TROY UBERTUS VS KAISER FOUNDATION ET AL

Tentative Rulings

Case Number: BC677097    Hearing Date: December 17, 2020    Dept: 47

Troy Umbertus v. Kaiser Foundation, et al.

MOTION FOR SUMMARY ADJUDICATION

MOVING PARTY: Defendants/Cross-Defendants/Cross-Complainants Brookfield Properties Management (CA) Inc. and 333 South Hope Co. LLC

RESPONDING PARTY(S): Cross-Defendant/Cross-Complainant Kaiser Foundation Health Plan, Inc.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a premises liability action. Plaintiff alleges that he was severely injured when he received an electrical shock from an exposed wire at 333 S. Hope Street.

Brookfield Properties and 333 South Hope filed a cross-complaint against Kaiser, Harris L. Woods Electrical Contractor, Interior Removal Specialist, and O’Bryant Electric for express indemnity (against Kaiser), equitable indemnity, contribution, and declaratory relief.

Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc. also filed a cross-complaint against 333 South Hope, Brookfield, Harris L. Woods Electrical Contractor, Interior Removal Specialist, and O’Bryant Electric for express indemnity, equitable indemnity, comparative fault, and declaratory relief.

Cross-Complainants Brookfield Properties and 333 South Hope seek summary adjudication of their fourth cause of action against Kaiser Foundation Health Plan, Inc.

TENTATIVE RULING:

Defendants/Cross-Complainants Brookfield Properties Management (CA) Inc. and 333 South Hope Co. LLC’s motion for summary adjudication against Kaiser Foundation Health Plan, Inc. is GRANTED.

DISCUSSION:

Cross-Complainants’ Request for Judicial Notice

Cross-Complainants request judicial notice of (1) the complaint in this action, and (2) the first amended cross-complaint in this action. These requests are GRANTED per Evidence Code § 452(d) (court records).

Kaiser’s Evidentiary Objections

Pursuant to CCP § 437c(q), the Court only rules upon objections asserted against evidence which the Court deems to be material to the disposition of this motion, as follows:

Declaration of David Thompson

This evidence was not deemed material to the disposition of the motion (apart from the exhibits to the declaration, which are not challenged).

Declaration of Mark Phillips, Esq.

No. 5: OVERRULED. Not improper legal opinion. Sufficient personal knowledge and foundation. Not speculative.

Declaration of Mitchell D. Kaylor

This evidence was not deemed material to the disposition of the motion.

Cross-Complainants’ Evidentiary Objections

Pursuant to CCP § 437c(q), the Court only rules upon objections asserted against evidence which the Court deems to be material to the disposition of this motion, as follows:

Kaiser’s Exhibit 1

This evidence was not deemed material to the disposition of the motion.

Kaiser’s Exhibit 2: Deposition of Greg Zickovich

No. 4: OVERRULED. The objections go to weight, not admissibility.

Kaiser’s Exhibit 3: Declaration of Ed Banda

No. 5: OVERRULED. To the extent that this declaration contains hearsay, they are the types of statements that may ultimately be admitted at trial through the testimony of other witnesses, and therefore they are appropriately considered here. (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.) Other objections go to weight, not admissibility.

Nos. 6-10, 12, 13: OVERRULED. The objections go to weight, not admissibility.

No. 11: OVERRULED. To the extent that this declaration contains hearsay, they are the types of statements that may ultimately be admitted at trial through the testimony of other witnesses, and therefore they are appropriately considered here. (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.)

Motion for Summary Adjudication

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. Atl. Richfield Co. (2001) 25 Cal.4th 826, 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.)

“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.) Once the moving party has met that burden, section 437c shifts the burden to the opposing party to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. If the opposing party cannot do so, summary judgment should be granted. (Avivi v. Centro Medico Urgente Med. Ctr. (2008) 159 Cal.App.4th 463, 467.)

When deciding whether to grant summary judgment or adjudication, the Court must consider all of the evidence set forth in the papers, except evidence to which the Court has sustained an objection, as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment. (Ibid.)

[Unnumbered Sole Issue[1]]: “Cross-Complainants are entitled to summary adjudication as to the Fourth Cause of Action . . . for Declaratory Relief: Duty to Defend because there are no triable issues of material fact.”

In the sole issue Cross-Complainants present for summary adjudication, they argue that they are entitled to summary adjudication of their fourth cause of action for declaratory relief as to the duty to defend because Kaiser is contractually bound to defend them.

Parties to a 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. (See Civ.Code, § 2772 [“Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person.”].) . . . They may also assign one party, pursuant to the contract's language, responsibility for the other's legal defense when a third party claim is made against the latter. . . .

As befits the contractual nature of such arrangements, but subject to public policy and established rules of contract interpretation, the parties have great freedom to allocate such responsibilities as they see fit. . . . “When the parties knowingly bargain for the protection at issue, the protection should be afforded.” . . . Hence, they may agree that the promisor's indemnity and/or defense obligations will apply only if the promisor was negligent, or, conversely, even if the promisor was not negligent. . . .

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 (§ 1636), as ascertained from the contract's language if it is clear and explicit (§ 1638). Unless the parties have indicated a special meaning, the contract’s words are to be understood in their ordinary and popular sense. (§ 1644; . . . .)

* * *

[S]ection 2778, unchanged since 1872, sets forth general rules for the interpretation of indemnity contracts, “unless a contrary intention appears.” If not forbidden by other, more specific, statutes, the obligations set forth in section 2778 thus are deemed included in every indemnity agreement unless the parties indicate otherwise. Several subdivisions of this statute touch specifically on the indemnitor's obligations with respect to the indemnitee’s defense against third party claims.

In this regard, the statute first provides that a promise of indemnity against claims, demands, or liability “embraces the costs of defense against such claims, demands, or liability” insofar as such costs are incurred reasonably and in good faith. (§ 2778, subd. 3, italics added.) Second, the section specifies that the indemnitor “is bound, on request of the [indemnitee], to defend actions or proceedings brought against the [indemnitee] in respect to the matters embraced by the indemnity,” though the indemnitee may choose to conduct the defense. (Id., subd. 4, italics added.) Third, the statute declares that if the indemnitor declines the indemnitee's tender of defense, “a recovery against the [indemnitee] suffered by him in good faith, is conclusive in his favor against the [indemnitor].” (Id., subd. 5.)

(Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 551–553, bold emphasis added.)

A contractual promise to “defend” another against specified claims clearly connotes an obligation of active responsibility, from the outset, for the promisee’s defense against such claims. The duty promised is to render, or fund, the service of providing a defense on the promisee's behalf —a duty that necessarily arises as soon as such claims are made against the promisee, and may continue until they have been resolved. This is the common understanding of the word “defend” as it is used in legal parlance. . . .

A duty to defend another, stated in that way, is thus different from a duty expressed simply as an obligation to pay another, after the fact, for defense costs the other has incurred in defending itself. Section 2778, the statute governing the construction of all indemnity agreements, makes the distinction clear. On the one hand, as noted above, the section specifies that a basic contractual indemnity against particular claims, demands, or liabilities “embraces the costs of defense” against such claims, demands, or liabilities. (Id., subd. 3.) On the other hand, the statute separately specifies the indemnitor's duty actually “to defend,” upon the indemnitee's request, proceedings against the latter “in respect to the matters embraced by the indemnity,” though “the person indemnified has the right to conduct such defenses if he chooses to do so.” (Id., subd. 4.) Finally, section 2778 sets forth how the indemnitor's obligations will be affected if the indemnitor fails to accept an indemnitee’s tender of defense or, alternatively, if the indemnitor is denied an opportunity to assume and control the defense. (Id., subds. 5, 6.) . . .

By virtue of these statutory provisions, the case law has long confirmed that, unless the parties’ agreement expressly provides otherwise, a contractual indemnitor has the obligation, upon proper tender by the indemnitee, to accept and assume the indemnitee’s active defense against claims encompassed by the indemnity provision. Where the indemnitor has breached this obligation, an indemnitee who was thereby forced, against its wishes, to defend itself is entitled to reimbursement of the costs of doing so.

(Id. at 553-555, bold emphasis added.)

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.” (Id. at 558.) Thus, 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.” (Ibid.) “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.) And the “duty to defend upon the indemnitee's request, as set forth in subdivision 4 of section 2778, is distinct from, and broader than, the duty expressed in subdivision 3 of the statute to reimburse an indemnitee's defense costs as part of any indemnity otherwise owed.” (Id. at 564.)

Here, Cross-Complainants have presented evidence that 333 South Hope leased the premises where Plaintiff was allegedly injured to Kaiser and that the lease contains the following provision:

Tenant’s Indemnity. Unless waived by Landlord under (a), Tenant will indemnify and defend Landlord and its Affiliates and hold each of them harmless from and against Claims arising from:

(1) Any accident or occurrence on or about the Premises, except to the extent caused by Landlord’s or its Affiliates’ gross negligence or willful misconduct;

(2) Tenant’s or its Affiliates’ negligence or willful misconduct; or

(3) Any claim for commission or other compensation by any person other than the Brokers for services rendered to Tenant in procuring this Lease.

(Defendants’ Separate Statement of Undisputed Material Facts (“UMF”) Nos. 2-4, 7, 15; Exh. 1, at p. 20 [lease].) “Claims” are defined as “any and all liabilities, losses, claims, demands, damages or expenses that are suffered or incurred by a party, including attorneys’ fees reasonably incurred by that party in the defense or enforcement of the rights of that party.” (UMF No. 8; Exh. 1, at p. 20.) “Affiliates” are defined to include a party’s “agents.” (UMF No. 9; Exh. 1, at p. 21.) Cross-Complainants have presented evidence that Brookfield was an agent of 333 South Hope during the lease period. (UMF No. 10; Exh. 1, at p. 1.) They have also presented evidence that Plaintiff was working for a company that was hired to perform work for Kaiser on the premises when he was injured, and that Plaintiff alleges that Defendants, including Kaiser, were negligent in allowing the property to be in a dangerous and defective condition when he was injured. (UMF Nos. 14, 15, 16.) They present evidence that they tendered the defense and indemnity of Plaintiff’s suit to Kaiser three times in 2018 and that Kaiser refused to defend them. (UMF Nos. 17, 18.)

With this evidence, Cross-Complainants have met their initial burden to show that are entitled to declaratory relief that Kaiser owes them a duty to defend. Because Cross-Complainants have met their initial burden, the burden shifts to Kaiser to raise a triable issue of material fact.

For the most part, Kaiser does not dispute the facts as presented by Cross-Complainants. Rather, the parties’ disputes largely relate to the interpretation of their contract. Indeed, the few facts that Kaiser disputes primarily relate to the definition of the “Premises” in the lease and the exclusions from that term. (Kaiser’s Separate Statement in Opposition (“SS”) Nos. 2, 6, 12-14.) Otherwise, Kaiser only disputes the use of “defendants” to refer to Kaiser and certain other assertions by Cross-Complainants as to the language of the complaint (Kaiser’s SS No. 16), and Kaiser presents its own “additional undisputed material facts” in support of its arguments. Ultimately, Kaiser’s overall arguments are (1) that the language of Plaintiff’s complaint did not trigger its duty to defend; and (2) even if its duty to defend was triggered, the undisputed facts demonstrate that 333 S. Hope committed active negligence and therefore Kaiser was not required to defend it.

As to the first point – whether the complaint triggered its duty to defend – Kaiser argues that it did not because it (Kaiser Foundation Health Plan, Inc.) is not named in the complaint. (Kaiser’s SS No. 16.) It is not strictly necessary that Kaiser Foundation Health Plan, Inc. be named in the complaint, however, as long as Kaiser is somehow “implicated” in the allegations of the complaint. (UDC-Universal Development, L.P. v. CH2M Hill (2010) 181 Cal.App.4th 10, 21.) In UDC, the allegations against the Doe defendants in the complaint were descriptive enough that they “implicated CH2M Hill’s work.” (Ibid.) Here, Plaintiff alleges that the Defendants and Does 1 to 50 “negligently owned, maintained, controlled, managed, operated and inspected the premises.” (Complaint, at p. 4, Prem.L.-1, bold emphasis added.) Kaiser does not dispute that it was the tenant named in the lease (Kaiser’s SS No. 4), and it seems reasonable for Kaiser to recognize the potential implications of Plaintiff’s allegations. (Cf. Stowe v. Fritzie Hotels (1955) 44 Cal.2d 416, 421 [“To make one a tenant, as respects and owner’s liability for injuries sustained by an occupant on the premises, he must have exclusive possession and control.”].)

Kaiser also argues that the allegations in the complaint did not trigger its duty to defend because Plaintiff does not allege that any tenants were negligent or that he was injured in the one of the suites rented by Kaiser, and therefore the allegations were not “sufficient to implicate that Plaintiff’s claims were ‘arising’ from Kaiser’s duty to indemnify 333 S. Hope at the time of 333 S. Hope’s tender.” (Oppo., at p. 12). As noted above, however, a “contractual indemnitor has the obligation, upon proper tender by the indemnitee, to accept and assume the indemnitee’s active defense against claims encompassed by the indemnity provision.” (Crawford, supra, 44 Cal.4th at 555, bold emphasis added.) Kaiser’s argument appears to disregard the importance of 333 S. Hope’s tender in putting it on notice of its duty to defend. Its argument also minimizes the differences between the duty to indemnify and the duty to defend, which is “broader.” (Id. at 564.) As stated in the insurance context, the “duty to defend ‘runs to claims that are merely potentially covered, in light of the facts alleged or otherwise disclosed.” (Golden Eagle Ins. Corp. v. Rocky Cola Cafe, Inc. (2001) 94 Cal.App.4th 120, 125, bold emphasis added.) Thus, the law does not permit the party with the duty to defend to put blinders on and ignore other evidence disclosed along with the pleadings.

As to Kaiser’s second argument – that even if its duty to defend was triggered, the undisputed facts demonstrate that 333 S. Hope committed active negligence and therefore Kaiser was not required to defend it – this is a frequent and perplexing error in oppositions and opposing separate statements. Rather than the additional “undisputed” material facts in Kaiser’s separate statement, CCP § 437c contemplates that the opposition separate statement will set forth “any other material facts the opposing party contends are disputed.” (CCP § 437c(b)(3), bold emphasis added.) Additional “undisputed” facts do not create a triable issue of material fact, unless the moving party disputes them without also arguing that they are irrelevant, as most moving parties do under those circumstances.

In any event, Kaiser argues that it was not required to defend Kaiser because Kaiser was actively negligent. As Cross-Complainants argue in their reply, however, their potential negligence relates to indemnity, not Kaiser’s duty to defend. (Crawford, supra, 44 Cal.4th at 558.)

Kaiser also argues that it had no duty to defend Cross-Complainants because the wire that allegedly injured Plaintiff was “traced to the back wall of suite C-130 above the finished ceiling.” (Oppo., at p. 15.) Here, Kaiser relies on an “exclusion” from the definition of the “Premises” for “any areas above the finished ceiling or integrated ceiling systems, or below the finished floor coverings that are not part of the Leasehold Improvements.” (Kaiser’s Additional Undisputed Material Facts (“AMF”) No. 20; Exh. 1, at p. 6.] Kaiser also relies on a declaration indicating that the Plaintiff was electrocuted after coming into contact with an electrical wire that was “not serving suite C-130 and located above the finished ceiling in the suite.” (Kaiser’s AMF No. 34; Declaration of Ed Banda ¶ 9.) As Counter-Complainants point out, however, this declaration contradicts Banda’s deposition testimony that this wire had to be serving suite C-130’s emergency system. (Reply Evidence, Banda Depo. 155:11-20.) Banda also stated in his deposition that the ceiling was not finished. (Banda Depo. 81:24 to 82:1.) In general, a witness cannot seek to contradict his own deposition testimony through later declarations. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22.) Moreover, the contract applies to accidents “on or about” the premises, not merely “on” the premises. (Exh. 1, at p. 20.)

More generally, Kaiser argues that the relevant definition of the “Premises” is found in Section 2.5 of the Lease, which states that the “Premises includes the Leasehold Improvements and excludes certain areas, facilities and systems . . . .” (Kaiser’s SS Nos. 2, 6, 12-14; Exh. 1, at p. 6.) This would presumably mean that Plaintiff was not injured on the “Premises” and Kaiser had no duty to defend. Even aside from the “on or about” language, however, Kaiser’s reading of the definition of “Premises” ignores an earlier provision in the contract definiting the “Premises” to include its suites, C-130 and C-145. (Exh. 1, at p. 1.) In short, Kaiser has not shown that there is any dispute as to whether Plaintiff was injured “on or about the Premises” as defined in the contract.

Kaiser’s arguments also ignore that it is obligated to defend not only claims arising from any “accident or occurrence on or about the Premises,” but also claims arising from its own “negligence or willful misconduct.” (Cross-Complainants’ UMF No. 7; Exh. 1, at p. 20.) As discussed above, Plaintiff alleges that those who “controlled” and “operated” the premises acted negligently. (Complaint, at p. 4.) For the reasons discussed above, this provides an additional basis on which to conclude that Kaiser’s duty to defend was clear.

Accordingly, Cross-Complainants’ motion for summary adjudication is GRANTED.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: December 17, 2020 ___________________________________

Randolph M. Hammock

Judge of the Superior Court