Opinion
G055946
06-24-2020
MATTHEW FOSTER, Plaintiff and Appellant, v. MADISON HARBOR, ALC, et al., Defendants and Appellants.
Jenos Firouznam-Heidari for Defendants and Appellants. Mesisca, Riley & Kreitenberg, Dennis P. Riley and Rena E. Kreitenberg for Plaintiff and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00707156) OPINION Appeal from a judgment and postjudgment orders of the Superior Court of Orange County, Peter J. Wilson, Judge. Postjudgment orders affirmed and remanded for retrial on all issues. Jenos Firouznam-Heidari for Defendants and Appellants. Mesisca, Riley & Kreitenberg, Dennis P. Riley and Rena E. Kreitenberg for Plaintiff and Appellant.
* * *
INTRODUCTION
Matthew Foster was injured while working on a construction job. He settled his case against the general contractor and one of the subcontractors, receiving a cash settlement from that subcontractor's insurance carrier on behalf of the general contractor and that subcontractor, along with an assignment of rights to pursue claims against another subcontractor.
Foster then sued the second subcontractor on indemnity theories. A jury found in Foster's favor, but the court of appeal reversed, holding that Foster's claim should have been asserted in subrogation.
In this third lawsuit, Foster sued the attorneys representing him in the first two actions for legal malpractice. A jury found in favor of Foster. The defendant attorneys filed a motion for judgment notwithstanding the verdict (JNOV), which was denied, and a motion for a new trial, which was granted. Both Foster and the defendant attorneys appealed from the judgment and the postjudgment orders. We conclude the trial court correctly denied the JNOV motion and correctly granted the motion for a new trial. We remand the matter to the trial court for a new trial on all issues.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
Personal Injury Lawsuit
Plaintiff Matthew Foster was an employee of Schindler Elevator. Schindler Elevator was a subcontractor for general contractor Hathaway Dinwiddie Construction Company (Hathaway), as were Western Air Limbach LP (Western Air) and Raymond Group (Raymond). On April 6, 2006, while working in an elevator shaft on a construction site in Century City, California, Foster suffered an injury when a metal stud fell down the shaft, struck his head, and knocked him unconscious.
Foster retained the legal services of Madison Harbor, ALC (the law firm) to represent him in litigation due to his injuries. On January 30, 2007, the law firm filed a negligence case against Hathaway, Raymond, and Western Air (the Personal Injury Lawsuit). Hathaway filed a cross-complaint against Raymond and Western Air for breach of contract to indemnify, defend, and obtain insurance, comparative indemnity and apportionment of fault, total equitable indemnity, and declaratory relief.
Foster settled his case against Hathaway for $700,000 and against Raymond for $100,000; the total settlement was paid by Raymond's insurance carrier, American Safety Insurance Group (ASIG). Foster obtained an assignment of rights against Western Air from Hathaway, Raymond, and ASIG. Foster also accepted a Code of Civil Procedure section 998 offer from Western Air in the amount of $5,001. Judgment against Western Air in the Personal Injury Lawsuit was entered on March 12, 2008.
Indemnity Lawsuit
Foster again retained the law firm to represent him in the indemnity case against Western Air. On November 25, 2008, the law firm filed a lawsuit against Western Air on behalf of Foster, as assignee of Hathaway, Raymond, and ASIG, for breach of contract to indemnify, defend, and obtain insurance, comparative indemnity and apportionment of fault, total equitable indemnity, and declaratory relief (the Indemnity Lawsuit). The Indemnity Lawsuit did not include a cause of action for subrogation. The causes of action were tried to the trial court, and judgment was ultimately entered in favor of Foster and against Western Air in the amount of $954,882.32. That judgment breaks down as follows: (1) damages in the amount of $700,000, (2) attorney fees in the amount of $89,158.94, and (3) interest in the amount of $165,723.38. The $100,000 paid by ASIG on behalf of Raymond was not part of the judgment in the Indemnity Lawsuit.
Western Air appealed from the judgment and the Court of Appeal, Second Appellate District, Division Eight, reversed and directed the trial court to enter judgment in favor of Western Air because "Foster did not pursue a viable claim against Western Air." (Foster v. Western Air Limbach LP (Aug. 28, 2012, B230038) [nonpub. opn.].) The appellate court held that Foster could not recover for breach of contract against Western Air based on its assignment from Hathaway because Hathaway suffered no damages due to Western Air's breach of contract, as ASIG paid all of Hathaway's out-of-pocket expenses. (Ibid.) The appellate court also held that Foster could have recovered based on ASIG's subrogation rights against Western Air, but had not asserted a subrogation claim in the case. (Ibid.) The law firm represented Foster on appeal.
After the issuance of the remittitur, the trial court entered judgment in favor of Western Air and against Foster in the amount of $100,901.10 (the amount of Western Air's attorney fees and costs).
Legal Malpractice Lawsuit
On November 27, 2013, Foster sued the law firm and attorneys Robert Sabahat and Ali Parvaneh for professional negligence (the Legal Malpractice Lawsuit). (We will refer to the law firm and the individual attorneys collectively as Madison Harbor.) Before trial, the court granted a motion in limine to bar Foster from seeking recovery based on the compromise of the claim against Western Air in the Personal Injury Lawsuit in the "woefully deficient" amount of $5,001 rather than proceeding to trial. The court's ruling was based on Evidence Code section 1119's mediation confidentiality exclusion. The matter proceeded to a jury trial based on the theory that Madison Harbor failed to assert a subrogation claim in the Indemnity Lawsuit.
Foster filed a petition for a writ of mandate in this appellate court challenging the ruling on the motion in limine; Foster's petition and request for stay were denied.
In relevant part, the jury's verdict reads:
"1. Do you find that Defendants' failure to bring a subrogation claim in the Breach of Contract Litigation fell below the standard of care for an attorney?
"Yes v No ___"
"2. Do you find that had Defendants brought a subrogation claim, it is more likely than not a judge or fact finder would have adjudicated the claim in favor of Matthew Foster?
"Yes v No ___"
"3. What are Matthew Foster's damages?
"$1,537,154.75"
The trial court entered judgment on the verdict for Foster and against Madison Harbor in the amount of $1,537,154.75. After entry of the judgment, Madison Harbor filed a motion for JNOV and a motion for a new trial. After briefing and a hearing, the trial court denied the JNOV motion but granted the motion for a new trial, on the ground there had been insufficient evidence of collectability.
Madison Harbor and Foster both filed notices of appeal from the judgment and/or postjudgment orders.
DISCUSSION
I.
STANDARD OF REVIEW
We review both the judgment and the order denying the motion for JNOV to determine whether the jury's verdict is supported by substantial evidence. (Schmidt v. Superior Court (2020) 44 Cal.App.5th 570, 582; Hurley v. Department of Parks & Recreation (2018) 20 Cal.App.5th 634, 644.) "This traditional standard of review is highly deferential. It has three pillars. First, we accept all evidence supporting the trial court's order [or judgment]. Second, we completely disregard contrary evidence. Third, we draw all reasonable inferences to affirm the trial court. These three pillars support the lintel: we do not reweigh the evidence." (Schmidt v. Superior Court, supra, 44 Cal.App.5th at p. 581.)
We review an order granting a new trial for abuse of discretion. "The trial court . . . is in the best position to assess the reliability of a jury's verdict and, to this end, the Legislature has granted trial courts broad discretion to order new trials. The only relevant limitation on this discretion is that the trial court must state its reasons for granting the new trial, and there must be substantial evidence in the record to support those reasons." (Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412.) We must affirm the trial court's order granting a new trial unless we are convinced that no reasonable trier of fact could have found for the moving party under the trial court's theory. (Ibid.)
II.
THE TRIAL COURT DID NOT ERR IN DENYING THE MOTION FOR JNOV AS TO COLLECTABILITY
BUT GRANTING THE MOTION FOR A NEW TRIAL ON THE ISSUE.
In denying the motion for JNOV, the trial court found there was some evidence of collectability. In granting the new trial motion, however, the court found the evidence of collectability was not sufficient to meet Foster's burden of proof. "The court concludes that plaintiff Foster submitted some evidence bearing on the issue of collectability but not sufficient evidence to establish collectability under the weight of the evidence." Madison Harbor argues that there was no evidence of collectability, and the trial court should have granted the JNOV motion. Foster argues the trial court properly denied the motion for JNOV, but erred by granting the new trial motion.
A.
Relevant Law Regarding Collectability
Where a cause of action for legal malpractice is based on the attorney's mishandling of the plaintiff's underlying case, the plaintiff must "prove that careful management of a lawsuit would have resulted in a favorable judgment and collection thereof." (Wise v. DLA Piper LLP (US) (2013) 220 Cal.App.4th 1180, 1190 (Wise).) Collectability, in turn, requires a showing of the debtor's solvency. (Ibid.; Garretson v. Harold I. Miller (2002) 99 Cal.App.4th 563, 571 (Garretson).) Collectability is an element of the plaintiff's case, and the burden of proving collectability rests with the plaintiff. (Garretson, supra, 99 Cal.App.4th at p. 569 [JNOV in favor of the defendant properly granted where "there was no evidence of insurance, property with equity value, or other assets held by any of the third party defendants"].)
The jury in the Legal Malpractice Lawsuit was instructed regarding the elements of Foster's cause of action with the following special instruction proposed by Madison Harbor: "In order to recover damages from Madison Harbor . . . for negligence in the handling of a prior lawsuit, which negligence resulted in Matthew Foster's loss of the prior lawsuit, Matthew Foster must establish: (1) Madison Harbor . . . were negligent for not bringing a claim for subrogation against Western Air in the prior lawsuit; (2) Madison Harbor['s] . . . negligence was a substantial factor in Matthew Foster's loss of the prior lawsuit; and (3) the proper handling of the prior lawsuit by Madison Harbor . . . would have resulted in a collectable judgment in Matthew Foster's favor."
Collectability considers both the defendant's solvency and ability to pay some or all of the judgment. (Wise, supra, 220 Cal.App.4th at p. 1191.) A plaintiff may offer admissible evidence of the assets, net worth, or available proceeds of investments of the defendant in the underlying case; speculation and assumptions are insufficient. (Ibid.)
In Wise, the plaintiffs loaned $350,000 to the judgment debtor, who defaulted and filed for bankruptcy. (Wise, supra, 220 Cal.App.4th at p. 1183.) The defendant attorneys obtained a judgment on the plaintiffs' behalf in excess of $600,000. (Id. at p. 1184.) At the time the judgment was entered, the judgment debtor "was 'dead broke,' and a report from an asset search firm reported [the judgment debtor] had no assets, had numerous other creditors, had been sued in numerous other proceedings, and had state and federal tax liens filed against him." (Ibid.) The defendant attorneys did not advise the plaintiffs the judgment would become invalid if not renewed in 10 years. (Ibid.) The judgment expired as a matter of law; the plaintiffs sued the defendant attorneys after learning their judgment had expired. (Id. at p. 1185.)
At the trial on the legal malpractice case, the judgment debtor testified he had owned no assets since his bankruptcy and lived on Social Security benefits and proceeds from investments in various corporations he had formed. (Wise, supra, 220 Cal.App.4th at pp. 1185-1186.) The plaintiffs' expert witness opined the judgment was collectable based on the following: (1) the plaintiffs could have pierced the corporate veil of the judgment debtor's corporations; (2) the plaintiffs could have levied against the home in which the judgment debtor lived, although the expert did not know if the judgment debtor owned the property; (3) the judgment debtor claimed to have donated $1 million to his alma mater, although the expert had not verified this claim and did not know whether the donation occurred before or after the bankruptcy; (4) the judgment debtor had made multiple trips to China, although the expert had no evidence the judgment debtor used his personal funds for these trips, and the expert had not performed an asset search on the judgment debtor; and (5) the expert believed the judgment debtor had money in hidden foreign accounts, while admitting "'we have no evidence of that.'" (Id. at pp. 1187-1188.) In contrast, the defendant's expert witness testified that the judgment could not have been collected at any point in time. (Id. at p. 1189.) The defendant's expert witness had "conducted an extensive investigation of [the judgment debtor]'s assets . . . and determined that [the judgment debtor] has 'been broke' and has 'never had any assets' since [before the judgment was entered]. [The judgment debtor] owns no bank accounts in his name, drives a car—registered in the name of one of his companies—against which debt is owed, and lives in a rental unit (in which he had no ownership interest) not in good condition and furnished with 'quite old' furniture." (Id. at p. 1189.)
Based on the foregoing, the appellate court concluded that the plaintiffs had failed to offer admissible evidence, as opposed to speculation or assumptions, regarding the collectability of the judgment in the past or in the future, assuming it had been renewed. (Wise, supra, 220 Cal.App.4th at pp. 1195-1196, 1198.)
In DiPalma v. Seldman (1994) 27 Cal.App.4th 1499, 1509-1510 (DiPalma), the plaintiff settled a claim with the judgment debtors for a total of $340,000; the settlement was entered as a stipulated judgment. (Id. at p. 1504.) Almost two years after reaching the settlement, the judgment debtors filed for bankruptcy without having satisfied the judgment. (Ibid.) The plaintiff later sued the defendant attorney for failing to collect the judgment. (Id. at p. 1505.) The trial court granted a nonsuit against the plaintiff on the ground he had failed to prove collectability because the judgment debtors' bankruptcy made the judgment uncollectable. (Ibid.)
The appellate court reversed because there was substantial evidence of the judgment debtors' solvency when the stipulated judgment was entered. (DiPalma, supra, 27 Cal.App.4th at p. 1509.) The plaintiff had presented evidence that, during the relevant time period: the judgment debtors had sold a property and carried back a $700,000 mortgage; received "the bulk of $237,000 in refinancing proceeds on various properties they owned; had ownership interests "above the debts or loans against those properties" in 30 to 40 properties; had equity in 12 to 18 major construction projects; and were the sole owners of a restaurant that was later auctioned off in the bankruptcy for $310,000, supporting an inference that during the relevant time period the restaurant was worth significantly more. (Id. at pp. 1509-1510.) The foregoing evidence, which came from the testimony of one of the judgment debtors, was sufficient to establish that at least part of the stipulated judgment was collectable. (Id. at p. 1510.)
Evidence of insurance is relevant to the issue of collectability (Hecht, Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court (2006) 137 Cal.App.4th 579, 597-598; Garretson, supra, 99 Cal.App.4th at p. 569), as is evidence that a solvent entity was doing business with the debtor entity (Walker v. Porter (1974) 44 Cal.App.3d 174, 178 ["it appears from the bare allegation that county is solvent; county would be assumed to do business with a solvent contractor and, even as to appellant's landlord, a complexion of some solvency is suggested"]).
B.
Evidence of Collectability
At the trial of the Legal Malpractice Lawsuit, one of Madison Harbor's attorneys testified that in the Personal Injury Lawsuit, Western Air responded to form interrogatories and admitted it had insurance at the time of Foster's accident—$1 million per occurrence and $2 million aggregate—that might cover Foster's claims. The interrogatory responses themselves were not admitted into evidence. The subcontract between Hathaway and Western Air, which was admitted at trial, included a certificate of liability insurance, a statement of financial condition of Western Air's insurer, and a payment bond and performance bond. The payment bond and performance bond bound Western Air, as principal, and Arch, as surety, to Hathaway in an amount in excess of $7 million.
Madison Harbor argues that there was no evidence of insurance in effect at the time the judgment in the Indemnity Lawsuit was entered. Madison Harbor does not provide any authority that Western Air would not have been liable, or could not have made a claim on the policy at that time.
Hathaway's outside counsel, Gary Hoffman, testified that the Hathaway/Western Air subcontract required Western Air to obtain insurance naming Hathaway as an additional insured. Hoffman wrote to Western Air's insurance carrier, Arch Insurance Company (Arch), demanding that Arch defend and indemnify Hathaway as an additional insured under the Arch/Western Air insurance policy, and that Hathaway received the certificate of insurance and additional insured endorsement for the Arch/Western Air insurance policy. Arch's letter responding to Hoffman denied coverage because "this loss did not arise out [of] or result from Western Air['s] work or negligence." The jury could reasonably infer, based on the evidence that the loss did, in fact, arise out of or result from Western Air's work or negligence, that Western Air's insurance carrier should have defended and indemnified Hathaway.
In opposition to the motion for JNOV, Foster asked the trial court to take judicial notice of the undertaking filed by Western Air in connection with Western Air's appeal from the judgment in the Indemnity Lawsuit. There is no indication that this undertaking was presented during trial of the Legal Malpractice Lawsuit to the jury.
It is true that no evidence of Western Air's assets and liabilities was presented. Nevertheless, sufficient evidence supports the trial court's order denying the JNOV motion.
But given the lack of evidence of Western Air's assets and liabilities at or near the time judgment was entered in the Indemnity Lawsuit, we cannot say the trial court abused its discretion in granting a new trial on this issue. The trial court stated its reasons for granting the new trial, and substantial evidence supports that decision. We therefore affirm the order granting a new trial.
C.
Madison Harbor Did Not Forfeit the Right to Argue
the Sufficiency of the Evidence of Collectability.
Foster argues Madison Harbor admitted in the trial court that there was evidence of collectability, thereby forfeiting any substantial evidence argument on appeal. During the parties' discussion with the court regarding jury instructions, Foster's counsel claimed collectability was a "proven fact."
"The Court: How is it a proven fact? What evidence of any kind is there concerning the collectability of a judgment from Western Air?
"[Foster's counsel]: There is evidence that they have a million dollars insurance policy with which to pay any judgment. [¶] . . . [¶]
"The Court: Is there any dispute that there is evidence that the jury can consider on the collectability element?
"[Madison Harbor's counsel]: There is not, your Honor."
Foster argues that the statement by Madison Harbor's counsel conceded the issue of collectability and further conceded "that there was no basis for nonsuit based on the status of Foster's evidence." We disagree. At most, Madison Harbor conceded that some evidence of collectability was before the jury, which is not the same as conceding that the issue of collectability was resolved.
Not one of the cases Foster cites in support of this argument is on point. In In re Rebekah R. (1994) 27 Cal.App.4th 1638, 1649-1650, the mother's counsel's admission at the disposition hearing that the mother would not be able to reunify with her child within the 18-month statutory period forfeited an appellate argument that the juvenile court erred by denying reunification services to the mother. In Horn v. Atchison, T. & S. F. Ry. Co. (1964) 61 Cal.2d 602, 604-606, defense counsel conceded liability during closing argument at trial; on appeal, the court held that any argument relating to liability was waived. In Eng v. Brown (2018) 21 Cal.App.5th 675, 708, the court held that, when the plaintiff moves to amend his complaint to add a claim for breach of fiduciary duty, but then advises the court that he is not asserting a claim for breach of fiduciary duty, the trial court does not err by denying the motion to amend that it had taken under submission.
Foster also contends that Madison Harbor forfeited the issue of collectability on appeal because at the trial in the Legal Malpractice Lawsuit, it did not address collectability during closing arguments. Collectability is an element of Foster's prima facie case, and Foster cites no authority that Madison Harbor's decision not to raise the issue during closing arguments bars it from appealing the judgment based on Foster's alleged lack of evidence.
D.
The Trial Court Properly Ordered a New Trial on All Issues.
Foster argues that if this court does not reverse the new trial order, it should direct that the retrial be limited to the issue of collectability, and that there should not be a retrial of Madison Harbor's liability.
The trial court has the discretion to grant a new trial as to one or more issues and not as to others. (Code Civ. Proc., § 657.) Foster did not argue in opposition to the motion for a new trial that any retrial should be limited. At the hearing on the posttrial motions, the trial court stated: "I am not restricting the new trial and tying the defendant's hands by saying the only issue for new trial is collectability, that's a completely unfair restriction, I don't know how the jury took all these things in[to] account in their deliberation, a new trial is a new trial on the entire case . . . ."
The trial court properly exercised its discretion in granting a new trial on all issues.
III.
FOSTER PROVED HIS CASE WITHIN A CASE; THE TRIAL COURT PROPERLY DENIED THE
JNOV MOTION ON THIS GROUND.
In its motion for JNOV, Madison Harbor also argued that judgment should be entered on its behalf because Foster had failed to prove his case within a case.
Foster's claim for legal malpractice was based on his contention that Madison Harbor failed to bring a claim for subrogation against Western Air on which Foster would have prevailed. The elements of a claim for subrogation by Foster against Western Air would have been:
1. Hathaway, which was the insured party, suffered a loss for which Western Air, the defendant in the Indemnity Lawsuit, is liable because Western Air is legally responsible to Hathaway for the loss;
2. ASIG was not primarily liable for Hathaway's loss;
3. ASIG compensated Hathaway for the loss for which Western Air was primarily liable;
4. ASIG paid the claim to protect its own interest and not as a volunteer;
5. Hathaway had an existing, assignable cause of action against Western Air which Hathaway could have asserted if it not been compensated by ASIG;
6. ASIG suffered damages as a result of the act or omission upon which Western Air's liability depends;
7. Justice requires that the loss be shifted from ASIG to Western Air because Western Air's equitable position is inferior to ASIG's; and
8. ASIG's damages are in a liquidated sum, namely, the amount paid to Hathaway. (State Farm General Ins. Co. v. Wells Fargo Bank, N.A. (2006) 143 Cal.App.4th 1098, 1111-1112.)
Madison Harbor challenges whether Foster proved his case as to two of these elements: (3) whether ASIG compensated Hathaway for the loss for which Western Air was primarily liable, and (6) whether ASIG suffered damages as a result of the act or omission on which Western Air's liability depends. We address each in turn.
"[A] general liability insurer that has paid a claim to a third party on behalf of its insured may have an equitable right of subrogation against (1) other parties who contributed to the harm suffered by the third party (joint tortfeasors) under an equitable indemnity theory, and (2) other parties who are legally liable to the insured for the harm suffered by the third party (such as by an indemnification agreement) under a contractual indemnity theory." (Interstate Fire & Casualty Ins. Co. v. Cleveland Wrecking Co. (2010) 182 Cal.App.4th 23, 32 (Interstate Fire); see Valley Crest Landscape Development, Inc. v. Mission Pools of Escondido, Inc. (2015) 238 Cal.App.4th 468, 483.) The parties appear to agree in their appellate briefs that Interstate Fire is the controlling case on this issue. We therefore consider its facts and holdings in detail.
Webcor Construction, Inc. (Webcor) was the general contractor for a construction project. (Interstate Fire, supra, 182 Cal.App.4th at p. 28.) Cleveland Wrecking Company (Cleveland) and Delta Steel Erectors (Delta) were both subcontractors on the project, and both signed agreements agreeing to indemnify Webcor for liability arising out of their work and to procure general liability insurance naming Webcor as an additional insured. (Ibid.) Delta obtained the required insurance policy from Interstate; Cleveland did not obtain such a policy. (Id. at pp. 28-29.)
Thelbert Allen Frisby (Frisby), a Delta employee, was injured on the job and sued Webcor and Cleveland in tort. (Interstate Fire, supra, 182 Cal.App.4th at p. 29.) Webcor tendered its defense to Cleveland and to Interstate as Delta's insurer. (Ibid.) Cleveland declined the tender, Interstate accepted it. (Ibid.) Webcor also filed a cross-complaint against Cleveland and Delta for indemnification and breach of contract. (Id. at pp. 29-30.)
Interstate funded Webcor's settlement of the litigation with Frisby, and paid Webcor's attorney fees and costs. (Interstate Fire, supra, 182 Cal.App.4th at p. 30.) Interstate then sued Cleveland for subrogation, contending in a first amended complaint that Cleveland breached its contract with Webcor by failing to defend and indemnify Webcor in the Frisby litigation, and Cleveland's negligence was a proximate cause of Frisby's injuries. (Id. at pp. 30-31.) The trial court sustained Cleveland's demurrer in part because Webcor had suffered no damages as a result of Cleveland's breach of contract. (Id. at p. 31.) The appellate court reversed the trial court's decision. (Id. at p. 28.)
Interstate also alleged Cleveland breached its subcontract with Webcor by failing to obtain insurance naming Webcor as an additional insured. (Interstate Fire, supra, 182 Cal.App.4th at p. 30.)
As to challenged element No. 3, Interstate Fire holds: "Interstate compensated Webcor for the defense and settlement in Frisby, by paying Frisby and Webcor's attorneys. Cleveland nonetheless argues that Interstate made those payments because of its obligations under the Interstate-Delta insurance policy, and not because of Cleveland's contractual breach of the indemnification provision or its alleged negligence in causing Frisby's injuries. However, regardless of why Interstate made the payments, it made the payments. Indeed, it can always be said that an insurer has compensated its insured because it had to under its insurance policy. Cleveland provides no authority for its suggestion that subrogation must be denied on this ground." (Interstate Fire, supra, 182 Cal.App.4th at p. 36.) Here, too, ASIG compensated Hathaway for the damage caused by Western Air. No matter how the damage or injury is framed, it is incontestable that Western Air caused the injury, and ASIG paid the damages.
As to challenged element No. 6, the holding in Interstate Fire supports the decision of the trial court in this case. "Interstate has suffered damages by Cleveland's failure to indemnify Webcor for its costs of defense and settlement payment to Frisby. If Cleveland had made the payments, Interstate would not have had to make them. [¶] Cleveland argues that Interstate has not actually suffered damages, because Interstate was obligated to defend and indemnify Webcor anyway under the terms of the insurance policy. However, this merely reflects Cleveland's view that Interstate should have to pay, while Webcor alleges that Cleveland should pay. The fact that both Interstate and Cleveland were contractually obligated to defend and indemnify Webcor in the Frisby litigation gives rise to the question of which of them is in a superior equitable position to the other." (Interstate Fire, supra, 182 Cal.App.4th at p. 37.)
In this case, the evidence of ASIG's superior equitable position to that of Western Air was substantial. First, there was substantial evidence of Western Air's negligence. Gregory Kearns, a Hathaway employee and assistant superintendent of the project at which Foster was injured, testified that Western Air had removed studs and barricades. At the trial of the Indemnity Lawsuit, Grant Shuler, Schindler elevator's foreman, testified that immediately after Foster's accident Shuler went to the eleventh floor of the building and saw that the barricades in front of the elevator shaft had been removed, and it appeared that someone had been working on the air duct adjacent to the elevator shaft. Blady Ambriz, Raymond's jobsite foreman, testified he saw Western Air remove studs that Raymond had installed. Parvaneh testified that, in the Indemnity Lawsuit, Madison Harbor had the evidentiary basis to support the claim that Western Air was at fault.
There was also substantial evidence that ASIG suffered damages as a result of Western Air's negligence. Counsel for Hathaway and Raymond testified that ASIG paid all of their clients' bills in the Personal Injury Lawsuit. Madison Harbor argued in the Indemnity Lawsuit that Western Air had agreed it would defend and indemnify Hathaway, based on its subcontract.
Accepting the foregoing evidence, disregarding any contrary evidence cited by Madison Harbor, and drawing all reasonable inferences, we are compelled to affirm the trial court's denial of Madison Harbor's JNOV motion on this issue.
IV.
THE ADDITIONAL ISSUES RAISED BY THE PARTIES ON APPEAL ARE MOOTED BY THE
AFFIRMANCE OF THE NEW TRIAL ORDER.
In light of our affirmance of the trial court's order granting a new trial on all issues, all remaining issues raised by the parties on appeal are mooted.
DISPOSITION
The order granting the motion for a new trial and the order denying the motion for judgment notwithstanding the verdict are affirmed. The matter is remanded for retrial on all issues. In the interests of justice, neither side shall recover costs on appeal.
FYBEL, J. WE CONCUR: O'LEARY, P. J. MOORE, J.