Case Number: BC578874 Hearing Date: January 12, 2018 Dept: NCD

TENTATIVE RULING

MOTION FOR SUMMARY ADJUDICATION

[CCP § 437c; CRC 3.1350 et seq.]

Calendar: 16

Date: 1/12/18

Case Number: BC 578874 Trial date: March 8, 2018

Case Name: Ball v. Hines, LLC, et al.

Moving Party: Defendant/Cross-Complainant Cobalt Construction Company

Responding Party: Cross-Defendant Zastrow Construction, Inc. dba Reliance Company

RULING:

CCP 437c(g): Material facts which do or do not create a triable issue of controversy:

Motion of Cobalt Construction Company for Summary Adjudication on the First Amended Cross-Complaint is GRANTED.

Adjudiction No. 1: As a matter of law pursuant to the terms of the General Provisions, Zastrow Construction, Inc. owes Cobalt Construction Company a duty to immediately accept the defense of Cobalt Construction, Inc. against the Complaint filed by Plaintiff Wayne Ball in this action.

The court determines based on the facts presented that under the terms of the express agreement between the parties, in connection with statutory and decisional authority, cross-complainant Cobalt Construction Company has established that the contract at issue gives rise to a duty to defend against the claims currently alleged in this action, and that cross-complainant has tendered its defense to cross-defendant Zastrow Construction Construction, Inc. dba Reliance Company, giving rise to an immediate duty to defend. [UMF Nos. 1-16, and evidence cited]. The moving party has established that the allegations include allegations that the claims did not arise from the sole negligence sole negligence or willful misconduct of the Indemnified Parties, giving rise to a duty to defend which duty continues unless and until “during the progress of the third party proceeding against the indemnitee, all claims potentially subject to the contractual indemnity were eliminated…” Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 558, n. 7. [UMF Nos. 5-9, and evidence cited].

Defendant/Cross-Defendant Zastrow Construction, Inc.’s Objections to Evidence:

Objection No. 9 is SUSTAINED. Objection No. 6 is OVERRULED as not in proper format. Remaining objections are OVERRULED.

Relief Requested:

Summary adjudication with respect to the fourth cause of action for declaratory relief in favor of cross-complainant Cobalt Construction Company in its First Amended Cross-Complaint

Causes of Action from First Amended Cross-Complaint

1) Equitable Indemnity

2) Contribution

3) Express Indemnity

4) Declaratory Relief

SUMMARY OF COMPLAINT:

This action is brought by plaintiff Wayne Ball against defendants Hines, L.L.C. and Hines MIP Foothill, L.L.C., the owners and developers of a construction project in Pasadena, and the general contractor at the construction project, defendant Cobalt Construction Company. The complaint alleges that in October 2014, plaintiff was employed as a driver of a cement deliver truck, and assigned to deliver cement to an area within the project site. Plaintiff alleges that the roadway and ramp at the site were negligently designed, built and maintained so that they would not handle vehicles driven thereon in a careful manner, and that as a proximate result of defendants’ negligence, and the dangerous condition of the roadway and ramp, plaintiff’s vehicle rolled over when the ramp subsided as his vehicle was driving over it, causing plaintiff to sustain severe injuries.

Defendant Cobalt Construction has filed a cross-complaint for indemnity. The First Amended Cross-Complaint alleges that cross-defendant Roes are responsible for the occurrences alleged, and for cross-complainant’s damages, and also alleges that cross-complainant is entitled to express indemnity as well as declaratory relief that it is entitled to indemnity, reimbursement for the costs of defending the principal action, and is owed a duty to defend the underlying action.

Cross-defendant Zastrow Construction has been added to the action by Doe Amendment by plaintiff and Roe Amendment by cross-complainant Cobalt.

ANALYSIS:

Procedural

Failure to Dispose of Entire Cause of Action

The motion is for summary adjudication of the fourth cause of action of the First Amended Cross-Complaint, seeking adjudication that Zastrow Construction owes Cobalt a duty to immediately accept the defense of Cobalt in the present action.

CCP § 437c(f) provides that “a motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”

The opposition objects that the motion is improper as the fourth cause of action seeks a duty to defend as well as indemnity, but the motion only seeks that the court adjudicate a duty to defend. The motion does not submit evidence or request summary adjudication of whether a duty to indemnify is owed, or whether cross-complainant is owed reimbursement for the costs of defense so far incurred, which are both included in the fourth cause of action along with the request for a declaration concerning the duty to defend. [See FACC, Ex. 13, paras. 26-29].

It has been held that a court may address by summary judgment or adjudication a request that an indemnitor assume in an ongoing action an immediate duty to defend. See Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 565, n. 12 (“When a party sues one or more other persons, seeking to establish a contractual right to a defense against litigation not yet concluded, these issues may, if the parties agree, be deferred until the underlying litigation is complete. If any party moves for summary judgment or adjudication (Code Civ. Proc., § 437c) with respect to the duty to defend against litigation still in progress, the court may proceed as it deems expedient.”)

The duty to defend falls within the summary adjudication statute’s adjudication of an issue of “duty,” and the motion is not denied on this ground.

Failure to Establish Defense Expenses Incurred

The opposition argues that the moving papers have failed to present evidence that cross-complainant has incurred out of pocket fees and costs which is necessary to establish standing to assert a claim for breach of a duty to defend.

The opposition relies on Bramalea California, Inc. v. Reliable Interiors, Inc. (2004) 119 Cal.App.4th 468, in which the court of appeal found that a developer pursuing claims for breach of contract and indemnity against a subcontractor had no standing to pursue such claims, noting, “It is not disputed that Bramalea has paid nothing.” Bramalea, at 471.

However, as discussed above and pointed out in the reply, the motion here does not seek to recover past expenses of defense, but to have the court declare that cross-defendant must assume the defense going forward, which is permitted under Crawford. The motion accordingly is not denied on this ground.

Request for Continuance

The opposition argues that if the court is inclined to grant the motion despite the arguments in the opposition, the motion should be denied or continued for Cobalt’s failure to comply with its written discovery obligations.

CCP § 437c (h) provides

“If it appears from the affidavits submitted in opposition to a motion for summary judgment… that facts essential to justify the opposition may exist but cannot, for reasons stated, then be presented, the court shall deny the motion, or order a continuance to permit affidavits to be obtained or discovery to be had or may make any other order as may be just.”

Since the amendment of the summary judgment timelines in 2003, the courts have imposed good faith/diligence requirement on parties seeking continuances. The Second District in Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, set forth the required elements of an affidavit in support of a request for continuance, holding that

“A declaration in support of a request for a continuance under section 437c, subdivision (h) must show:

(1) the facts to be obtained are essential to opposing the motion;

(2) there is reason to believe such facts may exist; and

(3) the reasons why additional time is needed to obtain these facts.”

Cooksey, at 254, citations, internal quotations omitted.

It is recognized that where an appropriate declaration meeting these requirements is submitted, then denial of the motion or grant of the continuance is mandatory. Dee v. Vintage Petroleum, Inc. (2003) 106 Cal.App.4th 149, 167. Where the declaration is not timely submitted, or fails to make the required showing, then whether to grant a continuance is a matter within the trail court’s discretion, and the trial court’s ruling will be reviewed for abuse of discretion. Cooksey, at 254.

In Cooksey, the Second District affirmed the trial court’s denial of a request for a continuance, as the declaration was not only untimely but inadequate, as it “provided no explanation how the outstanding discovery was relevant to the issues raised by respondent’s motion,” and failed to show diligence in obtaining the outstanding discovery, so failed to show a justifiable reason why the essential facts could not be presented.

Here, the declaration submits copies of the Requests for Production of Documents, and the Responses, and indicates that Cobalt has failed to produce responsive documents, as of the date of the declaration, July 20, 2017. [Patterson Decl., paras. 8-10]. The declaration briefly states that “Zastrow believes that these documents will further establish Cobalt’s sole negligence for the subject incident notwithstanding Plaintiff’s own negligence.” [Para. 10].

As discussed below, unless those documents can establish that the allegations that parties other than Cobalt are responsible cannot be established, they would not be relevant to the inquiry on this motion. In addition, with respect to diligence, this matter has already been continued from its original hearing date of July 20, 2017, the reply indicates that prior to that date Cobalt had provided the documents, and in the more than five months since the original hearing date Zastrow has not filed a discovery motion to obtain the documents, and has not sought an order from this court permitting further briefing to include any new facts or documents. Under these circumstances, no further continuance is warranted. Accordingly, the court denies the request for continuance.

Substantive

Adjudication Issue No. 1

As a matter of law pursuant to the terms of the General Provisions, Zastrow Construction, Inc. owes Cobalt Construction Company a duty to immediately accept the defense of Cobalt Construction, Inc. against the Complaint filed by Plaintiff Wayne Ball in this action.

Under CCP § 437c(p)(1) a cross-complainant “has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on that cause of action. Once the…cross-complainant has met that burden, the burden shifts to the …cross-defendant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.”

CCP § 437c(f) provides that “a motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”

Cobalt here seeks to establish that it is entitled to a declaration that Zastrow owes it a duty to defend it against the complaint in this matter.

Indemnity means “the obligation resting on one party to make good a loss or damage another party has incurred.” Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal. 3d 622, 628. An indemnity obligation arises from two general sources, express contractual language, or it may be implied based on equitable considerations. E.L. White, Inc. v. City of Huntington Beach (1978) 21 Cal. 3d 497, 507.

CCP § 1060 provides with respect to declaratory relief:

“Any person interested under a written instrument,…or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property… , may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”

Under CCP Section 1061:

“The court may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.”

Cobalt argues that the parties entered into written General Provisions in connection with the work to be performed, which contains an indemnity provision, which states:

“With the exception that this Paragraph 17 shall in no event be construed to require indemnification by Subcontractor to a greater extent than permitted by the laws and the public policy of the state in which the Project is located and without in any manner limiting Contractor’s rights and remedies in the event of a breach of these General Provisions, Subcontractor agrees to indemnify, defend and hold harmless Owner and Contractor…from and against any and all claims, demands, causes of action, liabilities, losses, costs, damages, fines, restitutions, fees or penalties and/or expenses in law or equity (including, without limitation, attorneys’ fees, in-house legal fees, expenses, disbursements, court costs, and

professional, expert and consultant fees, investigative costs, postage costs, document copying costs, telecopy costs and other costs) of every kind and nature whatsoever (collectively, the “Claims”) that the indemnified Parties may incur or suffer that arise from or result from, directly or indirectly, and act or omission by Subcontractor, including but without limitation those that arise from defective or negligent Work performed by Subcontractor or from Subcontractor’s breach of its obligations under these General Provisions. Notwithstanding the foregoing, the obligations of Subcontractor under this Paragraph 17 shall not apply to claims that arise from sole negligence or willful misconduct of the Indemnified Parties.”

[UMF No. 10, 13, and evidence cited, Ex. 1, para. 17].

Cobalt argues that since there are allegations in this matter that plaintiff was injured as a result of an unsafe dirt ramp, and that Zastrow was excavating on the left side of the dirt ramp prior to the incident, and created a dangerous condition, the indemnity provision gives rise to a duty on the part of Zastrow to defend Cobalt against the complaint. [See UMF Nos. 5, 7, 9, and evidence cited]. The argument is that this duty has arisen because Cobalt tendered its defense and indemnity for the present lawsuit to Zastrow. [See UMF No. 14, and evidence cited, Exhibit 12].

Civil Code § 2778 provides, in pertinent part:

“In the interpretation of a contract of indemnity, the following rules are to be applied, unless a contrary intention appears:…

3. An indemnity against claims, or demands, or liability, expressly, or in other equivalent terms, embraces the costs of defense against such claims, demands, or liability incurred in good faith, and in the exercise of a reasonable discretion;

4. The person indemnifying is bound, on request of the person indemnified, to defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity, but the person indemnified has the right to conduct such defenses, if he chooses to do so…”

Cobalt relies on Crawford, in which the California Supreme Court found that this statute applies to noninsurance indemnity agreements, and that the obligations set forth in the statute, “are deemed included in every indemnity agreement unless the parties indicate otherwise.” Crawford, at 553.

“By virtue of these statutory provisions, the case law has long confirmed that, unless the parties’ agreement expressly provides otherwise, a contractual indemnitor has the obligation, upon proper tender by the indemnitee, to accept and assume the indemnitee’s active defense against claims encompassed by the indemnity provision. Where the indemnitor has breached this obligation, an indemnitee who was thereby forced, against its wishes, to defend itself is entitled to reimbursement of the costs of doing so.”

Crawford, at 555.

The Supreme Court in Crawford also found that due to the nature of a duty to defend, such a duty required immediate assumption of the defense of the entire action, even before a determination of negligence requiring actual indemnity had been made:

“Thus, as these decisions indicate, subdivision 4 of section 2778, by specifying an indemnitor’s duty “to defend” the indemnitee upon the latter’s request, places in every indemnity contract, unless the agreement provides otherwise, a duty to assume the indemnitee’s defense, if tendered, against all claims

“embraced by the indemnity.” The indemnitor’s failure to assume the duty to defend the indemnitee upon request (§ 2778, subd. 4) may give rise to damages in the form of reimbursement of defense costs the indemnitee was [*558] thereby forced to incur. But this duty is nonetheless distinct and separate from the contractual obligation to pay an indemnitee’s defense costs, after the fact, as part of any indemnity owed under the agreement. (Id., subd. 3.)

Implicit in this understanding of the duty to defend an indemnitee against all claims “embraced by the indemnity,” as specified in subdivision 4 of section 2778, is that the duty arises immediately upon a proper tender of defense by the indemnitee, and thus before the litigation to be defended has determined whether indemnity is actually owed. This duty, as described in the statute, therefore cannot depend on the outcome of that litigation. It follows that, under subdivision 4 of section 2778, claims “embraced by the indemnity,” as to which the duty to defend is owed, include those which, at the time of tender, allege facts that would give rise to a duty of indemnity. 7

Crawford, at 557-558, italics in the original.

This duty to defend would continue unless and until “during the progress of the third party proceeding against the indemnitee, all claims potentially subject to the contractual indemnity were eliminated…” Crawford, at 558, n. 7.

There is no dispute here that there has been a tender by Cobalt of its defense to Zastrow, and that Zastrow has refused to defend and indemnify Cobalt against plaintiff’s claims in this action. [See UMF Nos.

14, 15, and evidence cited]. The moving papers accordingly argue that since it is alleged facts which could give rise to a duty of indemnity in this matter, a duty to defend is immediately owed under Crawford.

The opposition argues that Cobalt has failed to meet its burden of proof regarding whether a duty is owed under Crawford, because it has failed to present any evidence that the subject incident was not caused by Cobalt’s “sole negligence,” which showing is necessary to trigger a duty to defend under the subject subcontract, and that even if the burden has been met, the opposition papers raise a triable issue of fact as to whether the subject incident was caused by Cobalt’s sole negligence.

This leaves the issue of whether the final sentence of the indemnity provision here requires the party seeking indemnity to establish that the incident was not caused by its sole negligence or willful misconduct prior to the duty to defend being imposed, so that triable issues on such an issue defeat the Crawford pronouncements.

The indemnity provision provides here:

“Notwithstanding the foregoing, the obligations of Subcontractor under this Paragraph 17 shall not apply to claims that arise from sole negligence or willful misconduct of the Indemnified Parties.”

[Ex. 1, para. 17].

The provision is evidently based on Civil Code § 2782(a), which provides:

“(a) Except as provided in Sections 2782.1, 2782.2, 2782.5, and 2782.6, provisions, clauses, covenants, or agreements contained in, collateral to, or affecting any construction contract and that purport to indemnify the promisee against liability for damages for death or bodily injury to persons, injury to property, or any other loss, damage or expense arising from the sole negligence or willful misconduct of the promisee or the promisee’s agents, servants, or independent contractors who are directly responsible to the promisee, or for defects in design furnished by those persons, are against public policy and are void and unenforceable…”

The opposition argues that this statute further supports that Cobalt cannot assert a duty to defend for claims arising out of Cobalt’s sole negligence.

However, the moving papers do submit facts which appear to support plaintiff’s allegations that the claim arose, at least in part, from the negligence of parties other than Cobalt, in effect, the conduct of Zastrow, in excavating on the left side of the dirt ramp and causing instability in the ramp, altering so that it veered to the right and created the condition which caused the accident. [See UMF Nos. 7-9, and evidence cited].

This appears sufficient to meet any initial burden of establishing that the allegations are not based on claims arising out of Cobalt’s sole negligence. There appears little question that the action here, based on alleged negligence on the part of both parties to the agreement, encompasses the matters contemplated by the agreement, and, as discussed above, this would be the case regardless of whether Cobalt is ultimately found even solely responsible for the harm, as the duty to defend (as opposed to the duty to indemnify) is based on what is alleged and continues until circumstances exist establishing those allegations cannot be established. Crawford, at 558, n. 7.

The opposition submits evidence which raises a reasonable inference that Zastrow performed work confined to an area left of the ramp, with no work performed on the right but that the accident occurred on the

ramp constructed by Cobalt and due to conditions on the right portion and side of the ramp. The evidence includes a declaration from an accident reconstructionist stating that the incident occurred on the right, but not expressly stating that the accident was due to any sole negligence of the indemnitees. [See Additional Facts Nos. 25, 27, 28, and evidence cited; Bare Decl., para. 10]. This does not present circumstances establishing that the allegations plaintiff relies on here cannot be established, including evidently that the work even if confined to the left side of the ramp caused the ramp to lean to the right.

Although not mentioned in the papers, the agreement between the parties here seems to contemplate application of the holding in Crawford, as it not only expressly mentions a duty to “defend” in the indemnification subpart of the provision, but sets forth a separate subpart, which states:

“(d) The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend exists regardless of any ultimate liability of Subcontractor. Such defense obligation shall arise immediately upon presentation of the Claim by any party and written notice of such Claim being provided to the Subcontractor.”

[Ex. A, para. 17 (d)].

It appears that Cobalt has established the plaintiff’s claims in this action are “in respect to the matters embraced by the indemnity,” and give rise to a duty to immediately provide a defense. The motion accordingly is granted.