The Morrison Law Journal
As many are aware, with the advent of Code of Civil Procedure § 2782.05, which bars express contractual indemnity for the active negligence of the indemnitee (and typically, that would be a developer or a general contractor), there will still be a significant period of time in which the Courts will delve into traditional "Type 1" indemnity contracts (which provide express indemnity for the indemnitees active negligence) and there will also continue to be many disputes involving broad indemnity agreements where the indemnitee is not actively negligent.
In that regard, one issue that the Courts continue to grapple with is who determines whether an indemnity obligation is owed. The Court of Appeal (Second Appellate District) in Centex vs. R-Help, Inc. (2109) Westlaw 1109627 ("Centext case") provides quite a bit of guidance in answering that question.
The facts of the Centex case are relatively routine. Centex was the developer of the Novella residential development located in the City of Thousand Oaks, California. The work appears to have occurred between 2003 and 2007. Centex hired R-Help Construction Co., Inc. ("R-Help") to trench, install, and inspect utility boxes and conduits for the Novella development. The Centex subcontract required that R-Help defend and indemnify Centex for all claims "to the extent such Claim(s) in whole or in part arise out of or relate to" R-Help's work.
Plaintiff Matthias Wagener ("Wagener") filed a civil Complaint against Southern California Edison and others alleging he was injured when he fell into a utility box at the Novella Development. The Complaint alleged that the Defendants negligently managed, maintained, and inspected the utility box cover so as to create an unstable platform. Centex and R-Help were later added as DOE Defendants. In answering R-Help's interrogatories, Wagener stated, "It appears as though R-Help installed and thereafter abandoned the subject junction box." Wagener contended that, as a Centex agent, R-Help and Centex were both jointly and separately liable. Centex tendered the Complaint to R-Help for defense and indemnity, but R-Help did not respond. Centex then filed a Cross-Complaint against R-Help, alleging Causes of Action for Breach of Contract, Indemnity, and Declaratory Relief. Centex eventually obtained a Dismissal of the Wagener action pursuant to a settlement. Wagener also settled his action with the remaining Defendants, leaving the Centex Cross-Complaint against R-Help to be decided by the Court.
Prior to trial, Centex moved for Summary Adjudication, contending that the allegations of Wagener's Complaint alone required R-Help to defend Centex under the indemnity agreement as a matter of law. R-Help moved for Summary Judgment contending that undisputed evidence showed the utility box in which Wagener was injured was not within the scope of R-Help's work under the R-Help subcontract. Both Motions were denied. After pretrial Motions in Limine, the Court determined the question of indemnity should be for the jury. At trial, Centex put on a percipient witness and an expert witness, testifying that R-Help was responsible for the utility box. R-Help submitted its own witnesses who testified that the box was not part of the work of R-Help. The Trial Court gave the jury a special verdict form that included the following question: "Did the information available to both parties at the time of the tender [by Centex] eliminate any reasonable potential that the allegation in WAGENER's claim arose out of or were related to R-HELP's work?" The jury answered "yes." The Trial Court entered judgment in favor of R-Help on that issue.