Case Name:   Moreno v. Devcon Construction, Inc., et al.

Case No.:       1-13-CV-254368

After full consideration of the evidence, the separate statements submitted by each party, and the authorities submitted by each party, the court makes the following rulings:

Plaintiff Blanca Moreno (“Plaintiff”) alleges that she was injured at the Rosewood Hotel (“the Hotel”) when a wood beam fell from the ceiling of the Hotel’s spa (“the Spa”) and struck her.  (Compl., ¶¶ 5-7.)  Plaintiff alleges that the Hotel hired defendant/cross-defendant Quality Cabinet & Fixture Company (“Cross-Defendant”) and defendant/cross-complainant Devcon Construction (“Devcon”) to construct the Spa; Cross-Defendant designed, manufactured, distributed, or sold the defective beam; and Cross-Defendant and Devcon severely damaged or improperly installed the beam.  (Id., ¶¶ 9-10, 13-15;, & 29-30; Amend. to Compl.)  Plaintiff asserts causes of action against Cross-Defendant for strict liability and negligence, and asserts a separate cause of action against Cross-Defendant and Devcon for negligence.

In the cross-complaint (“XC”), Devcon asserts causes of action against Cross-Defendant for (1) declaratory relief re duty to defend, and (2) duty to indemnify.  Devcon alleges that, pursuant to a written contract (“the Agreement”), Cross-Defendant agreed to defend and indemnify Devcon against any claim arising from the performance of work under the Agreement, and that Plaintiff’s claim against Devcon is encompassed by the indemnity.  (XC, ¶¶6-10.)  Devcon moves for summary adjudication of its first cause of action against Cross-Defendant.  (See Code Civ. Proc. [“CCP”], § 437c, subd. (f).)

In support of the motion, Devcon requests judicial notice of the pleadings, including Plaintiff’s complaint and amendment to the complaint wherein she substituted the name of Cross-Defendant in place of defendant Does 1 and 11.  Devcon’s request for judicial notice is GRANTED.  (See Evid. Code, § 452, subd. (d); see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.)

A plaintiff or cross-complainant moving for summary adjudication may meet its initial burden by setting forth evidence sufficient to prove each element of its claim.  (S.B.C.C., Inc. v. St. Paul Fire & Marine Ins. Co. (2010) 186 Cal.App.4th 383, 388, citing CCP, § 437c, subd. (p)(1).)  If the moving party meets its burden, then the burden shifts to the opposing party to show that a triable issue of material fact.  (Id.)

Devcon presents two issues of legal duty arising from its first cause of action against Cross-Defendant to be adjudicated on this motion: (1) whether Cross-Defendant owes a duty to defend Devcon against Plaintiff’s claims, and (2) whether Cross-Defendant owes a duty to reimburse Devcon’s defense costs.

Cross-Defendant asserts that the Court should deny Devcon’s motion for failing to comply with California Rules of Court (“CRC”), rule 3.1350.  This argument is without merit because the moving papers comply with CRC, rule 3.1350.

To demonstrate that an indemnitor owes it a duty to defend and/or a duty to reimburse defense costs, the indemnitee must show that (1) a valid indemnity agreement exists that imposes on the indemnitor a duty to defend, (2) a third party’s alleged claim is possibly “embraced by” the indemnity, and (3) the indemnitee’s tender of defense to the indemnitor was denied.  (Crawford v. Weather Shield Mtf. Inc. (1008) 44 Cal.4th 541, 553-558 & fn.7, 560, & 565 [“Crawford”].)

With respect to the first element, Devcon proffers undisputed evidence demonstrating that the Agreement contains a valid indemnity clause and imposes on Cross-Defendant a duty to defend Devcon against third party claims. (Devcon’s Separate Statement of Undisputed Material Fact [“UMF”] No. 2, citing requests for admission [“RFA”] & Cross-Defendant’s response to RFA Nos. 1-2.)  It also presents undisputed evidence that Cross-Defendant entered into the Agreement with Devcon to perform work on a project at the Hotel.  (Id. No. 1.)  This evidence is sufficient to establish the first element of Devcon’s duty to defend claim.

As for the second element, Devcon presents evidence indicating that the Agreement is for construction work on the Spa, Plaintiff alleges she was injured at the Spa, and Plaintiff alleges that Cross-Defendant is liable, at least in part, for the injury that forms the basis for her lawsuit.  (Devcon’s UMF Nos. 1-4, citing Compl., Amend. to Compl., & RFA responses.)  Devcon also presents evidence showing that the indemnity applies to third party claims “of every kind and nature whatsoever arising out of or in any way connected with or incidental to, the performance of the Work under this Agreement or any of the obligations contained in this Agreement.”  (Id. No. 2.)  Devcon does not present facts in its separate statement regarding Plaintiff’s alleged cause of her injury; however, those facts are set forth in the complaint and amendment to the complaint, and the Court takes judicial notice of those court records.[1]  In her pleadings, Plaintiff alleges that her injury is the direct and proximate result of Devcon’s and Cross-Defendant’s negligent performance of work on the Spa, and that they were hired by the Hotel to construct the Spa.  Since Devcon’s evidence shows that the indemnity embraces any third party’s claim “arising out of or in any way connected with or incidental to, the performance of the Work under [the] Agreement,” that the work under the Agreement is Devcon’s and Cross-Defendant’s construction of the Spa on behalf of the Hotel, and that Plaintiff’s claims are allegedly the direct and proximate result of Devcon’s and Cross-Defendant’s work on the Spa, Devcon’s evidence is sufficient to establish that Plaintiff’s claims are “embraced by” the indemnity.

Turning to the third element, Devcon proffers evidence that it tendered a defense to Cross-Defendant, and “[Cross-Defendant] has not accepted Devcon’s tender of defense in this matter.”  (Devcon’s UMF Nos. 6 & 8.)  Devcon’s evidence is sufficient to establish that Cross-Defendant has not accepted Devcon’s tender of defense.

Thus, Devcon has met its initial burden with respect to the first issue, and the burden shifts to Cross-Defendant to demonstrate that there is a triable issue of material fact.  (See CCP, § 437c, subd. (p)(1).)  Cross-Defendant disputes the evidence submitted by Devcon in support of the third element of its duty to defend claim on the ground that Devcon’s insurer—as opposed to Devcon itself—tendered the defense, and Cross-Defendant “has not accepted [Devon’s insurer]’s tender of defense.”  (Cross-Defendant’s UMF Nos. 6 & 8.)  Cross-Defendant cites a letter submitted by Devcon, and this letter states that “[Devcon’s insurer] tenders the above referenced matter to [Cross-Defendant] on behalf of Devcon pursuant to the insurance and indemnity provisions of the [Agreement] between Devcon and [Cross-Defendant] for the [Spa].”  (Hyde decl., Ex. A, italics added.)  The fact that Devcon’s insurer, acting as its agent, tendered the defense is immaterial, since an agent is generally “authorized to do any acts which his principal might do.”  (See Civ. Code, § 2303.)  Moreover, Devcon submits evidence from Cross-Defendant’s responses to RFA Nos. 15-16 and 18, wherein Cross-Defendant admitted that Devcon tendered its defense.  (Hyde Decl., Exs. C & G.)  Cross-Defendant’s admissions are conclusively established against it.  (See CCP, § 2033.410, subd. (a).)  Cross-Defendant does not proffer any other evidence in support of its opposition.  Thus, it has not proffered evidence sufficient to raise a triable issue of material fact.

Accordingly, Devcon’s motion for summary adjudication as to the issue of whether Cross-Defendant owes a duty to defend Devcon is GRANTED.

Turning to the issue of whether Cross-Defendant owes Devcon a duty to reimburse it for its defense costs, if an indemnitor breached its obligation to defend an indemnitee such that the “indemnitee was thereby forced, against its wishes, to defend itself,” then the indemnitee “is entitled to reimbursement of the costs of doing so” from the indemnitor.  (Crawford, supra, at p. 555.)  Since Devcon has met its burden to demonstrate that Cross-Defendant owes it a duty to defend against Plaintiff’s claims, it follows that Devcon has also met its burden to demonstrate that it is entitled to reimbursement from Cross-Defendant of the costs of defending itself.

Cross-Defendant maintains that the Court should deny the motion for summary adjudication as to the second issue because Devcon does not proffer evidence regarding the costs that it has incurred, or evidence demonstrating that there is no other party which may be partially liable to pay for an allocated portion of the costs.  However, a determination of damages is not necessary for the adjudication of a declaratory relief claim.  (See CCP, § 1060.)  Moreover, Devcon is not required to submit evidence regarding the allocation of its defense costs.  (See Crawford, supra, at p. 565, fn.12 [on a motion for summary adjudication, if “the court finds that an ongoing duty to defend is owed . . . the court may, in its discretion, permit the underlying litigation to proceed with counsel chosen and paid by the party to whom the duty is owed, subject to a later determination of how damages for breach of the duty to defend should be apportioned”].)  Accordingly, Cross-Defendant’s arguments are not well-taken.

Devcon’s motion for summary adjudication of the issue of whether Cross-Defendant owes it a duty to reimburse Devcon for its defense is therefore GRANTED.

[1] In opposition, rather than proffering evidence in an effort to raise a triable issue of material fact, Cross-Defendant essentially asserts that since Plaintiff’s allegations as to the cause of her injury are not expressly stated in Devcon’s separate statement, the Court should disregard those allegations.  A court has the discretion to consider evidence not set forth in the separate statement.  (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316 [“San Diego Watercrafts, Inc.”]; King v. United Postal Service, Inc. (2007) 152 Cal.App.4th 426, 437 [“King”].)  A trial court does not abuse its discretion “by considering evidence of which [the opposing party] was well aware and which he had ample opportunity to debunk.”  (King, supra, at p. 438.)  The evidence is Plaintiff’s allegations in the complaint and amendment to the complaint.  On a motion for summary adjudication, the pleadings are necessarily considered.  (See Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493.)  Moreover, Devcon properly submits Plaintiff’s pleadings as evidence by making a request for judicial notice in support of its motion.  (See CCP, § 437c, subds. (b)(1) & (c).)  To the extent Cross-Defendant contends that considering Plaintiff’s allegations would violate its due process rights, that assertion is unavailing.  Devcon’s moving papers notified Cross-Defendant that it would rely upon Plaintiff’s pleadings as evidence by (1) referring to the complaint and amendment to the complaint as evidence in the separate statement (Devcon’s UMF Nos. 3-4), (2) requesting judicial notice of the complaint and the amendment to the complaint (Devcon’s RJN, Exs. 1 & 6), and (3) stating in the notice that the motion will be based in part on the request for judicial notice (Devcon’s Notice, at p. 2:20).  Thus, the Court exercises its discretion to consider Plaintiff’s allegations as evidence.