Sedgwick Insurance v. CDS, Inc.

Filing 59

ORDER Denying 42 Objection filed by Angela Sarazin, and Affirming 41 Order on Motion to Dismiss. Signed by District Judge Paul D. Borman. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

SEDGWICK INSURANCE AND
ANGELA SARAZIN,
Plaintiffs,

Case No. 13-10485
Paul D. Borman
United States District Judge

v.
F.A.B.E. CUSTOM DOWNSTREAM
SYSTEMS, INC.

David R. Grand
United States Magistrate Judge

Defendant.
_____________________________/
ORDER: (1) DENYING PLAINTIFF ANGELA SARAZIN’S OBJECTIONS
TO MAGISTRATE JUDGE’S MARCH 25, 2014 ORDER (ECF NO. 42), AND (2)
AFFIRMING THE MAGISTRATE JUDGE’S MARCH 25, 2014 ORDER (ECF NO. 41)
Now before the Court is Plaintiff Angela Sarazin’s Objection to Magistrate Judge David
R. Grand’s March 24, 2014 Order Denying Plaintiff’s Motion to Dismiss and/or to Strike
Defendant F.A.B.E. Custom Downstream System, Inc’s Notice of Non-party Fault. (Pl.’s Obj.,
ECF No. 42). Defendant F.A.B.E. Custom Downstream System, Inc. (“CDS”) filed a response
(ECF No. 43) and Plaintiff Sarazin then filed a reply (ECF No. 44).1
For the reasons that follow, the Court AFFIRMS the Magistrate Judge’s Order (ECF No.
41) and DENIES Plaintiff Sarazin’s Objection (ECF No. 42).

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The Court notes that this case was consolidated pursuant to a stipulation on August 16,
2013 (ECF No. 21), such that Sedgwick Insurance v. CDS, Inc., case number 13-10485 was
consolidated with Angela Sarazin v. Custom Downstream Systems, Inc., case number 13-10492.
Thereafter the caption in the action was amended to reflect the correct corporate name of the
defendant, F.A.B.E. Custom Downstream Systems, Inc., that was misidentified in the pleadings
as “Custom Downstream Systems, Inc.” (ECF No. 26). Defendant CDS’s Notice of Nonparty at
Fault was filed on June 14, 2013. (Case No. 13-10492, ECF No. 11).

I. BACKGROUND
Magistrate Judge Grand’s Order adequately sets forth the relevant factual background in
this matter and the Court adopts that section of the Order here. (ECF No. 41 at 1-4).
II. STANDARD OF REVIEW
When a party objects to a magistrate judge’s ruling on a non-dispositive matter, a district
court may “modify or set aside any part of the order that is clearly erroneous or is contrary to
law.” FED. R. CIV. P. 72(a). The United States Supreme Court and the United States Court of
Appeals for the Sixth Circuit have both held that “a finding is ‘clearly erroneous’ when although
there is evidence to support it, the reviewing court on the entire evidence is left with the definite
and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum Co., 333
U.S. 364, 395 (1948) (explaining the clearly erroneous standard under Rule 52(a)); United States
v. Mabry, 518 F.3d 442, 449 (6th Cir. 2008) (quoting U.S. Gypsum Co., 333 U.S. at 395). The
Court notes that this standard does not allow a reviewing court to reverse a magistrate judge’s
finding merely because it would have decided the matter differently. See Anderson v. City of
Bessemer City., N.C., 470 U.S. 564, 573 (1985) (interpreting the clearly erroneous standard in
Rule 52(a)).
“The ‘clearly erroneous’ standard applies only to the magistrate judge’s factual findings;
his legal conclusions are reviewed under the plenary ‘contrary to law’ standard.” Haworth, Inc.
v. Herman Miller, Inc., 162 F.R.D. 289, 291 (W.D. Mich. 1995) (citing Gandee v. Glaser, 785 F.
Supp. 684, 686 (S.D. Ohio 1992), aff’d 19 F.3d 1432 (6th Cir. 1994) (Table)). The “contrary to
law” standard requires the district court employ “independent judgment” in determining whether
the magistrate judge’s legal conclusions “contradict or ignore applicable precepts of law, as

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found in the Constitution, statutes, or case precedent.” Glaser, 785 F. Supp. at 686 (internal
citation and quotation marks omitted).
III. ANALYSIS
In the March 25, 2014 Order, the Magistrate Judge denied Plaintiff Sarazin’s motion to
dismiss and/or strike Defendant CDS’s notice of non-party fault. The Magistrate Judge found
that Defendant CDS had properly named Plaintiff Sarazin’s employer and co-employee in the
Notice and also that the Notice was timely and sufficient. Plaintiff Sarazin now raises one
objection to the Magistrate Judge’s Order, arguing that the Magistrate Judge’s conclusion that an
employer and co-employee subject to Worker’s Disability Compensation Act’s (“WDCA”)
exclusive remedy provision may be named as a non-party at fault, was contrary to Michigan law.
See MICH. COMP. LAWS § 418.131. Particularly, Plaintiff Sarazin contends that the Magistrate
Judge erred in his analysis of this legal issue because he relied upon unpublished and, therefore,
not binding case law. Plaintiff Sarazin also appears to argue that the Magistrate Judge erred in
finding that an employer owes a duty to its workers to maintain a reasonably safe workplace.
(See Pl.’s Obj. at 9).
The Michigan comparative fault statutes provide that in a tort action for personal injury
the liability of each person is allocated by the trier of fact “in direct proportion to the person’s
percentage of fault.” MICH. COMP. LAWS § 600.2957(1); see Jones v. Enertel, Inc., 245 Mich.
App. 432, 434 (2002) (“As a result of the Legislature’s ‘fair share liability’ system, each
tortfeasor is responsible for a portion of the total damage award according to their percentage of
fault.”) (citation omitted). In assessing percentages of fault, “the trier of fact shall consider the
fault of each person, regardless of whether the person is, or could have been, named as a party to

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the action.” MICH. COMP. LAWS § 600.2957(1). Section 600.2957(3) also explicitly recognizes
that the comparative fault statutes:
...do not eliminate or diminish a defense or immunity that currently exists, except
as expressly provided in those sections. Assessments of percentages of fault for
nonparties are used only to accurately determine the fault of named parties. If
fault is assessed against a nonparty, a finding of fault does not subject the
nonparty to liability in that action and shall not be introduced as evidence of
liability in another action.
MICH. COMP. LAWS § 600.2957(3).
Further, the comparative fault statutes provide that in “personal injury actions involving
the fault of more than one person, the trier of fact must specifically determine the plaintiff’s total
damages and the percentage of fault attributed to all persons involved ‘regardless of whether the
person was or could have been named as a party to the action.’” Jones, 245 Mich. App. at 436
(quoting MICH. COMP. LAWS § 600.3404(1)(b)). The term “fault” is then defined in the statute as
“an act, an omission, conduct, including intentional conduct, a breach of warranty, or a breach of
a legal duty, or any conduct that could give rise to the imposition of strict liability, that is a
proximate cause of damage sustained by a party.” MICH. COMP. LAWS § 600.6304(8). The
Michigan Supreme Court has held that “proof of a duty is required ‘before fault can be
apportioned and liability allocated’ under the comparative fault statutes, MCL 600.2957 and
MCL 600.6304.” Romain v. Frankenmuth Mut. Ins. Co., 483 Mich. 18, 20 (2009) (per curiam)
(emphasis in original).
While these legal principles are not in dispute, Plaintiff Sarazin argues that her employer,
Fagerdala USA-Marysville, Inc. (“Fagerdala”) and “John Doe, the plant manager”, Plaintiff’s
co-employee, fall under the WDCA’s exclusive remedy provision and therefore cannot be

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properly listed as nonparties at fault by Defendant CDS.2 Plaintiff Sarazin relies upon two cases
for her theory, Romain v. Frankenmuth Mutual Ins., 483 Mich. 18 (2009) (per curiam) and Kopp
v. Zigich, 268 Mich. App. 258 (2005) (overruled in part by Romain, 483 Mich. at 20).
The Magistrate Judge accurately and succinctly summarized the Kopp decision:
In Kopp, the plaintiff was injured while delivering a hot tub for his employer. He
sued the owners of the residence based on premises liability, alleging negligence
in maintaining their residence and in not warning him of known dangers. The
defendant filed a notice, identifying the plaintiff’s employer as a nonparty at fault
and alleging that the employer had failed to properly train the plaintiff in the
delivery of hot tubs. The plaintiff moved to strike the notice, and the trial court
granted the motion, reasoning that a duty must exist before fault can be
apportioned under the comparative fault statutes, and finding that plaintiff’s
employer did not owe him a duty because plaintiff’s exclusive remedy against his
employer was under the WDCA.
The Court of Appeals disagreed, holding that under a plain reading of the
comparative fault statutes, a court is required to award damages based on a
proportional determination of a defendant’s fault in relation to the plaintiff’s total
damages caused by all persons who contributed to the injury. Kopp, 268 Mich.
App. at 260. Accordingly, the Court of Appeals held that the defendant “must
have the opportunity to name [the plaintiff’s employer] as a potential nonparty at
fault and present evidence that [the employer] contributed to plaintiff’s injuries.”
Id. The Court of Appeals then stated that “a plain reading of the comparative
fault statutes does not require proof of a duty before fault can be apportioned and
liability allocated.” Id.
(ECF No. 41, Order at 9).
In Romain, the Michigan Supreme Court partially overruled Kopp, stating: “Specifically,
we overrule the statement in Kopp v. Zigich that ‘a plain reading of the comparative fault statutes
does not require proof of a duty before fault can be apportioned and liability allocated.’”
Romain, 483 Mich. at 20. The Michigan Supreme Court clarified that “proof of duty is required

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The Court notes that while Fagerdala hired Plaintiff as a contract employee through a
staffing agency, the parties do not contest that, for legal purposes, Fagerdala is considered
Plaintiff’s employer.
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‘before fault can be apportioned and liability allocated’ under the comparative fault statutes ...”
Id. at 21.
Plaintiff Sarazin argues in her objection, just as she did in her motion, that “[t]he
proposition that an employer cannot be named as a non-party at fault is implicit within the
Court’s rulings in Romain and Kopp.” (Obj. at 7). Plaintiff Sarazin reasons that the Supreme
Court’s decision in Romain only overruled the determination that a duty was not required and
“essentially leaves the [trial court’s] holding that an employer cannot be named as a non-party at
fault as the only remaining viable principle that can be derived from Kopp.” (Obj. at 8).
Defendant CDS also argues that the Romain decision only overturned the statement in
Kopp that a duty was not required, but left standing the portion of Kopp that held pursuant to
Mich. Comp. Law § 600.2957 and § 600.6304, a party may still be named as a nonparty for
purposes of assessing fault, even if that party may not be sued. See Kopp, 268 Mich. App. at
260. Defendant CDS relies upon two unpublished cases for this interpretation, Richardson v.
Time Manufacturing, No. 505CV27, 2005 WL 1923592 (W.D. Mich. Aug. 11, 2005) and
Schmeling v. Whitty, Nos. 292190, 292740, 2011 WL 520539 (Mich. Ct. App. Feb. 15, 2011).
While decided prior to Romain, the Richardson decision is persuasive as it addresses the
issue of whether an employer subject to the WDCA can be deemed a nonparty at fault. In
Richardson, the court found that because “fault” is statutorily defined to include intentional
conduct in addition to conduct that could give rise to strict liability, “the statute implicitly
includes – as non-parties who may be assigned ‘fault’ – employers whose acts, omissions, or
conduct have proximately caused a claimed injury.” Richardson, 2005 WL 1923592, at *3-4.
The Richardson court also noted that employers subject to the WDCA were not “expressly

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excluded” from the fault allocations pursuant to §§ 600.2957 and 600.6304. Id.
In Schmeling, the Michigan Court of Appeals also addressed the pertinent issue now
before this Court: whether an employer and coworker, subject to the WDCA’s exclusive remedy,
can be properly named as nonparties at fault. Schmeling, 2011 WL 520539 at *1. In Schmeling,
the court first acknowledged Romain for the proposition that before a party can be named a
nonparty at fault, it must be shown that person owed the plaintiff a duty. Then, the court held
that:
The existence of a duty turns on the relationship between the defendant and the
person whose injury was allegedly caused by the defendant’s act or failure to act.
Essentially, the question of duty is a public-policy question of whether the
defendant should be held responsible for the conduct or inaction in question.
Although workers’ compensation benefits are the exclusive remedy for an
employee injured while working, it does not follow that employers and
coemployees do not owe an employee any duty.
A duty encompasses the type of behavior that the person in question must engage
in, or refrain from, in order to avoid legal liability. A remedy, however, refers to
the kind of relief a claimant may obtain, once the claimant has shown a breach of
some duty. Critically, MCL 600.2957(1) and MCL 600.[6]304(1)(b) recognize
this distinction by explicitly providing that a defendant can notice a nonparty at
fault even though that nonparty could not be sued. In other words, a person can
owe a duty to a plaintiff even when the plaintiff cannot recover any remedy from
that person.
Schmeling, 2011 WL 520539, at *1-2 (internal citations omitted, emphasis in the original).
In the Report and Recommendation, the Magistrate Judge rejected Plaintiff Sarazin’s
interpretation of Romain and Kopp, finding that both Defendant CDS’s argument and the
reasoning in Richardson and Schmeling were more persuasive and on-point. (Report and
Recommendation, at 9-12). Accordingly, the Magistrate Judge found that because Plaintiff
Sarazin’s employer had a duty rooted in both common law and statute to maintain a reasonably
safe workplace, Defendant CDS could properly name it and its plant manager as nonparties at
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fault. (Report and Recommendation at 11).
Plaintiff Sarazin objects and claims that the Magistrate Judge erred in relying upon
Richardson and Schmeling because they are unpublished cases and have no precedential value.
Plaintiff Sarazin’s argument lacks merit. Here, the Magistrate Judge explicitly acknowledged
that Richardson and Schmeling are “unpublished and, thus not binding on this Court”. (Report
and Recommendation at 10). The Court further agrees with the Magistrate Judge that Defendant
CDS’s argument, as well the reasoning of the Richardson and Schmeling decisions, is persuasive
on the issue. Indeed, the Schmeling decision is particularly compelling, because, while it is nonbinding on this Court, the opinion was issued by the Michigan Court of Appeals and addresses
the very same issue.
Moreover, the Court finds that the Romain decision did not disturb Kopp’s holding that
the Michigan comparative fault statutes, § 600.2957 and § 600.6304, require that a judge or jury
must first make findings of fact regarding the total amount of a plaintiff’s damages and “then
determine the percentage of the total fault of each person who contributed to the injury,
‘regardless of whether the person was or could have been named as a party to the action.’”
Kopp, 268 Mich. App. at 260 (citation omitted). Here, the Magistrate Judge’s finding that
Plaintiff Sarazin’s employer and coworker owed her a duty and therefore are properly listed as
nonparties at fault is in harmony with that undisturbed portion of Kopp as well as Romain.
Accordingly, the Magistrate Judge’s decision properly applied Michigan case law and Plaintiff
Sarazin’s objection that it was error for the Magistrate Judge to rely upon unpublished case law
is denied.

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Plaintiff Sarazin also appears to object to the Magistrate Judge’s finding that “Michigan
employers owe duties to their employees, grounded in both statutory and common law, including
for example, to provide safe workplaces, free from hazards that likely will cause serious physical
harm.” (Report and Recommendation, at 11) (citing Michigan Occupational Safety and Health
Act (“MIOSHA”), MICH COMP. LAWS § 408.1011(a) and Villar v. E.W. Bliss, 134 Mich. App.
116 (1984) (collecting cases)). Plaintiff Sarazin contends that Defendant CDS cannot establish
Plaintiff Sarazin’s employer or her coworker owed her a statutory duty under MIOSHA because
“[d]uty is defined as conduct that an individual must take to avoid becoming subject to liability
to another for injuries sustained.” (ECF No. 44, Pl.’s Reply at 2, citing Restatement Second
Torts § 4). Plaintiff Sarazin reasons that because there are no actions that an employer can take
to avoid liability under MIOSHA, an employer does not owe its employees any “duty”. (Pl.’s
Reply at 2). Further, Plaintiff Sarazin claims that her employer and coworker did not owe her
any common law duty because the cases cited, e.g., Villar, are distinguishable or predate the
WDCA. (Id.).
The Court finds Plaintiff Sarazin’s arguments are unpersuasive and off the mark in light
of case law illustrating that Michigan court’s have generally recognized both a common law and
statutory duty owed by an employer to its employees. Specifically, the Michigan Supreme Court
has explained this duty in conjunction with the WDCA framework:
[w]orkplace safety, at common law and under MIOSHA, is the responsibility of
the workers’ employer .... There is, however, generally no tort liability for failure
to measure up to that responsibility. The employer, as a trade-off for the
obligation to secure the payment of workers’ compensation benefits, is relieved of
tort liability under the provision of the workers’ compensation act that makes a
claim for workers compensation the injured workers’ exclusive remedy against
the employer.

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White v. Chrysler Corp., 421 Mich. 192, 199 (1984) (emphasis added); see also Ghrist v.
Chrysler Corp., 451 Mich. 242, 250 (1996) (acknowledging that “an employer has a statutorily
imposed duty to make the workplace safe for its employees” but finding MIOSHA does not
“abrogate the general duty of a manufacturer to exercise the degree of care necessary in the
design and manufacture of a product to avoid all reasonably foreseeable injuries.”); see also
Villar, 134 Mich. App. at 120 n. 1 (recognizing that Michigan courts had long recognized that
“as a matter of common law, an employer has a duty to maintain a reasonably safe workplace.”)
(collecting cases). As the court in Schmeling explained, “a person can owe a duty to a plaintiff
even when the plaintiff cannot recover any remedy from that person.” Schmeling, 2011 WL
520539, at *2 (emphasis in original). The Court agrees with the Magistrate Judge that this
interpretation is consistent with the Michigan comparative fault statutes’ plain language that
requires the trier of fact to allocate liability among all persons found to at fault “regardless of
whether the person is, or could have been, named as a party to the action.” MICH. COMP. LAWS §
600.2957(1).
IV. CONCLUSION
For all these reasons, the Court denies Plaintiff’s Objection to Magistrate Judge’s March
25, 2014 Order (ECF No. 42) and affirms the Magistrate Judge’s March 25, 2014 Order (ECF
No. 41).
IT IS SO ORDERED.

s/Paul D. Borman
PAUL D. BORMAN
UNITED STATES DISTRICT JUDGE
Dated: September 17, 2014

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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each attorney or
party of record herein by electronic means or first class U.S. mail on September 17, 2014.

s/Deborah Tofil
Case Manager

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