Judge: H. Jay Ford, III, Case: 22SMCV02839, Date: 2025-03-11 Tentative Ruling

Case Number: 22SMCV02839    Hearing Date: March 11, 2025    Dept: O

  Case Name:  301 Ocean LLC v. 301 Ocean A LLC, et al.

SUBJECT:                 MOTION FOR SUMMARY ADJUDICATION

MOVING PARTY:   Cross-Complainant 301 Ocean A LLC

RESP. PARTY:         Cross-Defendant Alpha Construction Co. Inc.

TENTATIVE RULING

            Cross-Complainant 301 Ocean A LLC’s Motion for Summary Adjudication as to the 3^rd cause of action for declaratory relief within the Cross-Complaint as to Cross-Defendant Alpha Construction Co., Inc. is. GRANTED. The Court declares that Cross-Defendant Alpha Construction Co. Inc has an affirmative and immediate duty to defend Cross-Complainant 301 Ocean A LLC against the claims in Plaintiff 301 Ocean LLC’s First Amended Complaint.

            Cross-Complainant 301 Ocean A LLC’s RJN is GRANTED as to the existence of articles, court documents, and the administrative ruling documents, but not to the “truth of the hearsay statements in the documents.” (In re Vicks (2013) 56 Cal.4th 274, 314.)

REASONING

            “A party is entitled to summary judgment only if it meets its initial burden of showing there are no triable issues of fact and the moving party is entitled to judgment as a matter of law. This is true even if the opposing party fails to file any opposition. The court's assessment of whether the moving party has carried its burden—and therefore caused a shift—occurs before the court's evaluation of the opposing party's papers. Therefore, the burden on the motion does not initially shift as a result of what is, or is not, contained in the opposing papers.” (Mosley v. Pacific Specialty Insurance Company (2020) 49 Cal.App.5th 417, 434–435 [landlord’s failure to address issue of whether they were aware of their tenant’s marijuana growing operation was not grounds to grant summary judgment where moving party failed to satisfy its initial burden as to the issue]; Thatcher v. Lucky Stores, Inc. (2000) 79 Cal.App.4th 1081, 1086-1087 [court cannot grant summary judgment based merely on lack of opposition; court must first determine if the moving party has satisfied its burden].)

            In addition, the evidence and affidavits of the moving party are construed strictly, while those of the opponent are liberally read. (Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 100. “All doubts as to the propriety of granting the motion (whether there is any issue of material fact [Code of Civil Procedure] § 437c) are to be resolved in favor of the party opposing the motion (i.e., a denial of summary judgment).” (Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502.)

“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. 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.” (Code Civ. Proc., § 437c, subd. (f)(1).)

I.                Cross-Complainant 301 Ocean A LLC MSA to the 3^nd cause of action in Cross-Complaint for declaratory relief as to Cross-Defendant Alpha Construction Co., Inc.

            A motion for summary adjudication of an issue of duty is expressly allowed for by CCP §437c(f)(1), so long as it fully resolves an issue of duty.  (Code Civ. Proc., §437c, subd., (f)(1).)  “The question of whether a duty exists under certain circumstances is generally a question of law. [citation]. This is particularly true in the context of insurance and the issue of duty to defend. [citation].  It is reasonable to conclude that this is why the Legislature included duty as an issue to be addressed in a motion for summary adjudication. The language of the statute is clear and unequivocal, a plaintiff may seek a determination of whether a defendant or defendants owed a duty to the plaintiff.”  (Transamerica Ins. Co. v. Superior Court (1994) 29 Cal.App.4th 1705, 1713 [reversing summary adjudication in favor of insured where insurance policy exclusions established that insurer did not have duty to defend and distinguishing Regan Roofing].)   

            As explained in Crawford v. Weather Shield Mfg. Inc. (2008) 44 Cal.4th 541, the duty to defend under CC §2778(4) “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. This duty, as described in the statute, therefore cannot depend on the outcome of that litigation.”  (Crawford, supra, 44 Cal.4^th at p. 558.)  Thus, under CC §2778(4), “claims ‘embraced by the indemnity,’ as to which the duty to defend is owed, include those which, at the time of tender, allege facts that would give rise to a duty of indemnity.  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.”  (Ibid.)

            “Parties to a contract, including a construction 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.” (Ibid.) The parties to an indemnity agreement “have great freedom to allocate such responsibilities as they see fit.” (Ibid.) 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 . . ., as ascertained from the contract's language if it is clear and explicit.” (Id., at p. 552.)

            “Express indemnity refers to an obligation that arises “ ‘by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances.” (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1158.)

In the context of noninsurance indemnity agreements, if a party seeks to be indemnified for its own active negligence, or regardless of the indemnitor's fault, the contractual language on the point “must be particularly clear and explicit, and will be construed strictly against the indemnitee.” (Ibid.) [E]xpress indemnity allows contracting parties “great freedom to allocate [indemnification] responsibilities as they see fit,” (Ibid.)

            “[W]here the plaintiff's complaint alleges facts embraced by the indemnity agreement, the indemnitor has a duty to defend throughout the underlying tort action unless it can conclusively show by undisputed facts that plaintiff's action is not covered by the agreement.” (Centex Homes v. R-Help Construction Co., Inc. (2019) 32 Cal.App.5th 1230, 1237.)

“To allege facts sufficient to state a cause of action for declaratory relief, the plaintiff must allege two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” Childhelp, Inc. v. City of Los Angeles (2023) 91 Cal.App.5th 224, 235, as modified (May 5, 2023), [internal citations omitted].)

“The “actual controversy” language in Code of Civil Procedure section 1060 encompasses a probable future controversy relating to the legal rights and duties of the parties.” (Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877, 885, as modified (Jan. 9, 2008).)

“An action for declaratory relief is authorized by Code of Civil Procedure section 1060, which provides in pertinent part: “Any person interested under a written instrument, ... may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.” (Doan v. State Farm General Ins. Co. (2011) 195 Cal.App.4th 1082, 1094–1095.)

I.                Cross-Complainant Meets Their Burden to show There are no triable issues of material fact at the 3^rd cause of action for Declaratory Relief stating Cross-Defendant owes Cross-Complainant a duty to defend.

Cross-Complainant 301 Ocean A, LLC (“Ocean” or “Seller”) moves to summarily adjudicate the 3^rd cause of action for declaratory relief in their Cross-Complaint as to Cross-Defendant Alpha Construction Co. Inc. (“Alpha”) arguing that Ocean is entitled to a judicial declaration regarding the fact that Alpha has a present and ongoing duty to defend Ocean in the overarching lawsuit.

Ocean shows, and it is undisputed, that on 7-14-24 Ocean and Alpha entered into a construction contract (the “Contract”) for the remodeling of a 47-unit condominium building located at 301 Ocean Ave., Santa Monica, CA. (SSUF, ¶ 1.) Ocean shows, and it is undisputed. that the Contract between Ocean and Alpha included an indemnity provision requiring in relevant part that Alpha indemnify Ocean  “from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the Work…” (SSUF, ¶ 4.) Specifically, the indemnification provision in the Contract states:

3.18 INDEMNIFICATION § 3.18.1 To the fullest extent permitted by law the Contractor shall indemnify and hold harmless the Owner, Architect, Architect's consultants, and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property ( other than the Work itself), but only to the extent caused by the negligent acts or omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity that would otherwise exist as to a party or person described in this Section 3.18. The Contractor's duties of indemnity under this Section 3.18 shall survive the termination of this Agreement and the completion of the Work.

(SSUF, ¶ 4; Marquis Decl., ¶ 4, Ex. B (the “Contract”) § 3.18 at p. 21.)

            Ocean shows, and it is undisputed that in the FAC, Plaintiff 301 Ocean LLC (“Plaintiff”) alleges generally the following:

1.     Ocean “failed to properly design, build, reconstruct and renovate the Property resulting in certain defective conditions and damages as detailed in more particularly below, and sold the Property to Plaintiff that now requires extensive repairs,” that Ocean and Alpha  (SSUF, ¶ 7; Semon Decl., ¶ 4, Ex. C (the “FAC”) ¶ 9.)

2.     Ocean and Alpha “failed to and neglected to cause the work, labor and services to be performed properly or adequately, and failed to advise Plaintiff of such facts, and that [Alpha Construction] negligently, grossly and in such unworkmanlike manner caused the aforesaid work to be performed, that the Property as described herein was constructed improperly, negligently, carelessly and/or in an unworkmanlike manner.” (SSUF, ¶ 8; FAC, ¶ 21.)

3.     As a result of Ocean and Alpha’s negligent performance of their services “the Property has failed, become defective and been damaged and caused resultant damage to the Property . . . .” (SSUF, ¶ 9; FAC, ¶ 23–25.)

4.     As a direct and proximate result of the carelessness and unworkmanlike conduct, actions and /or omissions alleged against Ocean and Alpha, Plaintiff has suffered damages. (SSUF, ¶ 10; FAC, ¶ 10.)

5.     Plaintiff alleges all the elements of a nuisance claim against Ocean and Alpha. (SSUF, ¶¶ 11–13; FAC, ¶¶ 27–32.)

Ocean shows that there is an actual dispute as whether Ocean is entitled a defense and indemnity from Alpha since Alpha filed an answer to Ocean’s Cross-Complaint denying all allegations contained in the causes of action for equitable indemnity, express indemnity, contribution and declaratory relief. (SSUF, ¶16; Semon Decl., ¶ 6, Ex. E.)

It is undisputed that an indemnity agreement exists between Ocean and Alpha, that the Plaintiff’s claims arise out of or relate to Alpha’s Construction work, that Plaintiff’s claims fall withing the indemnity agreement, and that there is no limiting or excluding language within the indemnity agreement. Thus, Ocean has met their burden to show that there are no triable issues of fact as to the existence of a duty to defend by Alpha. The burden now shifts Alpha to show a triable issue of fact as the existence of a duty to defend or the 3^rd cause of action for Declaratory Relief that a duty to defend exists.

II.             Cross-Defendants’ Burden

Alpha argues that the Court cannot dispose of the entirety of the 3^rd cause of action for Declaratory Relief since the entitlement to be defended and indemnified, as stated in the Cross-Complaint, is prohibited pursuant to CCP § 437(c)(f)(1). However, Alpha provides no authority supporting why the Court cannot summarily adjudicate a cause of action for Declaratory Relief asking for a declaration that one party is entitled to be defended and indemnified by another party pursuant to an indemnification agreement. Thus, this argument is not persuasive.

Alpha argues that Ocean has produced no evidence that Ocean is entitled to summary adjudication on the duty of Alpha to indemnify Ocean for the allegations and causes of action in Plaintiff’s FAC, however, if a Complaint “alleges facts embraced by the indemnity agreement, the indemnitor has a duty to defend throughout the underlying tort action unless [the indemnitor] can conclusively show by undisputed facts that plaintiff's action is not covered by the agreement.” (Centex Homes v. R-Help Construction Co., Inc. (2019) 32 Cal.App.5th 1230, 1237.) Thus, the burden is on Alpha to show undisputed facts that the FAC is not covered by the indemnification agreement. Ocean has shown the Plaintiff’s FAC encompasses the indemnity agreement, and that is all Ocean has to show to meet their burden since the duty to defend is triggered immediately upon the filing of a complaint encompassing the indemnification terms. (See Crawford, supra, 44 Cal.4th at p. 558 [“claims ‘embraced by the indemnity,’ as to which the duty to defend is owed, include those which, at the time of tender, allege facts that would give rise to a duty of indemnity.  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.”] Alpha provides no evidence that the duty is not triggered by the FAC other than a declaration from Alpha’s Vice President which does not dispute the what is stated in the Plaintiff’s FAC. Thus, this argument fails.

Alpha argues that the indemnification provision is unenforceable because Ocean was “actively negligent in the completion of the Project, maintenance and repair of the Property from July 2017 to July 2021 and the sale of the Property to the Plaintiff in July 2021.” (Oppo., at pp. 14–15.) However, the Court does not find this argument persuasive. The duty to defend is created the moment a claim is filed alleging damages or loss arising from a subcontractor’s negligent role in a project, as is the case here. (See Crawford, supra, 44 Cal.4th at p. 553 [Subcontractor “thus had a contractual obligation to defend such a suit even if it was later determined, as a result of this very litigation, that [Subcontractor] was not negligent.”] It is undisputable that Plaintiff’s FAC alleges the 1^st–5^th and 10^th causes of action against Alpha as well as Ocean, and that the allegations against both are regarding the construction work of Alpha. Thus, Alpha has a duty to defend 301 Ocean A regarding the causes of action.

Alpha argues that the Court must deny the motion because several causes of action in the FAC are alleged against Ocean only and not embraced by the indemnification provision in the contract between Ocean and Alpha. This argument is not persuasive, as the same six causes of action are plead against both Alpha and Ocean in the FAC. (See generally FAC.)

Alpha does not meet their burden to show a triable issue of fact as the 3^rd cause of action for declaratory relief. Ocean’s Motion for Summary Adjudication is GRANTED.