Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. GC 038622 C. Edward Simpson, Judge.
Magaña, Cathcart & McCarthy and Anne M. Huarte for Plaintiff and Appellant.
Murchison & Cumming and Edmund G. Farrell III for Defendant and Respondent.
Retired Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Silvia Jimenez lost her right arm below the elbow in a cotton gin while working for J.G. Boswell Company (Boswell). She filed a tort action against the manufacturer of the cotton gin, Consolidated Cotton Gin Company (Consolidated), and obtained a default judgment for $2,000,289.50. She then filed a breach of contract action against Boswell for the same amount, claiming that she was a third party beneficiary of an indemnity clause in the purchase agreement between Boswell and Consolidated. The trial court granted summary judgment for Boswell, and Jimenez appeals. We affirm the grant of summary judgment.
BACKGROUND
Boswell bought a cotton gin from Consolidated in March 2002. The purchase agreement included an indemnity clause: “Buyer [Boswell] is solely responsible for and agrees to indemnify and hold harmless Seller [Consolidated] and Seller’s shareholders, directors, officers, employees and agents, from and against any and all liability, claims, causes of action, cost and expense, including reasonable attorney’s fees and legal costs, relating to or in any way arising out of any improper installation, operation or other use of the Equipment, including any failure to install or maintain guards and/or any alteration or disabling thereof.”
Jimenez began work for Boswell in November 2002. On February 17, 2003, Jimenez was operating the cotton gin, and attempted to clean out the cotton from the machine by turning the power switch off, removing the cover, and reaching in to remove the cotton. When she did so, the blades, which were still rotating, amputated her right arm below the elbow.
On October 18, 2004, Jimenez filed a tort action against Consolidated in Kern County, alleging that Consolidated negligently manufactured and sold the cotton gin, which was a defective and dangerous product. The complaint also alleged that Consolidated was strictly liable for defects in manufacturing and design.
Consolidated filed a petition for bankruptcy in Texas in May 2005. The bankruptcy court did not discharge Consolidated’s debt to Jimenez and allowed her suit to proceed. On December 22, 2006, Jimenez obtained a default judgment against Consolidated for $2,000,289.50.
On February 28, 2007, Jimenez filed a complaint for breach of contract and declaratory relief against Boswell. She alleged that she was a third party beneficiary of the indemnity provision in the cotton gin purchase agreement between Consolidated and Boswell. She also alleged that she had demanded that Boswell pay her $2,000,289.50, and that Boswell had refused, thus violating the contract. She asked for damages of $2,000,289.50 and prejudgment interest, as well as a declaration that she was a third party beneficiary of the contract and Boswell thus was obligated to pay her the damages requested.
Boswell moved for summary judgment, and Jimenez filed a cross-motion for summary judgment. After oral argument, the court issued an order granting Boswell’s motion and denying Jimenez’s motion, “on the basis that [Jimenez] is not a third party beneficiary to the indemnification contract. If [Jimenez] is deemed a third party beneficiary, she would essentially obtain a double recovery for the same injuries, once against Consolidated and again against Boswell.”
DISCUSSION
Summary judgment “‘shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’” (Spinks v. Equity Briarwood Residential Apartments (2009) 171 Cal.App.4th 1004, 1020 (Spinks).) We review the trial court’s grant of summary judgment de novo. (Id. at p. 1021.)
Civil Code section 1559 provides, “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” If a third party is expressly identified in the contract, then she is an “intended” beneficiary entitled to performance. (Spinks, supra, 171 Cal.App.4th. at p. 1022.) But “the third person need not be named or identified individually to be an express beneficiary.” (Kaiser Engineers, Inc. v. Grinnell Fire Protection Systems Co. (1985) 173 Cal.App.3d 1050, 1055.) If a third party can show that she is a member of a class of persons for whose benefit the contract was made, then she will qualify as an intended third party beneficiary. (Spinks, supra, 171 Cal.App.4th at p. 1023.) The intent of the contracting parties is pivotal. If the contracting parties intended to confer a benefit on the third party, the third party may enforce the contract. (Id. at p. 1022.) And “there is no requirement that ‘both of the contracting parties must intend to benefit the third party.’” (Id. at p. 1023.) If the promisee intended to benefit a third party, and “‘the promisor must have understood that the promisee had such intent,’” a third party qualifies as an intended beneficiary entitled to enforce the contractual promises. (Ibid.)
If all a third party can show is that she would incidentally benefit from performance of the contract, it is not enough; section 1559 “‘exclude[s] enforcement by persons who are only incidentally or remotely benefited.’” (Spinks, supra, 171 Cal.App.4th at p. 1022, quoting Lucas v. Hamm (1961) 56 Cal.2d 583, 590.) Ascertaining whether the contract intended to confer a benefit on a third party, or whether the third party is simply an incidental beneficiary, is a matter of ordinary contract interpretation, “giv[ing] effect to the parties’ intent as it existed at the time of contracting.” (Id. at p. 1023.) While whether a third person is an intended beneficiary is ordinarily a question of fact, here “‘the issue is presented to the court on the basis of undisputed facts and uncontrovertible evidence and only a question of the application of the law to those facts need be answered,’” so our review is de novo. (Id. at p. 1025.)
Jimenez is not, and could not have been, an express beneficiary named in the purchase contract; she did not yet work for Boswell. The purchase contract was not expressly made for the benefit of the class of Boswell employees. To qualify as a third party beneficiary, Jimenez therefore must show that the contracting parties, or at the very least Consolidated, the promisee under the indemnity clause, intended to benefit her as a Boswell employee injured by the cotton gin.
Jimenez did not show that she was an intended beneficiary. The contract’s terms show only that the parties intended the indemnity clause to benefit Consolidated, the manufacturer, by holding it harmless from any liability related to Boswell’s installation, operation or use of the cotton gin. Consolidated, the promisee, did not intend to benefit employees of Boswell, but instead to shield itself from liability to them for any claims based on how Boswell handled the cotton gin once it was sold to Boswell. (See American Home Ins. Co. v. Travelers Indemnity Co. (1981) 122 Cal.App.3d 951, 967 [“Generally, a policy of indemnity insurance will not inure to a third party’s benefit unless the contract makes such an obligation express, and any doubt should be construed against such intent.”].) There is no indication that either party intended to benefit a Boswell employee injured by a defective machine who has obtained a judgment against the manufacturer (the bankrupt Consolidated). Under these circumstances, any benefit to Jimenez from Boswell’s promise to indemnify Consolidated would be merely fortuitous, not intended. Jimenez is no more than an incidental beneficiary and may not enforce the indemnity clause.
Jimenez cites Johnson v. Holmes Tuttle Lincoln-Merc. (1958) 160 Cal.App.2d 290, 297, which states, “Where a promise is made to benefit a third party on the happening of a certain contingency, the third party may enforce the contract on the occurrence of that contingency.” We note that here, the promise was made to benefit Consolidated (by shielding it from liability) on the happening of a certain contingency, that is, the filing of a tort claim based on Boswell’s “improper installation, operation or other use of the Equipment.” Jimenez did not name Boswell as a defendant in her tort complaint, or allege in the instant case that Boswell’s installation, operation or use of the cotton gin was improper. There is no evidence that the bargained-against contingency occurred, which is another reason that summary judgment was properly granted in Boswell’s favor.
Johnson v. Holmes Tuttle Lincoln-Merc., supra, 160 Cal.App.2d 290 construed California Insurance Code section 11580, and its discussion of third party beneficiary principles is closely related to that code section. (See Gambra v. International Lease Finance Corp. (C.D. Cal. 2005) 377 F.Supp.2d 810, 822, fn. 13 [Johnson is “readily distinguishable” from cases involving third party beneficiary claims because liability arose from section 11580].)
We conclude that the trial court properly granted summary judgment because Jimenez was not a third party beneficiary of the purchase contract between Consolidated and Boswell. We therefore do not discuss whether worker’s compensation was her exclusive remedy against Boswell.
DISPOSITION
The order granting summary judgment is affirmed.
Defendant is entitled to costs on appeal.
We concur: MALLANO P. J., ROTHSCHILD, J.