2013-00145388-CU-BC

County of Sacramento vs. Valley Healthcare

Nature of Proceeding:      Hearing on Demurrer or in the Alternative Motion to Strike

Filed By:    Tratten, Mark S.

Judge Cadei has reviewed the following matter and determined that it does not
disqualify him from hearing cases involving the County of Sacramento.  This
information is provided to allow all parties appearing before him on any matter
involving the County of Sacramento as a party to be fully informed in advance of any
hearing as to his connection with this entity.

Judge Cadei is married to Toni J. Moore, Executive Director of the First 5 Sacramento
Commission which is an entity that is part of the County of Sacramento.  First 5
California and 58 First 5 County Commissions were created by statewide voter
initiative passed in 1998. First 5 is separately funded out of special tobacco tax
proceeds and is directed to support programs for children.  As such the Commission is
not dependent on the general funds of Sacramento County for its operations. The
Board of Supervisors of Sacramento County does review and approve its yearly
budgets and long-term plans.

Defendant Valley Healthcare Systems, Inc.’s  (“VHSI”) demurrer, or in the alternative,
motion to strike, is ruled upon as follows.

The parties’ requests for judicial notice are granted.  In taking judicial notice of these
documents, the court accepts the fact of their existence, not the truth of their contents.
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(See Professional Engineers v. Dep’t of Transp. (1997) 15 Cal.4   543, 590 [judicial
notice of findings of fact does not mean that those findings of fact are true]; Steed v.
Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 120-121.)

This is an action for contractual indemnity. Plaintiff County of Sacramento (“County”) is
suing VHSI, a contractual provider of medical services. In the underlying case, a  surviving family member sued the County and others on various theories for the death
of her son, who allegedly was incarcerated in the
Sacramento County Main Jail and under the care of a VHSI nurse at the time of death.
The underlying action settled for $1.45 million, and the County allegedly incurred
$497,000 in attorney’s fees. (Compl., ¶¶ 15-16.) The County now seeks indemnity from
VHSI for these sums.  The County’s position is based on the following provisions in the
County/VHSI contract:

“Contractor shall indemnify, defend and hold harmless County, its Board of
Supervisors, Officers, Directors, agents, employees and volunteers from and against
any and all claims, demands, actions, losses, liabilities, damages and costs, including
reasonable attorneys’ fees, arising out of or resulting from the performance of this
Agreement, regardless of whether caused in part by a party indemnified hereunder.”

The complaint alleges two causes of action: (1) breach of express contractual
indemnity, and (2) declaratory relief.

General Indemnity v. Specific Indemnity

VHSI demurs to the complaint on the grounds that the indemnity provision is a
“general” indemnity provision and the County “actively” participated in the Decedent’s
death.

An indemnity agreement may provide for indemnification against an indemnitee’s own
negligence, but such an agreement must be clear and explicit and is strictly construed
against the indemnitee. If an indemnity clause does not address itself to the issue of
an indemnitee’s negligence, it is referred to as a “general” indemnity clause. While
such clauses may be construed to provide indemnity for a loss resulting in part from an
indemnitee’s passive negligence, they will not be interpreted to provide indemnity if an
indemnitee has been actively negligent. (Rossmoor Sanitation, Inc. v. Pylon, Inc.
(1975) 13 Cal. 3d 622, 628-29 [“Provisions purporting to hold an owner harmless “in
any suit at law”, “from all claims for damages to persons”, and “from any cause
whatsoever”, without expressly mentioning an indemnitee’s negligence, have been
deemed to be “general” clauses.”].)

However, “whether an indemnity agreement covers a given case turns primarily on
contractual interpretation, and it is the intent of the parties as expressed in the
agreement that should control. When the parties knowingly bargain for the protection
at issue, the protection should be afforded. This requires an inquiry into the
circumstances of the damage or injury and the language of the contract; of necessity,
each case will turn on its own facts.”  (Rossmoor, supra, 13 Cal.3d at 633.)

Here, while the indemnity clause does not specifically mention the County’s own
“negligence”, the clause expressly provides for indemnity “from and against any and all
claims, demands, actions, losses, liabilities, damages and costs, . . . arising out of or
resulting from the performance of this Agreement, regardless of whether caused in
part by a party indemnified hereunder.”  Given the language of the provision, the Court
agrees with the County, for the purposes of this demurrer,  that it appears that the
intent of the parties was to provide defense and indemnity, even when the injury, loss
or claim is due at least in part, by the County’s own negligence.  Moreover, the intent
of the parties is a question of fact, outside the scope of demurrer.
Nonetheless, to the extent the provision can be construed as a “general indemnity”
provision, whether the County “actively participated” in Decedent’s death is a question
of fact, outside the scope of a demurrer.  The County’s complaint is does not include
allegations regarding its own participation in the decedent’s death.  While VHSI relies
on the County’s Amended Separate Statement in support its motion for summary
judgment filed in the underlying action (VHSI’s RJN, Ex. 2) to demonstrate the
County’s “active negligence”, the Court does not accept the truth of the contents of the
document.  The Court declines VHSI’s request that the Court invoke the doctrine of
judicial estoppel, as there has been no showing the underlying court accepted the
County’s position.  (International Engine Parts, Inc. v. Federsen & Co. (1998) 64
Cal.App.4th 345, 351.)

Moreover, at this stage of the proceedings, the County’s allegations that Decedent’s
death “arose out of and resulted from the performance of the CONTRACT by VALLEY,
because Mr. Sams’ death occurred while he was receiving medical and nursing
services by personnel furnished pursuant to VALLEY’s CONTRACT with the
COUNTY” are sufficient. The Court disagrees with VHSI that the County must
specifically state that Nurse Diza wither caused the death or that the Decedent’s life
was salvageable by the time of Nurse Diza’s acts.

Accordingly, the demurrer is OVERRULED.

Attorneys’ Fees

The County does not oppose VHSI’s motion to strike the prayer for attorneys’ fees and
costs to the extent they were incurred in prosecuting this indemnity action.
Accordingly, the motion to strike is GRANTED with leave to amend.

Where leave to amend is granted, the County may file and serve a first amended
complaint (“FAC”) by no later than December 23, 2013.  Response to be filed and
served within 10 days thereafter, 15 days if the FAC is served by mail. (Although not
required by any statute or rule of court, Plaintiffs are requested to attach a copy of the
instant minute order to the FAC to facilitate the filing of the pleading.)

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or further notice is required.

VHSI is admonished for filing a memorandum of points and authorities in excess of the
page limits provided by CRC 3.1113(d).