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Midwest Diesel3/18/2003
FOR PUBLICATION
In these consolidated appeals, plaintiffs appeal by right from the circuit court's judgment granting defendant Combustion Research Corporation's motion for summary disposition pursuant to MCR 2.116(C)(7). We reverse and remand.
This action arises out of a fire at a business owned and operated by plaintiff Midwest Diesel, Inc. (Midwest). Plaintiffs alleged that the fire was started when a heater, manufactured by defendant, ignited a wall through which a portion of the heater referred to as a "fire tube" passed. Plaintiff Farm Bureau Mutual Insurance Company (Farm Bureau) was the insurer of Midwest and paid Midwest $406,995 as a result of the fire and pursuant to an insurance policy. Upon this payment, and pursuant to the terms of the insurance policy, Farm Bureau became subrogated, to the extent of its payment, to the rights of Midwest against defendant.
It is undisputed that defendant was the manufacturer of the radiant heater at issue, which it sold to Michigan Infrared Heating Company (MIHC). MIHC was owned by Gilbert Ham. The sale occurred on February 22, 1993. The unit was in turn sold to Midwest, and Ham provided installation of the heater. Ham stated that a portion of the heater was installed outside of the building, requiring the fire tube to pass through a combustible wall. The record indicates that shortly after its installation, the heater began to malfunction by "shorting out." The record also reflects that Steven Spencer, president of Midwest, contacted Ham on a number of occasions in an effort to remedy the problem. Spencer noted that on December 1, 1994, he noticed smoldering inside the building and called defendant, who referred him to Dee Cramer, Inc. ("Cramer"), a heater repair firm.
Kevin Kelly, a technician for Cramer, testified at his deposition that on December 2, 1994, he went to Midwest and found the installation of the heater to be what he considered atypical because the heater's fire tube passed through a combustible wall. According to Kelly, due to the irregularity of the installation, he called defendant and asked that a representative inspect the installation in order to determine its safety. Kelly's work invoice indicated that defendant's employee, Craig Thornton, visited Midwest that same day. Specifically, the Cramer invoice states that "customer had problems with installation" and that Kelly "called Craig Thornton from Combustion Research. He met me here to check system. We repaired . . . and checked operation and installation." According to Kelly, based on this inspection, Thornton approved the installation.
Thornton, however, denied telling Kelly that the installation was appropriate. Thornton explained that Kelly had only been concerned about "water getting on a burner," and denied being asked about the advisability of a fire tube passing through a combustible wall. Defendant denied that it installed, serviced, repaired, or inspected the heater. Defendant now concedes that Thornton did visit Midwest on the day in question, but that he did so only as a "public relations visit" and not to inspect the heater. Specifically, defendant argues that Thornton went to Midwest in an attempt to mollify the dispute that had occurred between Steven Spencer of Midwest and Gilbert Ham.
In December 2000, defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(7) and (10). According to defendant, plaintiffs' remaining claim arose from defendant's manufacture and sale of the heater, and there was "no question that did not install, service or otherwise have anything to do with the placement of the heater." Accordingly, defendant argued that plaintiffs' action arose solely out of the sale
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