Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

MOVING PARTY: Defendant Jose Jesus Flores 

RESPONDING PARTY: Plaintiff Century Surety Company 

BACKGROUND 

This dispute arises from a subrogation claim.  Non-party Roberto Soofiani and Defendant Jose Jesus Flores (on behalf of Don Chuy’s Restaurants, LLC) entered into a lease agreement (“Lease”) for property located at 11800 W. Jefferson Blvd, Space D, Culver City, California (the “Property”).  (Undisputed Material Fact (“UMF”) No. 3.)   

Section 15 of the Lease contained a mutual waiver of subrogation claims: “Lessor and Lessee shall cause their respective insurers to waive any and all rights of recovery, claims, action or causes of action … for any loss or damage that may occur to Lessor or Lessee or any party claiming by, through or under Lessor or Lessee, as the case may be, with respect to Lessee’s property …”  (UMF No. 3.)   

Plaintiff Century Surety Company is Soofiani’s insurer.  It claims Defendant converted equipment owned by Soofiani and left water running causing property damage.  As a result of these alleged acts, Plaintiff made payments under its insured’s policy for the repair of the Property in the sum of $199,535.10.  Plaintiff now brings claims for subrogation and indebtedness, seeking to recover from Defendant monies paid out to its insured.  (UMF No. 1.)     

This hearing is on Defendant’s motion for summary judgment.  Defendant argues Plaintiff does not possess any right to pursue claims for subrogation or indebtedness because such rights were waived by its insured pursuant to the Lease.   

REQUEST FOR JUDICIAL NOTICE  

 Defendant seeks judicial notice of Plaintiff’s First amended Complaint filed on April 18, 2022.  The Court grants the request pursuant to §§ 452(d) and 453. 

EVIDENTIARY OBJECTIONS  

 The Court sustains in part and overrules in part Objection No. 1 to the Declaration of Roberto Soofiani; the Court sustains the objection as to the following sentence: “The Defendant breached the terms of the Lease for failure to make payment of the rent while remaining in possession of the Premises.”  The Court also sustains Objection Nos. 2 and 3 to the Declaration of Roberto Soofiani.   

LEGAL STANDARD  

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial.  (Aguilar v. Atlantic Ritchfield Co. (2001) 25 Cal.4th 826, 843.)  Code Civ. Proc. §437c(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. Minor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)  “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.”  (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67).   

As to each claim as framed by the complaint, a defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element of the claim(s) or by establishing an affirmative defense.  (Code Civ. Proc. §437c(p)(2); Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)  

Once the defendant has met its burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.  (Id.)  To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence.  (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) 

DISCUSSION 

          Defendant argues that Plaintiff’s right of subrogation was contractually waived by its insured and the waiver is valid and enforceable.  The Court agrees. 

The right of subrogation is subject to waiver.  (Fireman’s Fund Ins. Co. v. Sizzler USA Real Property Inc. (2008) 169 Cal.App.4th 415, 419.)  Such waivers operate to waive or release the rights of contracting parties with respect to claims covered by insurance.  (Id.)   

Subrogation waivers in written contracts have been upheld and enforced to preclude an insurer from attempting to obtain benefits paid through a subrogation action.  (See, e.g., Davlar Corp. v. Superior Court (1997) 53 Cal.App.4th 1121, 1125 (granting summary judgment by reason of such waiver); Lloyd's Underwriters v. Craig & Rush, Inc. (1994) 26 Cal.App.4th 1194 (waiver of rights for damages covered by insurance barred insurer’s subrogation suit).) 

In Davlar, a property owner retained a general contractor to perform construction work on the property, and the general contractor in turn retained defendant as its subcontractor.  During construction, a fire damaged the general contractor’s property.  The general contractor was reimbursed by its insurer, and assigned all of its claims to the insurer.  The insurer then sought subrogation from the subcontractor.  The subcontractor moved for summary judgment on the grounds the general contractor had waived its subrogation rights, and the trial court denied the motion.  On appeal, the appellate court reversed, holding that the subrogation waiver was plain and unambiguous and covered all of plaintiff’s claims.  (Davlar, 53 Cal.App.4th at 1126.) 

Likewise, in Fireman’s Fund, the insured landlord owned a shopping center in which the defendant tenant rented space.  The insurer sought to recover amounts that it paid to indemnify the landlord in a premises liability case.  Tenant and landlord were successor parties to leases which contained a subrogation waiver.  The subrogation waiver provided: “The parties [] agree that neither party shall be liable to the other for any damage caused by fire or any of the risks insured against under any insurance policy and each party shall cause each insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with any covered damage.”  ¿The appellate court agreed with the trial court that the subrogation waiver in the leases barred the insurer's claim. The leases plainly provided that liability and subrogation would be waived as to all risks covered by any insurance policies carried by the parties.  (Fireman’s Fund, 169 Cal.App. 4th at 423.) 

Sacramento-Yolo Port Dist. v. Cargill of Calif. (1970) 4 Cal.App.3d 1004 is also instructive.  There, plaintiff landlord brought an action against defendant tenant for fire damage to the leased premises caused by defendant's negligence.  Tenant appealed the trial court’s grant of summary judgment to landlord, contending that landlord’s insurance policy released tenant from liability for the loss. The court held that written correspondence between the parties evidenced their agreement that plaintiff would insure the premises with a policy including a clause waiving subrogation against defendant for any damage caused by its negligence and that such correspondence constituted a valid amendment to the lease contract.  The court, therefore, reversed and remanded directing judgment to be entered for defendant. 

Here as in Davlar, Fireman’s Fund and Sacramento-Yolo Port Dist., the Lease between Plaintiff’s insured and Defendant contained an express subrogation waiver.  Accordingly, Plaintiff cannot bring an action against Defendant because its insured expressly waived the right to do so.   

Plaintiff argues that the subrogation waiver does not apply to intentional torts.  Plaintiff relies on Civ. Code § 1668 which states: “All contracts which have for their object, directly or indirectly, to exempt one from responsibility for his own fraud or willful injury to the person or property of another, or violation of law, whether willful or negligent are against the policy of law.”  But Plaintiff has not cited to a single case which has invalidated a subrogation waiver based on Civ. Code § 1668.  California courts treat exculpatory clauses and subrogation waivers differently and have not invalidated subrogation waivers on the basis of gross negligence or willful misconduct.  (See, e.g., Travelers Cas. Ins. Co. of Am. v. Alberti, 2017 Cal. Super. LEXIS 60088 at *9-*10) (a waiver of subrogation rights is not expressly exculpatory and not encompassed by¿section 1668¿because it does not have exculpation from fraud, willful injury, or violation of law as its “purpose”).  In any event, Plaintiff has not refuted with any admissible evidence Defendant’s statement of fact that there was no damage at the time Defendant turned over the Premises to Plaintiff in a final walk-through.  (Plaintiff’s Response to UMF No. 4.)  Accordingly, there is no disputed issue that Defendant did not engage in gross negligence or willful misconduct. 

Plaintiff next argues that Defendant’s breach of the Lease by failing to pay rent invalidates the subrogation clause.  Plaintiff offers no authority for this proposition.  The subrogation waiver provision itself is not conditioned on any other contractual provision.  The case law is clear that a subrogation waiver in a lease that is not specifically conditioned on any other contractual provision will not be invalidated by breach of another provision.  Fireman’s Fund Ins. Co. v. Sizzler USA Real Prop. Inc. (2008) 169 Cal.App.4th 415 is instructive.  There, the Court found that the tenant’s breach of the lease by its failure to obtain the full amount of liability insurance did not preclude enforcement of the lease’s subrogation waiver.  Despite the fact that the insurance provisions are undoubtedly related to a waiver of subrogation provision, the Court found the waiver of subrogation clause barred the plaintiff’s claims.  According to Fireman’s Fund, “provisions of a contract will not be construed as condition precedent in the absence of language plainly requiring such construction.”  (Id. at 421.)  As in Fireman’s Fund, there is no express language in the Lease conditioning the subrogation waiver provision on the payment of rent.  

CONCLUSION 

For the foregoing reasons, the Court GRANTS Defendant Jose Jesus Flores’ motion for summary judgment.  

 

IT IS SO ORDERED. 

 

DATED: September 28, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court