On 06/01/2017 JEREMY M STAGE filed a Personal Injury - Motor Vehicle lawsuit against SOUTHERN CALIFORNIA EDISON COMPANY. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are AMY D. HOGUE and YOLANDA OROZCO. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
AMY D. HOGUE
STAGE JEREMY M.
HENKLELS & MCCOY INC.
HENKELS & MCCOY GROUP INC.
CAIRE JOSE ANTONIO
CALIFORNIA TRAFFIC CONTROL
CITY OF SAN GABRIEL
ZURICH AMERICAN INSURANCE CO.
CALIFORNIA TRAFFIC CONTROL SERVICES
CAIRE JOSE A.
SOUTHERN CALIFORNIA EDISON COMPANY
DOES 1 TO 30
HENKELS & MCCOY GROUP INC. (DOE 1)
HENKELS & MCCOY GROUP INC.
CALIFORNIA TRAFFIC CONTROL
CALIFORNIA TRAFFIC CONTROL SERVICES DOE 2
HENKELS & MCCOY GROUP INC. DOE 1
BORDIN-WOSK JOSHUA ESQ.
BLOOM MARK J. ESQ.
BORDIN-WOSK JOSHUA D
BORDIN-WOSK JOSHUA D ESQ.
BASS LEON JR. ESQ.
MEYERSON LAURA A. ESQ.
HARRISON ROBERT G.
HOLLINS ANDREW STEWART ESQ.
HARRISON ROBERT GEORGE
HOLLINS ANDREW STEWART
KINNEY CHRISTIANE E. ESQ.
BASS LEON JR. JR.
HARRISON ROBERT GEORGE ESQ.
HARRISON ROBERT G.
HOLLINS ANDREW STEWART
BORDIN-WOSK JOSHUA D
PATEL RAJEEV S. ESQ.
HOLLINS ANDREW S. ESQ.
PATEL RAJEEV SUSHIL ESQ.
INAMINE BRIAN S. ESQ.
5/29/2019: Minute Order
6/14/2019: Motion for Protective Order
6/14/2019: Minute Order
7/26/2019: Separate Statement
7/31/2019: Certificate of Mailing for
3/5/2018: Proof of Service
4/30/2018: Amendment to Complaint (Fictitious/Incorrect Name)
11/7/2018: Civil Case Cover Sheet
3/12/2019: Separate Statement
4/26/2019: Other -
12/6/2017: CIVIL DEPOSIT
6/30/2017: Proof of Service of Summons and Complaint
7/18/2017: Amendment to Complaint (Fictitious/Incorrect Name)
Hearingat 08:30 AM in Department B at 300 East Olive, Burbank, CA 91502; Case Management ConferenceRead MoreRead Less
Docketat 10:14 AM in Department B; Ruling on Submitted MatterRead MoreRead Less
DocketOrder (Court's Order re: Defendant Henkels & McCoy Group's Motion for Summary Judgment; Defendant Southern California Edison Company's Motion for Summary Judgment); Filed by ClerkRead MoreRead Less
DocketCertificate of Mailing for ((Ruling on Submitted Matter) of 08/13/2019); Filed by ClerkRead MoreRead Less
DocketMinute Order ( (Ruling on Submitted Matter)); Filed by ClerkRead MoreRead Less
Docketat 08:30 AM in Department B; Hearing on Motion for Summary Judgment (by Defendant Henkels & McCoy Group) - Held - Taken under SubmissionRead MoreRead Less
Docketat 08:30 AM in Department B; Hearing on Motion for Summary Judgment (by Defendant Southern California Edison) - Held - Taken under SubmissionRead MoreRead Less
DocketOrder Appointing Court Approved Reporter as Official Reporter Pro Tempore; Filed by Henkels & McCoy Group, Inc. (Defendant)Read MoreRead Less
DocketMinute Order ( (Hearing on Motion for Summary Judgment by Defendant Henkels &...)); Filed by ClerkRead MoreRead Less
Docketat 08:30 AM in Department B; Case Management Conference - Not Held - Advanced and Continued - by CourtRead MoreRead Less
DocketAmendment to Complaint (Fictitious Name)Read MoreRead Less
DocketProof-Service/Summons; Filed by Plaintiff/PetitionerRead MoreRead Less
DocketProof of Service of Summons and ComplaintRead MoreRead Less
DocketProof-Service/Summons (PARTY SERVED: SOUTHERN CALIFORNIA EDISON COMPANY ); Filed by Attorney for Plaintiff/PetitionerRead MoreRead Less
DocketComplaint; Filed by Dennis Garr (Plaintiff)Read MoreRead Less
DocketSummons (on Complaint)Read MoreRead Less
DocketComplaintRead MoreRead Less
DocketSummons Filed; Filed by Attorney for Plaintiff/PetitionerRead MoreRead Less
DocketComplaintRead MoreRead Less
DocketSummonsRead MoreRead Less
Case Number: BC662423 Hearing Date: November 20, 2020 Dept: NCB
North Central District
jeremy m. stage, et al.,
southern california edison company, et al.,
Case No.: BC662423
Hearing Date: November 20, 2020
[TENTATIVE] order RE:
(1) HENKELS & MCcOY gROUP’S motion for summary ADJUDICATION
(2) SOUTHERN CALIFORNIA EDISON company’S motion for summary ADJUDICATION
A. Allegations of the Complaint
This action arises out of a motor vehicle accident that occurred on the night of November 6, 2015. Plaintiff Jeremy M. Stage (“Stage”) was driving his vehicle and Plaintiff Dennis Garr (“Garr”) was a passenger in Stage’s vehicle. Plaintiffs allege that Defendant Southern California Edison Company (“SCE”) caused a power outage, which caused the traffic control signals and streetlights to malfunction or become inoperative. It is further alleged that the intersection through which Plaintiffs were driving had no cones, blockage, signage, or warnings to drivers that would apprise drivers of potential hazards. Plaintiffs allege that Defendants caused the dangerous condition – a dark intersection with inoperative or malfunctioning traffic control signals and streetlights.
Plaintiffs allege as they were driving across the intersection of Walnut Grove and Broadway in the city of San Gabriel (“Subject Intersection”), another vehicle was driving through the Subject Intersection and crashed into Stage’s vehicle. Immediately prior to the accident, Stage had been driving his vehicle northbound on Walnut Grove, while the other vehicle was being driven eastbound on Broadway when it entered the Subject Intersection.
The complaint, filed June 1, 2017, alleges causes of action for: (1) general negligence; and (2) premises liability.
On July 18, 2017, the complaint was amended to substitute Defendant Henkels & McCoy Group, Inc. (“H&M”) for Doe 1. On April 30, 2018, the complaint was again amended to substitute Defendant California Traffic Control Services d/b/a California Traffic Control (“CTC”) for Doe 2.
On August 30, 2017, H&M filed a cross-complaint. On February 26, 2018, H&M dismissed without prejudice its cross-complaint against CTC only. On July 26, 2019, H&M filed a second cross-complaint, alleging causes of action for: (1) breach of contract; (2) express indemnification; (3) implied indemnification; (4) equitable indemnification; (5) contribution; and (6) declaratory relief against CTC, Stage, and Caire.
On August 31, 2017, SCE filed a cross-complaint for: (1) total equitable indemnity; (2) contribution; (3) declaratory relief; (4) breach of contract; and (5) breach of insurance contract against Cross-Defendants Jose Antonio Caire, H&M, and Zurich American Insurance Co.
On April 30, 2019, CTC filed a cross-complaint for: (1) equitable indemnity; (2) contribution; (3) apportionment of fault; and (4) declaratory relief against the City of San Gabriel (“City”).
C. Two Motions for Summary Adjudication
On September 1, 2020, H&M and SCE each filed motions for summary adjudication on the issues of duty against CTC. H&M and SCE each seek summary adjudication on the same issues:
· Issue Nos. 1-3: As to the 1st cause of action for breach of contract, the 2nd cause of action for express contractual indemnity, and the 6th cause of action for declaratory relief, CTC at all relevant times owed, and continues to owe, an express contractual duty to defend H&M and/or SCE against any and all claims and/or cross-claims against H&M and/or SCE in this action;
· Issue No. 4: As to the 6th cause of action, H&M is entitled to a declaration that CTC breached, and continues to breach, its duty to defend H&M and/or SCE against any and all claims and/or cross-claims brought against H&M and/or SCE in this action.
On November 6, 2020, CTC filed opposition briefs to the motions. CTC filed separate memorandums of points and authorities in response to H&M and SCE, and filed joint opposition papers for the separate statement, evidence, and declarations.
On November 13, 2020, H&M and SCE filed a joint reply brief.
A. Request for Judicial Notice
H&M and SCE jointly request judicial notice of the following exhibits: (1) the complaint; (2) the amendment to the complaint naming H&M (Doe 1); (3) H&M’s answer to the complaint; (4) H&M’s cross-complaint filed August 30, 2017; (5) the request for dismissal of CTC from H&M’s cross-complaint entered February 26, 2018; (6) the notice of ruling on CTC’s motion for summary judgment/adjudication; (7) H&M’s cross-complaint against CTC filed July 26, 2019; (19)-(21) SCE’s Tariff Schedules TC-1, LS-2, and LS-3; and (23) CTC’s answer to H&M’s cross-complaint.
CTC requests judicial notice of the following exhibits: (12) SCE’s cross-complaint filed on August 31, 2017; and (13) CTC’s answer to H&M’s cross-complaint filed on August 29, 2019.
The requests for judicial notice regarding the court-filed documents are granted. (Evid. Code, § 452(d).) The requests for judicial notice of the SCE Tariff Schedules are granted. (See Evid. Code, §452(b), (h); Los Angeles Cellular Telephone Co. v. Superior Court (1998) 65 Cal.App.4th 1013, 1017 [stating that L.A. Cellular’s tariff was filed with the Public Utilities Commission, at which it became binding on the public with the force and effect of the law].)
B. Evidentiary Objections
With the reply brief, H&M and SCE submitted evidentiary objections to CTC’s evidence. The objection to CTC’s Exhibit 7 (Email from Raul Guardado from H&M to Ron Hill from CTC) is sustained. The objection to paragraph 7 of the Declaration of Jang H. Kang is overruled. (The Court notes that the objection to Mr. Kang’s declaration is to paragraph 7 and the “Grounds for Objection” refers to Exhibit 7; however, Exhibit 7 is discussed in paragraph 8 of Mr. Kang’s declaration.)
DISCUSSION RE SCE’S MOTION FOR SUMMARY ADJUDICATION
A. The Pleadings Limit the Scope of the Motion
With a summary judgment motion, a three-step analysis is required of the trial court. (AARTS Productions, Inc. v. Crocker Nat’l Bank (1986) 179 Cal.App.3d 1061, 1064–65.) First, the trial court must identify the issues framed by the pleadings since it is these allegations to which the motion must respond by establishing a complete defense or otherwise showing there is no factual basis for relief on any theory reasonably contemplated by the opponent’s pleading. (Id.) Secondly, the court must determine whether the moving party’s showing has established facts which negate the opponent’s claim and justify a judgment in movant’s favor. (Id.) Third, when a summary judgment motion establishes the prima facie justification for a judgment, the final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue. (Id.)
In its notice of motion, SCE moves for summary adjudication on the issues of duties asserted by Cross-Complainant H&M against Cross-Defendant CTC. However, it is unclear upon which pleading SCE is moving for summary adjudication.
SCE filed a cross-complaint on August 31, 2017 for: (1) total equitable indemnity against Jose Antonio Caire and H&M; (2) contribution against Caire and H&M; (3) declaratory relief against Caire and H&M; (4) breach of contract against H&M; and (5) breach of insurance contract against Zurich American Insurance Co. CTC is not a named party in SCE’s cross-complaint. Thus, it does not appear that SCE is moving for summary adjudication on its cross-complaint.
H&M filed a cross-complaint on July 26, 2019 for: (1) breach of contract against CTC; (2) express contractual indemnity against CTC; (3) implied indemnity against CTC, Stage, and Caire; (4) equitable indemnity against CTC, Stage, and Caire; (5) contribution against CTC, Stage, and Caire; and (6) declaratory relief against CTC, Stage, and Caire. SCE is not a party to H&M’s cross-complaint, nor does H&M make any mention of SCE in its allegations. Rather, H&M’s causes of action for breach of contract and indemnity (which also seeks the duty to defend) is sought only on behalf of H&M and not on behalf of SCE.
Thus, the Court finds that SCE improperly seeks summary adjudication on issues that were not pled in its cross-complaint or in H&M’s cross-complaint. Based on the current state of the pleadings, SCE seeks adjudication on issues outside of the operative pleadings, such that CTC was not afforded any notice by SCE, CTC was not given an opportunity to raise affirmative defenses, and CTC was not able to conduct discovery on these “claims” asserted by SCE in its moving papers. As such, the Court declines to reach the substantive merits of SCE’s motion because SCE seeks adjudication of issues beyond the operative pleadings.
SCE’s motion for summary adjudication is denied.
DISCUSSION RE H&M’s MOTION FOR SUMMARY ADJUDICATION
A. Issues in Summary Adjudication
In light of the discussion above regarding SCE’s motion, the Court will limit its discussion of H&M’s motion for summary adjudication on the issues as they pertain to H&M and CTC only. Thus, to the extent H&M seeks summary adjudication on the 1st, 2nd, and 6th causes of action on behalf of SCE, the Court denies the motion as to SCE.
B. H&M’s Cross-Complaint Claims
In the 1st cause of action for breach of contract, H&M alleges that prior to the subject incident, H&M contracted with CTC on March 10, 2015 to perform various security related services at the subject location, pursuant to a Master Subcontract Agreement. (H&M XC, ¶¶9, 12.) Pursuant to paragraph 10 of the Master Subcontract Agreement, CTC was and is required to defend, indemnify, and hold H&M harmless for any and all claims arising out of the complaint and any cross-complaints. (Id., ¶¶10, 13.) H&M alleges that CTC breached the Master Subcontract Agreement by refusing to accept H&M’s tenders to defend and indemnify H&M in the action brought by Plaintiff, as required in the agreement. (Id., ¶15.)
In the 2nd cause of action for express contractual indemnity, H&M alleges that pursuant to paragraph 10 of the Master Subcontract Agreement, CTC was required to defend and indemnify H&M for claims such as Plaintiff’s complaint and any other cross-complaints in this lawsuit. (Id., ¶¶19-20.) H&M alleges that it has incurred attorney’s fees for this action, which CTC was contractually obligated to indemnify H&M. (Id., ¶21.)
In the 6th cause of action for declaratory relief, H&M alleges an actual controversy exists between it and Cross-Defendants CTC, Stage, and Caire, regarding whether Cross-Defendants were obligated to indemnify and defend H&M in this action. (Id., ¶36.)
The Court will discuss the breach of contract, express contractual indemnity, and declaratory relief causes of action together, as they are essentially based on the same allegations and issues regarding whether CTC had a duty to defend H&M in this action.
In its memorandum of points and authorities, H&M argues that “[t]his summary adjudication motion focuses only upon the duty to defend….” (Mot. at p.5, lines 3-4.) As alleged in the 1st, 2nd, and 6th causes of action, H&M alleges that CTC had a contractual duty to indemnify and defend it in this action and breached the Master Subcontract Agreement by refusing to accept its tender of defense. H&M now seeks summary adjudication on the 1st, 2nd, and 6th causes of action, arguing that CTC owes H&M an express contractual duty to defend H&M against any and all claims and/or cross-claims against H&M in this action.
1. Relevant Law
The essential elements of a cause of action for breach of contract are: “(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
“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 [internal quotation marks omitted].) In the non-insurance context, parties to a contract may define their duties toward one another in the event of a third-party claim against one or both arising out of their relationship. (Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 551.) Terms of this kind may require one party to indemnify the other under specified circumstances, as well as assign one party responsibility for the other’s legal defense when a third-party claim is made against the latter. (Id.) They may also agree that the promisor’s indemnity and/or defense obligations will only apply if a promisor was negligent, or, conversely, even if the promisor was not negligent. (Id.) A contractual promise to “defend” another connotes an obligation of active responsibility from the outset for the promisee’s defense against such claims and where the indemnitor has breached this obligation, an indemnitee who was thereby forced to defend itself is entitled to reimbursement of the costs of doing so. (Id. at 554-555, 557-558.) “[E]ven if the indemnity obligation is triggered only by an ultimate finding of the indemnitor's fault, the defense obligation applies before, and thus regardless of, any finding to be made in the course of the litigation for which a defense is owed.” (Id. at 561.)
“Any person interested under a written instrument … or under a contract, or … in, over or upon property… may in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint … 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.” (CCP § 1060.) Declaratory relief is allowed if the seeking party presents two essential elements: “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to [the party's] rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.) “Declaratory relief generally operates prospectively to declare future rights, rather than to redress past wrongs” and is a remedy in the interests of “... preventative justice, to declare rights rather than execute them.” (Id.; Babb v. Superior Court (1971) 3 Cal.3d 841, 848.)
2. Discussion Regarding Whether CTC Owes H&M a Duty to Defend
The background facts regarding the subject incident are largely undisputed as they apply to this motion. Plaintiffs allege that, at the time of the accident, a power outage was affecting the intersection, and neither the overhanging streetlights nor the traffic signals were operational. (H&M Fact 12.) Plaintiffs filed their complaint against SCE on June 17, 2017, alleging general negligence and premises liability on the grounds that the power outage placed the intersection in a dangerous condition; the darkened un-signaled intersection was dangerous because there were not cones, blockage signs, or warnings to drivers; and defendants failed to place barricades, warnings, or signs that informed drivers or pedestrians of the inoperative traffic lights. (Id. at 13, 15.) Plaintiffs named H&M as Doe 1 on July 18, 2017. (Id. at 15.) H&M filed its first cross-complaint against CTC on August 30, 2017, which was dismissed without prejudice on February 26, 2018, and refiled the cross-complaint on July 26, 2019. (Id. at 19-20.)
It is also undisputed that H&M was hired by public utility SCE to perform removal and replacement work on a power pole at Broadway Avenue near Del Loma Avenue, approximately 1,000 feet west of the intersection where Plaintiffs’ vehicle collided with Caire’s vehicle on November 6, 2015. (Id. at 1.) SCE provided electrical services to the traffic signal and overhanging lights at the intersection of Walnut Grove Avenue and Broadway Avenue, pursuant to SCE’s tariffs filed with and approved by the California Public Utilities Commission. (Id. at 2.) The power outage was the result of SCE’s planned maintenance outage to allow for the safe removal and replacement of the power pole. (Id. at 3.) H&M did not perform any construction work at the Walnut/Broadway intersection on the day of the accident and did not provide guidance to SCE regarding the scope of the power outage or what geographic areas it should include. (Id. at 4-5.)
On March 10, 2015, H&M and CTC entered into a Master Subcontract Agreement. The terms of the agreement apply to the traffic control services that CTC provided for H&M and SCE on November 6, 2015, relevant to this action. (H&M Fact 8.) CTC agreed to “perform the following Work … and shall provide and pay for all labor, materials, tools, equipment and all other necessary facilities for the execution and completion thereof to Contractor’s [H&M] satisfaction provide general traffic control services in accordance with ‘California Joint Utility – Traffic Control Manual’ and ‘SCE Pedestrian Traffic Control Manual’.” (Id. at 7; H&M’s Ex. 8 [Master Subcontract Agreement, ¶1].)
Paragraph 10 of the Master Subcontractor Agreement states in relevant part:
10. Hold Harmless. To the fullest extent permitted by law, Subcontractor [CTC] assumes the entire responsibility and liability for, and shall defend, indemnify and forever hold harmless Contractor [H&M] and its agents, servants and employees and Principal [SCE] from and against all claims, damages, losses, costs and expenses (including attorney’s fees), fines and penalties and without regard to the cause or causes therefore, including the negligence of [sic] (active or passive) of any party or parties, including the joint or concurrent negligence of Contractor and including claims under any theory of strict liability or defect of premises arising out of, in connection with or resulting from any failure of Subcontractor to adhere to any of the terms of this Agreement, bodily injury, sickness, disease or death or from any injury to or destruction of property sustained in connection with or arising out of any act or omission in the performance of any Work hereunder by Subcontractor, its agents, servants, employees, suppliers, materialmen or subcontractors, and Subcontractor shall defend, at its own expense, any proceedings brought against Contractor, its agents, servants or employees or Principal on account thereof, and shall pay all expenses incurred and satisfy all judgments rendered against Contractor, or any of them in connection therewith. This paragraph shall not apply if the claim arises from Contractor’s sole negligence. Subcontractor must comply with this paragraph unless and until a final determination is made regarding the sole negligence, if any, of Contractor.
(H&M Fact 9; Master Subcontract Agreement, ¶10.) Paragraph 9 of the agreement required CTC to obtain and maintain, at its own cost and expense, a commercial general liability insurance policy naming H&M and SCE as additional insured for ongoing and completed operations. (H&M Fact 10; Master Subcontract Agreement, ¶9(a)(1).)
On September 8, 2017, Zurich American Insurance Co. (H&M’s insurance company, “Zurich”) tendered a demand for H&M and SCE’s defense and indemnity on CTC and its insurer, United Specialty Insurance Company (“United”), referencing Plaintiffs’ lawsuit and the complaint in Case No. BC662523 and CTC’s contract to provide traffic control services at the intersection. (H&M Fact 16; H&M Ex. 9.) It is undisputed that CTC and its insurer denied the tender in a letter dated October 30, 2017. (H&M Fact 17; H&M Ex. 10.) On May 22, 2019, a second tender was made to CTC and its insurer on behalf of H&M and SCE, but H&M did not receive CTC’s acknowledgement of the second tender. (H&M Fact 18; H&M Ex. 11.) H&M argues that CTC has consistently denied and failed to uphold its duty to defend H&M and SCE as set forth in the Master Subcontract Agreement from September 8, 2017 to the present date. (H&M Fact 23.)
H&M argues that CTC owes a continuing duty to defend H&M from the time H&M tendered the action to CTC. (Mot. at pp.9-11.) Based on the terms of the Master Subcontract Agreement at paragraph 10, H&M has upheld its initial burden in showing that CTC agreed to defend, indemnify, and hold H&M harmless from all claims of any party (without regard to the negligence, active or passive, of any party) arising out of or in connection with or resulting from any failure of CTC to adhere to the terms of the agreement and any bodily injury sustained in connection with or arising out of any act or omission in the performance of any work by CTC; and CTC agreed to defend at its own expense any proceedings against H&M and shall pay all expenses incurred and satisfy all judgments rendered against H&M. Based on the Crawford case, the duty to defend is broader than the duty to indemnify and is triggered regardless of the ultimate finding of fault. (Crawford, supra, 44 Cal.4th at 561.) Paragraph 10 states that it must be complied with until a final determination is made regarding H&M’s sole negligence, if any.
Next, H&M argues that the ruling on CTC’s motion for summary judgment on Plaintiff’s complaint established a continuing duty to defend H&M and that CTC has breached that duty. (Mot. at pp. 11-13.) On March 12, 2019, CTC filed a motion for summary judgment on Plaintiffs Stage and Garr’s complaint on the ground that CTC did not owe or breach any duty of care with respect to Plaintiffs. (H&M Fact 21.) On June 14, 2019, the Court denied CTC’s motion on the grounds that CTC did not uphold its initial burden in summary judgment or summary adjudication because CTC’s evidence did not establish the range of its scope of work nor did it conclusively establish that the subject intersection at Walnut/Broadway where the accident occurred could not have been within the scope of its work. (CTC Fact 22; H&M Ex. 6.) The Court also found that even if CTC were able to shift the burden, Plaintiffs raised triable issues of material fact whether CTC owed a duty to Plaintiffs to perform traffic control services up to and at the Walnut/Broadway intersection. (H&M Fact 22.) In the Court’s order regarding CTC’s motion for summary judgment or summary adjudication, the Court did not definitively find that CTC’s scope of work included the Walnut/Broadway intersection—only that there were triable issues on whether CTC’s scope of work extended to that area.
Yet regardless of whether CTC’s scope of work has been definitely established, “[t]he defense duty arises upon tender of a potentially covered claim and lasts until the underlying lawsuit is concluded, or until it has been shown that there is no potential for coverage. [Citation.] When the duty, having arisen, is extinguished by a showing that no claim can in fact be covered, ‘it is extinguished only prospectively and not retroactively.’” (Centex Homes v. R-Help Construction Co., Inc. Taking this together with Crawford, H&M has established its initial burden in showing that CTC had a duty to defend H&M in this action. (The Court notes that even if CTC establishes that it did not owe a duty to defend, the duty to defend is extinguished only prospectively—and not retroactively—upon a showing that no claim is covered.) In opposition, CTC argues that its scope of work did not include the Walnut/Broadway intersection and that Plaintiffs’ allegations did not implicate the work that CTC was hired to perform to trigger a duty to defend. On September 29, 2015, H&M submitted a Traffic Control Request Form to CTC, requesting “Traffic Control Services – Vehicular and/or Pedestrian (Hourly Unit)” for a planned project on November 6, 2015 from 7:30 a.m. to 6:00 p.m. at the Job Address of 8411 E. Broadway Ave., San Gabriel “West.” (CTC Additional Material Fact [AMF] 5; CTC Ex. 6 [Traffic Control Request Form].) The Form requested a two-man crew with arrowboard and equipment (flagging operation) pursuant to Traffic Diagram 4 of the Manual of Uniform Traffic Control Devices. (CTC AMF 6.) CTC argues that it was not hired to perform traffic control at the Walnut/Broadway intersection. (Id. at 7.) It also argues that there were no written “Change Orders” or “Extra Work” pursuant to the Master Subcontract Agreement to authorize H&M to perform traffic control at the Walnut/Broadway intersection, or any other change to the scope of work. (Id. at 20; CTC Ex. 2 [William White, CTC safety director, Depo. at p.74].) CTC provides an email from Raul Guardado (Superintendent of H&M) dated March 17, 2014 that “Moving forward please do not put out stop signs at intersections unless I APPROVE it.” (Id. at 8; CTC Ex. 7.) CTC also provides evidence that the City of San Gabriel placed temporary stop signs at the subject intersection on the morning of November 6, 2015 (CTC Ex. 9 [City’s Response to SROG No. 8]; CTC Ex. 8 [Frank Cardenas Depo. at p.70]); according to City, temporary stop signs at intersections in San Gabriel would only be placed upon advance notice of and if advised by the police department (Cardenas Depo. at pp.48-49; City’s Response to SROG Nos. 1 and 5); and at some point that day, the temporary stop signs at the intersection were removed (CTC Ex. 11 [Stage Depo. at p.71]). (CTC AMF 9-11.)
However, with regard to the email from Mr. Guardado, as stated in the Court’s ruling on the Evidentiary Objections above, the Court sustains the evidentiary objection to CTC’s Exhibit 7 regarding Mr. Guardado’s email. Further, even if considered, the email and Mr. Kang’s declaration lack context to determine whether this email applied to the particular job at issue (re the power pole project in November 2015), or to a specific job in or around March 2014 when the email was sent.
Next, while CTC argues that City placed temporary stop signs at the subject intersection, this may show that City owed some liability to Plaintiffs for placing and removing the temporary stop signs, but this does not absolve CTC’s duty to provide general traffic control services during the power pole project. Also, to the extent CTC argues that prior approval of the police department would be necessary to place stop signs, this does not address whether CTC had a prior duty to seek such permission from the police department and whether that was a part of its scope of work.
Finally, as discussed above, the Court previously found there are triable issues of material fact regarding CTC’s scope of work during the project in a prior motion for summary judgment. Here, the Court finds that there are still questions regarding whether CTC’s scope of duty included the subject intersection. At the summary adjudication stage, the Court does not find that CTC has established that there is no potential for coverage and that its duty to defend was thereby extinguished. (See Centex Homes, supra, 32 Cal.App.5th at 1238.) Thus, CTC continues to owe H&M a defense duty for H&M’s potentially covered claims until Plaintiffs’ lawsuit is concluded or until CTC can show that there is no potential for coverage. (Id.)
3. Discussion Whether the Tender Letters Complied with Civil Code, § 2782.05
Next, the parties dispute whether Civil Code, § 2782.05 applies and the “Hold Harmless” provision is enforceable. Section 2782.05(a) states in relevant part:
(a) Except as provided in subdivision (b), provisions, clauses, covenants, and agreements contained in, collateral to, or affecting any construction contract and amendments thereto entered into on or after January 1, 2013, that purport to insure or indemnify, including the cost to defend, a general contractor, construction manager, or other subcontractor, by a subcontractor against liability for claims of death or bodily injury to persons, injury to property, or any other loss, damage, or expense to the extent the claims arise out of, pertain to, or relate to the of that general contractor, construction manager, or other subcontractor, or their other agents, other servants, or other independent contractors who are responsible to the general contractor, construction manager, or other subcontractor, or for defects in design furnished by those persons, or to the extent the claims do not arise out of the scope of work of the subcontractor pursuant to the construction contract. This section shall not be waived or modified by contractual agreement, act, or omission of the parties. Contractual provisions, clauses, covenants, or agreements not expressly prohibited herein are reserved to the agreement of the parties.
(Civ. Code, § 2782.05(a).)
The Oltmans Construction Co. v. Bayside Interiors, Inc. (2017) 10 Cal.App.5th 355 case is instructive regarding this issue. At issue in Oltmans was a subcontract’s indemnity provision wherein the subcontractor (Bayside) agreed to indemnify the general contractor (Oltmans) against all claims arising out of the scope of its work and that the provision “shall apply in all described matters herein except to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct of the contractor parties …, or to the extent such obligation is inconsistent with the provisions of California Civil Code 2782.05.” (Oltmans, supra, 10 Cal.App.5th at 363.) The disputed issue was whether Oltmans’ active negligence precluded it from recovering any indemnity or only from being indemnified for the portion of its liability based on its own active negligence or intentional misconduct. (Id.) The Court of Appeal found that despite whether an indemnitee is found to be actively negligent, the indemnitee is still entitled to indemnification for the portion of its liability attributable to the negligence of the indemnitor based on comparative fault principles. (Id. at 364; see also id. at 362 [stating that the California Supreme Court in Roosmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 632 determined that “the analysis of an indemnity clause was a matter of contract interpretation and the ‘active-passive dichotomy’ was not ‘wholly dispositive.’”].) The Court also found that the provision entitled Oltmans to indemnification for all liability arising out of the scope of Bayside’s work “except to the extent” the liability arose out of Oltmans’ active negligence or willful misconduct, such that Oltmans could obtain indemnification based on the proportionate or comparative fault of the parties. (Id. at 364, 365-366.) Thus, the Court found that even assuming Oltmans’ active negligence was the cause of the underlying personal injury claim, Oltmans may still be entitled to indemnification from Bayside for the portion of any liability it incurs attributable to others. (Id. at 367.)
The Master Subcontract Agreement at issue in this action states that CTC agrees to defend H&M from all claims (without regard to active or passive negligence of any party, including the joint or concurrent negligence of H&M) arising out of or in connection with CTC’s failure to adhere to the agreement’s terms or any bodily injury sustained in the performance of work performed by CTC. Paragraph 10 further states it does not apply if the claim arises from H&M’s sole negligence; however, CTC also agreed to comply with the paragraph unless and until a final determination is made regarding H&M’s sole negligence, if any.
Similar to Oltmans, the Court finds that paragraph 10 provides for CTC’s duty to defend H&M, unless and until there has been a determination that H&M was solely negligent. Further, paragraph 10 states that CTC shall defend H&M against all claims whether the claim was due to the active or passive negligence of any parties, including the joint or concurrent negligence of H&M. The provision does not state that CTC shall defend H&M against claims based on the active negligence (or willful misconduct) of H&M. Based on the Court’s interpretation of the contract’s terms, the terms carve out a provision similar to Oltmans imposing on CTC a duty to defend H&M in this action, even in the circumstances of comparative fault as it considers H&M’s joint or concurrent negligence. Thus, the Court does not find that CTC’s arguments based on Civil Code, § 2782.05(a) to be a ground to deny the motion.
CTC also argues that H&M did not comply with section 2782.05(e) in its tender letters. Subdivision (e) states in relevant part:
Subdivision (a) does not prohibit a subcontractor and a general contractor or construction manager . A subcontractor shall or portion thereof, to the subcontractor that includes the information provided by the claimant or claimants relating to claims caused by that subcontractor's scope of work. In addition, the general contractor or construction manager shall provide a written statement regarding how the reasonable allocated share of fees and costs was determined. The written tender shall have the same force and effect as a notice of commencement of a legal proceeding.”
(Civ. Code, § 2782.05(e).) “If a general contractor or construction manager tenders a claim, or portion thereof, to a subcontractor in the manner specified by this subdivision, the subcontractor shall elect to perform either…”: (1) defend the claim or (2) pay, within 30 days of receipt of an invoice, no more than a reasonable allocated share of the defense fees and costs, on an ongoing basis during the pendency of the claim. (Id.)
CTC argues that the two tender letters: (1) fail to mention any limitation on CTC’s purported duty to defend and (2) did not make any attempt to allocate CTC’s share of fees and costs. (See CTC AMF 25, 31.)
First, the letters sufficiently apprise CTC/United of the information relating to the claims caused by CTC’s scope of work. In the September 8, 2017 tender letter, Zurich informed United that H&M was demanding CTC/United to assume the defense and indemnity of H&M based on Plaintiffs’ case in BC662423 and described that CTC was contracted to provide traffic control services at the Walnut/Broadway intersection at the time traffic control had been deactivated during H&M’s work. In the November 22, 2019 tender letter, Zurich again informed United that H&M was making a demand upon CTC/United for defense and indemnity regarding Plaintiffs’ lawsuit and again stated the claims for CTC’s scope of work that caused the accident.
Further, as discussed above regarding CTC’s scope of duty, the Court finds that CTC continues to owe H&M a duty to defend until the underlying lawsuit is concluded or until CTC can show that there is no potential for coverage (which CTC has not established in its opposition).
Second, CTC argues that the tender letters fail to provide a written statement regarding how the reasonable allocated share of fees and costs was determined. In the September 8, 2017 and May 22, 2019 tender letters, Zurich (on behalf of H&M) wrote that the tender is “being made under the terms of that contract, in accordance with both the indemnity and hold harmless agreement.” (H&M Exs. 9, 11.) As stated in the “Hold Harmless” (Master Subcontract Agreement, ¶10), “Subcontractor [CTC] shall defend, at its own expense, any proceedings brought against Contractor [H&M], its agents, servants or employees or Principal [SCE] on account thereof, and shall pay all expenses incurred and satisfy all judgments rendered against Contractor, or any of them in connection therewith.” (Emphasis added.) The tender letters put CTC on notice of the allocation of fees and costs, which were based on the parties’ agreed-upon terms in the Master Subcontract Agreement.
For these reasons, the Court does not find that CTC has raised a triable issue of material fact on whether the tender letters failed to comply with Civil Code, § 2782.05(e). Thus, this is not a ground upon which the motion will be denied.
4. Discussion Regarding when the Duty to Defend Arose
Lastly, CTC argues that if a duty to defend has been triggered, there are triable issues of material fact as to when the duty to defend was triggered—either September 8, 2017 with the first tender letter or May 22, 2019 with the second tender letter. (Opp. at pp.18-19.) H&M argues that the duty to defend arose upon the September 8, 2017 tender because a proper tender was made at that time and there was a continuing duty to defend from that tender date. (Reply at pp.11-12.)
The following chronology of events is relevant:
· Plaintiffs Stage and Garr commenced this action on June 1, 2017 against SCE.
· On July 18, 2017, Plaintiffs named H&M as Doe 1 to the complaint.
· On April 30, 2018 Plaintiffs named CTC as Doe 2 to the complaint.
· On August 30, 2017, H&M filed a cross-complaint against CTC. (CTC AMF 21.)
· On September 8, 2017, Zurich (H&M’s insurer) tendered a demand for defense to CTC and United, which United denied on October 30, 2017. (CTC AMF 23, 26; H&M Exs. 9-10.)
· On February 1, 2018, CTC’s counsel sent a letter requesting H&M to dismiss CTC from the cross-complaint. (CTC AMF 28; H&M Ex. 24.)
· On February 26, 2018, H&M dismissed its cross-complaint against CTC. (CTC AMF 29.)
· On May 22, 2019, Zurich re-tendered to CTC and its insurer. (CTC AMF 30; H&M Ex. 11.)
· On July 26, 2019, H&M re-filed its cross-complaint against CTC. (CTC AMF 32.)
In light of the dismissal and the second tender, CTC argues that it is disingenuous of H&M to argue that the September 8, 2017 tender “remained in place throughout this continuing action.” (See Mot. at p.11, lines 3-4.) The Court agrees.
The chronology of events is undisputed such that the Court does not find any triable issue of material fact. As such, the Court may make a determination on when CTC’s duty to defend was triggered.
The duty to defend “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.” (Crawford v. Weather Shield Mfg., Inc. However, neither party provides legal support or case law comparable to the facts of this case where Party A tenders a demand for defense on Party B, Party A dismisses Party B from the action, Party A re-tenders a demand on Party B, and Party A re-adds Party B to the action. Nevertheless, the Court finds that by dismissing CTC from the cross-complaint, H&M indicated to CTC that it was no longer asserting claims seeking indemnity, contribution, or a request for defense against CTC. At the time of the dismissal, H&M extinguished CTC’s duty to defend H&M based on the September 8, 2017 letter. H&M only triggered the duty to defend again upon the second tender letter on May 22, 2019.
As such, the Court finds that CTC’s duty to defend H&M arose beginning from the May 22, 2019 tender letter.
CONCLUSION AND ORDER
SCE’s motion for summary adjudication against CTC is denied.
H&M’s motion for summary adjudication against CTC is granted in part such that the Court finds that CTC has a duty to defend H&M in this action and this duty to defend arose from the second tender letter on May 22, 2019. The remainder of the motion as to any issues of adjudication regarding SCE is denied.
H&M and SCE shall provide notice of this ruling.
 On August 9, 2019, the Court held a hearing on H&M and SCE’s motions for summary judgment as to Plaintiffs’ Complaint and took the matters under submission. On August 13, 2019, the Court denied H&M’s motion for summary judgment and denied SCE’s motion for summary judgment.
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