2014-00169551-CU-CD

Borrego Solar Systems, Inc. vs. Campbell Certified, Inc.

Nature of Proceeding: Motion to File Cross-Complaint

Filed By: Vegter, Brandon J.

Defendant Campbell Certified, Inc. and Mark Campbell’s (“Campbell”) Motion to File Permissive Cross-Complaint against Jerry Dodd and Dodd & Associates is unopposed [by Dodd], opposed by Borrego and Catlin, and is granted.

Borrego’s Request for Judicial Notice is granted.

This complex case involves seven carport solar support structures built throughout California. Borrego Solar Systems, Inc. (“Borrego”) contracted with Campbell to design and build the structures at all seven Subject Projects. For five sites, Campbell acted as the design-build steel subcontractor and Sterling Engineering, Inc. (“Sterling”) as the engineer. (FAC, ¶¶ 17-24.) For the two San Diego County Water Authority (SDCWA) sites, Campbell fabricated and erected the structures, but Reno acted as a master subcontractor occupying a place between Borrego (the general contractor) and Campbell (the steel subcontractor) and Dodd & Associates (“Dodd”) was the engineer. (Id. at ¶¶ 32-39.)

Plaintiff’s Complaint was filed in 2014. The prior trial date is March 19, 2018. has now been rescheduled to August 20, 2018. (See ROA Item 534)

Campbell contends that it was not until January of 2018 that it discovered the contract it entered into with Dodd in January 2011 that gives rise to a cause of action for express indemnity against Dodd for claims arising from plaintiff’s complaint. The document was never produced in discovery even though it was requested by Borrego.

A defendant may cross-complain against a codefendant or third person not yet a party to the action only if the cause of action asserted “(1) arises out of the same

transaction, occurrence, or series of transactions or occurrences (set forth in the complaint) … or (2) asserts a claim, right, or interest in the property or controversy

which is the subject of the cause (of action) brought against him.” CCP § 428.10(b). Cross-complaints against third parties are permissive, not mandatory. While it may be “more orderly and expeditious” to resolve all claims in a single lawsuit, this is not

required. Defendants may wait and pursue their rights against third parties in subsequent, independent proceedings. See Insurance Co. of North America v. Liberty

Mut. Ins. Co. (1982) 128 Cal.App.3d 297, 303. Here, defendant seeks to resolve the issue in this litigation rather than bringing a later independent action for express indemnity.

§ 428.50(c): “Leave may be granted in the interest of justice at any time during the course of the action.” Permission to file permissive cross-complaint is solely within trial court’s discretion. § 428.50(c): Crocker Nat. Bank v. Emerald (App. 3 Dist. 1990) 221 Cal.App.3d 852, 864; Orient Handel v. United States Fid. and Guar. Co. (1987) 192 Cal.App.3d 684, 701.

Campbell’s complaint against Dodd for express indemnity for Plaintiffs’ claims for the SDCWA projects arises out of the same transaction, occurrence, or series of

transactions or occurrences as the causes of action in the FAC. Plaintiffs allege the seven Subject Projects all generally have similar design problems and the seven Subject Projects have similar construction deficiencies. (FAC, 43-45.) Plaintiffs sued Jerry Dodd and Dodd & Associates as Defendants. Plaintiffs allege Dodd was negligent in their engineering services for the SDCWA-Escondido and SDCWA-Headquarters projects. (FAC 38-39, 43-45.) Therefore, the cross-complaint arises out to the same transaction, occurrence, or series of transactions or occurrences as the cause of action in the FAC.

Dodd has not opposed the motion. However, Borrego and Catlin Specialty Insurance Company oppose the motion, contending that the underlying agreement attached to the motion that forms the basis of the express indemnity claim is not properly authenticated and highly suspect. Borrego also contends that the motion is brought in bad faith since it is simply not credible that Campbell did not discover its own subcontract with Dodd until seven years after it was entered.

Although the court agrees that Campbell has not been diligent in asserting its claims against Dodd, Dodd has not opposed the motion, and the question remains, what prejudice is there to Borrego now that the trial date has been continued to August 20, 2018? Borrego contends that Campbell’s discovery abuse in failing to earlier produce the document should warrant denial of the motion to amend. However, the issue to be determined in this motion is whether the allowance of the cross-complaint at this time will prejudice the remaining parties. The court finds it does not. Judicial resources as well as the parties’ resources will be reduced if the cross-complaint is resolved in connection with this complex case rather than as an independent action in the future.

Borrego’s requests to condition the granting of the motion on unrelated relief is denied, as the relief request is in no way related to the proposed cross-complaint for express indemnity against Dodd. However, Borrego is not precluded from seeking to amend its FAC as to Mark Campbell as a result of the granting of this motion.

The proposed cross-complaint shall be filed and served on or before March 16, 2018. Response to be filed and served within 30 days of the service of the cross-complaint, 35 days if served by mail.