Judge: Daniel M. Crowley, Case: 20STCV25568, Date: 2022-08-25 Tentative Ruling

Case Number: 20STCV25568    Hearing Date: August 25, 2022    Dept: 28

Cross-Defendant Terminix Interntional’s Demurrer without Motion to Strike to Defendants’ Cross-Complaint.

Having considered the moving, opposing and reply papers, the Court rules as follows. 

BACKGROUND

On July 7, 2020, Plaintiff Eric Cottrell (“Plaintiff”) filed this action against Defendants Jose Castro (“Castro”), Caliber Bodyworks, Inc. (“Bodyworks”) and RCB Equities South Bay, LLC (“RCB”) for negligence and premises liability. Plaintiff later amended the complaint to include Defendants Emcor Facilities Services, Inc. (“Emcor”) and Caliber Holdings, LLC (“Holdings”). 

On September 3, 2020, Bodyworks and Castro filed an answer and a Cross-Complaint against ROES 1 through 500 for implied contractual indemnity, total indemnity, equitable indemnity, negligence and contribution. 

On December 2, 2020, RCB filed its answer and a Cross-Complaint against Bodyworks for equitable indemnity, express indemnity, apportionment of fault, breach of contract and declaratory relief. 

On November 10, 2021, Plaintiff dismissed Emcor, without prejudice. Holdings filed its answer on January 28, 2022. 

On April 22, 2022, Holdings, Bodyworks, Castro and RCB filed a Cross-Complaint against the Terminix International (“Terminix”) for express contractual indemnity, equitable indemnity, contribution, breach of contract, declaratory relief (duty to defend) and declaratory relief (duty to indemnify). 

On May 10, 2022, Holdings, Bodyworks, Castro and RCB filed a Cross-Complaint against the Terminix International for express contractual indemnity, equitable indemnity, contribution, breach of contract, declaratory relief (duty to defend) and declaratory relief (duty to indemnify).  This appears to be an earlier copy of the previously submitted Cross-Complaint.

On July 28, 2022, Terminix filed a Demurrer to the Cross-Complaint to be heard on August 25, 2022. On August 12, 2022, Caliber filed an opposition. On August 18, 2022, Terminix filed a reply.

Trial is currently set for November 29, 2022.  

PARTY’S REQUESTS

Terminix requests the Court sustain the demurrer on the basis that there are insufficient facts to constitute a valid cause of action.

Defendants request the Court overrule the demurrer.

LEGAL STANDARD

CCP § 430.10 states: “The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds: (a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading; (b) The person who filed the pleading does not have the legal capacity to sue; (c) There is another action pending between the same parties on the same cause of action; (d) There is a defect or misjoinder of parties; (e) The pleading does not state facts sufficient to constitute a cause of action; (f) The pleading is uncertain. As used in this subdivision, “uncertain” includes ambiguous and unintelligible; and (g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.”

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, courts read the allegations liberally and in context.  (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.)  In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (CCP § 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.  (Id.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn, 147 Cal.App.4th at 747.)

Indemnification clauses do not “extend to claims or liability arising out of [incidents] in the common areas over which the tenant had no control.” (Morlin Asset Mgmt. LP v. Murachanian (2016) 2 Cal.App.5th 184, 189.)

California Labor Code §3864 states “If an action as provided in this chapter prosecuted by the employee, the employer, or both jointly against the third person results in judgment against such third person, or settlement by such third person, the employer shall have no liability to reimburse or hold such third person harmless on such judgment or settlement in absence of a written agreement so to do executed prior to the injury.”

DISCUSSION

Plaintiff alleges that while inspecting Defendants' roof, the roof collapsed, resulting in injuries. Plaintiff specifically alleges that Defendants negligently maintained and supervised the subject premises. Defendants filed a Cross-Complaint against Terminix, Plaintiff’s employer, on the basis that there is a Master Service Agreement between Terminix and EMCOR.

Terminix argues that Defendants rely upon an indemnity provision in the MSA that does not actually require Terminix to indemnify Defendants for claims arising out of Caliber’s own misconduct or negligence. Additionally, Terminix points to Labor Code §3864, which states that an employer has no liability to reimburse or hold such third person harmless on such judgment or settlement absence a written agreement to do so.

The relevant MSA provides that “Subcontractor shall defend, indemnify, and hold harmless...each of their parents and affiliates....employees...and assigns from all liabilities.” it states that the right to indemnification is excused only be acts of gross negligence or willful misconduct; otherwise, it covers “any and all losses for claims made by or brought against an Indemnified Party by any former or present employee of Terminix...arising from or connected to such employee’s tenure with Terminix.”  Terminix argues that because the relevant section is considered a general indemnity clause but has no express agreement to indemnify Caliber for its own negligence, the first cause of action, as well as subsequent causes of action, must be dismissed.

The Court disagrees. Generally speaking, contracts are interpreted under the most reasonable reading of the language. Here, Terminix agreed to indemnify EMCOR’s client’s, which would include Defendants, from “all liabilities,” with such obligations only excused by “gross negligence” or “willful misconduct.” As the underlying complaint has yet to be litigated or subjected to summary judgment, there is no way of determining that the actions alleged are clearly gross negligence or willful misconduct. In addition, the Court does not find that the facts alleged are insufficient to constitute a cause of action. Defendants allege that, in part, Plaintiff’s injuries were attributable to his connection with Terminix as they allege that Terminix provided insufficient training and supervision. As such, the Court finds that Terminix has failed to meet its burden.

All other relevant causes of action stem from the existence of this agreement. As the indemnity agreement potentially asserts liability against Terminix, the Court also overrules the demurrer as to these causes of action.

CONCLUSION

Cross-Defendant Terminix Interntional’s Demurrer without Motion to Strike to Defendants’ Cross-Complaint is OVERRULED.

            Moving party is ordered to give notice of this ruling.

Moving Party is ordered to file the proof of service of this ruling with the Court within five days.

The parties are directed to the header of this tentative ruling for further instructions.