Oltmans Constr. Co. v. Bayside Interiors, Inc.

• Decision Date: 30 March 2017
• Docket Number: A147313
• Citation: 215 Cal.Rptr.3d 918,10 Cal.App.5th 355
• Court: California Court of Appeals Court of Appeals
• Parties: OLTMANS CONSTRUCTION CO., Cross-complainant and Appellant, v. BAYSIDE INTERIORS, INC., Cross-defendant and Respondent.

10 Cal.App.5th 355

215 Cal.Rptr.3d 918

OLTMANS CONSTRUCTION CO., Cross-complainant and Appellant,

v.BAYSIDE INTERIORS, INC., Cross-defendant and Respondent.

A147313

Court of Appeal, First District, Division 3, California.

Filed March 30, 2017

ARCHER NORRIS, W. Eric Blumhardt, Walnut Creek, ROPERS, MAJESKI, KOHN & BENTLEY, PC, Susan H. Handelman, Redwood City, for Cross-complainant and appellant

CHRISTENSEN EHRET LLP, Jennifer K. Stinnett, Lake Forest, James C. Keowen, Sacramento, for Cross-defendant and respondent

Pollak, J.

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.

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 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.

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, 35 Cal.Rptr.3d 624. 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 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, 119 Cal.Rptr. 449, 532 P.2d 97 (Rossmoor ); Morgan v. Stubblefield (1972) 6 Cal.3d 606, 626-627, 100 Cal.Rptr. 1, 493 P.2d 465.)

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, 100 Cal.Rptr. 1, 493 P.2d 465.) Hence, Bayside's evidence arguably was insufficient to...