Judge Anne Hwang, Case Number: 22STCV09010, Date: 2024-09-19 Tentative Ruling

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.

1. Notice of Motion and Motion for Summary Judgment, or alternatively, Summary Adjudication; Memorandum of Points and Authorities

On March 14, 2022, Plaintiff Hugo Salcedo (“Plaintiff”) filed a complaint against Veritiv Operating Company and Does 1 to 60, for premises liability and negligence. Plaintiff alleges that on March 17, 2020, he tripped and fell on a pothole in Veritiv Operating Company’s (“Veritiv”) parking lot.

On February 6, 2023, Veritiv filed the operative second amended cross-complaint (“SAXC”) asserting contractual/express indemnity and declaratory relief against PDQ Manufacturing, Inc. The second amended cross-complaint alleges that on March 2, 2020, PDQ Manufacturing, Inc. (“PDQ”) and Veritiv entered into a Purchase Order Agreement. (SAXC ¶ 8.) PDQ then contracted with XPO Logistics Cartage, LLC (“XPO”) to deliver the purchased goods to Veritiv. (Id. ¶ 9.) On March 17, 2020, Plaintiff entered Veritiv’s premises during the course and scope of his employment with XPO. (Id. ¶ 11.) Veritiv alleges that pursuant to paragraphs 9 and 13 of the Purchase Order Agreement, PDQ Manufacturing, Inc. (“PDQ”) agreed to indemnify Veritiv. (Id. ¶ 18.)

PDQ now moves for summary judgement, or alternatively, summary adjudication against the express indemnification and declaratory relief causes of action, arguing that Plaintiff’s action is not subject to the Purchase Order Agreement because he was not PDQ’s agent or subcontractor under section 9(iii) of the Agreement, and that section 13 of the Agreement does not require indemnification. As a result, there is no controversy to warrant declaratory relief.

“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”].)

The Court denies PDQ’s request for judicial notice of the Contract Carriage Agreement.

The Court overrules Veritiv’s objection to the Declaration of Bryan Jost, the Vice President and General Manager for PDQ. (See Forest Lawn Memorial-Park Ass’n v. Superior Court (2021) 70 Cal.App.5th 1, 8 [“A statement lacks foundation if no jury could reasonably find that the witness has personal knowledge of the matter.”] [Citation and alterations omitted, emphasis in original.].)

“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. (See Civ. Code, § 2772 [“Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person.”].)” (Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 551 [citation omitted, emphasis in original] [hereafter, Crawford].)

“As befits the contractual nature of such arrangements, but subject to public policy and established rules of contract interpretation, the parties have great freedom to allocate such responsibilities as they see fit.” (Crawford, supra, 44 Cal.4th at 551.) “In general, such an agreement is construed under the same rules as govern the interpretation of other contracts. Effect is to be given to the parties' mutual intent (§ 1636), as ascertained from the contract's language if it is clear and explicit (§ 1638). Unless the parties have indicated a special meaning, the contract's words are to be understood in their ordinary and popular sense.” (Id. at 552.)

“In interpreting the provisions of a contract, the rules are well-settled. ‘The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.’ [Citations.] ‘Courts must interpret contractual language in a manner which gives force and effect to every provision, and not in a way which renders some clauses nugatory, inoperative or meaningless.’ [Citations.] The contract must also be ‘interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.’ [Citation.] ‘Such intent is to be inferred, if possible, solely from the written provisions of the contract.’ [Citation.] ‘In construing a contract which purports on its face to be a complete expression of the entire agreement, courts will not add thereto another term, about which the agreement is silent. [Citation.]’ [Citation.] When determining the intent of the parties, the court will consider a particular provision paramount over a general provision.” (The Ratcliff Architects v. Vanir Construction Management, Inc. (2001) 88 Cal.App.4th 595, 601-02.)

“An agent is one who represents another, called the principal, in dealings with third persons. In California, an agency is either actual or ostensible. Actual agency arises when the principal's conduct causes the agent reasonably to believe that the principal consents to the agent's act on behalf of the principal.” (Rogers v. Roseville SH, LLC (2022) 75 Cal.App.5th 1065, 1074 [internal citations and quotations omitted]; Civ. Code, § 2316 [“Actual authority is such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess.”].)

“Agency and independent contractorship are not necessarily mutually exclusive legal categories as independent contractor and servant or employee are. In other words, an agent may also be an independent contractor. [Citation.] One who contracts to act on behalf of another and subject to the other's control, except with respect to his physical conduct, is both an agent and an independent contractor. [Citations.] But, ‘[t]he law indulges in no presumption that an agency exists but instead presumes that a person is acting for himself and not as agent for another.’ [Citation.] ‘[W]hether an agency relationship has been created or exists is determined by the relation of the parties as they in fact exist by agreement or acts [citation], and the primary right of control is particularly persuasive. [Citations.] Other factors may be considered to determine if an independent contractor is acting as an agent, including: whether the “principal” and “agent” are engaged in distinct occupations; the skill required to perform the “agent's” work; whether the “principal” or “agent” supplies the workplace and tools; the length of time for completion; whether the work is part of the ‘principal's’ regular business; and whether the parties intended to create an agent/principal relationship. [Citation.]’” (Jackson v. AEG Live, LLC (2015) 233 Cal.App.4th 1156, 1184.)

“ ‘Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.’ (Civ. Code § 2317; see Civ. Code § 2316 [actual authority defined].) A corollary derived from this principle is that ostensible authority of an agent cannot be based solely upon the agent’s conduct.” (Pierson v. Helmerich & Payne Internat. Drilling Co. (2016) 4 Cal.App.5th 608, 635.) Therefore, “[a] defendant may be held liable as a ‘principal’ for the acts of the defendant's ostensible agent (that is, the third party who is not actually his agent) only if (1) the plaintiff, when dealing with the agent, did so ‘with [a reasonable] belief in the agent's authority,’ (2) that ‘belief [was] generated by some act or neglect by the principal,’ and (3) the plaintiff was not negligent in relying on the agent's apparent authority.” (Pereda v. Atos Jiu Jitsu LLC (2022) 85 Cal.App.5th 759, 768.)

“The question whether an agency relationship has been created is normally a question of fact. Where a conflict in the evidence exists from which either conclusion could be reached as to the status of the parties, the question must be submitted to the jury. However, ‘. . . where but one inference can reasonably be drawn from the evidence . . . the question of whether one is an employee or an independent contractor becomes one of law for the court.’” (Stilson v. Moulton-Niguel Water Dist. (1971) 21 Cal.App.3d 928, 936 [internal citations omitted].)

Here, the subject Purchase Order Agreement (“Agreement”) between Veritiv and PDQ contained the following relevant sections:

“Seller (PDQ) agrees to indemnify, defend and hold harmless the Buyer (Veritiv), its agents, and employees from and against any and all expenses, claims, demands, losses, damages, actions, or liability of any kind, including reasonable attorney’s fees incurred for any and all damage or injury of any kind or nature whatever (including death) to all persons (including those employed by Seller) or property which is caused by, arises out of, on account of, or as a result of: (i) use of goods or services provided hereunder; (ii) breach by Seller of any of its representations, warranties, covenants and/ or agreements contained herein; (iii) any act or omission of Seller, its agents, employees, representatives or subcontractors or failure to comply with the terms hereof; or (iv) any alleged infringement of any trademark, patent, copyright or other proprietary right, by reason of the sale or use of the goods and/ or services furnished under these Terms.”

“While on Buyer’s premises, Seller and its subcontractors shall comply with Buyer’s site specific regulations and shall ensure that all of its employees, subcontractors and agents have a safe work environment. Seller is solely responsible for the safety of the employees of Seller and its subcontractors and the means and methods utilized by it or its subcontractors’ employees in performing the services contemplated herein, and Seller agrees that Buyer shall have no such responsibility.”

The following facts are undisputed. Plaintiff was an independent contractor for XPO and was on Veritiv’s premises to deliver goods to Veritiv. (UMF 2.) The goods that were being delivered were products sold by PDQ to Veritiv pursuant to a Purchase Order Agreement between PDQ and Veritiv, entered on or about March 2, 2020. (UMF 3.) PDQ requested XPO to deliver the goods. (UMF 4.) Plaintiff alleges that, as he was exiting a Semi 18-wheeler truck at VERITIV’s premises, he tripped and fell as a result of a pothole, causing him to sustain injuries. (UMF 5.) PDQ did not own Plaintiff’s truck, did not employ Plaintiff, train Plaintiff, pay Plaintiff, instruct Plaintiff to take a certain route, or instruct him to wear a certain type of shoes while making the delivery. (UMF 12.) Plaintiff’s services as a delivery driver were performed without the day-to-day supervision of PDQ. (UMF 13.) Plaintiff’s work as a delivery driver required the use of equipment not owned or provided by PDQ (such as the truck and PPE). (UMF 14.) Plaintiff’s work as a delivery driver was not part of PDQ’s regular business of manufacturing cleaning supplies. (UMF 15.)

PDQ argues that Plaintiff was not its “agent” or “subcontractor” under the indemnity agreement. PDQ also notes that paragraph 9(iii) did not expressly include the subcontractor’s agents or employees when the agreement made that distinction in paragraph 13 (“subcontractors’ employees”). (See UMF 10, PDQ Exh. 5.)

In opposition, Veritiv contends that Plaintiff was XPO’s agent, and therefore because XPO was PDQ’s subcontractor, Plaintiff falls under paragraph 9(iii). Veritiv contends that PDQ failed to meet its burden since it did not address whether Plaintiff was acting as an agent of XPO.

Therefore, the issue framed by the parties is whether Plaintiff is considered PDQ’s “agent” or subcontractor” under paragraph 9(iii) of the Agreement.

The parties agree that Plaintiff was an independent contractor of XPO. (UMF 18.) The undisputed facts regarding PDQ’s lack of control over Plaintiff, that it did not employ or pay Plaintiff, and did not instruct his delivery, support that Plaintiff was not acting as PDQ’s agent. PDQ provides no information about the relationship between it and XPO other than “PDQ requested XPO to deliver the goods.” (UMF 4; Drost Decl. ¶ 7.)

Neither party submits extrinsic evidence regarding their intent, nor do they argue that the contract is unclear or ambiguous. Both rely on the express contractual language. The Court assumes that XPO was PDQ’s subcontractor for purposes of this motion, which the parties do not appear to dispute.[1] (See Opposition at p. 5.) However, the agreement does not expressly state that it applies to PDQ’s subcontractor’s agents. Rather, it states that it applies to either PDQ’s agents or PDQ’s subcontractors (or PDQ’s employees or representatives). Veritiv does not point to any language in the agreement or, moreover, any ordinary or common definition, that would extend one’s subcontractors to agents of subcontractors. The undisputed fact that Plaintiff was an independent contractor of XPO is dispositive. (See also Opposition at p.2 [“Plaintiff, as an agent of XPO, then delivered the goods to Veritiv.”].)

Veritiv argues that Civil Code section 2775 provides a “common-sense principle in interpreting indemnity agreements.” (Opposition at p.2.) That section provides: “An agreement to indemnify against the acts of a certain person, applies not only to his acts and their consequences, but also to those of his agents.” (Civ. Code § 2775.) However, this principle is already contained in the agreement; the agreement expressly covers acts or omissions by PDQ and its agents. Here, at most, XPO can be considered PDQ’s agent. But it is undisputed that Plaintiff was not acting as PDQ’s agent.

The Court finds PDQ has met its initial burden to demonstrate the absence of a triable issue of fact, and viewing the evidence in the light most favorable to Veritiv, Veritiv has not raised a triable issue of material fact that Plaintiff’s “act or omission” is covered by the indemnity agreement.

Accordingly, there is also no “actual controversy” and the declaratory relief cause of action similarly fails. (See Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606 [“All that Code of Civil Procedure section 1060 requires is that there be ‘actual controversy relating to the legal rights and duties of the respective parties.’”].)

Based on the foregoing, Cross-Defendant PDQ Manufacturing, Inc’s Motion for Summary Judgment is GRANTED. Cross-Defendant shall serve and file a proposed judgment within 10 days.

Moving party shall provide notice of this ruling and file a proof of service of such.

[1] Although PDQ appears to argue in reply that XPO was not a subcontractor of PDQ, this argument was not made in the motion and, in any event, is not dispositive here. (Reply at p. 3.)

DEPT:	32
HEARING DATE:	September 19, 2024
CASE NUMBER:	22STCV09010
MOTIONS:	Motion for Summary Judgment, or alternatively, Summary Adjudication
MOVING PARTY:	Cross-Defendant PDQ Manufacturing, Inc.
OPPOSING PARTY:	Cross-Complainant Veritiv Operating Company