereby took on “a duty . . . to perform the act in
a nonnegligent manner.” See Fultz, 683 N.W.2d at 591. Viewing the facts in the light most
favorable to the plaintiffs, Michigan law would recognize that BMI owed Leone a duty “separate
and distinct” from its contractual obligations to A.K. Steel.
BMI notes other potential problems with the plaintiffs’ case, such as Leone’s concession
that he has no reason to believe that the slag that hit him was loose when BMI completed its
work. See Part I.A, supra. But those issues pertain to whether BMI breached its duty to Leone
or whether any such breach was a proximate cause of Leone’s injury, not whether a duty existed
in the first place. And because BMI proffers no alternative arguments on those grounds, we are
confined to the duty question.

Outcome: Therefore, we REVERSE the district court’s grant of summary judgment and REMAND
for further proceedings consistent with this opinion.

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