Solares v. Consolidated Disposal Service
Filed 2/27/13 Solares v. Consolidated Disposal Service
CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying
on opinions not certified for publication or ordered published, except as
specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE
DISTRICT
DIVISION EIGHT
GREGORIO SOLARES,
Plaintiff,
v.
CONSOLIDATED DISPOSAL
SERVICE, LLC,
Defendant.
B237713
(Los
Angeles County
Super. Ct.
No. BC395929)
CONSOLIDATED DISPOSAL
SERVICE, LLC,
Cross-complainant
and Appellant,
v.
ASPEN DISTRIBUTION I, INC.,
Cross-defendant
and Respondent.
APPEAL
from a judgment of the Superior Court
of
County. Kenneth
Freeman, Judge. Affirmed.
Neil, Dymott,
Frank, McFall & Trexler, Hugh A. McCabe and David P. Hall for
Cross-complainant and Appellant.
Early
Maslach & O’Shea, John Peterson, James Grafton Randall; Law Office of
Priscilla Slocum and Priscilla Slocum for Cross-defendant and Respondent.
__________________________
Consolidated
Disposal Service, LLC (Consolidated), appeals from the judgment entered against
it on its cross-complaint for indemnity against Aspen Distribution I, Inc. (Aspen)
the indemnity claim was based on an underlying product liability action by an Aspen
employee who was injured while filling a refuse container that Consolidated had
leased to Aspen. We affirm the judgment because there was no
evidence that the accident was caused even in part by Aspen’s
negligence.
FACTS AND PROCEDURAL HISTORY
On
August 6, 2008, Gregorio
Solares sustained serious head
injuries after falling from the top of a nine-foot high refuse bin while
working at Aspen. The container was one of several
40-cubic-yard roll-off containers that Aspen
leased from Consolidated. Solares sued
Consolidated for product liability, alleging that Consolidated had replaced the
lids on the containers with ones that were unsafe because: they were more likely to become stuck; they
required personnel to climb on top in order to open or close them; and Aspen
failed to provide warnings or instructions concerning these hazards.
Consolidated
cross-complained against Aspen for indemnity
and declaratory relief pursuant to the parties’ lease agreement, which
provided that “[Aspen] agrees to protect, defend, indemnify, and hold harmless
[Consolidated] against all claims, damages, suits, penalties, fines, and
liabilities for injury or death to persons or loss or damage to property
arising out of [Aspen’s] use, operation or possession of the Equipment.â€
Shortly
before trial, Aspen moved to
bifurcate Consolidated’s cross-complaint from the underlying product’s
liability complaint and try the indemnity claim first without a jury. Aspen’s
motion argued that no jury was required because interpretation of the indemnity
agreement raised only a question of law, and because by existing case law Aspen
had no duty to indemnify Consolidated for a strict product liability claim when
the indemnification agreement was silent on that issue. Consolidated opposed the motion, contending
in its points and authorities that: (1)
even under older case law, it was entitled to indemnification if its negligence
had been merely passive; and (2) under more recent authority, even if had been
actively negligent, Aspen was
obligated to contribute based on the proportional share of its own
negligence. Because there was evidence
of Aspen’s negligence, it made more
sense to try all issues that arose from the complaint and cross-complaint at
the same time.
At
the hearing on Aspen’s bifurcation motion, seven days before trial, counsel for
Consolidated argued that evidence concerning Aspen’s negligence would come from
several witnesses who would testify about Aspen’s use of the roll-off
container. The trial court said it would
try the indemnification cross-complaint first, in light of case authority
concerning the absence of a duty to indemnify for strict product liability,
which was Solares’s sole remaining cause of action. The court told Consolidated, “[I]f you feel
at that time that . . . there’s any factual component to it, you can raise it
at that time.â€
Consolidated
asked whether the court wanted it to have witnesses available to testify when
the bifurcated trial began. The court
answered, “No. What I’m saying is if you
feel there’s a factual component -- the argument is that this is a legal issue.
. . . [¶] Okay.
If you feel there’s a factual component, that may mean that I have to
consider facts to determine the legal issue.
But if it’s a legal issue, then I can make findings of fact that are
appropriate for the legal issue only.
[¶] If you think that there are
factual issues, then you can be prepared to present them at our hearing.â€
Consolidated
asked again for its right to a jury trial on any factual issues. The court replied, “Well, you can request all
of that. I’ll look at everything and
make the determination on that date [(January 19)]. But it’s set for trial then.â€
Next,
Consolidated challenged Aspen’s
assertion that both the indemnification and declaratory relief claims were for
the court to decide. The court answered
that there was no right to a jury trial for a declaratory relief claim. “If there are factual issues that need to be
determined for the declaratory relief I’ll hear that evidence and you can
present witnesses; okay.†Counsel for
Consolidated replied, “Sure.
Understood.†The court added that
Consolidated was free to present briefs on the jury trial issue, clarifying
that it was “not ruling on these issues now,†but was simply deciding to
bifurcate and try Consolidated’s cross-complaint first.
When
the bifurcated trial began the following week, the trial court put on the
record an agreement by the parties that the trial “will take place without any
testimony. That if there are any facts
that are going to be discussed they will be stipulated facts.†Consolidated agreed with that statement. The trial then proceeded much like argument
on a law and motion matter. At one point
during the argument, counsel for Consolidated claimed that the evidence would
show that: Aspen knew about, but never
tried to stop, its employees from overloading and climbing on top of the bins;
Aspen never trained its employees or provided safety gear for using the
containers; and Aspen was otherwise negligent concerning its handling of the
refuse bins.
In
response to these assertions, the trial court said, “All right. Now this is a factual issue; is it not?†Counsel for Consolidated said that it was,
and counsel for Aspen said, “And we are not stipulating to those facts, Your
Honor.†Consolidated never offered any
witnesses during the bifurcated trial, and never asked the trial court if it
could do so. It did not raise the jury
trial again.
The
trial court took the matter under submission and eventually concluded
Consolidated posed four questions in its request for a statement of
decision: “1. Whether, and to
what extent, the indemnity agreement . . . is to be applied between
[Consolidated] and Aspen in connection with the claim of . . . Solares. . .
. [¶]
2. Whether, and to what extent, a finding of active
negligence on the part of [Consolidated] following . . . Solares’s trial will
affect the application of the Indemnity Agreement between [Consolidated] and
Aspen. . . . [¶] 3. Whether, and to what extent, a
finding of passive negligence on the part of [Consolidated] following . . .
Solares’s trial will affect the application of the Indemnity Agreement between
[Consolidated] and Aspen. . . . [¶] 4.
Whether, and to what extent, a finding of negligence on the part of
Aspen following . . . Solares’s trial will affect the application of the Indemnity
Agreement between [Consolidated] and Aspen.â€
The trial court
then issued a statement of decision in which it concluded that Aspen had no
duty to indemnify Consolidated. Its
reasoning was as follows: “This court
construes the indemnity agreement entered into by [Consolidated] and Aspen to
contain a general indemnity promise as discussed in MacDonald & Kruse, Inc. v. San Jose Steel Co. (1972)
29 Cal.App.3d 413, 420 and cited with approval in Maryland Casualty Co. v. Bailey & Sons, Inc. (1995) 35 Cal.App.4th
856. As such, the agreement requires
Aspen to indemnify [Consolidated] regardless of whose negligence caused
injury. Pursuant to Maryland Casualty, supra, under this type of indemnity agreement,
Aspen is obligated to indemnify [Consolidated] unless [Consolidated] is
actively negligent. Also pursuant to
[Consolidated] is strictly liable for [Solares’s] injury, then [Consolidated]
is actively negligent as a matter of law.
Accordingly, the Court rules that Aspen has no obligation to indemnify
[Consolidated].†(Italics added.) Consolidated did not object to the statement
of decision.
The
trial then proceeded as to Solares’s claim.
After the jury deadlocked, Solares settled with Consolidated, and
judgment was entered for Aspen on Consolidated’s cross-complaint.
1.
The Law
Applicable to Indemnification Agreements
Contracting
parties are free to agree that one of them will indemnify the other for claims
asserted against the latter. (Civ. Code,
§ 2772; Crawford v. Weather Shield
Mfg., Inc. (2008) 44 Cal.4th 541, 551 (Crawford).) Indemnification
agreements are governed by the rules of contract interpretation, but
ambiguities are construed against the indemnitee, the party that benefits from
the indemnification agreement. (
indemnified for his own active negligence, language on that point must be clear
and explicit and will be strictly construed against the indemnitee. (Ibid.) “Active negligence†exists when an indemnitee
has personally participated in an affirmative act of negligence, was knowingly
connected to, or acquiesced in, negligent acts or omissions, or failed to
perform a precise duty he had agreed to perform. (Rooz
v. Kimmel (1997) 55 Cal.App.4th 573, 583, fn. 5.) “Passive negligence†results from mere
nonfeasance, such as the failure to discover a dangerous condition, or to
perform a duty imposed by law. (
The
parties here agree that the indemnity provision in their lease agreement was a
so-called “general indemnity agreement†because it was silent on the issue of
Consolidated’s active negligence. Under
the general rule, this meant that Aspen had no duty to indemnify Consolidated
unless any negligence by Consolidated was considered passive. Strict product liability is a form of active
negligence for purposes of construing indemnification provisions. (Price
v. Shell Oil Co. (1970) 2 Cal.3d 245, 257-258; Widson v. International Harvester Co. (1984) 153 Cal.App.3d
45, 59-60.) Both Price and Widson held
that the indemnitee under a general indemnity provision was not entitled to
indemnification for claims of strict product liability.
Later
decisions signaled a relaxation of this rule and permitted the actively
negligent indemnitee under a general indemnification provision to seek
indemnification from the indemnitor, at least to the extent the indemnitor’s
negligence contributed to a third party’s damages. In Rossmoor
Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, the Supreme
Court held that while the active-passive negligence distinction was still
vital, it was not dispositive. Instead,
the scope of an indemnity provision ultimately turns on contractual
interpretation and the intent of the parties as expressed in their agreement. This calls for an inquiry into the
circumstances of the damage or injury and the language of the contract at issue
in each case. When the parties have
knowingly bargained for the protection at issue, even protection against its
own active negligence, it should be afforded.
(Id. at pp. 632-633.)
This
flexible approach was applied in Morton
Thiokol, Inc. v. Metal Building Alteration Co. (1987) 193 Cal.App.3d
1025 (Morton Thiokol). Morton Thiokol was the owner of a salt
refinery and hired Metal Building to install a new roof on its facility. The contract included an indemnification
provision that said Metal Building would indemnify Morton from liability
sustained by reason of Metal’s breach of contract or negligence. A worker was injured due to Metal’s failure
to follow safety precautions and by Morton’s negligence by allowing the roof to
become slick with salt. The worker sued
and recovered against Metal and Morton based on Morton’s own active negligence. When Morton sought indemnification from Metal,
Metal argued that it had no such duty because the indemnification provision was
silent as to the effect of Morton’s active negligence.
The
Morton Thiokol court held that Morton
was entitled to indemnification because the circumstances showed that was
consistent with the parties’ intent and the loss sustained would not have
happened without the negligence of indemnitor Metal. “Where, as here, the agreement clearly
indicates that one party was to be indemnified for any damages sustained as a
result of another’s breach of the contract, and it is undisputed that the
accident would never have happened except for such breach, we conclude that the
indemnity is viable notwithstanding the jury’s finding of the indemnitee’s
‘active’ negligence.†(
193 Cal.App.3d at p. 1030.)
A
similar result was reached in Hernandez
v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791 (
in an accident involving a crane that his employer leased from a company called
Carde. The employee brought a products
liability claim against Carde, which in turn cross-complained against the
employer under the indemnification provision in their lease agreement. The agreement provided that the employer
would indemnify Carde for crane injury to any employee that was in any way
caused by the employer. The trial court
found that Carde was not entitled to indemnification because the jury had found
that Carde had been actively negligent.
The
Hernandez court reversed that portion
of the judgment because a reasonable interpretation of the indemnification
provision showed that the employer agreed “to indemnify Carde for the portion
of Carde’s liability attributable to [the employer’s] fault. Such interpretation is consistent with
Carde’s reasonable expectation it would be indemnified for liability arising
from the negligence of [employer]. Thus,
we conclude despite its 20 percent active negligence Carde was contractually
entitled to indemnification from [employer] for the portion of [employee’s]
joint and several economic damage award attributable to [employer’s] 55 percent
negligence that is ultimately paid by Carde.â€
(Hernandez, supra,
28 Cal.App.4th at p. 1822.)
This result was consistent with the “evolving and presumably more
equitable trend in statutory and case law toward allocating liability in
proportion to comparative fault.†(
2.
Consolidated
Waived Its Opportunity to Present Evidence Concerning Each Party’s Negligence
As
our previous discussion shows, Consolidated would be entitled to
indemnification from Aspen if Consolidated’s negligence had been merely
passive. Relying on decisions such as
negligent, Aspen would be required to indemnify it in part based on Aspen’s own
negligence. Consolidated contends that
the judgment must be reversed because the trial court’s bifurcation order led
the court to rule on the enforceability of the indemnification provision
without considering evidence that Consolidated had been passively negligent,
or, in the alternative, even if it had been actively negligent, that Aspen’s
negligence contributed to Solares’s injuries.
Even
if Consolidated’s interpretation of Hernandez
and Morton Thiokol were correct, a
necessary predicate to their applicability is negligence by the indemnitor – in
this case Aspen – that was at least one cause of Solares’s injuries. While Consolidated contends that the trial
court entered judgment on its indemnification cross-complaint without receiving
any evidence on that issue, its opening appellate brief makes no mention of the
trial court’s statement that if Consolidated believed there were factual issues
that had to be resolved as part of the trial court’s analysis, then
Consolidated should be prepared to present them at the hearing. The same is true for the passive negligence
exception. Absent evidence that could be
construed as passive negligence by Consolidated, there is no basis for that
exception. The record before the trial
court and before us is devoid of any evidence showing Consolidated was not
actively or passively negligent or that Aspen was negligent or caused Solares’s
injuries.
As
set forth in detail in our Facts and Procedural History, the trial court made
it abundantly clear that Consolidated was free to present evidence during the
bifurcated trial. The trial court also
said that it was not ruling on whether Consolidated was entitled to have a jury
try the cross-complaint, inviting Consolidated to raise that issue at trial as
well. Nor does Consolidated mention that
when the trial court said for a third time that Consolidated could present
witnesses, its counsel replied, “Sure.
Understood.†Finally,
Consolidated does not acknowledge its stipulation at the start of the
bifurcated trial that no witnesses would be presented. Instead of taking advantage of this
opportunity, Consolidated stipulated that it would present no witnesses.
to support findings that Consolidated had been passively negligent or that
Aspen was negligent in connection with Solares’s injuries.
Of
course, Aspen is quick to point this out, along with the doctrines of waiver
and invited error, which apply when an issue on appeal arises because of a
party’s affirmative conduct or failure to take steps to correct or avoid the
error. Accordingly, where a deliberate
trial strategy leads to an unfavorable outcome, counsel may not use that
tactical decision in order to claim prejudicial error. (Telles
Transport, Inc. v. Workers’ Comp. Appeals Bd. (2001) 92 Cal.App.4th
1159, 1166-1167.)
title="">
Because
Consolidated chose not to present evidence on the issues of either its own
passive negligence or Aspen’s contributory negligence, we find the doctrines of
waiver and invited error applicable here.
Absent such evidence, there is no basis for Consolidated’s
indemnification claim.
3.
Consolidated
Waived Aspen’s Duty to Defend
The
indemnification provision stated that Aspen would also defend Consolidated
against claims arising out of Aspen’s use of the roll-off containers. Consolidated contends the trial court erred
by entering judgment for Aspen because the duty to defend is broader than the
duty to indemnify (Food Pro Internat.,
Inc. v. Farmers Ins. Exchange (2008) 169 Cal.App.4th 976, 985),
thereby obligating Aspen to provide a defense from the outset of the litigation
regardless of whether the final result showed Aspen had no duty to
indemnify. (Crawford, supra, 44 Cal.4th at pp. 553-554.)
Although
the cross-complaint and trial briefs mentioned in passing that Consolidated
sought to recover its litigation fees and costs under the defense portion of
the indemnification provision, Aspen contends the issue was not truly raised at
trial and therefore cannot be raised for the first time on appeal. (City
of Scotts Valley v. County of Santa Cruz (2011) 201 Cal.App.4th 1,
28-29.) We agree.
Consolidated
never briefed or argued the issue whether Aspen’s duty to defend arose. It never alleged or mentioned whether it had
tendered its defense to Aspen, as required by Civil Code section 2778,
subdivision (4). It never alleged or
mentioned the amount of attorney’s fees and costs it sought, and therefore
never addressed whether those fees were incurred in good faith, as required by
section 2778, subdivisions (3) and (5).
Even though the trial court never reached the defense issue in either
its original proposed judgment or final judgment and statement of decision,
Consolidated never complained about that omission. On this record, we hold that the issue was
not adequately raised below and therefore deem it waived on appeal.
DISPOSITION
The
judgment for cross-defendant and respondent Aspen is affirmed. Aspen shall recover its appellate costs.
RUBIN,
J.
WE CONCUR:
BIGELOW,
P. J.
GRIMES,
J.
name="_ftn1" title="">[1] Solares’s
original form complaint alleged product liability under three theories –
negligence, strict liability, and breach of warranty. On the eve of trial, he amended the complaint
by deleting the negligence and breach of warranty theories.
name="_ftn2" title="">[2] This
language is at the end of a lengthy paragraph captioned “CUSTOMER’S [(ASPEN’S)]
RESPONSIBILITY FOR CARE OF EQUIPMENT,†which, among others, required Aspen to
make safe and proper use of the containers by not improperly loading or
overloading them.
