Judge: Lisa R. Jaskol, Case: 20STCV25568, Date: 2023-10-18 Tentative Ruling
Case Number: 20STCV25568 Hearing Date: December 15, 2023 Dept: 28
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., RCB Equities South Bay, LLC (“RCB”), and Does 1-20 for negligence and negligence: premises liability. On October 23, 2023, Plaintiff filed a first amended complaint adding a claim for gross negligence.
On September 3, 2020, Defendants and Cross-Complainants Caliber Bodyworks, Inc., and Castro filed an answer and a cross-complaint against Cross-Defendants Roes 1-500 for implied contractual indemnity, total indemnity, equitable indemnity, negligence and contribution.
On December 2, 2020, Defendant and Cross-Complainant RCB filed an answer and a cross- complaint against Cross-Defendants Caliber Bodyworks, Inc. and Roes 1-20 for equitable indemnity, express indemnity, apportionment of fault, breach of contract and declaratory relief.
On August 12, 2021, Plaintiff amended the complaint to include Defendant EMCOR Facilities Services, Inc. (“EMCOR”) as Doe 1. On November 10, 2021, the Court dismissed EMCOR without prejudice at Plaintiff’s request.
On December 9, 2021, Plaintiff amended the complaint to include Defendant Caliber Holdings Corporation as Doe 2. On January 28, 2022, Defendant Caliber Holdings LLC, formerly Caliber Holdings Corporation (“Caliber Holdings”) filed an answer.
On April 22, 2022, and May 10, 2022, Defendants and Cross-Complainants Caliber Holdings, Caliber Bodyworks LLC, formerly known as Caliber Bodyworks, Inc. (“Caliber”), Castro, and RCB filed a cross-complaint against Cross-Defendant The Terminix International Company Limited (“Terminix”) for express contractual indemnity, equitable indemnity, contribution, breach of contract, declaratory relief (duty to defend) and declaratory relief (duty to indemnify). On August 31, 2022, Terminix filed an answer to the cross-complaint.
On August 25, 2022, the Court overruled Terminix’s demurrer to the cross-complaint.
On March 17, 2023, the Court granted in part and denied in part Terminix's motion for summary judgment or summary adjudication of the cross-complaint filed by Defendants and Cross-Complainants Caliber Holdings, Caliber, Castro, and RCB (“Cross-Complainants”). The Court granted summary adjudication of Cross-Complainants’ claims for equitable indemnity and contribution and denied summary adjudication of Cross-Complainants’ express indemnity claim. Cross-Complainants’ remaining claims are for express contractual indemnification, breach of contract, declaratory relief (duty to defend), and declaratory relief (duty to indemnify).
On October 23, 2023, Plaintiff filed and served a first amended complaint asserting a cause of action for gross negligence against Cross-Complainants. (Terminix’s UMF 8.)
On January 25, 2023, Cross-Complainants filed a motion for summary judgment or, in the alternative, summary adjudication against Terminix, to be heard November 1, 2023. The Court continued the hearing to December 15, 2023. On October 25, 2023, Terminix filed an opposition. On November 3, 2023, Cross-Complainants filed a reply.
Trial is currently set for January 31, 2024.
Terminix’s objections (contained in its response to Cross-Complainants’ separate statement): Overruled
PARTIES’ REQUESTS
Cross-Complainants request that the Court grant summary judgment or, in the alternative, summary adjudication.
Terminix requests that the Court deny the motion.
LEGAL STANDARD
“‘[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.’” (LAOSD Asbestos Cases (2023) 87 Cal.App.5th 949, 945, quoting Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, supra, 25 Cal.4th at p. 850.)
When the moving party is a defendant, it must show that the plaintiff cannot establish at least one element of the cause of action. (Aguilar, supra, 25 Cal.4th at p. 853.) “The defendant has shown that the plaintiff cannot establish at least one element of the cause of action by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Id. at p. 854.) The defendant must “present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Ibid.) Thus, “the defendant must ‘support[ ]’ the ‘motion’ with evidence including ‘affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice’ must or may ‘be taken.’ [Citation.] The defendant may, but need not, present evidence that conclusively negates an element of the plaintiff’s cause of action. The defendant may also present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Id. at p. 855, original emphasis.)
“Supporting and opposing affidavits or declarations . . . shall set forth admissible evidence.” (Code Civ. Proc., § 437c, subd. (d).) “Matters which would be excluded under the rules of evidence if proffered by a witness in a trial as hearsay, conclusions or impermissible opinions, must be disregarded in supporting affidavits.” (Hayman v. Block (1986) 176 Cal.App.3d 629, 639.)
In addition, a party moving for summary judgment or summary adjudication must support the motion with “a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence.” (Parkview Villas Assn. v. State Farm Fire & Casualty Co. (2006) 133 Cal.App.4th 1197, 1209 (Parkview Villas), quoting Code Civ. Proc., § 437c, subd. (b)(1) [motion for summary judgment]; see Code Civ. Proc., § 437c, subd. (f)(2) [motion for summary adjudication “shall proceed in all procedural respects as a motion for summary judgment”].) The party opposing the motion must file with the opposition papers “a separate statement that responds to each of the material facts contended by the moving party to be undisputed, indicating whether the opposing party agrees or disagrees that those facts are undisputed. The statement also shall set forth plainly and concisely any other material facts that the opposing party contends are disputed. Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence.” (Code Civ. Proc., § 437c, subd. (b)(3).) If either party fails to comply with the applicable separate statement requirement, that failure may in the court’s discretion constitute a sufficient ground to decide the motion adversely to the offending party. (Code Civ. Proc., § 437c, subds. (b)(1), (3).)
In ruling on the motion, the court must consider all of the evidence and all of the inferences reasonably drawn from it and must view such evidence and inferences in the light most favorable to the opposing party. (Aguilar, supra, 25 Cal.4th at p. 843.)
DISCUSSION
A. The cross-complaint
The cross-complaint alleges the following:
On November 1, 2015, Terminix entered into a Master Services Agreement (“Terminix MSA”) with EMCOR. Under the Terminix MSA, Terminix was to provide pest management services to companies which had contracted with EMCOR for facilities maintenance services (“EMCOR Clients”).
Section 13 of the Terminix MSA required that Terminix defend and indemnify any EMCOR Client for which Terminix was providing pest management against “any and all liabilities, obligations, claims, demands, causes of action, losses, expenses, damages, fines, judgments, settlements and penalties (including, without limitation, reasonable costs, expenses and attorneys’ fees . . . whether or not brought by a third party)” arising out of Terminix’s performance under the Terminix MSA.
Section 12 of the Terminix MSA required that Terminix maintain certain insurance coverages including Commercial General Liability coverage. Cross-complainants are informed and believe that Terminix failed to procure such insurance in breach of the Terminix MSA.
Caliber Holdings is an “EMCOR Client,” as defined by the Terminix MSA. Castro is an employee of Caliber Holdings, and Caliber and RCB are affiliates of Caliber Holdings. All Cross-Complainants are therefore “Indemnified Parties,” as defined under Section 13 of the Terminix MSA and therefore third-party beneficiaries of the Terminix MSA.
On October 1, 2018, Caliber Holdings entered into a Master Services Agreement with EMCOR (“EMCOR MSA”) in which EMCOR was to provide facilities maintenance services for certain Caliber Holdings locations, including the Caliber Collision Center located at 1835 W. Rosecrans Avenue, Unit B in Gardena, California 90249 (the “Caliber South Bay Location”).
Some time prior to June 5, 2020, EMCOR was contacted regarding a rodent problem at the Caliber South Bay Location. On information and belief, EMCOR instructed Terminix to provide pest management services, under the EMCOR and Terminix MSAs, at the Caliber South Bay Location.
On June 5, 2020, a Terminix employee, Eric Cottrell, claims he was injured while providing pest management services at the Caliber South Bay Location.
Terminix failed to properly train Eric Cottrell on how to safely navigate elevated spaces and failed to train Cottrell to perform a hazard assessment prior to the incident and/or failed to properly supervise Cottrell while he was performing pest management services at the Caliber South Bay Location, and that this failure caused or substantially contributed to Cottrell sustaining the injuries that are the subject of the Cottrell Action.
On July 7, 2020, Cottrell filed suit against Caliber (the Caliber entity that operates at the Caliber South Bay Location), Castro (a former Caliber employee), and RCB (the owner of the property) for negligence and premises liability (the “Cottrell Action”). On December 9, 2021, Cottrell amended his complaint to add Caliber Holdings as a defendant.
On August 17, 2020, Cross-Complainants wrote to Terminix requesting that it acknowledge its defense and indemnification obligations with respect to the Cottrell Action and accept Cross-Complainants’ tender of the Cottrell Action. Terminix never responded to this letter. On April 13, 2021, Cross-Complainants in the Cottrell Action again requested that Terminix acknowledge its defense and indemnification obligations. Terminix failed to respond to this letter as well. Terminix has ignored all of Cross-Complainants’ attempts to get Terminix to acknowledge the defense and indemnification obligations it owes to Cross-Complainants with respect to the Cottrell Action.
Under Section 13 of the Terminix MSA, Cross-Complainants are entitled to a complete defense and indemnity from Terminix for all costs, expenses, and damages, including attorneys’ fees, that they have sustained and will sustain relating to the Cottrell Action.
B. Undisputed facts
On October 1, 2018, Caliber Holdings entered into a Master Services Agreement with EMCOR in which EMCOR agreed to provide facilities maintenance services for certain Caliber locations, including the Gardena Center. (UMF 1.)
On November 1, 2015, Terminix entered into a Master Services Agreement with EMCOR (“Terminix MSA”). Under the Terminix MSA, Terminix was to provide pest management services to companies which had contracted with EMCOR for facilities maintenance services (“EMCOR Clients”). (UMF 2.)
Section 13 of the Terminix MSA (titled “Indemnification”) provides in part:
“To the fullest extent permitted by applicable law, [Terminix] shall defend, indemnify and hold harmless [EMCOR] and [any EMCOR Client], and each of their parents and affiliates and their and their parents’ and affiliates’ respective officers, directors, employees, agents, shareholders, partners, joint ventures, affiliates, successors and assigns (collectively, ‘Indemnified Parties’) from an[d] against any and all liabilities, obligations, claims, demands, causes of action, losses, expenses, damages, fines, judgments, settlements and penalties (including, without limitation, reasonable costs, expenses and attorneys’ fees incident thereto and whether or not brought by a third party), arising out of, based upon, or occasioned by or in connection with:
“(a) [Terminix’s] performance of (or failure to perform) the Contract Duties;
“(b) the infringement of the proprietary rights of any third party, Contractor or [EMCOR Client], or a violation of any laws or any negligence, gross negligence or willful misconduct by [Terminix] or its affiliates, Sub-subcontractors, agents or employees during performance of the Contract Duties;
“(c) a breach of this Agreement by [Terminix] or any of its affiliates, Sub- subcontractors; and/or
“(d) any and all losses for claims made by or brought against an Indemnified Party by any former or present employee of [Terminix] or any of its Sub-subcontractors arising from or connected to such employee’s tenure with [Terminix] . . . . .”
(UMF 3.)
Section 8 of the Terminix MSA provides: “[Terminix] shall plan for, and ensure, that all personnel . . . performing any Contract Duties or additional work comply with the provisions of OSHA Safety and Health Standards (29 CFR 1910) . . . . The responsibility for the implementation and enforcement of health and safety requirements lies with [Terminix].” (UMF 5.)
Section 15 of the Terminix MSA states: “This agreement shall by governed by and construed in accordance with the laws of the state that governs [EMCOR’s] contract with Owner (other than its rules as to conflicts of laws which might require application of laws of another jurisdiction[)].” (UMF 6.)
After arriving at the Caliber Gardena Center on June 5, 2020, Plaintiff asked Castro where he believed the rodents were located. Castro showed Plaintiff in the lunchroom area where he believed the rodents were coming from. (UMF 7.)
At his deposition, Castro testified, “[A]ll [Plaintiff] said was, ‘I’ll take care of it,” but he’s like, ‘but I have to get up there’” … “And then he told me – he asked me, ‘How do I get up there?’” … “And then we walked outside the lunchroom, and I told him, ‘I seen them go up through here,’ and I pointed up to the ladder.’” When asked, “So you pointed the ladder out to [Plaintiff]?” Castro responded, “Yes.” (Terminix’s response to UMF 8.)
Once Plaintiff climbed the ladder affixed to the side of the sub-structure and entered the “mezzanine” area, the Caliber Holdings employees returned to their jobs and did not see Plaintiff again until they heard a loud commotion and found Plaintiff on the ground. (UMF 9.)
Plaintiff testified: “After I climbed up the ladder that is bolted onto the wall, I got up there, I looked around. The floor looked like a finished plywood floor that would be normal in that situation. There was a lot of dust up there. There was rodent marks in the dust. There was footprints in the dust. And I followed the footprints to the wall and fell through.” (Terminix response to UMF 10.)
C. Cross-Complainants’ arguments
Cross-Complainants argue that Terminix owes Cross-Complainants a defense and indemnity under the Terminix MSA because it requires that Terminix defend and indemnify Cross-Complainants for their own negligence except where Cross-Complainants are liable for gross negligence or willful misconduct. Cross-Complainants argue that they cannot be liable for gross negligence as a matter of Texas law. (See Reeder v. Wood Cnty. Energy, LLC (Tex. 2012) 395 S.W.3d 789, 796.)
Cross-complainants also argue they are third-party beneficiaries of the Terminix MSA and have the right to bring an action for breach of that contract.
Based on these arguments and supporting evidence, Cross-Complainants have carried their initial burden on summary judgment, shifting the burden to Terminix.
D. Terminix’s arguments
Terminix argues that, under Texas law, a claim for contractual indemnification against a plaintiff’s employer can be made only where the employer executed, before the injury or death occurred, a written agreement with the third party to assume the liability. Because there is no agreement between Terminix and Cross-Complainants, Terminix argues, Cross-Complainants’ claim for contractual indemnification is barred by the exclusive remedy of the Texas workers’ compensation system.
The Court previously rejected Terminix’s argument that Texas workers’ compensation law prevents Cross-Complainants from bringing an express indemnity claim against Terminix. On March 17, 2023, in ruling on Terminix’s motion for summary judgment, the Court noted that the Texas Supreme Court has held that that the Labor Code provision on which Terminix relies does not bar third parties from seeking express indemnity when the third party is an intended third-party beneficiary. (See Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., Inc. (Tex. 2007) 236 S.W.3d 190, 191.) The Court reasoned that Terminix agreed to indemnify EMCOR’s clients, which include Cross-Complainants, from “all liabilities,” except in cases involving by “gross negligence” or “willful misconduct.” The Court found that Cross-Complainants were intended beneficiaries of the Terminix MSA.
Terminix also argues that Cross-Complainants are not entitled to indemnification under the Terminix MSA because (1) it does not expressly state an intention to indemnify Cross-Complainants for their own negligence and (2) the evidence shows that Cross-Complainants were grossly negligent.
On August 25, 2022, in ruling on Terminix’s demurrer to the cross-complaint, the Court rejected Terminix’s argument that the Terminix MSA does not cover Cross-Complainants for their own negligence.
To support its assertion that Cross-Complainants were grossly negligent, Terminix relies on the testimony of John Martinet, Cross-Complainants’ retained expert. At his deposition, Martinet testified that (1) the roof that Plaintiff fell through consisted of drywall over joists that were more than 26 inches apart (Terminix’s UMF 9), (2) it is not safe to walk on the surface such as the roof of the mezzanine (Terminix’s UMF 10), (3) before the accident, Caliber received work estimates to install wooden reinforcements to address the surface of the roof of the mezzanine (Terminix’s UMF 11), (4) there was an opening in the roof in the same location where Plaintiff fell that was documented in photographs that were sent to representatives of Caliber in January 2018, five months before the accident (Terminix’s UMF 12), and (5) “defendants were on notice that the parts of the mezzanine could not support human body weight before the Cottrell accident” yet did nothing to remedy the situation before allowing Cottrell to go up onto the roof (Terminix’s UMF 13).
E. Cross-Complainants’ reply
Cross-Complainants argue that Martinet’s testimony is irrelevant because Cross-Complainants “are not requesting indemnity if they are found liable for gross negligence.” However, according to Cross-Complainants, “Terminix is contractually obligated to indemnify Defendants in all other instances.” (Reply p. 3.)
F. Analysis
Section 13 of the Terminix MSA provides: “Except as may be otherwise provided by applicable law or any governmental authority, [EMCOR] and [EMCOR Client’s] right to indemnification under this Article 13 shall be impaired or diminished only by their acts of gross negligence or willful misconduct.” (UMF 4.)
The Terminix MSA cannot fairly be read to require Terminix to indemnify EMCOR clients whose alleged conduct was grossly negligent simply because they engaged in other conduct that was not grossly negligent, at least when all the conduct contributed to the injury. Based on the evidence Terminix has presented, the Court finds that Terminix has raised a triable issue of fact regarding Cross-Complainants’ right to indemnification.
However, Section 13 of the Terminix MSA, by its terms, does not address Terminix’s obligation to provide a defense. Therefore, Terminix has not carried its burden of raising a triable issue on the issue of its obligation to provide a defense to Cross-Complainants. Cross-Complainants are entitled to summary adjudication of that issue.
CONCLUSION
The Court GRANTS IN PART AND DENIES IN PART the motion for summary judgment or, in the alternative, summary adjudication filed by Defendants and Cross-Complainants Caliber Holdings, Caliber, Castro, and RCB as follows:
The Court GRANTS IN PART Defendants’ and Cross-Complainants’ motion for summary adjudication of the cross-complaint’s fourth cause of action for breach of contract. The Court grants summary adjudication only with respect to Cross-Defendant The Terminix International Company Limited’s contractual obligation to provide a defense to Defendants and Cross-Complainants Caliber Holdings, Caliber, Castro, and RCB. In all other respects, the Court DENIES Defendants’ and Cross-Complainants’ motion for summary adjudication of this claim.
The Court DENIES Defendants’ and Cross-Complainants’ motion for summary adjudication of the cross-complaint’s sixth cause of action for declaratory relief (duty to indemnify).
Moving parties are ordered to give notice of this ruling.
Moving parties are ordered to file the proof of service of this ruling with the Court within five days.