Judge: Daniel M. Crowley, Case: 21STCV20584, Date: 2022-10-28 Tentative Ruling

Case Number: 21STCV20584    Hearing Date: October 28, 2022    Dept: 28

Cross-Defendant Isidro Rascon’s Motion for Summary Adjudication

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

BACKGROUND

On June 2, 2021, Plaintiffs Michael Hutchinson (“Plaintiff” or “Hutchinson”) and Jade Post-Ladou (“Post-Ladou”) filed a complaint against Defendants Isidro Rascon (“Rascon”), Christopher Ramirez (“Ramirez”), McCarthy Building Companies, Inc. (“McCarthy”), IOSM, Inc. (“IOSM”), Envision Physician Services (“Envision”), Palmdale Regional Medical Center (“PRMC”), Raymond Ruiz (“Ruiz”) and John Bartolozzi (“Bartolozzi”) for negligence.

On July 15, 2021, PRMC filed an answer. On July 21, 2021, Bartolozzi filed an answer. On August 12, 2021, ISOM filed an answer. On September 23, 2021, Envision and Ruiz filed an answer. On March 24, 2022, Ramirez filed an answer.

On August 11, 2021, McCarthy and Rascon filed an answer and a Cross-Complaint against Cross-Defendant IOSM for breach of contract, express indemnity, two causes of action for express duty to defend, equitable indemnity and declaratory relief. On August 20, 2021, IOSM filed an answer.

On August 12, 2022, Rascon filed a Motion for Summary Adjudication to be heard on October 28, 2022.On October 14, 2022, IOSM filed an opposition. On October 21, 2022, Rascon filed a reply.

Trial is set for June 12, 2023.

PARTIES’ REQUEST

            Rascon asks the Court to grant summary adjudication against Cross-Defendant IOSM as to its fourth cause of action for express duty to defend and its sixth cause of action for declaratory relief.

IOSM requests the Court deny the motion

OBJECTIONS

            IOSM’s objections are all GRANTED.

Racon’s objections are all GRANTED.

LEGAL STANDARD

The purpose of a motion for summary judgment “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”  (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 843.)  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.”  (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)  A defendant moving for summary judgment “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established.”  (Code Civ. Proc., § 437c(p)(2).)  “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.”  (Id.)  “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Med. Ctr. (2008) 159 Cal.App.4th 463, 467.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.”  (Avivi, supra, 159 Cal.App.4th at p. 467; see also Code Civ. Proc., § 437c, subd. (c).)

DISCUSSION

Overview

Plaintiffs’ complaint alleges that Plaintiff was injured on July 20, 2020, while working on a construction project. Rascon, an employee of McCarthy, was employed as the project’s safety manager. Ramirez, employed by IOSM, was responsible for providing evaluation and health service treatment to workers for the project. The complaint alleges negligence for failure to provide adequate healthcare services to plaintiff while he was suffering from a heat-related illness.

It is undisputed that IOSM and McCarthy signed a Master Agreement (the Agreement) in 2015 that contained indemnity and defense duty clauses at issue in this motion. It is also undisputed is the existence of an amendment to the Agreement signed by both parties in 2020 (the Amendment).

            The Fourth Cause of Action: Express Duty to Defend

            Rascon seeks summary adjudication on his fourth cause of action alleging IOSM has an express duty to defend Rascon because the contract is unambiguous and the claims alleged in the underlying complaint arise from services performed by IOSM pursuant to the contract. The Court agrees with Rascon

The contract unambiguously created an express duty to defend

            Section 3.6.3 of the Agreement states that IOSM “shall indemnify and defend McCarthy...and all of their agents, officers and employees from all claims and losses arising from professional services including negligent acts, errors, or omissions of [IOSM]… in the performance, nonperformance, or failure to render professional services under this Agreement.” (Declaration of Virginia Siegel, Exhibit A). Additionally, section 4.1, “Indemnity,” states:

“Consultant [IOSM] agrees to defend, indemnify and hold harmless McCarthy… and all of their agents, officers, and employees from and against all claims, damages, losses and expenses, including, but not limited to, in-house and outside attorney's fees and court costs arising out of or resulting from the performance, or failure in performance, of [IOSM’s] services and obligations, including any extra work, and from any claim, damage, loss or expense which (1) is attributable to, bodily injury, sickness, disease, death, injury to or destruction of tangible property, including the loss of use resulting therefrom, and (2) is caused in whole or in part by any acts, omissions or negligence of [IOSM] or anyone directly or indirectly employed by [IOSM], or anyone for whose acts [IOSM] may be liable regardless of whether it is caused in part by the acts, omissions or negligence of a party indemnified hereunder. In addition and without limiting the above, [IOSM] shall defend, indemnify and hold harmless McCarthy and the Owner from all claims and losses arising from negligent acts, errors, omissions or breach of [IOSM] in the performance, nonperformance or, failure to render professional services under this Agreement. Such obligations shall not be construed to negate, abridge, or otherwise reduce any other right or obligation of indemnity which would otherwise exist as to any party or person described in this Paragraph 4.1.” (Declaration of Virginia Siegel, Exhibit A) [emphasis added].

            Rascon relies on Crawford v. Weather Shield Mfg. for his position that the contract explicitly and unambiguously created a duty to defend separate from indemnification. Crawford v. Weather Shield Mfg., 44 Cal.4^th 541. Crawford concerned a contract dispute between a contractor and a window manufacturer in which the contractor argued that it was entitled to a full defense of any claim caused by the manufacturer’s negligence. Id. The California Supreme Court held that the contract expressly and unambiguously, obligated the manufacturer to defend from the outset any suit against the contractor insofar as that suit was founded upon claims alleging damages or loss arising from the manufacturer’s negligence. Id. at 553. In so holding, the Court focused on particular language of the subcontract that created two distinct obligations: 1) where the manufacturer agreed “to indemnify and save [the contractor] harmless against all claims for damages to persons or to property and claims for loss, damage and/or theft ... growing out of the execution of [the manufacturer’s] work” and 2) where the manufacturer made a separate and specific promise “to defend any suit or action brought against [the contractor] founded upon the claim of such damage ... loss, ... or theft.” Id. at 547-48. The Court held that 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. Id.

            Here, like in Crawford, the contract included the word “defend” in addition to “indemnify.” The clauses contained in sections 3.6.3 and 4.1, supra, repeatedly use some combination of the phrase “defend, indemnify, and hold harmless.” The word defend is separate and distinct from the word indemnify. As the Crawford court explained, a contractual promise to defend creates an active responsibility. On the other hand, indemnity connotes a passive responsibility to reimburse another for its legal defense. The Crawford court gave individual significance to the word “defend.” Accordingly, this court must similarly honor the inclusion of this word in the Agreement.

            IOSM argues that there is no express and unambiguous duty to defend in the Agreement or Amendment because there are several defense and indemnity clauses that contradict each other. IOSM offers no supporting evidence other than a declaration by its president, Virginia Siegel, affirming the validity of the Agreement and Amendment and stating that McCarthy drafted both contracts in their entirety and IOSM was not given the right or opportunity to make modifications.

            Contrary to what IOSM contends, the language in the Agreement reproduced above is consistent with regard to the duty to defend. It repeatedly and consistently includes the word “defend” along with the word “indemnify.” Moreover, the Agreement goes out of its way in section 4.1 to make clear that it is not limiting any other rights. It states: "obligations shall not be construed to negate, abridge, or otherwise reduce any other right or obligation of indemnity which would otherwise exist.”       

            IOSM does not put forth expert testimony or other evidence to suggest a different interpretation of the language in the Agreement. Therefore, even when construed in a light most favorable to IOSM, the Court concludes the Agreement did create an express duty to defend that arises upon the nonperformance of IOSM’s duties under the contract.

The allegations in the complaint arise from IOSM’s services under the contract

            IOSM argues that even if the contract contains an express duty to defend, the allegations in the complaint do not arise from any action or inaction on IOSM’s part related to the services it contracted to perform. Therefore, IOSM contends that its duty to defend was never triggered.

Crawford suggests that the obligation to defend may not continue “if the promisor…conclusively established that the claims were not among those ‘embraced by the indemnity.’” (Crawford, 44 Cal.4^th at 558.). For the court to grant IOSM’s argument that the duty to defend was never triggered, IOSM must conclusively establish that not one single allegation in the complaint is “embraced by the indemnity.”

            The relevant language in the Agreement, reproduced from above, is that which states that IOSM agrees to defend, indemnify, and hold harmless McCarthy’s employees from “all claims and losses arising from negligent acts, errors, omissions or breach of [IOSM] in the performance, nonperformance or, failure to render professional services under this Agreement.” [emphasis added].

            Here, IOSM does not dispute that the complaint alleges that IOSM 1) failed to provide safety measures including shade, cooling tents and water (UMF No. 16), 2) did not provide adequate hydration (UMF No. 18), 3) did not provide assessment of a medical condition (UMF No. 15, 17), and 4) failed to call for emergency medical transport (UMF No. 19). IOSM does not dispute that part of its work included providing water (UMF No. 24) and a place to cool down (UMF No. 23) for Hutchison. IOSM also does not dispute that IOSM provided water to Hutchison (UMF No. 24). IOSM does not dispute that it assessed Hutchison for heat related illness (UMF No. 22).     

            These allegations demonstrate that IOSM is alleged to have not performed or to have negligently performed part of what it contracted to perform. Therefore, Rascon successfully meets its burden.

On the other hand, IOSM does nothing to show that professional services did not include providing adequate safety measures, providing adequate hydration, assessing medical conditions at the project site, and calling for emergency medical transport. Therefore, there is no genuine issue of material fact as to whether the express duty to defend was triggered.

IOSM’s duty to defend arose immediately upon tender
            The defense “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.” Crawford, supra, 44 Cal.4th at 558. “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. The defense duty continues until all such claims have been resolved. Id. at 554.

            The following facts are undisputed. On July 26, 2021, Rascon, an employee of McCarthy, tendered his defense of this action to IOSM (UMF No. 23); however, IOSM did not respond to the tender. Thereafter, on August 11, 2021, Rascon filed a cross-complaint against IOSM for both an express duty to defend and declaratory relief action that IOSM owes such defense. (UMF No. 24). On April 26, 2022 IOSM denied the tender (UMF No. 25).

            IOSM’S duty arose immediately upon Rascon’s tender of defense. IOSM continues to deny any obligation to defend Rascon in this action (UMF No. 26). Therefore, the court holds that IOSM had and continues to have a duty to defend Rascon from the plaintiff’s allegations in this action.

The Sixth Cause of Action: Declaratory Relief

            “When the parties knowingly bargain for the protection at issue, the protection should be afforded.” Rossmoor Sanitation, supra, 13 Cal.3d at 633.

Despite Rascon’s early tender seeking a defense to IOSM (UMF. No. 25), IOSM ignored it. Then IOSM denied the tender (UMF No. 27) only after Rascon filed its cross-complaint against IOSM (UMF No. 26). Thereafter, IOSM opposed this motion by claiming ignorance as to its scope of work and contract promises and even tried to invalid its indemnity promise. Not only did IOSM promise McCarthy’s employee a defense, it also promised that it would pay reasonable legal fees and costs in connection with a legal dispute in the agreement (UMF No. 29) – a fact and promise IOSM does not dispute.

IOSM must not only defend Rascon in this action but also pay its reasonable fees and cost in pursuing the defense protection it bargained for it its contract with IOSM. The Court grants the motion as to this issue.

CONCLUSION

Cross-Defendant Isidro Rascon’s Motion for Summary Adjudication is GRANTED.

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.