Oltmans Construction v. Bayside Interiors , 10 Cal. App. 5th 355 ( 2017 )

Filed 3/30/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
OLTMANS CONSTRUCTION CO.,
Cross-complainant and Appellant,
A147313
v.
BAYSIDE INTERIORS, INC., (San Mateo County
Super. Ct. No. CIV527704)
Cross-defendant and Respondent.
This appeal presents for interpretation an indemnity provision in a construction
subcontract providing indemnity to a general contractor for injury claims arising out of
the scope of the subcontractor’s work “except to the extent the claims arise out of, pertain
to, or relate to the active negligence or willful misconduct” of the general contractor.
Does this provision preclude the general contractor from recovering any indemnity if its
active negligence contributed to the injury, or does the provision limit recoverable
indemnity to the portion of liability attributable to the negligence of others? The same
question arises as to the meaning of Civil Code section 2782.05,1 which renders void and
unenforceable an indemnity provision “to the extent the claims arise out of, pertain to, or
relate to the active negligence or willful misconduct of that general contractor.” The trial
court adopted the former interpretation but we conclude this was error. Under such a
provision the general contractor is precluded from recovering indemnity for liability
incurred as a result of its own active negligence but may be indemnified for the portion of
liability attributable to the fault of others. Therefore, summary judgment was erroneously
entered against the general contractor on its indemnity claim.
1
All statutory references are to the Civil Code unless otherwise indicated.
1
Background
This action arises out a jobsite injury suffered by Gerardo Escobar, an employee of
O’Donnell Plastering, Inc. (O’Donnell). O’Donnell was a sub-subcontractor of cross-
defendant Bayside Interiors, Inc. (Bayside), which was a subcontractor of cross-
complainant Oltmans Construction Co. (Oltmans), the general contractor on a
construction project in Menlo Park. Escobar brought suit against Oltmans (and against
the owner of the property), alleging, inter alia, that Oltmans negligently cut and left
unsecured a skylight opening in the roof of the building under construction, through
which Escobar fell and suffered injuries when installing scaffolding that O’Donnell had
contracted with Bayside, the plastering subcontractor, to erect. Oltmans filed a cross-
complaint against Bayside and O’Donnell, which contains the claims at issue in this
appeal. The cross-complaint states six causes of action, alleging, inter alia, a right to
express contractual indemnity and also breach of Bayside’s contractual obligation to
provide certificates of insurance certifying that Oltmans was covered as an additional
insured under liability policies the subcontractors were obligated to obtain.2
The basic facts concerning the incident giving rise to Escobar’s injury appear
largely without dispute in the parties’ summary judgment papers. On April 13, 2013, an
Oltmans employee, Dennis Raia, was cutting an opening for the installation of a skylight
on the roof of the building when Oltmans’ project superintendent instructed him to stop
work temporarily and secure the opening because debris was falling on other workers
below. Raia placed over the opening, which itself was covered with plywood, a skylight
curb, a 25-pound wooden frame with wire mesh over the top. He did not attach the curb
to the roof. On April 17, before Raia had returned to complete his job, Escobar and
another O’Donnell employee came to the jobsite to erect scaffolding. While tying the
scaffolding to the building Escobar climbed to the roof and while walking there fell
2
The six causes of action of the cross-complaint are labelled “Breach of Contract,”
“Express Contractual Indemnity,” “Comparative Equitable Indemnity,” “Contribution,”
“Declaratory Relief for Duty to Defend,” and “Declaratory Relief for Duty to
Indemnify.”
2
through the opening that had been partially cut and covered. Escobar had climbed to the
roof without wearing fall-protection gear and did not recall observing the skylight or the
skylight curb.
The subcontract between Oltmans and Bayside contains, as paragraph 11, an
indemnity provision reading in part as follows: “[Bayside] shall, to the fullest extent
permitted by law, indemnify, defend, protect and hold harmless [Oltmans] . . . from and
against each and all of the following: [¶] (a) Any claims . . . arising out of (i) the scope of
the work of [Bayside], or (ii) breach of the obligations of [Bayside] arising from the
scope of work under this subcontract . . . , or (iv) any other act or omission arising out of
the work of [Bayside or its] sub-subcontractors . . . resulting in or alleged to have resulted
in . . . bodily injury . . . . The indemnification and defense required by this Paragraph
11(a) 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.” (Italics added.)
Paragraph 10(f) of the subcontract provides: “[Bayside] shall not allow any
consultant or sub-subcontractor to commence any work until [Bayside] obtains from such
consultant or sub-subcontractor . . . an indemnification in form and substance identical to
the indemnity set forth in paragraph 11 of the subcontract, with the modification that such
indemnity shall be from the consultant or sub-subcontractor for the benefit of [Oltmans]
. . . .”
Bayside moved for summary judgment on Oltmans’ cross-complaint arguing,
among other things, that the undisputed facts establish that Oltmans’ employee was
actively negligent in failing to secure the skylight curb to the roof and that the active
negligence precludes Oltmans from obtaining any defense or indemnity under the terms
of the indemnity provision. Oltmans argued that there is a material disputed fact as to its
alleged active negligence and that, even if actively negligent, it is entitled to be
indemnified for the portion of any liability incurred as a result of the negligence of others,
specifically negligence of Escobar or O’Donnell.
3
O’Donnell also moved for summary judgment on Oltmans’ cross-complaint.
While Bayside’s motion was pending, the court granted O’Donnell’s motion on the
ground that because O’Donnell had not executed its sub-subcontract prior to the date of
Escobar’s injury, Labor Code section 38643 precludes any recovery under the indemnity
provision contained in the sub-subcontract that O’Donnell eventually executed. In
supplemental briefing on Bayside’s motion after that ruling, Oltmans argued that
summary judgment should be denied on the additional ground that Bayside’s failure to
obtain a signed agreement from O’Donnell before O’Donnell began its work constituted a
breach of Bayside’s obligations under paragraph 10(f) of Bayside’s subcontract.
After argument, the court granted Bayside’s motion for summary judgment. In a
written order, the court ruled that “Oltmans’ conduct in leaving a partially cut skylight on
the roof of a building for several days, without securing a cover, and failing to advise
O’Donnell’s employees of the hazard clearly constitutes active negligence on Oltmans’
part. As such, Bayside’s duty to indemnify and hold Oltmans harmless is precluded by
Oltmans’ own conduct.” The trial court rejected Oltmans’ response that, even if actively
negligent, it is entitled to indemnification for any portion of fault that may be apportioned
to O’Donnell or others, and that the words “to the extent” should be construed as barring
indemnity for Escobar’s injuries only to the extent of Oltmans’ own active negligence.
The trial court “reject[ed] this argument, [finding] that the parties’ subcontract is indeed a
general indemnity agreement. An actively negligent indemnitee cannot recover under a
general indemnity contract, even where other parties are contributorily negligent,” citing
McCrary Construction Co. v. Metal Deck Specialists, Inc. (2005) 133 Cal. App. 4th 1528,
1541. The court also rejected Oltmans’ breach of contract claim, stating that the issue was
“neither supported by any facts in Oltmans’ separate statement in opposition to Bayside’s
3
Labor Code section 3864 provides: “If an action as provided in this chapter prosecuted
by the employee . . . against the third person results in judgment against such third
person, or settlement by such third person, the employer shall have no liability to
reimburse or hold such third person harmless on such judgment or settlement in absence
of a written agreement so to do executed prior to the injury.”
4
motion, nor specifically pled in Oltmans’ cross-complaint” and that summary judgment
could not be denied “on issues not raised by the pleadings.”4
Oltmans timely appealed from the resulting adverse judgment.
Discussion
1. Express Contractual Indemnity
Preliminarily, we note that summary judgment may well have been improper
because Bayside failed to present evidence establishing Oltmans’ active negligence as a
matter of law. We agree that if Oltmans was negligent, its negligence would have been
active, rather than passive, as that distinction has been drawn in applying the law
applicable to indemnity agreements. (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13
Cal. 3d 622, 629 (Rossmoor); Morgan v. Stubblefield (1972) 6 Cal. 3d 606, 626-627.)
However, we question whether Bayside’s proffered evidence was sufficient to establish
as a matter of law that Oltmans was negligent. Oltmans’ employee, Raia, did place over
the partial opening, which was covered by plywood, a 25-pound wooden frame to which
was attached wire mesh that presumably would have prevented the accident had it
remained in place. The skylight curb was placed against the wall of the building. There is
no evidence that Raia had any reason to expect others to be on the roof before he
returned, that the 25-pound wooden frame was likely to move or be moved if not screwed
or otherwise attached to the roof, or—unlike the situation in Morgan v. Stubblefield, on
which Bayside heavily relies—that the roof site was in violation of construction safety
orders. (Morgan v. Stubblefield, supra, at p. 626.) Hence, Bayside’s evidence arguably
was insufficient to conclusively establish that the steps Raia took to secure the opening
were unreasonable and to shift the burden of presenting contrary evidence to Oltmans.
We need not resolve the question, however, because we conclude there is a more
fundamental error in the premise on which summary judgment was granted.
4
The court also rejected Oltmans’ claims for equitable indemnity and contribution. On
appeal, Oltmans does not challenge those rulings.
5
The development in California of the law governing the interpretation of
indemnity agreements has been chronicled in numerous decisions. A helpful summary is
found in the case on which Bayside and the trial court order place particular reliance,
McCrary Construction Co. v. Metal Deck Specialists, Inc., supra, 133 Cal. App. 4th 1528.
There, the court explained: “ ‘Indemnity may be defined as the obligation resting on one
party to make good a loss or damage another party has incurred. [Citation.] This
obligation may be expressly provided for by contract [citation], it may be implied from a
contract not specifically mentioning indemnity [citation], or it may arise from the equities
of particular circumstances [citations]. Where, as here, the parties have expressly
contracted with respect to the duty to indemnify, the extent of that duty must be
determined from the contract and not by reliance on the independent doctrine of equitable
indemnity. [Citation.]’ [Citations.] [¶] Some California cases have interpreted express
indemnity provisions by reference to a classification system described in MacDonald &
Kruse, Inc. v. San Jose Steel Co. (1972) 29 Cal. App. 3d 413.” (McCrary Construction Co.
at p. 1536.) The opinion then explains the three classifications described in MacDonald
& Kruse, before continuing with the approach that has to a large extent supplanted those
classifications. “In Rossmoor[, supra, 13 Cal. 3d 622], our Supreme Court described the
governing law as follows: ‘If an indemnity clause does not address itself to the issue of an
indemnitee’s negligence, it is referred to as a “general” indemnity clause. [Citations.]
While such clauses may be construed to provide indemnity for a loss resulting in part
from an indemnitee’s passive negligence, they will not be interpreted to provide
indemnity if an indemnitee has been actively negligent. [Citations.] [¶] Provisions
purporting to hold an owner harmless “in any suit at law” [citation], “from all claims for
damages to persons” [citation], and “from any cause whatsoever” [citation], without
expressly mentioning an indemnitee’s negligence, have been deemed to be “general”
clauses.’ [Citation.] [¶] Rossmoor explained, however, that the analysis of an indemnity
clause was a matter of contract interpretation and the ‘active-passive dichotomy’ was not
‘wholly dispositive.’ [Citation.] ‘[W]hile adhering to the underlying distinction between
active and passive negligence which has long been accepted by the bench, the bar, and
6
the insurance industry, we hold that . . . the question whether an indemnity agreement
covers a given case turns primarily on contractual interpretation, and it is the intent of the
parties as expressed in the agreement that should control. When the parties knowingly
bargain for the protection at issue, the protection should be afforded. This requires an
inquiry into the circumstances of the damage or injury and the language of the contract;
of necessity, each case will turn on its own facts.’ ” (Id. at pp. 1537-1538.) The court
continued, “Thus, following Rossmoor, an indemnity provision that does not refer to the
issue of the indemnitee’s negligence will be considered to be a general indemnity clause
under which the indemnitee is not entitled to indemnity for its active negligence, unless
the circumstances of the case and language of the contract evince a different intent by the
parties.” (Id. at p. 1538.)
An oft-cited case subsequent to Rossmoor, emphasizing that the fundamental
question in applying a contractual indemnity provision is interpretation of the parties’
intent, is Morton Thiokol, Inc. v. Metal Building Alteration Co. (1987) 193 Cal. App. 3d
1025. In that case, the indemnitee under a general indemnity provision was held to be
entitled to indemnification despite its active negligence. The court “agree[d] with the
proposition that indemnity should be afforded under any circumstances where to do so
furthers the manifest intent of the parties to the contract and where the loss sustained
could not have occurred without the indemnitor’s negligence.” (Id. at p. 1029.) The court
considered its conclusion to be faithful to the admonition in Rossmoor “that the active-
passive rubric ought not to be wholly dispositive, but that instead the enforceability of an
indemnity agreement shall primarily turn upon a reasonable interpretation of the intent of
the parties.” (Id. at p. 1030.)
The indemnity provision in the present case is not literally a “general” indemnity
clause as used in Rossmoor because it does address itself to the issue of the indemnitee’s
negligence. In paragraph 11 of the subcontract, Bayside does agree to indemnify Oltmans
against all claims arising out of the scope of its work, but the paragraph goes on to state
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
7
the contractor parties . . . , or to the extent such obligation is inconsistent with the
provisions of California Civil Code 2782.05.” This language plainly implies that Oltmans
is entitled to indemnification for a claim that arises out of its negligence that is not active
negligence or willful misconduct. What is disputed is whether its active negligence
precludes 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.
Contrary to Bayside’s argument and the trial court’s decision, McCrary
Construction Co. does not support the former interpretation. Although the court there
held that the indemnitee whose active negligence contributed to the injured party’s claim
was not entitled to indemnification, the indemnitee in that case was seeking
indemnification only for the portion of liability that was attributable to its own active
negligence. In the underlying action liability had already been apportioned on a
comparative fault basis. The court noted that it was not “necessary to resolve [the
indemnitor’s] contention that a general indemnity clause should be interpreted as
providing for at most comparative indemnity. . . . [H]owever, the practical effect of [its]
decision . . . will be consistent with comparative indemnity principles, as it will leave [the
indemnitee and the indemnitor] each liable to the plaintiffs in the proportion the jury
found each responsible for [the injury].” (McCrary Construction Co. v. Metal Deck
Specialists, Inc., supra, 133 Cal.App.4th at p. 1541, fn. omitted.)
Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal. App. 4th 1791,
1818-1823 provides compelling authority for interpreting the indemnity provision here to
permit indemnification for the portion of Oltmans’ liability attributable to the negligence
of others. Although not the basis for its decision, the Hernandez court noted that the
foundation of the holding in McDonald & Kruse. Inc., that under a general indemnity
provision the indemnitor will not be responsible for any indemnity if the indemnitee’s
negligence contributed to the injured party’s injuries, “appears substantially undercut by
the subsequently evolving and presumably more equitable trend in statutory and case law
toward allocating liability in proportion to comparative fault.” (Hernandez, at p. 1823.)
There, “based upon reasonable interpretation of the contract in light of its language, the
8
circumstances of Employee’s injury, and the parties’ intent in accord with Rossmoor . . . ,
supra, 13 Cal. 3d 622 and Morton Thiokol, Inc. v. Metal Building Alteration Co., supra,
193 Cal.App.3d. 1025” (Hernandez, pp. 1822-1823), the court held that despite being
found to have been actively negligent, the indemnitee was entitled to indemnification for
the portion of its liability attributable to the negligence of the indemnitor. “Reasonably
read, the contractual indemnity language here did not obligate [indemnitor] to indemnify
[indemnitee] for [indemnitee’s] own negligence. Neither could [indemnitee] reasonably
expect to be indemnified for its own negligence. However, reasonably construed, the
contractual language obligated [indemnitor] to indemnify [indemnitee] for the portion of
[indemnitee’s] liability attributable to [indemnitor’s] fault. Such interpretation is
consistent with [indemnitee’s] reasonable expectation it would be indemnified for
liability arising from the negligence of [indemnitor]. Thus, we conclude despite its 20
percent active negligence [indemnitee] was contractually entitled to indemnification from
[indemnitor] for the portion of plaintiffs’ joint and several economic damage award
attributable to [indemnitor’s] 55 percent negligence that is ultimately paid by
[indemnitee].” (Id. at p. 1822.)
In Maryland Casualty Co. v. Bailey & Sons, Inc. (1995) 35 Cal. App. 4th 856, 868-
869, the same court that decided Hernandez v. Badger Construction Equipment Co.,
supra, 28 Cal. App. 4th 1791 stated that Hernandez should not be read “so broadly” as to
necessarily permit an actively negligent indemnitee to recover indemnity on a
comparative fault basis from the indemnitor. Rather, the court reaffirmed that the general
rule limiting the right of an actively negligent indemnitee to obtain indemnification “may
not always apply and is merely a tool to be used to ascertain the intent of the parties.”
(35 Cal.App.4th at p. 869.) The court should not “ignore the traditional rule for
interpreting contractual intent if there is a basis in the record to show the parties intended
the rule to apply to their contracts.” (Ibid.)
The indemnity provision in the present case makes unmistakably clear that the
parties intended to limit the indemnitee Oltmans’ right to indemnification for liability
arising out of the scope of the indemnitor Bayside’s work only “to the extent” the claims
9
arose out of Oltmans’ active negligence or willful misconduct. Had the parties intended
to prohibit Oltmans from obtaining any indemnification if it was actively negligent, that
prohibition could have been stated simply and straightforwardly. Rather, the provision
limits the right to indemnification only “to the extent” of Oltmans’ active negligence, and
no more.
Oltmans cites numerous cases from other jurisdictions that have held that such
language in an indemnity provision creates a comparative fault standard for an award of
indemnity. (MT Builders v. Fisher Roofing, Inc. (Ariz.Ct.App. 2008) 197 P.3d 758, 765
[A provision “limited [indemnitor’s] indemnity obligation ‘to the extent caused in whole
or in part by any negligent act or omission of the Subcontractor.’ . . . [¶] . . . [O]ther
courts have construed this or virtually identical language as creating a comparative fault
or negligence arrangement whereby the indemnitor’s liability is limited ‘to the extent’ it
and its supervisees were at fault.”]; Nusbaum v. Kansas City (Mo. 2003) 100 S.W.3d 101,
106 [“The phrase ‘to the extent caused’ expresses an intention to limit the indemnitor’s
liability to the portion of fault attributed to the indemnitor.”]; East-Harding, Inc. v.
Horace A. Piazza & Associates (Ark.Ct.App. 2002) 91 S.W.3d 547, 551 [“Courts in other
jurisdictions, considering indemnification provisions virtually identical to the one at issue
in the present case, have agreed that the phrase ‘but only to the extent caused’ expresses
the intent to limit the indemnitor’s liability to that portion of fault attributed to the
indemnitor.”]; Greer v. City of Philadelphia (Pa. 2002) 795 A.2d 376, 379 [“By agreeing
to language stating that [indemnitees] were indemnified for damages ‘only to the extent
that’ the damages were caused by the negligence of [indemnitor] and its sub-
subcontractors, employees and anyone for whom it may be liable, the parties
communicated their intent to limit any indemnification to that portion of damages
attributed to the negligence of [indemnitor] and those under its supervision.”]; Hagerman
Construction Corp. v. Long Electric Co. (Ind.Ct.App. 2000) 741 N.E.2d 390, 393-394
[“[T]he phrase ‘but only to the extent” clearly limits indemnitor’s obligation to indemnify
[indemnitee] only to the extent that [indemnitor], its sub-subcontractors, employees, and
anyone for whom it may be liable are negligent.”]; Braegelmann v. Horizon Development
10
Co. (Minn.Ct.App. 1985) 371 N.W.2d 644, 646 [“The additional phrase, ‘to the extent
caused,’ . . . suggests a ‘comparative negligence’ construction under which each party is
accountable ‘to the extent’ their negligence contributes to the injury.”]; Mautz v. J.P.
Patti Co. (N.J. Super.Ct.App.Div. 1997) 688 A.2d 1088, 1092 [accord]; Frank v. MSI
Construction Managers, Inc. (Mich.Ct.App. 1995) 527 N.W.2d 79, 81 [accord]; Dillard
v. Shaughnessy, Fickel and Scott Architects (Mo.App. 1994) 884 S.W.2d 722, 724-725
[accord]; Brown v. Boyer-Washington Blvd. Associates (Utah 1993) 856 P.2d 352, 354-
355 [accord].)
Bayside argues that all of these cases are inapplicable because the “to the extent”
language in the various indemnity provisions applied to the extent of the indemnitor’s
obligations and not to the extent of the indemnitee’s right to obtain indemnification. This
is a distinction without a difference. The provision here states that Oltmans is entitled to
indemnification from all liability arising out of the scope of Bayside’s work “except to
the extent” the liability arises out of Oltmans’ active negligence or willful misconduct.
The meaning of “to the extent” is no less clear in one instance than the other. In both
instances the phrase is a qualification, either of the extent of the indemnitor’s obligation
or the extent of the indemnitee’s entitlement. In both cases the apparent intent is to
apportion liability as between the indemnitor and the indemnitee based on the
proportionate—or comparative—fault of the parties.
That this is the meaning of the qualification is made clearer still by the final
qualification included in the same sentence of the indemnity provision: “or to the extent
such obligation is inconsistent with the provisions of California Civil Code [section]
2782.05.” Subparagraph (a) of section 2782.05 provides, with inapplicable exceptions,
that “provisions . . . affecting any construction contract and amendments thereto entered
on or after January 1, 2013 that purport to insure or indemnify . . . a general contractor
. . . by a subcontractor against liability for claims of death or bodily injury to persons . . .
are void and unenforceable to the extent the claims arise out of, pertain to, or relate to the
active negligence or willful misconduct of that general contractor . . . .” Prior to the
adoption of this section in 2011, section 2782, subdivision (a) had already rendered void
11
and unenforceable a provision in a construction contract providing indemnity to one
whose “sole negligence or willful misconduct” caused an injury giving rise to liability.
The purpose of the new provision added in 2011 was to apportion liability on an
equitable basis in proportion to the fault of the various parties. According to one of the
proponents of the legislation, reflected in the Assembly committee report on the bill,
“This measure would require the commercial construction industry to adopt a fair and
equitable distribution of liability and that each party, including subcontractors, be held
responsible for the alleged defects or damage on construction job-sites caused by [their]
work but not for the alleged defects or damage caused by other parties.” (Assem. Com.
on Judiciary, Analysis of Sen. Bill No. 474 (2011-2012 Reg. Sess.) June 28, 2011
[proposed amendment], p 14.) Numerous letters submitted to the Legislature in support of
the bill emphasized, “SB 474 would simply establish a proportionate, or comparative,
liability standard which would hold each party responsible for the damage he/she
caused.” (E.g., Mark D. Brown, Struc Steel, Inc., letter to Assembly Members, June 23,
2011.) Another submission in support of the measure responded to the argument that the
bill would “immunize[] a subcontractor from any liability for his/her own acts on a
project” by pointing out that was “not true” and that “S.B. 474 has subcontractor
indemnity obligations to [the] extent they are liable.” (Skip Daum, Capitol
Communications Group, Floor Alert, May 23, 2011.) Still another letter stated, “SB 474
. . . requires a system where a subcontractor is only on the hook for the percentage of
fault or negligence that they are found to have committed.” (Ray LeVangie, Jr., United
Association of Journeymen and Apprentices etc., letter to Senator Leland Yee, May 16,
2011.) Another floor alert on behalf of numerous construction trade organizations pointed
out, “SB 474 will restore a comparative fault policy holding ALL contractors and
subcontractors responsible for their own actions.” (Air Conditioning Sheet Metal
Association et al., Senate Floor Alert, May 25, 2011.) Section 1 of Senate Bill No. 474,
which enacted section 2782.05, “finds and declares that it is in the best interests of this
state and its citizens and consumers to ensure that every construction business in the state
is responsible for losses that it, as a business, may cause.” (Stats. 2011, ch. 707, § 1.)
12
To the extent the negligence of Bayside’s sub-subcontractor contributed to the
injury of its employee, as Oltmans has alleged, denying Oltmans indemnification for the
portion of any liability it may occur attributable to that fault would be inconsistent not
only with the language of the contractual indemnity provision but with the purpose
behind section 2782.05. In moving for summary judgment Bayside did not offer evidence
to prove, and did not purport to prove, that Escobar’s injury was caused solely by
Oltmans’ negligence. Therefore, even assuming that Oltmans’ active negligence was one
cause of Escobar’s injury, Oltmans may still be entitled to indemnification from Bayside
for the portion of any liability it occurs attributable to O’Donnell or others. Therefore,
summary judgment was not properly granted against Oltmans.5
2. Breach of contractual obligation to obtain insurance
Paragraph 17(a) of Oltmans’ cross-complaint alleges that Bayside materially
breached its subcontract by “failing to obtain insurance required by the terms of the
subcontract[].” Bayside’s special interrogatory No. 19 addressed to Oltmans asked
Oltmans to state all facts “to support the allegation at par. 17(a) of your cross-complaint,
that Bayside materially breached its subcontract with you by ‘failing to obtain insurance
required by the terms of the subcontracts.’ ” In response Oltmans answered, “At the time
of that allegation, no insurer had yet agreed to defend and indemnify Oltmans without
reservation.” Yet, in moving for summary judgment, Bayside made no attempt to negate
the allegation. Its moving papers failed to address the issue entirely. When the issue was
raised by Oltmans in supplemental papers following the granting of the summary
judgment in favor of O’Donnell, the trial court correctly noted that Oltmans had not
addressed the issue in its separate statement in opposition to Bayside’s summary
5
Should trial of Escobar’s underlying claim produce an allocation of fault among the
various parties, the indemnity issue could become academic for the same reasons it did in
McCrary Construction Co. v. Metal Deck Specialists, Inc., supra, 133 Cal.App.4th at
page 1541. However, there are several possibilities under which the issue could affect
Oltmans’ right to recover, including an allocation of fault to O’Donnell and a judgment
against Oltmans for the full amount of Escobar’s economic damages, or a settlement of
Escobar’s claim without an apportionment of fault.
13
judgment motion. But the court was incorrect, as indicated above, that the issue was not
“specifically pled in Oltmans’ cross-complaint.” In its initial opposition to the summary
judgment motion Oltmans did not present facts to establish Bayside’s breach in this
respect, but it was under no obligation to do so. Because Bayside’s moving papers
included no facts tending to negate Oltmans’ allegation that Bayside had committed such
a breach, Bayside did not make a prima facie showing that the claim lacks merit and the
burden did not shift to Oltmans to present evidence supporting its claim. (Code Civ.
Proc., § 437c, subd. (p)(2); Y.K.A. Industries, Inc. v. Redevelopment Agency of City of
San Jose (2009) 174 Cal. App. 4th 339, 366-367; Nazaretyan v. Cal. Physicians’ Service
(2010) 182 Cal. App. 4th 1601, 1614.) Summary judgment in favor of Bayside therefore
also was improper on this ground.
Disposition
Subsequent to submission of briefing in this matter, the parties have advised this
court that a settlement has been reached calling for dismissal of the appeal. Therefore,
rather than reversing and remanding the matter for further proceedings consistent with
this opinion, as we would otherwise do in view of our conclusion that summary judgment
was erroneously granted, we hereby dismiss the appeal pursuant to the stipulation of the
parties.
_________________________
Pollak, J.
We concur:
_________________________
McGuiness, P. J.
_________________________
Siggins, J.
14
Trial court: San Mateo County Superior Court
Trial judge: Honorable Susan Irene Etezadi
Counsel for cross-complainant and ARCHER NORRIS
appellant: W. Eric Blumhardt
ROPERS, MAJESKI, KOHN & BENTLEY, PC
Susan H. Handelman
Counsel for cross-defendant and CHRISTENSEN EHRET LLP
respondent: Jennifer K. Stinnett
James C. Keowen
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