*1 App MUTUAL INSURANCE MILLERS SABRAWv MICHIGAN COMPANY INSURANCE MILLERS MUTUAL v MICHIGAN BULLOCK COMPANY MUTUAL INSURANCE MILLERS v MICHIGAN CSUTORA COMPANY INSURANCE MILLERS MUTUAL HANSEN v MICHIGAN COMPANY INSURANCE MILLERS MUTUAL v MICHIGAN WAUGH COMPANY 77-498, 77-499, 77-496, 77-497, 77-495, 77-500. Submitted Nos. Docket 1978, 8, 21, Lansing. December 1978. Leave June Decided appeal applied for. by Farm Bureau mill owned at a feed An occurred explo- employees killed or were Services. Several Saginaw brought damages Circuit Complaints were sion. Sabraw, the estate of administratrix of Alvia G. Court Bullock, Sabraw, administratrix of Helen J. T. Lowell Csutora, Bullock, himself and as Michael estate of Clarence Csutora, James and Pauline the estate of Alex administrator of Hansen, Waugh against Michigan Millers Mu- and Donald H. Company consoli- others. The cases were tual Insurance of each verdicts in favor trial. The returned dated for Millers, Joseph Michigan R. plaintiff, upon motion of but McDonald, J., judgment the verdict entered appeal. Michigan plaintiffs Held: favor of Millers. The regarding of the The evidence the defendant’s [1, ^[2] Practice and Liability 3, sulting ALR3d 1262. withstanding dure Rule 4] Am Jur 46 Am Jur insurance: 2d, 50(b) References procedure Insurance or in default ordinary 2d, or like state Judgments "accident or accidental” with §§ negligence 1182, of verdict under respect Points in provisions. 117. 1413. of insured Headnotes motions for 69 ALR2d Federal Civil including or 449. judgment agent. 7 loss Proce- not- re- Sabraw v parties knowledge was sufficient question jury’s whether the defend- justify verdict. The fire hazards gratuitously the mill for undertook to ant ample evidence of fact which there is a *2 granting judgment the presented. in The trial court erred' notwithstanding the verdict. jury ver- for reinstatement Reversed and remanded dicts. Clements, J., that the trial hold dissented. He would determining authority the issue of the its court was within employees duty matter of law because the as a defendant’s presented a to create insufficient evidence there was voluntarily had question the defendant on the issue of whether entry duty employees, of and that the a toward the assumed proper. notwithstanding

judgment verdict was the Notwithstanding Judgment Judgment the Verdict —Evidence 1. — of Fact. —Question judgment grant notwithstand- motion for a of a defendant’s only ing appropriate is insufficient if the evidence the verdict is plaintiff, judgment the of law to a matter every inference giving plaintiff reasonable the the benefit evidence; could reasonable men from the if that can be drawn plaintiff disagree satisfied his honestly has as to whether necessary proof cause on the elements burden of action, improper. notwithstanding judgment verdict is Negligence Insurers—Safety Inspections. 2. — proxi- consequences may An insurance carrier be held liable negligent safety inspections. mately caused Notwithstanding Judgment Judgment the Verdict —Evidence 3. — of Fact. —Question verdict, judgment notwithstanding of a defendant in favor A plaintiffs were fire insurer of a feed mill which mill, improper when occurred in the a dust insurer of fact as to whether where there was a hazards, gratuitously mill for undertook to evidence, point ample and where upon which there was actions insurer’s jury reasonably that the could have concluded failure insurer’s that the care or constituted want reasonable dangers mill caused warn of the to detect and plaintiffs’ injuries. Opinion op the Court M. E.

Dissent Judgment Judgment Notwithstanding 4. — the Verdict —Insur- Duty—Evidence. ance — properly

A duty trial court determined the issue of as a matter of by granting law property judgment a defendant insurer a injuries the verdict in an action for wrongful employees death to of the insured where the defend- safety inspections ant insurer had made of a directed ñre, preventing pre- where there was insufficient evidence jury questions sented to create on the issue of whether the voluntarily duty insurer had assumed a toward the feed mill employees undisputed and where there was evidence that the regard insurer exercised no control in the feed mill with employee safety. Cicinelli, Mossner, Alexander, P.C., Majoros & plaintiffs Sabraw, Bullock, Csutora and Hanes. Martin, Martin & for plaintiff Waugh. *3 Otto,

Otto & Purcell, Cline, P.C., Tunison & for defendant.

Amici Curiae: Rowe, Joselyn, Jamieson & Grin- nan, P.C., for the Alliance of Insurers, American American Insurance Association and National As- sociation of Independent Insurers.

Before: R. B. Burns, P.J., and D. F. Walsh and Clements,* JJ. D. Walsh, F. J. Plaintiffs appeal by right the trial court’s entry of judgment notwithstand- ing the verdict in favor of defendant Michigan Millers Mutual Insurance Company.

The complaints arose out of an Farm Bureau Services’ Zilwaukee Feed Mill on

* judge, sitting Circuit Appeals by assignment. on the Court of Sabraw v op Opinion the Court plaintiffs September 15, 1969. Three of the were explosion; plaintiffs three the other explo- persons represent of killed in the the estates employees of All the casualties were Farm sion. of the time of the accident. Bureau at Michigan Millers was the fire insur- Defendant for the Zilwaukee mill.1 ance carrier consolidated individual actions were Plaintiffs’ Jury of each rendered in favor for trial. plaintiff verdicts the trial court on the

were set aside insufficient to raise a that the evidence was basis pro- of fact for determination. only priety the, issue trial court’s action is we shall address.2 notwithstanding judgment the verdict on de-

A appropriate only if the evi- fendant’s motion is insufficient as a matter of law dence is plaintiff. judgment Fox, 69 Jackson v for the (1976). making In 283; 244 NW2d Mich give plain- determination, must the court every tiff the reasonable inference benefit Katz, Kroll v from the evidence. could be drawn (1965). If reasonable disagree honestly the the as to whether men could plaintiff proof on has satisfied his burden judg- necessary action, his cause of elements of improper. the verdict ment supra. supra; Katz, Fox, v Kroll Jackson premised Plaintiffs’ cause action p Torts, 2d, 324A, Restatement 142: compensation Company, Fireman’s Fund Insurance the worker’s mill, originally but was carrier for the named as a defendant appealed. granted plaintiffs Mill verdict which have not a directed *4 Company, Michigan Millers’ rein- Elevator Mutual Insurance and surer, third-party of the above was a defendant. Insofar as neither parties Michigan appeal, refer to we shall hereinafter are involved in this as the defendant. Millers 2 considering necessity disposition this Our issue obviates erroneously plaintiffs’ excluded. claim that certain evidence was App Mich 568 572 undertakes, gratuitously "One who or for considera- tion to render services to another which he should recognize person person protection necessary for the of a third to the third as things, subject liability his or resulting physical harm from his failure to if undertaking, protect exercise reasonable care to "(a) his failure to exercise care increases reasonable harm, or the risk of "Ob) perform duty by he has undertaken to owed or person, other to the third

"(c) the harm is suffered because of reliance of the (Em- person upon undertaking.” other or the third phasis supplied.) apply That section has been held to to insurance carriers so as to render them liable for conse- quences caused their proximately negligent e.g., Olkowski v Aetna & inspections; Casualty Co, Surety 497; (1974), 53 Mich App 220 NW2d 97 aff’d 393 Mich Megge v (1974), 223 NW2d 296 Co, Lumbermens Mutual Casualty 45 Mich (1973), Ray 245 Transamerica NW2d Co, 46 (1973).3 App 647; NW2d We distinguish imposing liability Defendant seeks to these cases as carriers, only upon compensation points worker’s to Smith v Co, App 351; Allendale Mutual Ins 79 Mich proposition employees’ injuries for the are not included by inspection within the orbit of risk created for fire hazards. Neither contention is correct. Nothing Torts, 2d, 324A, in 2 Restatement or in the line of cases beginning Ray Co, App 647; with v Transamerica Ins (1973), suggests any principled excluding NW2d 610 liability a fire which basis negligent inspection a fire insurance carrier whose results injures plaintiffs. liability foreseeable In such a case does responsible not attach because the fire insurer is held se, safety per plaintiffs’ injuries but rather because from the resulted inspecting ñre insurance carrier’s failure to use due care for ñre hazards. Smith, supra, point. plaintiff illustrates this In that case injured as the result of an electrical malfunction in an overhead injury crane. Defendant fire insurer was held not liable because the was not caused hazard. Steel, provide “Allendale Mutual did fire insurance to Great Lakes Mutual, hazards; agent, Factory plant and its did for fire however, scope purpose. were limited in both *5 Sabkaw it whether to determine the evidence review shall support jury’s In the verdicts.4 to sufficient was accept making facts as we that determination reasonably from the inferable conclusions those evidence. likely agreed parties cause of most that the All parti- ignition explosion of dust the was pipe by indus- of a four-wheeled the exhaust

cles5 trial the gist The of to as a "Bobcat”.6 truck referred reasonably plaintiffs’ careful that case was representative, by inspection field the defendant’s prevented danger and that detected have would the explosion._ hazards the detection of fire "Factory concerned with Mutual was specially trained in this area. employed who were individuals and employees safety purpose. training area of Factory no in the Mutual had of making inspections for this they out hold themselves as nor did equipment or Factory the electrical Mutual did not virtually material. they no combustible contained because the cranes Factory

Furthermore, if the any Mutual make difference it did not ungrounded grounded because or cranes were around the circuits ” added.) (Emhasis posed Id. at 356. a ñre hazard. neither scope asserting that the of thus is correct The instant defendant wrong parameter. limited, inspection it focuses on the was but its (i.e., property by injured or Liability what was is not circumscribed (whether damage caused by was persons) it but how was inspection). scope purpose If by and hazard within imposing reasoning provides anything, liability in Smith case, injuries plaintiffs’ from a derived since in the instant inspec- scope purpose patently of defendant’s within hazard tion. prevail appeal any theories of one of their on the evidence. if Plaintiffs will Consequently, not liability attempt we determine one supported by we shall evidentiary support theories once of additional assess the proof to create a sufficient have elements. each ingre converting raw production operation consisted of The mill’s corn, oats, soybeans food concentrate into wheat and dients such cattle, ingredients at pigs. received of the raw chickens and Most for the mill were highly ground powdery was finely material which air. explosive concentration 10-15% parties generally accepted theory precisely, the More ignited muffler the Bobcat was caused when corncob, and was ground fell unnoticed particles which some of dumped into a unignited That material material. buried storage it rose to hopper upward bins where into and carried ignited adjacent dust. surface Opinion op the Court undisputed It was the defendant’s field representative inspec- had conducted numerous purpose detecting tions7 of the mill for the employees hazards. He knew that a number building they worked in the and that would be explosion. harmed fire or He was aware of the explosive potential overtly of the dust8 and was *6 detecting eliminating possible concerned with ignition.9 sources of ignition

The Bobcat constituted an hazard10 and Although should not have been used indoors. it exclusively indoors, used almost defendant’s representative field stated that he had never seen any inspections. it inside in the course of of his Consequently, he never adverted it to as a fire reports superiors hazard his to his or in his 11 management. discussions with Farm Bureau’s 7 representative Defendant’s field conducted between 22 and 30 1969, including inspections of the mill between 1963 and 6 preceding explosion. average the 9 months the The duration of the inspections was between one and two hours. representative explosive potential Defendant’s field estimated its dynamite. as seven times that of possible ignition He testified that he had been concerned about cigarette, spark from a a match or even a from a nail on a workman’s suggestion, Smoking” signs shoe. At posted his "No had been various locations in the mill. expert Plaintiffs’ witness testified that the use of the Bobcat entirely improper inside propensity the mill was because for initiating explosions; only explosion-proof fires or electrical trucks equipment with sealed should have been used. representative Defendant’s February field testified that in of 1969 forcefully he amount of dust of urgency system. management informed the Farm Bureau the alarming in the mill at that time constituted an risk explosion. point immediate At that he renewed with increased suggestion that Farm Bureau install a dust control reprimand For his superiors efforts he received a from his "going through not apol channels”. Farm Bureau received written ogy of the system from the defendant. No dust control was installed because closing plant days economic ramifications of the for 30 to permit installation. Although representative’s recognition danger the field of the analytically negligence dust danger detecting distinct from his in not Bobcat, posed by dilatory Farm Bureau’s conduct in Sabraw v pro- safety

Although own Bureau had its Farm safety gram, Conse- no director. it had fulltime quently, to carriers were relied insurance problems. degree point safety out some safety representative committee for mill’s impression complex under the Zilwaukee inspect- representative was field that defendant’s safety ing employees’ and he relied inspections. Farm Bureau executives Two those any urgent they received had not testified that warning danger or fire at imminent mill. jus- foregoing evidence sufficient find the We jury’s tify the defendant verdicts. Whether gratuitously the mill for fire undertook to fact, Insurance Andrews v is a hazards Company America, 190; 230 60 Mich of North reconsideration, remanded NW2d 371 (1975),Megge, supra, ample point. Fur- on that evidence was and the representative thermore, admit- defendant’s field danger fire and ted that he realized *7 employees. explosion posed for the mill’s

inspections, of the From the number and extent frequency was used with which the Bobcat the indoors, danger ignition apparent as an

and its reasonably jury hazard, concluded could have inspector’s the Bobcat or failure to notice that to realize its

dangerousness want of constituted Moning Alfono, 400 Mich reasonable care. See purely tolerating danger posed by motives the dust for economic irresponsible say reminiscent the least. Its attitude was era, bygone "public philosophy be that dominated a damned” compensation state law in this current of the worker’s framework may It of its recklessness. it from the economic ramifications insulates be that such as exist in 14 other states provisions enacting penalty Legislature consider should liability impose which increased Larson, Compensation egregious 2A Workmen’s such conduct. See Law, 69.10. App Clements, by Dissent M. E. J. (1977). Similarly, jury 425; 254 NW2d 759 reasonably could have found that the failure to danger posed by detect and warn of the the Bobcat plaintiffs’ injuries by "cloak[ing] caused the dull[ing] vigilance”, Ray, defect, [or] the call to supra, 658, because of the reliance of either Farm plaintiffs inspec- Bureau or the on the defendant’s tions to disclose such a serious hazard.12

Although prece- we are bound line of clear dent, we view the result in the instant case with possible impact some reservation because of its inspection practices of fire insurers.13 The Legislature might be well-advised to consider ac- comparable respect tion taken with compensation 418.131; worker’s carriers. MCL 418.827(8); MSA 17.237 (827)(8). MCL MSA 17.237 so, however, Until it does fire insurance subject liability carriers remain to common law damages resulting negligent from un- der those circumstances enumerated in 2 Restate- supra. Torts, 2d, ment

Reversed and remanded for reinstatement of the appellants. verdicts. Costs to Burns, P.J., R. B. concurred. (dissenting). appeal Plaintiffs entry judgment the ver-

dict favor of the defendant. A review of the record indicates to this writer judge granting that the trial did not err JNOV. impractical text is the are we unaware of evidence. We have factual the amount and encompassing summary of the voluminous record before us is both But see *8 (1973). We are not exposition necessary only Ray suggesting one legally unnecessary. v Transamerica Ins consciously supportable that the to decide the issue before us—a more restricted ourselves to the minimum the evidence. See fn theory probative Co, liability force of the defendant’s described 3, supra. Nor v Mich Millers Ins Sabraw E. Dissent M. relationship Michigan between Millers The employer plaintiffs’ was Farm Bureau Services Michigan provided property insur Millers clear. safety inspections directed at and its were ance preventing collaterally, result, fire as premises. protection of The trial workers authority determining judge was within duty Ray v a matter of law. Transamer issue (1973). Co, ica Ins inspector testimony was The of the defendant’s designed unequivocal. solely His were having pay protect against Michigan to Millers policy it issued Farm under the insurance inspector Bureau elsewhere con- Services. had safety inspections, which were ducted than the Zil- more extensive those conducted inspector’s testimony mill. The waukee feed igni- provided the he never saw the Bobcat which the mill tion source for inside not contradicted.

Additionally, testimony of Farm Bureau Services officials convinces me

Farm Bureau Michigan rely Millers Services did not on concern- ing example, employee safety. Callum, for William accepted testified that Farm Bureau Services never inspector’s findings doing inde- without own pendent investigation. safety There was a commit- repre- tee which the feed mill sent Zilwaukee sentative. Co,

inAs Smith v Allendale Mutual App I would affirm entry com- JNOV defendant fire insurance presented pany. There was insufficient evidence jury questions trial to create issue voluntarily assumed a whether defendant had duty employees. towards Evidence undisputed that exercised no con- defendant *9 App 568 Mich Dissent regard mill with in the feed trol of North Company Andrews v Insurance safety. (1975), America, 190; 230 NW2d App 60 Mich remanded, Wausau, Ins Co of v Employers

Watson (1973). that defend- no evidence plaintiffs presented towards obligation any had undertaken ant element of a The threshhold mill employees. Restatement premised of action cause proven. not Torts, 2d, 324A was therefore affirm. dissent and vote to respectfully I