Judge: Anne Hwang, Case: 21STCV18687, Date: 2023-12-12 Tentative Ruling

Case Number: 21STCV18687    Hearing Date: December 12, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely.  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

MOVING PAPERS

1.      Notice of Motion and Motion for Summary Adjudication on Sayaco’s Cross Complaint

2.      Memorandum of Points and Authorities

3.      Separate Statement of Undisputed Facts

4.      Declaration of Ben Sayani

5.      Declaration of Artin Avetisove

6.      Compendium of Exhibits in Support

OPPOSITION PAPERS

1.      Opposition to Motion for Summary Adjudication

2.      Separate Statement in Opposition

3.      Declaration of Jeff Esguerra

4.      Declaration of Benjamin Thompson

REPLY PAPERS

1.      Reply to A Plus Fabric’s Opposition

2.      Objections to Evidence

BACKGROUND

On May 18, 2021, Plaintiff Kamran Massachi (Plaintiff) filed a complaint against Defendants Sayaco Partnership (Sayaco) and Does 1 to 50 for negligence and premises liability. Plaintiff alleges a rolling metal gate fell on him on property owned by Sayaco at 2080 Belgrave Avenue, Huntington Park, California. Plaintiff alleges the incident took place on April 30, 2021.

On July 26, 2021, Sayaco filed a cross-complaint against Roes 1 to 20 alleging causes of action for express indemnification, equitable indemnification, equitable contribution, and declaratory relief. On March 23, 2022, Sayaco added Cross-Defendant A Plus Fabric, Inc. (APF) as Roe 1. APF filed an answer to the cross-complaint on June 20, 2022.

Sayaco now moves for summary adjudication against APF towards its express indemnification and declaratory relief causes of action arguing that APF owes a contractual duty to indemnify and defend Plaintiff’s action on Sayaco’s behalf. APF opposes.

LEGAL STANDARD

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c, subd. (f)(1).) “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.” (Id.) “[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law[.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)  “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Ibid.; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474 [summary judgment standards held by Aguilar apply to summary adjudication motions].)  Further, in line with Aguilar v. Atlantic Richfield Co., “[o]n a motion for summary adjudication, the trial court has no discretion to exercise.  If a triable issue of material fact exists as to the challenged causes of action, the motion must be denied. If there is no triable issue of fact, the motion must be granted.” (Fisherman's Wharf Bay Cruise Corp. v. Superior Court (2003) 114 Cal.App.4th 309, 320.)

“On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence. While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues.  Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839 [cleaned up].)  Further, “the trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true.  Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Id. at p. 840 [cleaned up]; see also Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].) 

DISCUSSION

“Parties to a contract, . . . , may define therein their duties toward one another in the event of a third party claim against one or both arising out of their relationship.  Terms of this kind may require one party to indemnify the other, under specified circumstances, for moneys paid or expenses incurred by the latter as a result of such claims. (Citation omitted.) They may also assign one party, pursuant to the contract's language, responsibility for the other's legal defense when a third party claim is made against the latter.”  (Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 551 [citation omitted, emphasis in original] [hereafter, Crawford].)  

“In noninsurance contexts, . . . it is the indemnitee who may often have the superior bargaining power, and who may use this power unfairly to shift to another a disproportionate share of the financial consequences of its own legal fault. [citations.] This public policy concern influences to some degree the manner in which noninsurance indemnity agreements are construed. For example, it has been said that if one seeks, in a noninsurance agreement, to be indemnified for his or her own active negligence, or regardless of the indemnitor's fault—protections beyond those afforded by the doctrines of implied or equitable indemnity—language on the point must be particularly clear and explicit, and will be construed strictly against the indemnitee.” (Id. at 552.)  

“[T]he [indemnitor’s] duty to defend is broader than its duty to indemnify.  The latter duty runs only to claims that are actually covered by the [agreement], while the duty to defend extends to claims that are merely potentially covered.  The [indemnitor’s] defense duty is a continuing one, arising on tender of defense and lasting until the underlying lawsuit is concluded, or until it has been shown that there is no potential for coverage.”  (Crawford, supra, 44 Cal.4th at p. 547 [citations and quotations omitted, emphasis in original].)  Further, “a contractual promise to “defend” another against specified claims clearly connotes an obligation of active responsibility, from the outset, for the promisee’s defense against such claims.  The duty promised is to render, or fund, the service of providing a defense on the promisee’s behalf — a duty that necessarily arises as soon as such claims are made against the promisee, and may continue until they have been resolved.”  (Id. at pp. 553–554.)   

Equally important, “If not forbidden by other, more specific, statutes, the obligations set forth in [Civil Code] section 2778 thus are deemed included in every indemnity agreement unless the parties indicate otherwise.”  (Crawford, supra, 44 Cal.4th at p. 553.)  Civil Code section 2778 provides, in pertinent part:             

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; 

5. If, after request, the person indemnifying neglects to defend the person indemnified, a recovery against the latter suffered by him in good faith, is conclusive in his favor against the former 

(Civ. Code § 2778, subds. (3)–(5).)  “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, supra, 44 Cal.4th at p. 555.)  Moreover,

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.  Unless the indemnity agreement states otherwise, the statutorily described duty “to defend” the indemnitee upon tender of the defense thus extends to all such claims.”  (Id. at p. 558.) 

Whether a duty to defend arises from an indemnity agreement is question of law for a court.  (See Centex Homes v. R-Help Construction Co., Inc. (2019) 32 Cal.App.5th 1230 (“the duty to defend was not a question of fact for the jury; the trial court was compelled to determine [that issue of duty] as a matter of law”].) In Centex Homes, the court rejected the promisee’s argument that “the question of scope of work under the subcontract may be resolved independently of the underlying tort action,” because the court found that the scope of work was an issue in the underlying tort action, and therefore, the duty to defend arose “as a matter of law from the mere allegation in the underlying tort action that plaintiff’s injuries arose out of R-Help’s work.” (Id. at 1236.)  

The duty to defend continues until the underlying lawsuit is concluded “or until it has been shown that there is no potential for coverage.” (Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 295 (emphasis in original).) “To prevail, the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential. In other words, the insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot.” (Id. at 300 (emphasis in original).) Doubt about an insurer’s duty to defend generally must be resolved in the insured’s favor. (Id.)

Here, Sayaco offers the following facts:

-          Sayaco, an owner of the Property, leased Subject Property to APF on or about October 29, 2020 pursuant to a written lease. (UMF 6.)

-          At the time lease was entered into between Sayaco and APD, the subject gate was fully functional.[1] (UMF 9.)

-          Plaintiff started working for APF 27 months prior to the incident. (UMF 10.)

-          Plaintiff started working at the Subject Property for APF toward the end of 2020. (UMF 11.)

-          The gate that fell on Plaintiff was damaged sometime in February 2021. (UMF 12.)

-          The gate was damaged as a result of an APF employee, “Hector,” driving a truck that was too heavily loaded over the gate railing, causing the muffler or some other portion of the truck to damage the railing, approximately three months before the incident. (UMF 13.)

-          The gate was not damaged when Plaintiff first started working at the Subject Property toward the end of 2020. (UMF 14.)

-          Plaintiff had no difficulty opening or closing the gate prior to the time it was damaged in February 2021. (UMF 15.)

Paragraph 10 of the Lease Agreement states in pertinent part:

“Landlord shall be defended, indemnified and held harmless by Tenant from any liabilities, costs, expenses, and for damages to any person or any property in or upon the Leased Premises and/or building, including the property of Tenant, and its employees and all persons in the Building at its or their invitation or with their consent. All property kept, stored or maintained in the Leased Premises shall be so kept, stored or maintained at the risk of the Tenant only. Tenant shall not suffer or give cause for the filing of any lien against the Leased Premises. Landlord and Tenant shall hold each other harmless from any liability or damages to any person or property in any common areas of the Leased Premises on account of the negligence of the other party or its employees, agents or invitees.” (UMF 7.)

Here, the language in paragraph 10 is clear and explicit by stating “Landlord shall be defended, indemnified and held harmless by Tenant from any liabilities, costs, expenses, and for damages to any person or any property in or upon the Leased Premises and/or building.” (UMF 7.) The parties do not dispute that they entered into this agreement. Therefore, Sayaco has met its burden that APF owes a contractual duty to indemnify and defend Plaintiff’s action. Sayaco has also met its burden showing that the subject gate was working properly before an APF vehicle damaged the gate rail in February 2021. (Sayaco Exh. F, Massachi Depo,. 31:22–32:22.) The burden shifts to APF.

APF argues there is a triable issue of fact of whether the gate was a “structural component of leased premises” and thus the responsibility of Sayaco. For this assertion, APF points to paragraph 7A of the Lease Agreement which states:

“Maintenance and Repair. Tenant shall keep the interior of the Leased Premises and any improvements therein in good condition and repair, at its own expense including, but not limited to, light bulb replacement, ballast replacement, plumbing repairs, glass replacement, repairs to entry doors and all mechanical systems (HVAC). Landlord shall be responsible for structural components of the Leased Premises, except for repairs and maintenance required on the account of the intentional acts or negligence of the Tenant. Tenant shall operate all heating, ventilating, cooling, electrical and plumbing systems only in accordance with the procedures for the proper operation of the same. At the expiration of the tenancy created hereunder, Tenant shall surrender the Leased Premises in as good condition as when taken, reasonable wear and tear, loss by fire or other unavoidable casualty, excepted.” (UMF 8 [emphasis added].)

APF appears to argue that paragraph 7A of the Lease should be interpreted as an exception to the indemnity/defense provision in paragraph 10. APF cites Mora v. Baker Commodities, Inc. (1989) 210 Cal.App.3d 771 for the assertion that a commercial landowner cannot abrogate its responsibilities simply by signing a lease. (Id. at 781.) However, Mora did not involve an indemnity agreement.

APF also disputes whether removal of the metal strip caused the door to fall and notes that Sayaco did not produce expert testimony establishing that APF’s conduct caused it to fall. (Opp., 14.) As a result, APF argues that because Sayaco is responsible for the gate falling, the law should not allow Sayaco to avoid liability by contract. Sayaco acknowledges that the indemnity provision expressly provides that “Landlord and Tenant shall hold each other harmless from any liability or damages to any person or property in any common areas of the Leased Premises on account of the negligence of the other party or its employees, agents or invitees.” (Reply at p. 5.)

APF offers the following facts:

-          Plaintiff testified that the gate could still be used after the rail was removed, and that the gate continued to be used for three or four months prior to the subject incident. (PAMF 1.)

-          The large metal gate was designed to roll right and left to open and close so that delivery trucks could enter and leave the building. The gate was intended always to be up against the building, and never swing away from the property. Accordingly, the fact that the gate fell away from the building speaks to a design flaw. (PAMF 2.)

-          The gate under consideration is massive, as it occupies a height nearly half the height of the building it was constructed to protect, and is comprised of four substantial segments that, in total, appear to be longer than an average sized vehicle. Thus, the gate was a part of the leased premises’ structure. (PAMF 3.)

-          Plaintiff testified: “the third time, when we pushed back and we pulled the gate, the gate jumped the rail towards the sidewalk, meaning me, and came off the rail. And the gate, this heavy gate – this heavy gate, it fell towards me.” What caused the gate to fall requires expert testimony.[2] (PAMF 4.)

-          Plaintiff testified that he told a Sayaco representative about the fact that the railing was removed from the gate, so Sayaco was aware of, and in a position to do something about, the fact that the gate had been altered in the months prior to the subject incident. Accordingly, Sayaco cannot simply point the finger at APF for removing the flimsy metal rail that the gate rested upon, because Plaintiff told Sayaco about the development and Sayaco did nothing to correct it. (PAMF 8.)

Here, APF does not present any evidence showing that the subject gate fell due to Sayaco’s negligence. The deposition testimony by Plaintiff, which APF offers, does not create a triable issue of fact as to whether the gate fell due to an inherent design flaw. APF has not set forth evidence to create a triable issue of fact that the cause of the gate falling on Plaintiff was other than the February 2021 damage caused by an APF employee.[3] Therefore, even if the gate was a structural component, APF has not disputed with evidence that it was not caused by its negligence.

As such, considering the evidence in the light most favorable to APF and all reasonable inferences, there is no triable issue of material fact that the indemnity provision does not require APF to defend and indemnity Sayaco. Paragraph 10 states that Sayaco shall be “defended, indemnified and held harmless by Tenant from any liabilities, costs, expenses, and for damages to any person…in or upon the Leased Premises and/ or building…and its employees.” (UMF 7.) The language broadly covers all liabilities and damages to any person.

Accordingly, the Court finds that the Lease Agreement entered between Sayaco and APF requires APF to indemnify and defend Plaintiff’s action on behalf of Sayaco.

CONCLUSION AND ORDER

            Based on the foregoing, Sayaco Partnership’s Motion for Summary Adjudication on its cross complaint is GRANTED.

            Sayaco Partnership shall provide notice of this ruling and file a proof of service of such.