Judge: Joseph Lipner, Case: 21STCV35298, Date: 2024-03-21 Tentative Ruling

Case Number: 21STCV35298    Hearing Date: March 21, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant Mitsubishi Electric US, Inc. (“Defendant”) separately moves for summary judgment as to the Second Amended Complaint (“SAC”) filed by Plaintiff Zurich American Insurance Company (“Zurich”) and as to the First Amended Complaint (“FAC”) filed by Plaintiff ACE Property & Casualty Insurance Company (“Ace”). Defendant also seeks summary adjudication as to each of Zurich’s causes of action.

The Court DENIES Defendant’s motion for summary judgment against Zurich.

The Court DENIES Defendant’s motion for summary adjudication against Zurich.

The Court DENIES Defendant’s motion for summary judgment against Ace.

The motion against ACE is set for hearing on March 26, 2024.  The Court advances that hearing to today.  If any party objects to advancing the hearing, please bring this to the Court’s attention at the hearing. 

Background

The following facts are taken from the parties’ separate statements except where otherwise noted. Defendant filed a separate statement as to each of the two motions for summary judgment it filed. Defendant’s two separate statements are nearly identical, except that the statement as to Plaintiff Ace includes an additional fact, UMF 55. Although the Court considers the separate statements associated with both motions, the Court cites exclusively to the separate statements associated with the Ace motion for the sake of clarity and expediency.

This is a subrogation action that Zurich and Ace (“Plaintiffs”) are prosecuting against Defendant. This case relates to a settled and resolved lawsuit involving personal injuries resulting from an elevator accident at a DoubleTree-branded hotel located at 120 South Los Angeles Street, Los Angeles, California 90012 (the “Hotel”). Plaintiffs seek reimbursement from Defendant under an express indemnity provision in a service agreement to which Defendant is a party.

Plaintiffs are both insurers that issued liability policies to The RIM Corporation (“RIM”) covering damages resulting from bodily injuries. (UMF 65.) Zurich is the primary insurer for RIM, while Ace is the excess insurer for RIM. “RIM Hospitality” is a trade name that RIM used such that the two are synonymous. (UMF 68; Virgil Depo at pp. 15:1-16:18.)  RIM Hospitality is a named insured under Plaintiffs’ insurance policies for RIM.  (UMF 68.)

On July 23, 2014 David Rayburn suffered personal injuries while riding in an elevator in the Hotel (the “Incident”). Plaintiffs contend that the Incident resulted from Defendant’s failure to properly maintain the elevator.

At the time of the Incident, the Hotel was owned by 120 South Los Angeles Street Hotel Investors LLC (“Investors LLC”) and 120 South Los Angeles Street Hotel Operator LLC (“Operator LLC”) (collectively, the “Owners”). (UMF 1.) The Hotel was operated RIM, which was responsible for overseeing the day-to-day management and operation of the Hotel under an agreement with the Owners (the “Management Agreement”). (UMF 5-6.) Plaintiffs contend that RIM was an agent of the Owners and had a d/b/a as “RIM Hospitality, Inc.” (“RIM Hospitality”).

Also at the time of the incident, Operator LLC had entered into a Vertical Transportation Maintenance Agreement (the “Elevator Agreement”) with Defendant, under which Defendant agreed to furnish maintenance services for the elevators at the Hotel. (UMF 11-14.) RIM, through its then-CFO Jeff Virgil, executed the Elevator Agreement on behalf of the Owners. (Pagan Decl. ¶ 7, Exh. F (“Virgil Depo.”) at pp. 36:2-39:12; Wilson Decl., Ex. B at p. 9.) The customer under the Elevator Agreement was the hotel ownership. (Virgil Depo. at p. 41:2-4.)

The Elevator Agreement contain an indemnification clause (the “Indemnification Clause”) which states that “[t]o the fullest extent permitted by law, each party (an ‘Indemnitor’) shall defend, indemnify and hold harmless the other party, its affiliates and Customers and their respective directors, partners, shareholders, officers, agents and employees (collectively, the ‘Indemnitees’), from and against all claims, demands, lawsuits, … liability and expense … resulting from injury to or death of persons … for which any Indemnitee becomes liable, that is caused by or arises out of the fault or negligent acts or omissions … of the Indemnitor or anyone employed by the Indemnitor in connection with activities or the Work under the Agreement[.]” (UMF 18; Wilson Decl., Ex. B at p. 6, ¶ B.)

On October 8, 2015, David Rayburn filed a personal injury lawsuit in the Los Angeles County Superior Court, Case No. BC597286 (the “Underlying Action”). Rayburn named RIM Hospitality, but not RIM (The RIM Corporation) as a defendant for premises liability. Nevertheless, RIM litigated as though it had been named as a defendant, and all parties to the Underlying Action behaved as if RIM were a defendant. Per the terms of its insurance policy, Zurich provided RIM with a defense. (Huff Decl. ¶¶ 2-5.)

On February 15, 2017, Defendant was added as a defendant in the Underlying Action by Doe Amendment.

On November 27, 2017, counsel for RIM sent Defendant a tender of defense and indemnity. (Glaspy Decl. ¶ 6.) The parties agreed to table the issues raised by their tenders until liability in the underlying suit was adjudicated. (UMF 76-77.)

In the Underlying Action, RIM filed a motion for summary judgment, which Defendant opposed. In Defendant’s opposition, it argued that RIM and the Owners were both the “Customer” as defined in the Elevator Agreement and that RIM therefore owed the same obligations as the Owners under the Elevator Agreement. (Rogers Decl. ¶¶ 8-9; Plaintiffs’ Ex. L (Defendant’s Opposition to RIM’s Motion for Summary Judgement in the Underlying Action), pp. 2:10-2:27; see also Plaintiffs’ Ex. K (Defendant’s Motion for Summary Judgement in the Underlying Action), pp. 1:25-2:4.) In denying RIM’s motion for summary judgment, the court affirmed that RIM faced the same premises liability as the Owners because it controlled the Hotel premises. (UMF 72; Rogers Decl. ¶ 10, Ex. N at pp. 3-4.) The court determined based on evidence submitted by Defendant that RIM had agreed in the Elevator Agreement to various responsibilities with respect to the maintenance of the elevators. (Rogers Decl. ¶ 10, Ex. N at p. 5.)

On February 25, 2019, Rayburn and Defendant reached a settlement and obtained a determination of good faith settlement from the court. Rayburn dismissed the action with prejudice on July 8, 2019.

Plaintiffs ultimately agreed to fund a settlement between RIM and Rayburn for $1,850,000.00. (UMF 80.)

Plaintiffs filed subrogation actions for indemnification under the Elevator Agreement against Defendant. The actions were then consolidated.

Defendant filed a separate motion for summary judgment against each plaintiff on January 3, 2024. Plaintiffs filed a joint opposition, but with distinct separate statements due to the presence of an additional fact, UMF 55, in Defendants separate statement as to Ace. Defendant filed a separate reply to each plaintiff.

Request for Judicial Notice

The Court grants the parties requests for judicial notice. The Court additionally takes judicial notice of the filings submitted from the Underlying Action.

Evidentiary Objections

The Court sustains Defendant’s objections to the Supplemental Declaration of Matt Wilson, which is not made under penalty of perjury. However, it appears that this may be the result of simple error. If that is the case, the Court believes that it is in the interest of justice to allow Plaintiff’s an opportunity to cure this error, as the bulk of their evidence is authenticated through that single declaration.

The Court overrules the parties’ remaining evidentiary objections without prejudice to their ability to raise them at trial.

Legal Standard

The purpose of a motion for summary judgment or summary adjudication “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. Atlantic Richfield Co., supra, 25 Cal.4th at p. 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.) 

“In ruling on the motion, the court must consider all of the evidence and all of the inferences reasonably drawn therefrom [citation] and must view such evidence [citations] and such inferences [citations] in the light most favorable to the opposing party.” (Aguilar, supra, at pp. 844-845 [quotation marks omitted].) 

“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 or summary adjudication “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, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (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.” (Ibid.) 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.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)

Discussion

Defendant argues that it did not owe RIM indemnity because (1) RIM Hospitality is not a legal entity; (2) RIM was not a party to the Elevator Agreement and therefore not an eligible indemnitee; (3) Plaintiff did not indemnify any party to the Elevator Agreement; (4) RIM was never in harm’s way in the Underlying Action; and (5) RIM was not a party or third-party beneficiary to the Elevator Agreement and therefore lacks standing to sue, depriving Plaintiffs of derivative standing.

First, Plaintiffs have produced evidence creating a triable issue that RIM was the Owners’ agent for the purposes of the Elevator Agreement. Although all parties agree that the Elevator Agreement was between Defendant and the Owners, it is also undisputed that RIM executed the agreement through its CFO on the Owners’ behalf. This is not the behavior of a mere independent contractor; in order to execute the agreement on the Owners’ behalf, RIM had to be the Owners’ agent. The Elevator Agreement expressly provides that the agents of the parties to the agreement will be indemnitees. Thus, RIM was an eligible indemnity.

Further, Defendant is estopped from arguing that RIM Hospitality and RIM were different entities for the purposes of the Underlying Action.

Judicial estoppel applies “when: (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (State Water Resources Control Bd. Cases (2006) 136 Cal.App.4th 674, 826–827.)

In Defendant’s opposition to RIM’s summary judgment motion, it argued that RIM and the Owners were both the “Customer” as defined in the Elevator Agreement and that RIM therefore owed the same obligations as the Owners under the Elevator Agreement. (Rogers Decl. ¶¶ 8-9; Plaintiffs’ Ex. L (Defendant’s Opposition to RIM’s Motion for Summary Judgement in the Underlying Action), pp. 2:10-2:27; see also Plaintiffs’ Ex. K (Defendant’s Motion for Summary Judgement in the Underlying Action), pp. 1:25-2:4.) In denying RIM’s motion for summary judgment, the court affirmed that RIM faced the same premises liability as the Owners because it controlled the Hotel premises. (UMF 72; Rogers Decl. ¶ 10, Ex. N at pp. 3-4.) The court determined based on evidence submitted by Defendant that RIM had agreed in the Elevator Agreement to various responsibilities with respect to the maintenance of the elevators. (Rogers Decl. ¶ 10, Ex. N at p. 5.)

Defendant is therefore estopped from arguing that the entity which appeared and litigated as RIM in the underlying action was not actually RIM, because Defendant treated that entity, which it now refers to as “RIM Hospitality,” as if that entity were RIM, the entity that executed the Elevator Agreement as the Owners’ agent.

Additionally, the Court previously rejected Defendant’s argument in overruling Defendant’s demurrer. As the Court previously explained, although RIM Corporation was not the named defendant in the underlying action, “[t]he law respects form less than substance.” (Civ. Code § 3528.) “While such an argument might find some support in decisions of an earlier day when mere technicalities were deemed important, it is out of harmony with modern enlightened jurisprudence which regards the substance as more important than mere form and will not permit a mere technicality to defeat substantial justice.” (U.S. Fidelity & Guaranty Co. v. Keck (1946) 75 Cal.App.2d 828, 831.)

For all of these reasons, the Court rejects Defendant’s arguments that RIM was not entitled to indemnification as a matter of law. There is more than a triable issue of fact that RIM was an agent of the Owners for the purposes of the agreement, and therefore an eligible indemnitee, and that the RIM entitled to indemnification was the very same RIM at risk of an adverse judgment or settlement in the Underlying Action.

The Court denies summary judgment and summary adjudication on all claims.