Jones v. Smith et al

Filing 38

OPINION AND ORDER granting in part and denying in part 28 Defendants' Motion for Summary Judgment. Signed by District Judge Terrence G. Berg. (AChu)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

MICHAEL JONES,
Plaintiff,
Case No. 17-11304
Hon. Terrence G. Berg

v.
HORIZON TRUST COMPANY,
HORIZON TRUST COMPANY
FBO RICHARD SMITH IRA,
and RICHARD SMITH,
Defendants.

OPINION AND ORDER DENYING IN PART AND
GRANTING IN PART DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT
I.

Introduction

Plaintiff tripped on the top of an open pipe in the driveway of a
home in Detroit that he was renting from Defendants. Plaintiff’s
resulting physical injuries required surgery and prevented him
from working, and he now alleges that Defendants had a duty to fix
the driveway area where he tripped. Defendants include Horizon
Trust Company, an IRA account managed by Horizon Trust Company in Richard Smith’s name (styled as “Horizon Trust Company
FBO [“for the benefit of”] Richard Smith IRA”) and Richard Smith.
Defendants claim that the home was owned solely by Horizon Trust

Company FBO Richard Smith IRA, and that Richard Smith and
Horizon Trust Company did not own, possess, or control the property. Defendants also claim that the protruding pipe on which
Plaintiff allegedly tripped is a water pipe owned by the City of Detroit, and that they could not legally do anything to fix it. Alternatively, Defendants also claim that they contracted with a property
management service and that if anyone had a duty to fix the pipe,
it was the management company. For the reasons outlined below,
Defendant’s Motion for Summary Judgment is GRANTED in part
and DENIED in part.
II.

Background

In March 2015, Plaintiff rented a home at 9400 Piedmont in Detroit. Jones Deposition, Dkt. 28-5, PageID.228. He signed a lease
with the then-owner of the house, Sincere Investments, LLC, and
provided their representative with a list of repairs that needed to
be made at the property. Dkt. 28-5, PageID.227. That list included
the open pipe in the driveway, the concrete in the driveway, the
back porch area, the basement windows, a leaky bathtub, and the
front door lock. Id. That list also mentioned that the home lacked
smoke alarms and needed “lighting in the back on the side of the
house for security.” Id.
After attempting unsuccessfully to contact the person to whom
he gave the letter, Plaintiff researched online to find out who the
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owner of the property was. Id. at PageID.228. This is when Plaintiff
discovered that Stellar Property and Management Group (“Stellar”)
was now managing the property. Id. Plaintiff spoke to someone at
Stellar in person, and was informed that Stellar had to speak with
the new owner to get approval to do the repairs he mentioned, but
that they could not share the new owner’s name. Id. at PageID.230.
The back porch area was eventually fixed, but none of the other issues—including the open pipe in the driveway—was ever addressed
while Plaintiff lived at the Piedmont house. Id. Stellar office manager, Michelle Goode, testified that on June 22, 2015, Plaintiff created the following work order:
[T]he tenant mentioned that his furnace was replaced
on Easter, and the old one plus debris has not been removed from his basement. Also tenant mentioned that
when he moved in he was promised that the basement
windows would be redone and the block windows will be
installed. This has not happened and now ants are coming into the basement window and are around the home.
The tenant is now requesting that the home is to be
sprayed for the ant infestation.
The tenant also indicates that floods happen whenever
it rains and pipes back up. The tenant also reports bathroom window screen is cut up. Tenant mentioned that
the tub was reglazed and he discovered that it was not
reglazed but painted, and now he can see the dirt from
the tub from the previous tenant which was trying to
clean the tub. Gutters need to be cleaned out. Back porch
is falling down. Tenant also reports that bedroom outlets are falling off the wall and various outlets in the
home does not work. All garage lights are inoperable.
3

Goode Deposition, Dkt. 34-6, PageID.464–65. Ms. Goode then said
that the notes on the next page indicated “that the owner has
clearly stated that he will handle his own repairs.” Id. at
PageID.465.
On July 31, 2015, at approximately midnight, Plaintiff arrived
home after a night out with his girlfriend, Chanel Colona. Dkt. 285, PageID.231. Plaintiff exited Colona’s car at the curb, and started
to walk up the driveway towards the rear entrance of the home. Id.
at PageID.232. Plaintiff testified that he regularly used the rear
entrance, because the front door lock did not work well, and he did
not feel safe standing outside of his home at night. Id. at
PageID.239. Plaintiff said that as he walked up the driveway, he
“stepped into that hole that’s there and the nose of my foot got
caught in there, so I fell and broke my leg.” Id. at PageID.232. Plaintiff sustained serious injuries to his foot that required surgery. Dkt.
28-5, PageID.226.
a. Ownership of the house
Defendant Richard Smith is a resident of California, and as part
of a retirement investment portfolio, he owns several properties, including the home where the injury occurred in this case, which is
located at 9400 Piedmont Street in Detroit, Michigan. Smith Dep.,
Dkt. 34-8, PageID.514. In 2015, at the time of the incident, Smith
and his IRA owned ten houses, three in Michigan. Id. at
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PageID.516. Smith did not own the three Michigan properties in his
personal capacity, but through his self-directed IRA, which was
maintained by Horizon Trust Company. He explained the mechanics of this relationship this way:
[…][It’s]to accommodate a self-directed IRA so if I am
interested in a piece of property and the funds are there,
I ask – fill out the proper forms, they become the owner,
all activity associated with the property has to go
through them and because it’s an IRA, they have to report to the IRS, I’m required to take required – minimum distributions just like you would for any IRA once
you’re 70 and a half years old.
All activity in terms of income, the expenses, repairs go
through the trust, I have to request – fill out forms for
any kind of repairs that are brought to my attention by
property management – the property manager sends the
funds directly to Horizon Trust, I get a quarterly statement just like any IRA.
Dkt. 34-8, PageID.517.
Smith learned about Horizon Trust and the practice of holding
properties in an IRA during an investors seminar called Return on
Rents, held in Las Vegas in May 2015. Id. at PageID.518–19. Smith
directed funds from an existing IRA into a new Horizon Trust IRA,
which Horizon Trust then used to purchase four properties (three
in Detroit, and one in New York) at Smith’s direction. Id. at
PageID.519. Smith did not visit any of the properties or appraise
their actual condition, relying only on the information provided by
the Return on Rents representatives. Dkt. 34-8, PageID.519.
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Because Smith’s IRA is on the deed for the home, and not Smith
in his personal capacity, he is restricted from conducting certain
activities that a traditional landlord may ordinarily conduct. Dkt.
34-8, PageID.521 (“I’m not allowed to lift a finger to do anything
personally, otherwise, it’s contributing to my IRA…I can’t even
drive a nail into the wall to hang a picture[.]”). He was also restricted from using any of his personal funds to make improvements
or repairs to the property, because doing so would be adding value
to his IRA, which has tax consequences. Id.
b. The pipe
Donald Pratt, a consultant from “Construction Education & Consulting Services of MI,” was engaged by Plaintiff to evaluate the
pipe. Mr. Pratt provided a report (Dkt.34-1, PageID.369), and deposition testimony about the pipe (Dkt.28-8, PageID.250). In his report, Pratt described the pipe this way:
…[A]pproximately 4 inches in diameter partially buried
in the ground with approximately 1 inch to 2 inches exposed and protruding out of the ground and above the
concrete driveway. Around the exposed edges of the pipe
was a depression in the ground, likely caused by soil erosion around the pipe. This condition created a hole
which varied in depth from 2 1/2 to 2 5/8 inches in depth.
The top of the pipe was jagged and sharp. The top was
also irregular with one side of the exposed portion of the
pipe being approximately 1 inch above the other. This
condition along with the surrounding hole created a significant trip and/or fall hazard[.]
6

Pratt Final Report, Dkt. 34-1, PageID.371. Pratt also found that the
house had never been inspected or registered with the City of Detroit as a rental property. Id. Pratt concludes his report by saying
that it is his opinion that the “Property owner and/or its maintenance company were responsible for the maintenance of this property[,] and that “they had an obligation to maintain the drive and
lawn area in such a way to ensure a safe condition.” Id. at
PageID.375.
During his deposition, Pratt testified that he “determined that
that pipe was the water shutoff box from the City water line that
I’m believing - - I’m assuming it goes into the house, although I don’t
know that for a fact.” Pratt Deposition, Dkt. 28-8, PageID.262. Pratt
testified that the pipe itself was a sleeve that led down to the water
shutoff box, and that these sleeves usually have a cap on top. Id. at
PageID.263 & PageID.270. Pratt testified that he did not think the
open pipe on its own was a hazard, but when the open pipe was
combined with the recessed and deteriorating concrete surrounding
it, a trip hazard would result. Dkt. 28-8, PageID.283. Pratt was not
sure whether anyone other than the City of Detroit could fix the
pipe, but that he suspected it would be the responsibility of the
property owner, because it was located entirely in the property line.
Id. at PageID.281. Pratt further testified that the state of the concrete, absent consideration of the pipe, was a violation of the Detroit
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Property Maintenance Code, and that it was the responsibility of
the owner to fix the driveway. Id. at PageID.288.
Plaintiff had lived at the property for a period of time before the
accident, and the pipe was there the entire time he lived at the
home. Smith contends that the pipe was therefore an “open and notorious” hazard, and that Plaintiff’s failure to avoid the pipe is his
own fault.
c. Stellar Property Management
Smith contracted with a company called Stellar Property Management (“Stellar”) to handle collection of rent, and oversight of
most maintenance issues related to this house, as well as the two
other Michigan properties he also owns. Dkt. 34-8, PageID.519–20.
Smith testified in his deposition that Stellar was supposed to inform him when the property needed a repair or other expenditure,
and that he would then direct Horizon Trust to make the payment
necessary for that repair, but that he had no other involvement in
any aspect of the ongoing management of the property. Dkt. 34-8,
PageID.520–23. Smith claims that he did not have any involvement
in direct management of the property, nor any knowledge of the
state or condition of the property at the time he purchased it or at
the time of incident. Smith believes that if anyone was responsible
for fixing the pipe, it would have been Stellar. Stellar has not been
named in this lawsuit.
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Because there are genuine questions of material fact which
should be properly submitted to a jury for consideration, Defendant’s Motion for Summary Judgment is DENIED as to Defendants
Richard Smith and Horizon Trust Company FBO Richard Smith
IRA, but GRANTED as to Defendant Horizon Trust Company.
III. Standard of Review
a. Summary Judgment
“Summary judgment is appropriate if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
any affidavits, show that there is no genuine issue as to any material fact such that the movant is entitled to a judgment as a matter
of law.” Villegas v. Metro. Gov't of Nashville, 709 F.3d 563, 568
(6th Cir. 2013); see also Fed. R. Civ. P. 56(a). A fact is material if it
might affect the outcome of the case under the governing law.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). On a
motion for summary judgment, the Court must view the evidence,
and any reasonable inferences drawn from the evidence, in the light
most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citations
omitted); Redding v. St. Edward, 241 F.3d 530, 531 (6th Cir. 2001).
As the movant, the Defendant has the initial burden to show that
there is an absence of evidence to support Plaintiff’s case. Selby v.
Caruso, 734 F.3d 554 (6th Cir. 2013); see also Celotex Corp. v.
9

Catrett, 477 U.S. 317, 325 (1986). If the movant meets that burden,
the non-moving party must “set forth specific facts showing that
there is a genuine issue for trial.” Ellington v. City of E. Cleveland,
689 F.3d 549, 552 (6th Cir. 2012) (non-movant “may not rest upon
its mere allegations or denials of the adverse party’s pleadings[.]”).
In so doing, the non-moving party must present more than “a scintilla of evidence.” Anderson, 477 U.S. at 252. If the disputed evidence is “merely colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249–50. The Court must determine whether the evidence presents a factual disagreement sufficient to require submission of the claims to a jury, or whether the
moving party prevails as a matter of law. Id. at 252.
b. Michigan Property Laws and Liability
In every Michigan lease, the lessor promises that the premises
are fit for the use intended, that they will keep the premises in reasonable repair, and comply with the applicable health and safety
laws of the state—even if such language is not in the lease agreement. MICH. COMP. LAWS §554.139(a)(b) (2017). The only exception
to these covenants is when the “disrepair or violation of the applicable health or safety laws has been caused by the tenant’s willful
or irresponsible conduct or lack of conduct.” Id.
Furthermore, every landlord of a property in the City of Detroit
is required to obtain a certificate of compliance attesting to the
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safety and habitability of a rental property before they can rent it
to a lessee. DETROIT, MICH., CODE § 9-1-36 (Int’l Code Council 1999).
To obtain a certificate of compliance, the property must be inspected by the Buildings, Safety, Engineering & Environmental Department (BSEED) of the City of Detroit, and the owner of the property must make any corrections or repairs deemed necessary by
that department. DETROIT, MICH., CODE § 9-1-36(b) (Int’l Code
Council 1999). It is unlawful to rent out a home without a required
certificate of compliance. DETROIT, MICH., CODE § 9-1-36(d) (Int’l
Code Council 1999).
To establish a claim of negligence, plaintiff must show four elements: (1) the defendant owed a duty to the plaintiff, (2) defendant
breached that duty, (3) defendant’s breach caused1 plaintiff’s injury,
and (4) plaintiff incurred damages. Case v. Consumers Power Co.,
463 Mich. 1, 6 (Mich. 2000). Michigan law traditionally recognizes
three categories of visitors to a property: trespassers, licensees and
invitees. Stitt v. Holland Abundant Life Fellowship, 462 Mich. 591,
596–97 (Mich. 2000). The duty a landowner owes to those entering
his or her land depends upon the status of the visitor. Id. In this
case, Plaintiff—as an approved tenant—was an invitee, meaning

“Causation” is comprised of two elements: (1) cause in fact, and (2) legal or
proximate cause. Case v. Consumers Power Co., 463 Mich. 1, 6 (Mich. 2000)
citing Skinner v. Square D Co., 445 Mich. 153, 162–163 (Mich. 1994).
1

11

the property owner owed the Plaintiff a duty of ordinary care, or a
“duty to use reasonable care to protect [him] from an unreasonable
risk of harm caused by dangerous conditions on the premises...."
Hoffner v. Lanctoe, 492 Mich. 450, 455 (2012).
c. Open and Notorious Doctrine
A premises owner is liable for breach of the duty of ordinary care
if the owner "knows or should know of a dangerous condition on the
premises of which the invitee is unaware and fails to fix the defect,
guard against the defect, or warn the invitee of the defect." Id. at
460. “However, an integral component of the duty owed to an invitee considers whether a defect is open and obvious.” Id. (punctuation omitted). “Whether a danger is open and obvious depends on
whether it is reasonable to expect that an average person with ordinary intelligence would have discovered it upon casual inspection.
This is an objective standard, calling for an examination of the objective nature of the condition of the premises at issue." Id. at 461.
A pothole in a parking lot is an example of an open and obvious
hazard. Lugo v. Ameritech Corp., Inc., 464 Mich. 512, 523 (2001)
("[P]otholes in pavement are an everyday occurrence that ordinarily
should be observed by a reasonably prudent person."). A landowner
does not generally have a duty to protect invitees from open and
obvious dangers, but a landowner must take reasonable steps to
protect invitees from harm where "special aspects of a condition
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make even an open and obvious risk unreasonably dangerous."
Lugo, 464 Mich. at 517. To determine if special aspects exists,
courts must "focus on the objective nature of the condition of the
premises at issue, not on the subjective degree of care used by the
plaintiff." Id. at 523–24. Special aspects are found when the hazard
is unreasonably dangerous, or the hazard is unavoidable. Id. at 519.
"In either circumstance," the danger must "give rise to a uniquely
high likelihood of harm or severity of harm if the risk is not
avoided." Hoffner, 492 Mich. at 463.
IV.

Analysis

Two of the defendants claim that they are wrongly named in this
suit, because neither Horizon Trust Company nor Richard Smith
(in his personal capacity) owns the Piedmont house, so neither
could have rectified the pipe hazard. The Court will address each in
turn.
a. Horizon Trust Company
Horizon Trust Company maintains the retirement account of
Smith that includes the property in question. The account is a “selfdirected IRA” (SDIRA) which utilizes real estate as an asset.
SDIRAs offer the same tax benefits as traditional IRAs and are similarly limited by the same IRS regulations. SDIRAs afford their
owners unique investment opportunities, but also come with signif-

13

icant risks, since those new opportunities bring additional responsibilities. According to the Horizon Trust Company website, both
IRAs and SDIRAs “are technically owned by a custodian[.]” But, “A
SDIRA is merely held by the custodian, while the account owner
takes complete control over all investment decisions. The custodian
can offer consultation…but ultimately their role is to act as the
bank and also approve any transactions.”2 Indeed, according to the
Wayne County Register of Deeds’ website, the Piedmont property
deed was recorded on June 10, 2015, indicating that NBC Properties LLC transferred the property ownership to “HORIZON TRUST
CO CSTDN SMITH RICHARD FBO.”3
So Horizon Trust Company holds the deed to the property, but
that is all they do. They played no part in the selection of the property as part of the portfolio, nor in the selection of Stellar Property
Management as a property manager. Furthermore, they play no
part in deciding what repairs or improvements to make on the property. All Horizon Trust Company does is disburse funds to Stellar
or any other contractor as directed by Smith, and maintain custodianship of the deed as long as Smith directs them to.

Horizon Trust Company website, available at:
https://www.horizontrust.com/ira-vs-self-directed-ira-whats-the-difference/
3 The Wayne County Register of Deeds’ free public search function is available
at https://www.waynecountylandrecords.com/recorder/eagleweb/custom
Search.jsp?pageId=RealEstate
2

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Horizon Trust Company has no responsibility for the maintenance or condition of the property—they could never have been expected to arrange to repair the pipe, or to schedule the required inspection by the BSEED. Because Horizon Trust Company bore no
responsibility for maintenance of the property or ensuring the use
of the property, they cannot be held liable for this claim. For that
reason, Defendant’s Motion for Summary Judgment as to Defendant Horizon Trust Company is GRANTED.
b. Richard Smith
The Piedmont house is part of a self-directed IRA for the benefit
of Richard Smith and is technically owned by Horizon Trust Company as custodian. But for the reasons laid out below, a reasonable
jury could find that Mr. Smith exerted sufficient control over the
maintenance and condition of the property to establish that he is in
fact the owner, notwithstanding any technicalities of the self-directed IRA. Likewise, a reasonable jury could find that Mr. Smith’s
alleged negligence as owner of the property was the reason that the
open pipe, front door lock, and front porch light were never fixed,
resulting in Plaintiff’s injury.
Certificate of Compliance
The Piedmont home did not have a certificate of compliance from
the City of Detroit at the time that Plaintiff lived there. Smith testified that he assumed the house had been registered as a rental
15

unit with the City before he purchased the home. Smith Deposition,
Dkt. 34-8, PageID.520. But Smith also said that he “expect[s] [it’s]
probably true” that it is the responsibility of the owner to register
the property with the City. Id. at PageID.521. The management
agreement with Stellar for three Detroit properties, including the
Piedmont home, contains an addendum setting out the owner’s obligation to register the home as a rental unit and arrange for an
inspection to ensure that the home is in compliance with
“all electrical, mechanical, and plumbing”, as well as HVAC code
requirements. Dkt. 34-9, PageID.543. This addendum contained
three potential “check-boxes” for the owner to indicate his preference as to how to handle the rental license obligation, as indicated
below:

16

Smith appears to have first checked the box indicating that he
had a valid rental license which is enclosed, but crossed that check17

mark out, and then checked the box indicating the he was enclosing
the application and the fee, and was asking the management company to forward them on his behalf. Smith signed this agreement—
in his personal capacity—and dated it. During a hearing on the Motion for Summary Judgment on August 27, 2018, counsel for Plaintiff represented that he had never seen any documents indicating
that Smith had paid the fee or that Stellar or Smith made any attempt to obtain a certificate of compliance. The record is not clear
about whether Smith paid the fee for Stellar to arrange the certification, but it was undisputed at the time of the hearing that the
Piedmont property had no certificate of compliance.
The Court therefore ordered Defendants to begin the application
process for obtaining a certificate of compliance within ten days,
and to file an affidavit showing as much. On August 29, 2018, Defendants filed an affidavit from Michelle Goode,4 who attested that
“the application for Registration of Rental Housing for 9400 Piedmont was filed with City of Detroit on August 28, 2018.” Dkt. 36.
According to the City of Detroit BSEED’s website, there are
three steps to obtaining a certificate of compliance: (1) Register the
property with BSEED, (2) Schedule an inspection of the property,

Ms. Goode’s name is spelled as both “Goode” and “Good” in the affidavit, and
the company is referred to as “Stellar Realty Group, Inc.” instead of Stellar
Property and Management Group. Dkt. 36.

4

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and (3) Obtain the certificate.5 To the Court’s knowledge, Defendants have, to date, performed only the first step of this process.6
Smith’s Alleged Conduct in Maintaining the Property
Smith stated during his deposition that he was not allowed to
take actions affecting the Piedmont property without violating the
rules regarding his self-directed IRA. He explained that he could
not do anything that would affect the value of the home without
incurring tax consequences. But Stellar Property Manager Michelle
Goode contradicted Mr. Smith’s position, saying that Mr. Smith had
directed Stellar more than once to let him personally handle
maintenance and repair issues with the property. Goode Deposition, Dkt. 34-6, PageID.465 (“So per notes the next page indicates
that the owner has clearly stated that he will handle his own repairs.”); PageID.474 (“[Smith] had his own contractors handling the
work so actually we were waiting on him to give us notification.”).
Plaintiff’s girlfriend, Chanel Colona, dropped Plaintiff off at the
Piedmont home on the night when he tripped on the pipe. Colona
Deposition, Dkt. 34-7, PageID.497. Colona testified that she remembered a time when the back porch was “cracked up and …

Available at: https://detroitmi.gov/departments/buildings-safety-engineering-and-environmental-department/rental-property-information/certificatecompliance/quick-steps-obtain-certificate-compliance 
6
Defendant Smith will therefore be required to provide an update to the
Court, by filing a written report, as to whether the additional steps have been
completed, and, if they have not, an explanation of the reasons why they have
not.
5

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whenever it rained or anything it would leak into the basement.”
Dkt. 34-7, PageID.502. Colona said that the leak caused “mold all
in the basement, and we couldn’t utilize the basement bathroom.”
Id. Colona testified that she spoke to Smith about the problem on
the phone, and that he told her “he wanted to send his contractor
out” to address the repairs. Dkt. 34-7, PageID.502. After speaking
with Smith on the phone, a contractor came to the home and inspected the house, and then more contractors came on a later date
to fix the back porch. Id. at PageID.503.
Considering these facts, a reasonable jury could find that Smith
had on several occasions endeavored to repair or improve the property himself, directing Stellar to let him handle these issues himself. A reasonable jury may also conclude that, because Smith did
so endeavor, the responsibility to discover and rectify the pipe hazard and other issues lied with him. Finally, a reasonable jury might
find that, if Smith failed to arrange for an inspection that could
have discovered the pipe problem and caused it to be repaired, this
permitted the hazard to remain. Defendants’ motion for summary
judgment as to defendant Richard Smith is DENIED.
c. Open and Notorious
Defendants claim that they cannot be held liable, because the
pipe was an open and obvious hazard. According to the Michigan
Supreme Court in Lugo v. Ameritech Corp., “a premises possessor
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is not required to protect an invitee from open and obvious dangers,
but, if special aspects of a condition make even an open and obvious
risk unreasonably dangerous, the premises possessor has a duty to
undertake reasonable precautions to protect invitees from that
risk.” Lugo v. Ameritech Corp., 464 Mich. 512, 516 (2001). The Supreme Court then gives an example of when a possessor still owes
a duty, even for a hazard that is open and notorious:
[B]ecause the danger of tripping and falling on a step is
generally open and obvious, the failure to warn theory
cannot establish liability. However, there may be special
aspects of these particular steps that make the risk of
harm unreasonable, and, accordingly, a failure to remedy the dangerous condition may be found to have
breached the duty to keep the premises reasonably safe.
Lugo, 464 Mich. at 517 (quoting Bertrand v. Alan Ford, Inc., 449
Mich. 606, 609 (1995) (emphasis in original)). The Lugo Court further states,
the critical question is whether there is evidence that
creates a genuine issue of material fact regarding
whether there are truly “special aspects” of the open and
obvious condition that differentiate the risk from typical
open and obvious risks so as to create an unreasonable
risk of harm, i.e., whether the “special aspect” of the condition should prevail in imposing liability upon the defendant or the openness and obviousness of the condition should prevail in barring liability.
Id. at 517–18.

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It is undisputed that the pipe was in the same condition at the
time that Plaintiff tripped on it as when he first moved in to the
home. It is also undisputed that the pipe is clearly visible in most
conditions. As such, it is clear that the open pipe was an open and
notorious hazard.
Plaintiff argues that a constellation of special aspects rendered
the open and notorious pipe unreasonably dangerous. Plaintiff argues that (1) it was late at night and dark, (2) the front porch light
was especially dim,7 (3) the front door lock worked poorly and inconsistently, and (4) the neighborhood was not safe at night. These
factors combined to force Plaintiff to use the back door instead of
the front door of his home, which required that he walk up the
driveway. The factors also combined to create a scenario in which
the otherwise open and notorious pipe hazard was likely obscured.
A reasonable jury could find that this scenario engendered “special
aspects” that except it from the open and notorious doctrine. See
Lugo, 464 Mich. at 517.
The Court finds that there is a genuine issue of material fact regarding whether there are “special aspects” of the open and obvious
doctrine, and whether those “special aspects” impose liability upon
the defendant. For this reason, defendant’s Motion for Summary as

“There is no streetlight like in front of the property…. I did have [a front porch
light], but it wasn’t really bright. It was very dim. They were supposed to fix
that as well.” Jones Deposition, Dkt. 28-5, PageID.231.
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22

to defendants Richard Smith and Horizon Trust Company FBO
Richard Smith IRA is DENIED.
d. Duty to fix the pipe
“It is a general proposition that liability for an injury due to defective premises ordinarily depends upon power to prevent the injury and therefore rests primarily upon him who has control and
possession.” Kubczak v. Chem. Bank & Tr. Co., 456 Mich. 653, 662
(1998) (quoting Nezworski v. Mazanec, 301 Mich. 43, 56 (1942)).
“Possession” is defined as “the right under which one may exercise
control over something to the exclusion of all others.” Derbabian v.
S & C Snowplowing, Inc., 249 Mich. App. 695, 702 (Mich. 2002).
“[I]t is appropriate to impose liability on the person who created the
dangerous condition or who had knowledge of and was in a position
to eliminate the dangerous condition.” Kubczak, 456 Mich. at id. 
Defendants claim that not only did they not have a duty to fix
the pipe, but that it would have been illegal for them to do so. Dkt.
28-1, PageID.142 (“Therefore, Defendants not only had no legal
duty to alter the pipe, but the Michigan Penal Code forbade the Defendants from doing so.”). They contend that the pipe is an easement from the City, and therefore if anyone had a duty to fix the
pipe, it was the City itself. Id. at PageID.141 (“A landlord cannot be
‘responsible for the maintenance’ of an area that he or she has no

23

legal right to enter or alter.”) (quoting Allison v. AEW Capital
Mgmt., L.L.P., 481 Mich. 419, 427 (Mich. 2008)).
Defendants’ reasoning here is tenuous. First, though neither
Plaintiff nor Defendants dispute that the pipe is very likely property of the City of Detroit, none of the Defendants have ever taken
any steps to have the City come to the property to confirm this. Furthermore, even if it is true that only the City can fix the pipe, that
does not mean defendants had no duty to inform the City of an unsafe hazard, and request the City to repair it. Moreover, Defendants
acknowledge their obligation to abide City ordinance relating to
having the home inspected and certified. Here, no certification was
sought and therefore no inspection took place. Had Smith complied
with the Detroit ordinance requiring the certificate of compliance,
the City would have been permitted to discover the pipe defect and
fix it, possibly preventing the incident from occurring at all. There
is evidence in the record that Smith took responsibility for conducting some repairs even though he had contracted with Stellar to do
so. Thus, a reasonable jury could conclude that Smith has also
taken on the responsibility of fixing the pipe or alerting the city to
the pipe hazard.
e. Horizon Trust Company FBO Richard Smith IRA
As mentioned above, the deed for the Piedmont Home lists
“HORIZON TRUST CO CSTDN SMITH RICHARD FBO” (Smith’s
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SDIRA) as the owner of the home. Because the SDIRA is the actual
owner, a factual issue exists as to whether the SDIRA may be liable
for injuries that occur as the result of alleged negligence by the person who benefits from the IRA. A reasonable jury could find that,
as the holder of the deed and actual owner of the property, the
SDIRA was also the “owner” of the home for purposes of ensuring
the safety of the premises. As such, the motion for summary judgment as to Horizon Trust Company FBO Richard Smith IRA is DENIED.
V.

Conclusion

For the foregoing reasons, Defendant’s Motion for Summary
Judgment is GRANTED in part as to Horizon Trust Company and
DENIED in part as to Richard Smith, and Horizon Trust Company
FBO Richard Smith IRA.
IT IS FURTHER ORDERED THAT Defendant Richard Smith
shall submit a written report to the Court recounting the steps that
have been taken to obtain a certificate of compliance for the 9400
Piedmont property, including whether an inspection of the property
has taken place and whether a certificate of compliance has been
obtained. If neither an inspection nor a certificate has been obtained, Defendant Richard Smith must SHOW CAUSE why they

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have not been obtained. This submission must be filed within seven
(7) days of the date of this Order.
SO ORDERED.

Dated: February 21,
2019

s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE

Certificate of Service
I hereby certify that this Order was electronically filed, and
the parties and/or counsel of record were served on February 21,
2019.
s/A. Chubb
Case Manager

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