Crawford v. Weather Shield Mfg., Inc.

• Citation: 136 Cal.App.4th 304,38 Cal.Rptr.3d 787
• Decision Date: 31 January 2006
• Docket Number: No. G032301.,G032301.
• Court: California Court of Appeals
• Parties: Kirk CRAWFORD, et al., Plaintiffs and Appellants, v. WEATHER SHIELD MFG., INC., Defendant and Appellant.

38 Cal.Rptr.3d 787

136 Cal.App.4th 304

Kirk CRAWFORD, et al., Plaintiffs and Appellants, v. WEATHER SHIELD MFG., INC., Defendant and Appellant.

No. G032301.

Court of Appeal, Fourth District, Division 3.

January 31, 2006.

[38 Cal.Rptr.3d 789]

Sedgwick, Detert, Moran, & Arnold, Christina J. Imre, Stephanie Rae Williams and Orly Degani, Los Angeles, for Defendant and Appellant Weather Shield Mfg., Inc.

Anderson & Kriger, Clayton Anderson, La Mesa, Philip Y. Kim, Rancho Santa

[38 Cal.Rptr.3d 790]

Margarita; and Richard H. Benes, San Diego, for Plaintiffs and Appellants Kirk Crawford, et al.

Kabteck & Garris, Brian S. Kabateck, Los Angeles, Alfredo Torrijos; Kabateck Brown Kellner, and Richard L. Kellner, Pasadena, for Plaintiffs and Appellants Parviz Alai, et al.

OPINION

SILLS, P.J.

I. SUMMARY

This appeal by a window manufacturer in a construction defect case involves three major issues.

A. The New Trial Order

The first issue is whether the trial judge abused his discretion in granting a partial new trial motion so as to allow a previously and erroneously dismissed strict liability claim against a window manufacturer to go forward. Here are the skeletal facts: Prior to a jury trial against a window manufacturer by a group of homeowners, two Court of Appeal decisions had precluded strict products liability claims against manufacturers of component parts for mass-produced homes. (La Jolla Village Homeowners' Assn. v. Superior Court (1989) 212 Cal.App.3d 1131, 261 Cal.Rptr. 146; Casey v. Overhead Door Corp. (1999) 74 Cal.App.4th 112, 87 Cal.Rptr.2d 603.) The window manufacturer strenuously argued that no strict liability claim against it should go to the jury. The trial judge, following those two appellate decisions, agreed.

However, after the jury's verdict, the Supreme Court ruled that strict liability claims could indeed be asserted against manufacturers of component parts for mass-produced homes. (Jimenez v. Superior Court (2002) 29 Cal.4th 473, 127 Cal.Rptr.2d 614, 58 P.3d 450.) In the process the Supreme Court expressly overruled both La Jolla and Casey, on which the trial judge had relied. So the judge did the logical thing and granted a partial new trial as to just the homeowners' strict liability claim.

Under such circumstances we are tempted to say the only possible abuse of discretion would have been if the trial judge hadn't granted the new trial motion. Certainly under the "or even fairly debatable" standard for the grant of new trial motions articulated in Jiminez v. Sears, Roebuck & Co. (1971) 4 Cal.3d 379, 387, 93 Cal.Rptr. 769, 482 P.2d 681 ["So long as a reasonable or even fairly debatable justification under the law is shown for the order granting the new trial, the order will not be set aside."] there would seem to be no doubt that the trial judge acted within his discretion.¹

B. Adjudication of the Developer's Defense Costs

But not only was the window manufacturer sued by the disappointed homeowners, so was the developer. There was an agreement between the window manufacturer, as subcontractor, and the developer in which the window manufacturer promised the developer to "defend" actions brought against the developer "founded on . . . claims growing out of the execution" of the window manufacturer's work. (We quote the entirety of indemnity clause in the margin now,² and again later in part IV. of this opinion when we discuss the language in greater detail.) Pursuant to this promise, the developer asked the window manufacturer (as well as a window framer) to defend it in the homeowners' suit. The window manufacturer (and window framer) refused, and the developer eventually settled the case. The developer sought the costs of defending the homeowners' suit from both the window manufacturer and window framer, and the trial judge declared that the window manufacturer and window framer each owed half of the costs incurred in the lawsuit which were properly attributable to the homeowners' claims for leaky and fogging windows. However, the jury also found that the window manufacturer was not negligent.

Thus the issue arises: Did the absence of the window manufacturer's negligence retroactively excuse any duty that the window manufacturer had to provide a defense to the homeowners' suit which was — there is no argument as to this — founded upon claims growing out of the execution of the window manufacturer's work? That's the big issue in this case, and it accounts for most of the length of this opinion. The issue is of importance because it relates to legal problems that commonly arise in the construction industry³ in a context where the case law is, perhaps, not as clear as one might hope. (Indemnity is an inherently dull subject anyway, and reading even the most pellucid indemnity opinion generally takes much longer than reading an equivalent length opinion about, say, school prayer or whether a trial judge abused his or her discretion in issuing a spousal support order.⁴)

This opinion will show that, at least as regards the language of the particular contract before us, the case law is consistent, and upholds the decision of the trial judge.

At least two decisions of the Court of Appeal, Continental Heller Corp. v. Amtech Mechanical Services, Inc. (1997) 53 Cal.App.4th 500, 61 Cal.Rptr.2d 668 and Centex Golden Construction Co. v. Dale Tile Co. (2000) 78 Cal.App.4th 992, 93 Cal.Rptr.2d 259, have clearly held that there is no per se rule precluding a subcontractor-indemnitor from paying for the defense costs of a general contractor-indemnitee related to claims growing out of the subcontractor-indemnitor's work, even though the subcontractor-indemnitor is ultimately found not to be negligent.

However, a separate group of Court of Appeal decisions, Peter Culley & Associates v. Superior Court (1992) 10 Cal.App.4th 1484, 13 Cal.Rptr.2d 624; Regan Roofing Co. v. Superior Court (1994) 24 Cal.App.4th 425, 29 Cal.Rptr.2d 413; Heppler v. J.M. Peters Co. (1999) 73 Cal.App.4th 1265, 87 Cal.Rptr.2d 497; Mel Clayton Ford v. Ford Motor Co. (2002) 104 Cal.App.4th 46, 127 Cal.Rptr.2d 759; and, most recently, Baldwin Builders v. Coast Plastering Corp. (2005) 125 Cal.App.4th 1339, 24 Cal.Rptr.3d 9, have language in them which, out of context, can be taken as supporting such a per se rule.

In this case we will prove that the latter cases do not stand, and should not be read, for any such per se rule. Readers who are willing to take our word that no opinion thus far, properly read in context, stands for a per se rule that the absence of negligence retroactively excuses a defense obligation undertaken by a subcontractor can save themselves about 20 pages of detailed explanations of these cases set forth in part IV.C of this opinion (at pp. 815-832). Readers who are skeptical, as counsel for the window manufacturer certainly will be (they heavily rely on several of these cases) are invited to wade through these cases with us. At the very least they will be a little more knowledgeable of what those cases actually do, and don't, say. (There is also the problem that, generally speaking, indemnity cases are hard to read and easy to forget. We hope, therefore, that our detailed summaries of the cases will serve the dual purpose of mapping the exact contours of the case and also of furnishing readers with summaries of the development of the existing case law to which they may refer in other contexts. (See Cal. Rules of Court, rule 976(c)(4)).)

In any event, let us at the outset emphasize the narrowness of our decision. Under no circumstances should this opinion be read as even remotely imposing on subcontractors who make promises like the one at bar anything resembling the broad triggers of a duty to defend that are associated with insurers' duties to defend. The case law is clear that non-insurance indemnity contracts are construed against the indemnitee and courts must construe narrowly the promises of subcontractors who make them. (E.g., Goldman v. Ecco-Phoenix Elec. Corp. (1964) 62 Cal.2d 40, 49, 41 Cal.Rptr. 73, 396 P.2d 377.) No way, for example, should the language before us in this case be construed to obligate the subcontractor to defend all claims against a general contractor (or developer) in a construction defect case, or, more particularly, claims that cannot be said to reasonably "grow out" of the subcontractor's particular work. (See, e.g., St. Paul Fire & Marine Ins. Co. v. American Dynasty Surplus Lines Ins. Co. (2002) 101 Cal.App.4th 1038, 1049-1054, 124 Cal.Rptr.2d 818 [subcontractor not obligated to provide a defense to a general contractor in a context where the suit against the general contractor was entirely unrelated to any work that the subcontractor was doing at the time].)

We only construe the subcontract before us, but as to this particular subcontract, even narrowly construed, it is clear that this subcontractor was indeed obligated to defend the particular claims for which this developer was sued in this particular case. It is as simple as this: A window manufacturer who promises to "defend" claims "growing out" of the window manufacturer's "work" must provide a defense to the developer when the developer is sued by homeowners based on claims for defective windows — even if the window manufacturer is ultimately shown not to have been negligent. (In that process we will also show that the relevant statutes governing indemnity, particularly section 2778, subdivision (3), not only do not pose any obstacle to the enforcement of what the parties contracted for here (the statute clearly does not apply when a "contrary intention governs"), but in fact contemplate the very result we reach today — that there will be times, however narrowly defined, when an indemnitor must provide a defense to an indemnitee even if the indemnitor has yet to be adjudicated negligent.)

Moreover, we also stress that any question of conscionability is not before us. We deal in this case only with two...