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A Better Partnership
February 21, 2014

COA rules that a plaintiff may hold a principal liable for his breach of duty, even where the negligence claims against the agents have been dismissed

In Bailey v. Schaaf, the Court of Appeals held that negligence claims against a principal for his breach of duty may continue, even though the negligence claims against the agents have been dismissed, because the claims against the principal arise from a separate duty than the claims against the agents.  There, two security guards, allegedly ignored warnings that a person at an apartment complex was threatening others with a gun at an outdoor gathering.  The gunman shot and injured Plaintiff Devon Bailey, who subsequently brought multiple claims against the landlord (Evergreen Regency Townhomes, Ltd.), the building manager (Radney Management and Investments), the security company (Hi-Tech Protection, Inc.), and others, on theories of premises liability, negligence, breach of contract and vicarious liability.  On remand from the Michigan Supreme Court, the Court of Appeals was asked to consider (1) whether Hi-Tech owed Bailey a duty to protect or assist him; and (2) whether Evergreen and Radney could be held liable for a breach of their duty to involve the police after learning of an ongoing emergency.
The Court held that Hi-Tech did not owe Bailey a duty to protect or assist him under these facts.  In its previous opinion, the Court had already held that Bailey was not a third-party beneficiary of Hi-Tech’s security contract.  Accordingly, the question was whether Hi-Tech owed Bailey a duty separate and distinct from Hi-Tech’s contract.  The Court reasoned that there is no common-law duty to protect others, and there was no special relationship between Bailey and Hi-Tech that created such a duty here.
The Court next held that Evergreen and Radney could be held liable for breaching their duty to involve the police.  Under Al-Shimmari v Detroit Medical Ctr, 477 Mich 280; 731 NW2d 29 (2007), a principal cannot be found vicariously liable for his agent’s torts if a court dismisses the claim against the agent and the dismissal is on the merits.  The Court held that Al-Shimmari did not apply here because Bailey alleged that Evergreen and Radney, as principals, breached a duty owed to him.  He was not seeking to hold them vicariously liable for the acts of their agents.  Accordingly, the Court directed that Bailey could proceed on remand with his claims against Evergreen and Radney.

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