Judge: Lisa R. Jaskol, Case: 22STCV12508, Date: 2023-09-08 Tentative Ruling

Case Number: 22STCV12508    Hearing Date: September 8, 2023    Dept: 28

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

BACKGROUND 

On April 13, 2022, Plaintiff Zhirayr Lalayan (“Plaintiff”) filed this action against Defendants Dealer Tire, LLC, 310 Dealer Tire, and Does 1-100 for general negligence and premises liability. 

On June 28, 2022, Defendant Dealer Tire, LLC dba 310 DEALER TIRE (“Dealer”) filed an answer.  Dealer also filed a cross-complaint against Cross-Defendant State Courier and Logistics LLC (“Courier”) and Roes 1-25 for full indemnity, partial indemnification, contribution and declaratory relief. 

On July 11, 2023, Dealer filed a first amended cross-complaint. 

On August 7, 2023, Courier filed a demurrer to the first amended cross-complaint, to be heard on September 8, 2023. On August 23, 2023, Dealer filed an opposition. On August 30, 2023, Courier filed a reply. 

Trial is scheduled for March 5, 2024. 

PARTIES’ REQUESTS 

Courier requests that the Court sustain the demurrer. 

Dealer requests that the Court overrule the demurrer. 

LEGAL STANDARD 

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds: 

“(a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading. 

“(b) The person who filed the pleading does not have the legal capacity to sue. 

“(c) There is another action pending between the same parties on the same cause of action. 

“(d) There is a defect or misjoinder of parties. 

“(e) The pleading does not state facts sufficient to constitute a cause of action. 

“(f) The pleading is uncertain. As used in this subdivision, “uncertain” includes ambiguous and unintelligible. 

“(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct. 

“(h) No certificate was filed as required by Section 411.35.” 

(Code Civ. Proc., § 430.10.) 

In a demurrer proceeding, the defects must be apparent on the face of the pleading or by judicial notice. (Code Civ. Proc., § 430.30, subd. (a) [“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading”].) 

“For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded (i.e., all ultimate facts alleged, but not contentions, deductions, or conclusions of facts or law).”  (L. Edmon and C. Karnow, Cal. Practice Guide: Civil Procedure Before Trial (Rutter 2023) (Cal. Practice Guide) ¶ 7:43, p. 7(l)-25, emphasis omitted.) 

DISCUSSION 

A.   The first amended cross-complaint 

Dealer alleges the following: 

Plaintiff was Courier’s employee and was acting in the scope of his employment, and under Courier’s supervision, when he allegedly slipped and fell in a warehouse, suffering injuries.  (First Amended Cross-Complaint (FACC) ¶ 7.) 

At the time, a Dedicated Services Agreement existed between “Southern California Logistics” (the same company as Courier) and Dealer.  The agreement “established a preferential relationship whereby Dealer Tire will realize efficiencies in cost, availability, and service to itself and its customers through use of [Courier’s] dedicated transportation services, Equipment and Personnel, at Dealer Tire locations set forth therein.” (FACC ¶ 9.)  A copy of the Dedicated Services Agreement is attached to the first amended cross-complaint as Exhibit D.^[1]

 Courier is contractually obligated to indemnify Dealer for the claimed costs, expenses, and fees incurred by Dealer in defending itself in the pending proceedings.  (FACC ¶ 14.) 

B.   The Dedicated Service Agreement 

The Dedicated Service Agreement attached to the first amended cross-complaint states in part: 

“9. INDEMNIFICATION. Provider [Southern California Logistics, which Dealer asserts is the same company as Courier] agrees to defend, indemnify and hold harmless Dealer Tire from and against any and all actual or alleged losses, damages, claims, liabilities, obligations, and expenses (including costs of litigation and reasonable attorney's fees) relating to or arising out of (i) the acts, errors or omissions or willful misconduct of Provider and/or Personnel [Provider’s employees or contractors]; (ii) any failure to perform or breach by Provider of the terms, representations, warranties, covenants, obligations or duties of Provider under this Agreement; and (iii) any injuries caused or incurred by Personnel while performing services hereunder.”  (FACC, Exh. D, p. 4.) 

The agreement also stated:  “The term of this Services Agreement is for one (1) year from the date of execution. This Agreement shall renew for successive one-year periods unless sooner terminated as set forth below or by mutual written consent of the parties. This Agreement may be terminated by either party for convenience upon not less than sixty (60) business days prior written and verbal notice. In addition, this Agreement may be terminated: (i) by either party by written notice to the other party upon bankruptcy or insolvency of the other party; (ii) by the non-breaching party upon written notice if a party fails to comply with the terms of this Agreement and does not cure such breach and provide non-breaching party with evidence verifying such compliance within five (5) days after receipt of notice thereof.”  (FACC, Exh. D, p. 4.)

 The agreement’s effective date is January 1, 2018.  (FACC, Exh. D, pp. 1, 5.)  “All provisions which would naturally survive the expiration or termination of this Agreement shall so survive, including, but not limited to all indemnification provisions . . . .” (FACC, Exh. D, p. 5.) 

C.   The demurrer 

Courier argues the indemnification provision in the service agreement does not apply because “there is still no allegation as to any fault or misconduct on the part of [Courier].”  According to Courier, “[t]he clause discusses losses caused by the willful misconduct of Provider (SCL) and/or Personnel AND, not OR, injuries caused or incurred by Personnel. If the clause had meant a blanket indemnity for any injury incurred by "personnel", it would have been "OR". However, the clause used the word "AND", which means injury incurred and from the result of the acts, errors omissions or willful misconduct of the Provider SCL.” 

Courier’s interpretation is not convincing.  As relevant here, the indemnification provision is reasonably interpreted to mean that Southern California Logistics agrees to indemnify Dealer (1) for expenses arising out of acts, errors or omissions, or willful misconduct by Courier and/or its employees and contractors, as well as (2) for any injuries caused or incurred by Courier’s employees or contractors while performing services under the agreement.  An allegation of fault or misconduct by Courier is not required.    

The Court overrules the demurrer.  

CONCLUSION 

The Court OVERRULES the demurrer of Cross-Defendant State Courier and Logistics LLC.  Cross-Defendant State Courier and Logistics LLC is ordered to file its answer to the first amended cross-complaint within 10 days.  (Cal. Rules of Court, rule 3.1320(g).) 

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.