Judge Audra Mori, Case 21STCV09299 2022-09-29 Tentative Ruling

Plaintiff, TR (“Plaintiff”), a minor by and through her guardian ad litem, Niloofar Rabbani, filed this action against Defendants, Encino Place, LP and Encino Place, LLC, Elevators Etc., Inc., and Elevators Etc. Gs Inc. for injuries Plaintiff sustained when her left hand became entrapped inside an escalator. The complaint alleges that Encino Place, LP and Encino Place, LLC owned the property where the incident occurred, and that Elevators Etc., Inc., and Elevators Etc. Gs Inc. were contracted to perform the necessary maintenance and service for the escalators at the property.

On November 3, 2021, Elevators Etc. Inc. (“Elevators”) filed a cross-complaint against Encino Place, LP, Encino Place, LLC, and Niloofar Rabbani alleging causes of action for (1) express indemnity, (2) equitable indemnity, (3) negligence, (4) apportionment of fault/contribution, and (5) declaratory relief. On November 23, 2021, Elevators filed its operative First Amended Cross-Complaint (“FACC”) adding Kamran Rabbani as a cross-defendant in the caption of the FACC and asserting the same five causes of action as above against the cross-defendants.

At this time, Encino Place, LP and Encino Place, LLC (collectively, the “Encino Defendants”) move for judgment on the pleadings as to the first cause of action for express indemnity in Elevators’s FACC. Elevators opposes the motion, and the Encino Defendants filed a reply.

The Encino Defendants contend that Elevators is relying on a provision in its service contract with the Encino Defendants in stating a claim for express indemnity against them.[1] The Encino Defendants argue that the provision cannot reasonably be construed to give rise to an indemnity obligation in this case, as there is no provision in the agreement by which Encino agrees to indemnify Elevators for any alleged negligence on the Encino Defendants’ part in managing its premises. The Encino Defendants contend that the indemnity provision does not use specific enough language to find that they owe Elevators express indemnity, and that the only work to be performed under the relevant agreement was Elevators’s. Further, the Encino Defendants argue that the agreement does not provide for any indemnification by a property owner, and that indemnity agreements are not meant to be reciprocal.

In opposition, Elevators argues that the FACC properly pleads a claim for express indemnity, and that the relevant maintenance contract is clear by its plain meaning. Elevators asserts that when the agreement is read as a whole, it is obvious the indemnification provision applies during the pendency of the maintenance agreement, and that it is clear from the express language of the agreement that it was meant to protect both parties against the negligence of the other. Elevators argues that the parties agreed that “so long as [Elevators] is under contract with Encino Defendants to serve the subject escalators, the parties to the agreement agree to indemnify one another for damage caused by their own negligent acts or omissions related to these escalators.” (Opp. at p. 7:24-26.) Elevators contends that this is a reasonable interpretation and understanding. Elevators asserts that the agreement’s express language is meant to protect both parties.

In reply, the Encino Defendants contend that Elevators fails to support its arguments with any relevant legal authority, and that the agreement does not obligate the Encino Defendants to indemnify Elevators. The Encino Defendants contend Elevators is erroneously interpreting the agreement, and that the agreement does not give rise to any indemnity obligation on behalf of the Encino Defendants.

A defendant may move for judgment on the pleadings when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (C.C.P. §438(b)(1) and (c)(1)(B)(ii).)

“A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself. [Citation.]” (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 877.) “A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings.” (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999 (Citations Omitted).) The standard for ruling on a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law. (Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-322 (citing Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216).)

The Encino Defendants request judicial notice be taken of Elevators’s original cross-complaint and exhibit 1 attached thereto. The Encino Defendants assert that exhibit 1 attached to the cross-complaint is the relevant maintenance contract entered into between the Encino Defendants and Elevators, and that this is the agreement referred to in both the cross-complaint and the FACC, but Elevators inadvertently failed to attach the agreement to the FACC. Elevators, in its opposition, requests the Court take judicial notice of its FACC and of a Notice of Errata Re: Inadvertently Omitted Exhibit Attachment to FACC. The notice of errata includes a copy of the agreement referenced in the FACC as exhibit 1 that Elevators’s provides it failed to attach when it filed the FACC due to a photocopy glitch. The agreement in the notice of errata is identical to the agreement attached to Elevators’s original cross-complaint.

“ ‘Where written documents are the foundation of an action and are attached to the complaint and incorporated therein by reference, they become a part of the complaint, …’ ” and they may be considered on demurrer or a motion for judgment on the pleadings. (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650 [noting that a motion for judgment on the pleadings may be made on the same ground as a demurrer].) Interpretation of a written instrument is a judicial function “when it is based on the words of the instrument alone.” (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395.)

“The goal of contractual interpretation is to determine and give effect to the mutual intention of the parties.” (Belasco v. Wells (2015) 234 Cal.App.4th 409, 420.)

The court must first consider the mutual intention of the parties at the time the contract was formed. (Civ. Code, § 1636.) This initial inquiry is confined to the writing alone. (Id. § 1639.) The “clear and explicit” meaning of the provisions, interpreted in their “ordinary and popular sense,” unless “used by the parties in a technical sense or a special meaning is given to them by usage,” (Id. § 1644), controls the court’s interpretation. (Id. § 1638; see Griffin Dewatering Corp. v. Northern Ins. Co. of New York (2009) 176 Cal.App.4th 172, 204 (plain language is an important principle of contract interpretation).) Therefore, if the meaning a layperson would give the contract language is not ambiguous, the court applies that meaning. (Santisas v. Goodin (1998) 17 Cal.4th 599, 608.) Simultaneously, the court recognizes that “[a] contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates.” (Civ. Code § 1647.)

According to the California Supreme Court, “the question 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.” (Rossmoor Sanitation, Inc. v. Pylon (1975) 13 Cal.3d 622, 633.) “When the parties knowingly bargain for the protection at issue, the protection should be afforded.” (Id. at 633; see also Smoketree-Lake Murray, Ltd. v. Mills Concrete Construction Co. (1991) 234 Cal.App.3d 1724, 1737 [“In interpreting an express indemnity agreement, the courts look first to the words of the contract to determine the intended scope of the indemnity agreement.”].)

11. On or about October 1, 2014, [Elevators] entered into a Master Maintenance Contract (the “Contract”) with Encino Place to service four escalators at the Encino Place Mall. A true and correct copy of the Subcontract Agreement is attached hereto as Exhibit 1.

12. Moreover, pursuant to the terms of the Contract, Encino Place agreed to indemnify [Elevators] from any action like that now brought by Plaintiff. The specific language, which is contained in Exhibit 1, states as follows: “We will indemnify and hold you harmless for losses due to personal injury or property damage to the extent caused by our negligent acts or omissions during the performance of the work, but not to the extent caused by others. You agree to indemnify us under the same terms and conditions.” Based upon this language, Encino Place is obligated to indemnify and hold [Elevators] harmless for Plaintiff’s injuries.

13. The Contract also set forth that, “[i]t is agreed that we do not assume possession or control of any part of the units, that such remains yours solely as owner, operator, lessee or agent of the owner or lessee, and that you are solely responsible for all requirements imposed by any federal, state or local law, ordinance or regulation. This responsibility includes, but is not limited to advising, warning and/or instructing passengers in the proper use of the equipment.”

19. As set forth in Plaintiff’s Complaint, Plaintiff alleges damages and/or injuries related to The Subject Escalator which was one of the four escalators located at the Encino Mall as set forth in the Contract. As such, said allegations fall squarely within the terms of the Contract, requiring ENCINO PLACE, LP and ENCINO PLACE LLC to indemnify and hold harmless [Elevators] for injuries being alleged as caused by [Elevators] work on the Subject Escalator.

The maintenance contract states it is being made “To: Encino Place” “From: Elevators Etc.” (Mot. Request for Judicial Notice Exh. A at p. 1; Opp. Request for Judicial Notice Exh. A at p. 1.) The agreement uses “we” to refer to Elevators, and “you” to refer to the Encino Defendants. Under the subsection titled, “Terms and Conditions” the agreement states in relevant part: “We will indemnify and hold you harmless for losses due to personal injury or property damage to the extent caused by our negligent acts or omissions during the performance of the work, but not to the extent caused by others. You agree to indemnify as under the same terms and conditions.” (Mot. Request for Judicial Notice Exh. A at p. 4; Opp. Request for Judicial Notice Exh. A at p. 4.)

Based on its plain language, the indemnity clause provides that Elevators will indemnify the Encino Defendants for personal injury losses caused by Elevators’s negligent acts or omissions during the performance of the work. The clause then states that the Encino Defendants agree to indemnify Elevators under the same terms and conditions, which based on the plain language of the agreement would mean that the Encino Defendants agreed to indemnify Elevators for personal injury losses caused by the Encino Defendants’ negligent acts or omissions during the performance of the work. Accordingly, while the Encino Defendants argue that the agreement is not reasonably susceptible to the meaning given to it in the FACC, the contract on its face states that the Encino Defendants are agreeing to indemnify for personal injury losses to the extent they are caused by the Encino Defendants’ negligent acts or omissions. This language is sufficiently certain.

Furthermore, pursuant to the agreement, Elevators proposed to “furnish Elevators Etc Service on” four escalators at the Encino Defendants’ property, with the proposed service to include maintenance as follows: “We will use reasonable care to maintain your equipment using trained personnel. We will regularly and systematically examine, clean, lubricate, adjust and if in our opinion conditions warrant, unless specifically excluded under the proration provision, repair or replace” various parts and components of the escalators. (Mot. Request for Judicial Notice Exh. A at p. 4; Opp. Request for Judicial Notice Exh. A at p. 4.) Although the Encino Defendants argue that the indemnity clause’s language pertaining to “during the performance of the work” can only reasonably be interpreted as referring to the acts of Elevators, the subject indemnity clause does not expressly limit indemnity to personal injury losses caused by work contemplated under the agreement. Rather, the agreement states that Elevators is agreeing to “indemnify … [the Encino Defendants] for losses due to personal injury … to the extent caused by [Elevators’] negligent acts or omissions during the performance of the work, but not to the extent caused by others,” and that the Encino Defendants are agreeing to indemnify Elevators under the same terms and conditions. (Mot. Request for Judicial Notice Exh. A at p. 4; Opp. Request for Judicial Notice Exh. A at p. 4, emphasis added.) As Elevators contends, this language suggests that the Encino Defendants and Elevators are agreeing to indemnify each other under the relevant terms during the pendency of the maintenance contract.

The Encino Defendants cite to Building Maintenance Service Co. v. AIL Sys., Inc. (1997) 55 Cal.App.4th 1014 (“Building Maintenance”), in asserting that the above language applies only to Elevators. In Building Maintenance, the plaintiff filed a personal injury action against her employer, AIL Systems, Inc. and the company with which it had contracted to provide janitorial services, Building Maintenance Services (“BMS”). (55 Cal.App.4th 1018-19.) Following a jury verdict, BMS was found not negligent, and the court then ordered that AIL take nothing on its cross-complaint it had filed against BMS. (Id. at 1019.) On appeal, AIL argued that under the terms of an indemnity provision in its contract with BMS, it was entitled to attorney fees and expenses incurred to defeat BMS’s cross-complaint. (Id. at 1021.) The indemnity provision provided:

Seller [BMS] further agrees to indemnify and save Buyer [AIL] harmless from any and all losses, liabilities, damages, claims, demands, suits, actions, proceedings, subrogations and expenses including court costs and reasonable attorney's fees, related in any way to this Order, or the services performed or goods delivered under this Order, […] Seller further agrees, upon receipt of notification, to promptly assume full responsibility for the defense of any and all such suits, actions, or proceedings which may be brought against Seller or against Buyer.... […] The Seller will further indemnify and save harmless Buyer, its officers, employees, agents and representatives from and against any and all demands of every nature and kind (including attorney's fees resulting therefrom) due to any damage to property or injury to or death of any third party, including any subcontractor, employee, agent, representative or invitee of Buyer or of any subcontractor of Seller while in, on or near the premises of the Buyer caused by the act or omission of Seller or its agents.

(Id. at 1022.) The Court of Appeal noted that “[n]othing in paragraph 13 of the parties' contract expressly obligates BMS to indemnify AIL for AIL's own negligence, or precludes BMS from seeking equitable indemnification from AIL for AIL's own negligence.” (Id.) Further, “[t]he language pertaining to ‘services performed or goods delivered under this Order’ in the first sentence of paragraph 13 only reasonably can be interpreted to refer to acts of BMS, not acts of AIL, because AIL was not performing any services for BMS under the contract.” (Ibid.) Therefore, there was “no express or explicit language in paragraph 13 which affords AIL indemnification for the expenses it incurred in defending BMS's cross-complaint.” (Ibid.)

However, unlike the indemnity agreement in Building Maintenance, the indemnity provision in the agreement between the Encino Defendants and Elevators states that the Encino Defendants agree to defend Elevators under the same terms and conditions as Elevators does. The language in the agreement at issue in Building Maintenance was clearly not reciprocal and stated only that BMS was agreeing to indemnify AIL for all losses “related in any way” to the order or for any act or omission caused by BMS. (Supra.) Moreover, nothing precludes contracting parties from agreeing to a reciprocal indemnification provision. (See e.g., Pac Tel. & Tel. Co. v. Pac. Gas & Elec. Co. (1959) 170 Cal.App.2d 387, 389-90, and California School Bds. Assn. v. State Bd. of Education (2010) 191 Cal.App.4th 530, 568 [“A reciprocal hold harmless/indemnification provision makes sure each party is protected from the consequences of the other party's acts, errors or omissions while remaining responsible for its own acts, errors and omissions.”].)

Based on the foregoing, the Encino Defendants do not establish that the FACC fails to state a claim for express indemnity against them.

Hon. Audra Mori

Judge of the Superior Court

[1] The Encino Defendants provide that while Elevators’s FACC states that the relevant maintenance contract is attached as exhibit 1 to the FACC, Elevators apparently failed to attach the contract to the FACC. However, the Encino Defendants attest that the contract was attached as exhibit 1 to Elevators’s original cross-complaint.