Opinion
NOT TO BE PUBLISHED
APPEALS from a judgment of the Superior Court of San Diego County No. GIN028031, Michael B. Orfield, Judge. Affirmed.
McDONALD, J.
Plaintiffs Matthew C. Bishop, Kimberly L. Bishop, Cameron Bishop, and Connor Bishop (together the Bishops) filed a construction defect action against developer and general contractor Brehm Homes (Brehm) and subcontractor Sun Plumbing Company, Inc., (Sun) for damages allegedly caused by defective plumbing in their new home. Sun filed a cross-complaint against Brehm alleging causes of action for indemnity (express, implied, and equitable), breach of contract, negligence, and intentional and negligent misrepresentation. Brehm, in turn, filed a cross-complaint against Sun alleging causes of action for indemnity (express, implied, and equitable), breach of contract, and negligence. The trial court granted Sun's motion for summary adjudication on two causes of action alleged in Brehm's cross-complaint. The trial court granted Brehm's motion for summary adjudication on all causes of action alleged by Sun in its cross-complaint against Brehm. After Brehm and Sun reached separate settlements with the Bishops, the case proceeded toward trial solely on Brehm's cross-complaint against Sun. However, after considering the parties' pretrial motions and arguments, the trial court concluded Brehm could not prove it sustained any damages, including attorney fees, as a result of Sun's alleged conduct, and on its own motion dismissed the remaining causes of action alleged in Brehm's cross-complaint. The trial court entered judgment for Brehm on Sun's cross-complaint and for Sun on Brehm's cross-complaint.
Those causes of action were for express indemnity and breach of contract.
Sun appeals the judgment, contending the trial court erred by granting Brehm's motion for summary adjudication on each of the causes action alleged in its (Sun's) cross-complaint and by denying its motion for attorney fees. Brehm cross-appeals, contending the trial court erred by dismissing its cross-complaint against Sun on the ground it did not show it sustained any damages.
FACTUAL AND PROCEDURAL BACKGROUND
In July 1998, Brehm and Sun entered into a subcontract agreement (Agreement) pursuant to which Sun, as a subcontractor, agreed to perform for Brehm, the general contractor, certain rough and finish plumbing work for new homes constructed in Brehm's development known as Serenata at Aviara in Carlsbad (Project). The Agreement (which is in printed form) was drafted by Brehm. The Agreement provides that Sun could enroll in Brehm's "wrap" insurance program (BWIP):
"14.1 BREHM INSURANCE PROGRAM. Brehm has established the Brehm Wrap Insurance Program ('BWIP') to provide liability insurance coverage for specified Subcontractors and their subcontractors as respects the Project.
"14.1.1 General Coverage. BWIP is for the benefit of Brehm, Project Owner, Subcontractors and their subcontractors of all tiers who are specifically enrolled in the program. Brehm, at its sole discretion, shall determine which Subcontractors are to be enrolled in BWIP and such determination shall be binding. BWIP shall apply only to work performed at the Project unless otherwise indicated as part of this Agreement. BWIP shall not cover suppliers, subcontracts with a value less than an amount to be determined by Brehm, or any other subcontractors Brehm elects to exclude. Unless otherwise directed by Brehm in writing, the excluded subcontractors shall secure and maintain, at their own cost, the insurance coverages specified in Section 14.2 below.
"14.1.2 Specific Coverage. BWIP shall include general liability insurance coverage only. Subcontractor shall be covered under the Project's general liability insurance policy relative to Subcontractor's work on the Project. Brehm shall provide an insurance certificate evidencing coverage. . . . Subcontractor shall pay his pro-rata share of the cost of BWIP based on the amount of the contract and Subcontractor's current rate for liability coverage. [¶] . . . [¶]
"14.1.4 BWIP Procedures. Subcontractor shall cooperate with Brehm in connection with BWIP. Subcontractor's responsibilities shall include, without limitation: . . . (iv) notifying their insurance brokers and insurers of the coverage provided under BWIP and instructing them to exclude such coverage from their other policies . . . .
"14.1.5 Deduction of BWIP Insurance Costs. In consideration for Brehm providing the coverage specified in BWIP, Brehm shall deduct insurance costs from the amounts otherwise due from Brehm to Subcontractor. As specified, the BWIP enrollment forms shall indicate Subcontractor's current insurance rate for the coverage to be provided by BWIP. Brehm shall deliver its calculation of insurance charges to Subcontractor prior to or in conjunction with payment on which the deduction is taken. Brehm's calculation shall be conclusive, except for manifest mathematical errors.
"14.1.6 Cancellation of BWIP. Brehm's intent is to keep BWIP in force throughout the Project. However, Brehm reserves the right to terminate or modify BWIP or any portion thereof at its sole discretion. Brehm shall provide forty-five (45) days advance written notice to Subcontractor of any cancellation and Subcontractor shall immediately obtain replacement insurance coverage consistent with Section 14.2 below and the reasonable pro rata cost of such replacement insurance shall be reimbursed by Brehm accordingly. Written evidence of such insurance must be provided to Brehm prior to the actual termination of BWIP." (Italics added.)
Brehm and Sun deleted certain printed form language by lining it out and initialing adjacent to that deletion. The printed form language deleted by the parties was as follows: "Said general liability insurance policy shall be maintained for ten (10) years following the completion of the Project and provide coverage at least as broad as [specified form policy]."
Section 14.2 of the Agreement provides: "Any subcontractor not enrolled in BWIP shall secure and maintain[,] at its own cost (subject to reimbursement)[,] the following insurance coverage. Additionally, if Brehm elects to discontinue BWIP under Section 14.1 above, then all subcontractors shall secure and maintain at their own cost (subject to reimbursement) the following insurance coverage: [lists specific requirements for insurance coverage]."
The Agreement also requires that Sun indemnify Brehm in certain circumstances:
"13.1 In connection with the performance of this Agreement, to the extent permitted by law, Subcontractor shall indemnify, defend and hold harmless Brehm . . . from all claims, liabilities, damages, losses, costs or expenses, including attorney's and experts' fees and costs, resulting from the injury or death of any person . . . or damage to property of any kind, including loss of use, arising out of or in any way connected with any of the following acts or omissions by Subcontractor, its subcontractors or others for whom Subcontractor is responsible: (i) any willful misconduct or other intentional acts; (ii) any acts or omission[s] giving rise to punitive damages; (iii) any acts or omissions off the Project Site; (iv) any acts or omissions in connection with ownership, maintenance, use . . . or loan to others of aircraft, automobiles or watercraft owned or operated by or rented or loaned to Subcontractor . . .; or (v) any acts or omissions giving rise to employers['] liability and/or injury or death subject to state workers' compensation laws and regulations.
"13.2 If [Subcontractor] . . . is [not covered by] Brehm's Subcontractor Insurance Program [i.e., BWIP], or if Brehm elects to [discontinue the] Brehm Subcontractor Insurance Program under Section 14.1, the [Subcontractor's obligations] under Section 13.1 shall extend to any injury, death or damage [arising out of], or in any way connected with[,] [the Subcontractor's] work on the Project.
"13.3 The indemnity obligations in Section 13 shall apply regardless of whether or not the event giving rise to the indemnity obligation is caused in part by the negligence (passive or active) or strict liability of Brehm . . . or any other indemnitee, but shall not apply as to a particular indemnitee if the loss is caused solely by the negligence or willful misconduct of that indemnitee. This indemnity obligation shall survive the Subcontractor's completion of its obligations under this Agreement and termination of this Agreement."
Because of the unfortunate placement of two "hole punches" within Section 13.2 of the printed form of the Agreement, certain language (as bracketed above) is missing from the copy of the Agreement contained in the record. However, based on the representations made in Brehm's appellate brief, our quotation of Section 13.2 above includes the language bracketed above that presumably was printed in the Agreement (but was unfortunately omitted from the copy in the record). Sun's opening brief describes Section 13.2 of the Agreement in a manner consistent with Brehm's representation. Furthermore, although the Section 13.2 language in Brehm's brief does not include the bracketed words "discontinue the" as quoted above, another document in the record quotes that section as including those words and, accordingly, we presume those two missing words were also included in the original copy of the Agreement. With that caveat, we nevertheless note that we did not consider those two words in deciding the issues in this case.
Brehm selected Legion Indemnity Company (Legion) and Legion provided the BWIP general liability insurance policy described in Section 14.1 of the Agreement. On May 18, 1998, Sun enrolled in BWIP and thereafter paid for insurance coverage by Legion through deductions made by Brehm pursuant to Section 14.1.5 of the Agreement. On or about June 1, 1998, Sun received proof of insurance evidencing Sun's general liability insurance coverage under the Legion policy.
In connection with issuance of the policy, Legion provided an "SLA Form D-2" notice, disclosing that Legion was not licensed by the State of California and was, instead, a "non-admitted" or "surplus lines" insurer. That notice further disclosed that Legion did not participate in any insurance guarantee funds created under California law and, therefore, those funds would not pay the insureds' claims if Legion became insolvent.
On February 28, 2002, Brehm was notified by the Bishops that they observed mold on a wall inside a bathroom sink cabinet in their Serenata home. On March 20, Brehm sent a discrepancy notice to Sun describing a "[p]lumbing leak causing mildew [in the Bishops'] guest bathroom" and requesting corrective action by Sun pursuant to the Agreement. On April 4, Arnie Rempher, a Sun representative, investigated the problem and found water was leaking from a hot water pipe joint. Rempher completed a damage report form (Damage Report), which included a blank space adjacent to the words "DAMAGE CAUSED BY." In that blank space, Rempher wrote: "Bad sold[er] joint, at 1/2" hot [water] stub out." Sun paid J & M Keystone, Inc. to remediate the mold in the Bishops' home. In April 2002, Legion was ordered into a conservatorship in Illinois.
Legion was licensed only in Illinois, but sold insurance in other states and jurisdictions on a surplus lines basis.
In February 2003, the Bishops filed a complaint against Brehm, Sun, and other defendants alleging causes of action for breach of contract, negligence, breach of implied warranty, and strict liability. The Bishops alleged the defendants failed to install the plumbing in their home in a careful and skillful manner rendering the plumbing unsuitable and subject to deterioration and the growth of toxic mold. Brehm submitted letters tendering to Legion its defense of the Bishops' action, but Brehm apparently received no response from Legion.
Sun filed a cross-complaint against Brehm alleging causes of action for express indemnity, implied indemnity, equitable indemnity, breach of written contract, breach of implied contract, intentional misrepresentation, negligence, negligent misrepresentation, breach of fiduciary duty, and declaratory relief.
Brehm filed a cross-complaint against Sun alleging causes of action for declaratory relief, express indemnity, implied indemnity, equitable indemnity, breach of contract, negligence, and alter ego. Its cross-complaint alleged that "[a]lthough Wrap Insurance was procured at or before the time of the contract, the Wrap Insurance [i.e., Legion] went into receivership and liquidation before the [Bishops] in the underlying case filed suit. Therefore, [Sun] 'is not covered by [BWIP]' and is therefore obligated to tender indemnification and defense to [Brehm] under Section 13.1 and Section 13.2 of the [Agreement]."
Brehm filed a motion for summary judgment or, in the alternative, summary adjudication as to each cause of action alleged against it in Sun's cross-complaint. Brehm argued that the Agreement could not be interpreted as making Brehm (in place of insolvent Legion) an insurer required to indemnify Sun, especially for Sun's own negligence as shown by the Damage Report. Sun opposed Brehm's motion, arguing that Brehm, by promising to obtain insurance coverage for Sun, in effect agreed to indemnify Sun.
Sun filed a motion for summary adjudication as to the second and sixth causes of action alleged in Brehm's cross-complaint (i.e., express indemnity and breach of contract causes of action). Sun argued it had no obligation under the Agreement to indemnify Brehm.
In April 2004, the trial court, after hearing arguments of counsel, confirmed its tentative ruling granting Brehm's motion for summary adjudication on each cause of action alleged in Sun's cross-complaint. The court found "there are no triable issues of fact and that [Brehm] is entitled to judgment as a matter of law [on Sun's cross-complaint]." The court found the Agreement did not require Brehm to maintain insurance for Sun, but only to include Sun as an insured under the BWIP policy and provide Sun with a certificate evidencing that insurance coverage. The court further found that the Damage Report submitted by Brehm was evidence showing Sun was negligent, and that Sun did not submit any admissible evidence showing it was not negligent.
The trial court also confirmed its tentative ruling granting Sun's motion for summary adjudication on the second and sixth causes of action alleged in Brehm's cross-complaint. The court found Brehm did not have a contractual right of indemnity against Sun under the provisions of the Agreement.
In September, the trial court issued a written order granting Brehm's motion for summary adjudication (and, in so doing, restated the language from its April tentative ruling).
In October, the Bishops and Brehm entered into a settlement agreement pursuant to which the Bishops dismissed their action against Brehm in exchange for Brehm's waiver of fees and costs. The Bishops also dismissed their action against Sun in exchange for Sun's payment of a settlement amount.
Although Brehm's opening brief represents that the Bishops separately settled their action against Sun in exchange for Sun's payment of $60,000, Brehm's citation to the record does not support that representation. However, because Sun's trial brief represented that the Bishops' claims had been settled "with [Sun] paying the entire settlement sum," we presume the Bishops settled their action with both Brehm and Sun before trial.
Thereafter, the remaining causes of action alleged in Brehm's cross-complaint proceeded toward trial. However, after considering the parties' in limine motions and oral arguments, the trial court concluded Brehm was unable to prove it sustained any damages (e.g., attorney fees) in support of those causes of action, and on the court's own motion dismissed each of the remaining causes of action alleged in Brehm's cross-complaint.
On May 27, 2005, the trial court entered judgment for Brehm on Sun's cross-complaint and for Sun on Brehm's cross-complaint.
Sun timely filed a notice of appeal. Brehm timely filed a notice of cross-appeal.
DISCUSSION
I
SUN'S APPEAL
Standard of Review
A trial court's order granting a motion for summary adjudication is reviewed de novo. (Ojavan Investors, Inc. v. California Coastal Com. (1997) 54 Cal.App.4th 373, 385.) In reviewing that order, we apply the same standards as we would in reviewing a trial court's order granting a motion for summary judgment. (Code Civ. Proc., § 437c, subds. (c) & (f); Certain Underwriters at Lloyd's of London v. Superior Court (2001) 24 Cal.4th 945, 972; Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1506-1507; Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440, 1450.) "A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment." (§ 437, subd. (f)(2).) "A party may move for summary adjudication as to one or more causes of action within an action . . . if that party contends that the cause of action has no merit . . . . A motion for summary adjudication shall be granted only if it completely disposes of a cause of action . . . ." (§ 437, subd. (f)(1).)
All statutory references are to the Code of Civil Procedure unless otherwise specified.
"On appeal after a motion for summary judgment [or summary adjudication] has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. [Citation.]" (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334; Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) "The purpose of the law of summary judgment [and summary adjudication] is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citation.]" (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).)
Aguilar clarified the standards that apply to summary judgment motions under section 437c. (Aguilar, supra, 25 Cal.4th at pp. 843-857.) Generally, if all the papers submitted by the parties show there is no triable issue of material fact and the " 'moving party is entitled to a judgment as a matter of law' " (§ 437c, subd. (c)), the court must grant the motion for summary judgment. (Aguilar, supra, at p. 843.) Section 437c, subdivision (o) provides a cause of action has no merit if: (1) one or more elements of that cause of action cannot separately be established; or (2) a defendant establishes an affirmative defense to that cause of action. Section 437c, subdivision (p)(2) states:
"A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to that cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff or cross-complainant may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto."
Aguilar made the following observations:
"First, and generally, from commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. . . . There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . .
"Second, and generally, the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. . . .
"Third, and generally, how the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on which would bear what burden of proof at trial. . . . [I]f a defendant moves for summary judgment against . . . a plaintiff [who would bear the burden of proof by a preponderance of the evidence at trial], [the defendant] must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not--otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact." (Aguilar, at pp. 850-851, fns. omitted.)
Summary judgment law in California no longer requires a defendant to conclusively negate an element of a cause of action. (Id. at p. 853.) It is sufficient for a defendant "to show that the plaintiff cannot establish at least one element of the cause of action," which the defendant can do "by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence." (Id. at pp. 853-854.) However, "[s]ummary judgment law in this state . . . continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence." (Id. at p. 854, fn. omitted.) Aguilar stated:
"To speak broadly, all of the foregoing discussion of summary judgment law in this state, like that of its federal counterpart, may be reduced to, and justified by, a single proposition: If a party moving for summary judgment in any action . . . would prevail at trial without submission of any issue of material fact to a trier of fact for determination, then he should prevail on summary judgment. In such a case, . . . the 'court should grant' the motion 'and avoid a . . . trial' rendered 'useless' by nonsuit or directed verdict or similar device. [Citations.]" (Id. at p. 855, italics added.)
In deciding whether a defendant is entitled to summary judgment or summary adjudication, the court "must . . . determine what any evidence [submitted by the plaintiff] or inference [therefrom] could show or imply to a reasonable trier of fact." (Aguilar, supra, 25 Cal.4th at p. 856.) Therefore, if any evidence or inference therefrom shows or implies the existence of the required element(s) of a cause of action, the court must deny a defendant's motion for summary judgment or summary adjudication because a reasonable trier of fact could find for the plaintiff. (Id. at pp. 856-857.) "But if the court determines that all of the evidence presented by the plaintiff, and all of the inferences drawn therefrom, show and imply [the existence of a required element of a cause of action] only as likely as [its nonexistence] or even less likely, it must then grant the defendant['s] motion for summary judgment [or summary adjudication], even apart from any evidence presented by the [defendant] or any inferences drawn therefrom, because a reasonable trier of fact could not find for the plaintiff." (Id. at p. 857, fn. omitted.) When a plaintiff relies on inference rather than evidence, he or she "must all the same rely on an inference implying [the existence of a required element] more likely than [its nonexistence], either in itself or together with other inferences or evidence." (Ibid.) An "inference is reasonable if, and only if, it implies [existence of the element is] more likely than [its nonexistence]." (Ibid.)
"On appeal, we exercise 'an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.' [Citation.] 'The appellate court must examine only papers before the trial court when it considered the motion, and not documents filed later. [Citation.] Moreover, we construe the moving party's affidavits strictly, construe the opponent's affidavits liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it.' [Citations.]" (Seo v. All-Makes Overhead Doors (2002) 97 Cal.App.4th 1193, 1201-1202.)
II
Order Granting Brehm's Motion for Summary Judgment on the Causes of Action Alleged in Sun's Cross-Complaint
Sun contends the trial court erred by granting Brehm's motion for summary judgment or, in the alternative, summary adjudication of the causes of action alleged in Sun's cross-complaint.
A
Sun argues the trial court erred by granting Brehm's motion for summary judgment because there are triable issues of material fact on its (Sun's) causes of action against Brehm for breach of contract, express indemnity, and breach of fiduciary duty.
In moving for summary adjudication of those causes of action, Brehm argued the Agreement did not contain any express language requiring it to indemnify Sun. Furthermore, because the Agreement did not require Brehm to indemnify Sun, Brehm did not breach any express indemnity provision or any other provision of the Agreement by not defending and indemnifying Sun. Rather, under the Agreement Brehm was required only to obtain a BWIP general liability insurance policy covering Sun as an insured and deliver to Sun a certificate evidencing that coverage. Furthermore, Brehm's obligation to obtain the policy did not make it an insurer of Sun and therefore it did not owe Sun any fiduciary duty as an insurer.
In opposing Brehm's motion, Sun argued below (and again argues on appeal) that the Agreement did not require Brehm to merely obtain a BWIP general liability insurance policy for Sun, an enrolled subcontractor, and provide Sun with evidence of coverage, but also to directly provide Sun with coverage, thereby requiring Brehm to defend and indemnify Sun for general liability claims arising out of the Project.
In granting Brehm's motion for summary adjudication on Sun's cause of action for express indemnity, the trial court stated: "[Brehm] had no express duty of indemnity to [Sun] under the [Agreement] . . . . Under the provisions of the [Agreement], [Brehm] took on no duty to maintain insurance, only to include [Sun] under the Project's general liability insurance policy and provide [Sun] with an insurance certificate evidencing coverage." In granting Brehm's motion for summary adjudication on Sun's cause of action for breach of contract, the trial court stated:
"a. To the extent that [Brehm] undertook duties to obtain insurance coverage under a general liability policy for the [P]roject and provide [Sun] with an insurance certificate evidencing same [citation], the court finds admissible evidence that [Brehm] performed under the [Agreement] by 1) obtaining a policy from Legion . . . for a policy period beginning January 15, 1998 and ending January 15, 2001[,] [citation] and 2) providing [Sun] with proof of insurance. [Citations.] [¶] [Sun] has failed to introduce admissible evidence to the contrary.
"b. As above, the court finds that [Brehm] undertook no contractual duty to defend and indemnify [Sun] under the [Agreement]. [Citation.]"
Finally, in granting Brehm's motion for summary adjudication on Sun's cause of action for breach of fiduciary duty, the trial court stated: "[T]he court finds that [Brehm] has introduced admissible evidence that it was not acting as an insurer in this case [citation to the Agreement]. [Sun] has introduced no competent evidence to the contrary."
Based on our independent review of the record, including the Agreement, and strictly construing Brehm's moving papers and evidence, we conclude the trial court properly granted Brehm's motion for summary adjudication of Sun's cause of action for express indemnity. As Brehm notes, the only express indemnity provisions in the Agreement (i.e., Sections 13.1 and 13.2 of the Agreement, as quoted above) require Sun to indemnify Brehm in certain circumstances. There are no provisions in the Agreement expressly requiring Brehm to indemnify Sun. An agreement for indemnification "must be clear and explicit" and is "strictly construed against the indemnitee." (Goldman v. Ecco-Phoenix Elec. Corp. (1964) 62 Cal.2d 40, 44, disapproved on another ground in Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1029-1030, fn. 10; see also Vinnell Co. v. Pacific Elec. Ry. Co. (1959) 52 Cal.2d 411, 416.) Furthermore, to the extent Sun argues a duty for Brehm to indemnify Sun arises out of Brehm's obligation under the Agreement to obtain a BWIP general liability insurance policy covering Sun, we conclude, as the trial court did, that the Agreement required Brehm to obtain a BWIP insurance policy covering Sun for general liability arising out of the Project and to provide Sun with evidence of that coverage.
Section 14.1.2 of the Agreement provides: "Subcontractor [i.e., Sun] shall be covered under the Project's general liability insurance policy relative to Subcontractor's [i.e., Sun's] work on the Project. Brehm shall provide an insurance certificate evidencing coverage." Section 14 of the Agreement does not contain any language expressly requiring Brehm to indemnify Sun for general (or other) liability. The language of the Agreement cannot be reasonably interpreted as requiring Brehm, in addition to obtaining a BWIP general liability insurance policy covering Sun, to also directly provide indemnity to Sun for general liability arising out of the Project. Alternatively stated, the Agreement cannot be reasonably interpreted as requiring Brehm to essentially become the "back-up" or secondary indemnitor/insurer in the event the insurance company selected by Brehm to provide the BWIP general liability insurance policy (i.e., Legion) becomes insolvent and/or otherwise cannot or does not indemnify Sun. "The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity." (Civ. Code, § 1638.) Considering the clear language of the Agreement in the circumstances of this case, we conclude the Agreement does not expressly require Brehm to indemnify Sun.
Likewise, Sun does not cite any authority for its argument, or persuade us, that because Brehm selected an insurance company not admitted in California, Brehm should be required to directly indemnify Sun for general liability if that insurance company becomes insolvent.
Sacramento-Yolo Port Dist. v. Cargill of California, Inc. (1970) 4 Cal.App.3d 1004 and the other cases cited by Sun are inapposite and do not persuade us to conclude otherwise.
We also conclude the trial court properly granted Brehm's motion for summary adjudication of Sun's cause of action for breach of contract. The Agreement does not require Brehm to directly indemnify or insure Sun, but merely required Brehm to obtain a BWIP general liability insurance policy covering Sun. Furthermore, the Agreement does not require Brehm to maintain that policy during development of the Project and the 10-year completion period thereafter. Although Section 14.1.6 of the Agreement states it was Brehm's intent to keep the BWIP policy in force throughout the Project, that section expressly allows Brehm to terminate the BWIP policy at any time in its sole discretion. Therefore, the Agreement did not require Brehm to maintain the BWIP policy throughout the Project. Nevertheless, the record shows the Legion policy was, in fact, in force during the initial three-year period of its 1998 BWIP policy (during which time the Bishops' home was constructed) and only thereafter (in 2002) did Legion become insolvent (i.e., was ordered into conservation).
Section 14.1.6 of the Agreement provides: "Brehm's intent is to keep BWIP in force throughout the Project. However, Brehm reserves the right to terminate or modify BWIP or any portion thereof at its sole discretion. . . ."
The record shows Brehm satisfied its obligations under the Agreement to obtain a BWIP general liability insurance policy covering Sun and provide Sun evidence of that coverage. Brehm selected Legion, which provided the BWIP general liability insurance policy described in Section 14.1 of the Agreement, covering an initial policy period from January 15, 1998, through January 15, 2001. On May 18, Sun enrolled in BWIP and thereafter paid for insurance coverage by Legion through deductions made by Brehm pursuant to Section 14.1.5 of the Agreement. On or about June 1, Sun received proof of insurance evidencing Sun's general liability insurance coverage under the Legion policy. Sun does not assert, or present any evidence showing, Brehm did not satisfy those obligations under the Agreement. Rather, Sun merely attempts to construe the Agreement as imposing on Brehm additional obligations not expressly set forth in the Agreement. The Agreement does not expressly require Brehm to indemnify Sun or require Brehm to indemnify or insure Sun in the event the BWIP insurer (i.e., Legion) becomes insolvent.
The fact that Legion became insolvent in 2002 and was thereafter unable to meet its obligations under the BWIP insurance policy does not show Brehm breached its obligation to obtain a BWIP general liability insurance policy covering Sun. The Agreement cannot be reasonably interpreted as requiring Brehm to maintain general liability insurance coverage for Sun in the event the BWIP insurer (i.e., Legion) becomes insolvent after issuance of the BWIP policy covering Sun. Sun's loss of effective BWIP general liability insurance coverage four years after the issuance of the BWIP policy cannot be construed as a "retroactive" breach by Brehm of its obligations under the Agreement.
Furthermore, by agreeing in the Agreement to obtain a BWIP general liability insurance policy covering Sun, Brehm did not agree to directly provide Sun with that insurance coverage. By creating the BWIP program, Brehm did not act as an insurer. By fulfilling its obligations under Section 14.1 of the Agreement, Brehm was an insured, rather than an insurer. Brehm merely obtained a BWIP general liability insurance policy covering itself and its enrolled subcontractors regarding the Project. Brehm's obligations under the Agreement to obtain a BWIP policy did not constitute the issuance of insurance. "Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event." (Ins. Code, § 22.) "The person who undertakes to indemnify another by insurance is the insurer, and the person indemnified is the insured." (Ins. Code, § 23.) In this case, Legion, not Brehm, provided the BWIP insurance coverage to Sun. Legion, not Brehm, was the insurer. The Agreement (i.e., BWIP) did not shift the risk of loss from Sun to Brehm. (Cf. Truck Ins. Exchange v. Amoco Corp. (1995) 35 Cal.App.4th 814, 824 [self-insured parent company did not insure subsidiary because there was no shifting of risk from subsidiary to parent company].) Because there are no triable issues of material fact on the question of whether Brehm breached the Agreement, the trial court properly granted Brehm's motion for summary adjudication on Sun's cause of action for breach of contract. (§ 437, subd. (f)(1); Aguilar, supra, 25 Cal.4th at p. 843.)
Assuming arguendo Brehm had breached its contractual obligation to obtain a BWIP general liability insurance policy covering Sun, Sun's remedy would be to seek damages for that breach and not to hold Brehm liable as an insurer. The liability of a party for breaching a contractual duty to procure insurance is to pay damages, and that liability is not the liability of an insurer. (Delta Manufacturing Co. v. Jones (1977) 69 Cal.App.3d 428, 432.)
To the extent Sun argues in its reply brief that Brehm was subject to licensing requirements under the Insurance Code, we decline to address that argument as untimely raised. (See, e.g., Ins. Code, § 1631 ["[A] person shall not solicit, negotiate, or effect contracts of insurance . . . unless the person holds a valid license from the commissioner authorizing the person to act in that capacity. . . ."] In any event, that argument, even if correct, would not establish that Brehm agreed to, or was otherwise required to, indemnify or insure Sun for general liability arising out of the Project.
Wayne v. Staples, Inc. (2006) 135 Cal.App.4th 466, cited by Sun, is inapposite and does not persuade us to conclude otherwise. In that case, Staples acted as the insurer's agent by offering direct or excess value insurance issued by UPS and profiting therefrom by charging customers twice the price of the actual coverage and retaining the difference. (Id. at p. 472.) In our case, there is no evidence showing Brehm either acted as Legion's agent or made any profit by offering its subcontractors the opportunity to enroll in BWIP along with Brehm.
We also conclude the trial court properly granted Brehm's motion for summary adjudication of Sun's cause of action for breach of fiduciary duty. The purported fiduciary duty on which Sun bases that cause of action is the duty owed by an insurer to an insured. Sun's cross-complaint alleges that Brehm breached a fiduciary duty owed it (Sun) "by failing to maintain insurance coverage for the work [Sun] performed on the [P]roject . . . ." In opposing Brehm's motion for summary adjudication, Sun argued: "By creating the BWIP, Brehm acted as an insurer." It further argued that by failing to provide Sun with insurance coverage, Brehm breached the fiduciary duty it owed Sun as an insurer. Sun repeats that argument on appeal. However, because Brehm did not act as an insurer under the Agreement, it does not owe Sun any fiduciary duty as an insurer to an insured. The trial court properly granted Brehm's motion for summary adjudication on Sun's cause of action for breach of fiduciary duty. (§ 437, subd. (f)(1); Aguilar, supra, 25 Cal.4th at p. 843.)
To the extent Sun argues in its reply brief that Brehm owes it a fiduciary duty based on Brehm's control of the BWIP program under the provisions of the Agreement, we decline to address that argument as untimely raised. In any event, Sun does not persuade us that the facts of Brehm's choice of the insurance company that issued the BWIP policy (i.e., Legion) and deduction of the premiums charged by that insurance company are sufficient to create a fiduciary, in contrast to a mere contractual, relationship between Brehm and Sun.
B
Sun argues the trial court erred by granting Brehm's motion for summary judgment because there are triable issues of material fact on its (Sun's) causes of action against Brehm for implied indemnity and equitable indemnity.
In moving for summary adjudication of those causes of action, Brehm argued the Damage Report showed Sun acknowledged that the Bishops' entire loss was caused by Sun's defective work. Citing Cahill Bros., Inc. v. Clementina Co. (1962) 208 Cal.App.2d 367 (Cahill) (disapproved on another ground in Bay Development, Ltd. v. Superior Court, supra, 50 Cal.3d at pp. 1029-1030, fn. 10), Brehm argued that because Sun's affirmative act of negligence was the sole cause of the Bishops' loss, Sun was not entitled to either implied or equitable indemnity.
In opposing Brehm's motion for summary adjudication of those causes of action, Sun argued Brehm had not presented any evidence showing there were no triable issues of fact regarding whether Sun's plumbing work did not meet the applicable standard of care and caused the Bishops' loss.
In granting Brehm's motion for summary adjudication on Sun's causes of action for implied and equitable indemnity, the trial court stated:
"[T]he court finds that [Brehm] has met its burden of providing admissible evidence to the court of a complete defense to the causes of action. Specifically, the court finds under [Cahill] that [Brehm] has provided evidence that [Sun] participated in an affirmative act of negligence. Evidence: [the Damage Report in which] a representative of Sun stated: 'Damage caused by: Bad sold[er] [sic] joint at 1/2 ["] Hot [sic] stub out.' [Sun] has failed in its burden to provide admissible evidence that it was not negligent. Attacking the credibility of the moving party's evidence is not sufficient."
We conclude the trial court properly granted Brehm's motion for summary adjudication of Sun's causes of action for implied and equitable indemnity. In moving for summary adjudication, Brehm submitted the Damage Report as evidence showing Sun's plumbing work was deficient and the sole cause of the Bishops' loss. As quoted above, the Damage Report stated the "DAMAGE [WAS] CAUSED BY" a "Bad sold[er] joint, at 1/2 " Hot [water] stub out." Based on the evidence submitted by the parties, a trier of fact could reasonably infer from the Damage Report that Arnie Rempher, Sun's representative who prepared that report, investigated the damage at the Bishops' home and concluded the damage was caused by Sun's "bad" solder joint. A trier of fact could further reasonably infer from the Damage Report that Rempher's finding of a "bad" solder joint essentially meant Sun's plumbing work on that joint was "bad" or below the applicable standard of care. Because Sun was the plumbing subcontractor who performed the solder work on that joint, it can be reasonably inferred that any "bad" joint was the result of Sun's deficient work. The Damage Report, by itself, provides sufficient evidence for a trier of fact to reasonably infer Sun's plumbing work (i.e., soldering) on the Bishops' hot water joint was below the standard of care for plumbers and Sun's negligence caused the pipe joint leak and Bishops' damages. Furthermore, the Damage Report supports a reasonable inference that Sun's negligence was the sole cause of the pipe joint leak and Brehm was not negligent and did not cause the leak.
In making its prima facie case for summary adjudication in the circumstances of this case, Brehm was not required to submit expert testimony on the applicable standard of care for plumbers or on the cause of the Bishops' leaking pipe joint. The Damage Report provided sufficient evidence to support reasonable inferences that Sun was negligent in soldering the pipe joint and that its negligence caused the Bishops' damage. Furthermore, because the Damage Report did not identify any other possible cause of that pipe joint being "bad" and Sun did not submit any other evidence supporting a reasonable inference that there was another cause of the leaking pipe joint, a trier of fact could not reasonably infer there was another cause of that leak (i.e., that Sun's negligence was not the sole cause of that leak). Absent any cause of the leak other than Sun's negligence in soldering the pipe joint, Brehm cannot be liable to Sun for implied or equitable indemnity. (Cahill, supra, 208 Cal.App.2d at p. 382; Goldman v. Ecco-Phoenix Elec. Corp., supra, 62 Cal.2d at p. 44; Baird v. Jones (1993) 21 Cal.App.4th 684, 689-690 [comparative equitable indemnity applies when there are multiple tortfeasors].) Therefore, by submitting the Damage Report in support of its motion, Brehm satisfied its initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact on Sun's causes of action for implied and equitable indemnity. (§ 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851, fns. omitted.)
On Brehm's prima facie showing of the nonexistence of any triable issue of material fact, the burden of production shifted to Sun to submit evidence to make a prima facie showing a triable issue of material fact existed on its causes of action. (§ 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851.) To make that prima facie showing, section 437, subdivision (p)(2) provides: "The . . . cross-complainant [i.e., Sun] may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto." However, in opposing Brehm's motion, Sun did not satisfy its burden of production of evidence making a prima facie case showing a triable issue of fact existed. To refute Brehm's prima facie showing, Sun submitted its separate statement of undisputed material facts in support of its opposition to Brehm's motion. In Sun's separate statement, Sun stated that:
"19. A Sun technician visited the Bishops' residence and determined that a leak was present near the solder joint.
"20. The technician did not make any determination as to the cause of the leak. [¶] . . . [¶]
"30. The drafter [of the Damage Report] also testified that leak could have been caused by a 'hundred of different things.' "
In support of those statements, Sun cited certain excerpts from the transcript of Rempher's deposition testimony. Those excerpts are as follows:
"Q[:] All right. And can you read into the record what you wrote.
"A[:] 'Bad soldered joint at half-inch hot stub out.'
"Q[:] Okay. And what does that mean?
"A[:] That means that's where the leak was, at the half-inch stubout.
"Q[:] And does that mean that you found a bad solder joint at that location?
"A[:] Yes. That's where it was leaking.
"Q[:] All right. And so why did you -- why would you have written 'bad solder joint' if there wasn't a bad solder joint?
"A[:] Because that's where it was leaking, at the solder joint. [¶] . . . [¶]
"[Q:] What was your custom and practice in terms of how you would go about determining what the cause of any particular leak that you were being asked to look at was?
"A[:] We really don't determine the cause of it. We just find the leak, and we fix it. [¶] . . . [¶]
"A[:] It could be a number of different things.
"Q[:] Like what?
"A[:] It could be a cracked -- the solder joint itself cracked from somebody hitting it, bumping it. It could have been not cleaned, not soldered right. There could be hundreds of different things. [¶] . . . [¶]
"Q[:] Give me some other examples or other reasons why you would write down a bad solder joint.
"A[:] Well, basically, like there's hundreds of different reasons why it's bad. It could be defective material. It could be defective solder. As I say, somebody hitting it, bumping it, drywall guys, cabinet guys, carpenters. It could be the solder joint itself. There's a number of different reasons why."
However, in those excerpts, Rempher never retracted or contradicted his statement in the Damage Report that the solder joint in the Bishops' hot water stub out was "bad." Considering Rempher's deposition testimony liberally in Sun's favor, we conclude that Rempher's testimony, at most, was an attempt to distract others from the plain meaning of his statement that he found a "bad" soldered joint at the hot water stub out by suggesting it merely meant the location of where he found the bad solder joint. Subsequently, when asked the question of how he typically approached the task of determining the cause of a particular leak (but not the specific leak in this case), Rempher answered: "We [apparently referring to Sun] really don't determine the cause of it. We just find the leak, and we fix it." However, in so doing, Rempher did not contradict his statement in the Damage Report in which he concluded that the Bishops' damage was caused by a bad solder joint at the hot water stub out. The Damage Report cannot be reasonably interpreted as only a statement of the leak's location without any determination as to its cause. On its face, it expressly states that the cause of the damage was a "bad" solder joint at the hot water pipe stub out. The Damage Report does not contain any suggestion that Rempher saw any cause of the leaking pipe other than the "bad" solder joint.
Finally, although Rempher testified there could be other causes of the leak in the Bishops' pipe, he did not testify that he determined there was any cause other than the "bad" joint solder. Although theoretically there could have been other causes of the leak (e.g., drywall nail, etc.), Rempher apparently did not observe, and the Damage Report did not identify, any other cause. That theoretical possibility constitutes, at most, speculation that there may have been a cause other than Sun's negligence. That speculation does not constitute evidence to support Sun's assertion that there is a triable issue of fact regarding the cause of the leak. (Aguilar, supra, 25 Cal.4th at p. 864; Knapp v. Doherty (2004) 123 Cal.App.4th 76, 99; Joseph E. Di Loreto, Inc. v. O'Neill (1991) 1 Cal.App.4th 149, 161.) The evidence Sun submitted in opposition to Brehm's summary adjudication motion is insufficient to make a prima facie showing that there is a triable issue of material fact on Sun's causes of action for implied and equitable indemnity. Therefore, the trial court properly granted Brehm's motion for summary adjudication of those causes of action.
Assuming arguendo Brehm's evidence was insufficient to show Sun was negligent and Sun's negligence caused the Bishops' loss, we nevertheless would further conclude Brehm met its burden to show Sun could not prove its causes of action for implied and equitable indemnity. To prove those causes of action, Sun would be required to present admissible evidence supporting a reasonable inference that Brehm was negligent and its negligence was a cause of the Bishops' loss. However, in opposing Brehm's motion for summary adjudication, Sun did not present any evidence supporting a reasonable inference on either of those elements. In contrast, by submitting the Damage Report, which supports only the reasonable inference that Brehm was not the cause of the Bishops' loss, Brehm satisfied its burden in moving for summary adjudication. As we noted above, it is sufficient for a defendant (i.e., Brehm) "to show that the plaintiff [i.e., Sun] cannot establish at least one element of the cause of action," which the defendant can do "by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence." (Aguilar, supra, 25 Cal.4th at pp. 853-854.)
C
Sun argues the trial court erred by granting Brehm's motion for summary judgment because there are triable issues of material fact on its (Sun's) causes of action against Brehm for intentional and negligent misrepresentation. Sun's cause of action for intentional misrepresentation alleged Brehm represented to Sun that Brehm would provide insurance coverage to Sun for its work on the Project and knew, or should have known, that representation was false when made. Sun's cause of action for negligent misrepresentation alleged Brehm falsely represented to Sun that Brehm was providing wrap insurance for the Project and had no reasonable ground to believe that representation was true.
In moving for summary adjudication of those causes of action, Brehm argued Sun could not prove the element of misrepresentation because the statements made to Sun by Brehm personnel were true and Brehm did, in fact, procure insurance from Legion covering Sun and that insurance policy was effective during the entire three-year policy period. It was only later that Legion became insolvent and was unable to indemnify Sun for the Bishops' claims.
In opposing Brehm's motion, Sun argued Woody Brehm, Brehm's president, told Sun that BWIP would defend and indemnify Sun on the Project. In its separate statement of undisputed material facts, Sun cited an excerpt from the deposition testimony of Bruce Magellan as support for its assertion that Woody Brehm made that misrepresentation. The excerpt from the transcript of Magellan's deposition is as follows:
"[Magellan:] We had a meeting at Brehm, and it was probably before I signed the first contract, because I think it [was] the first time they ever used wrap insurance, and I'm not sure that -- I know we had -- already had Shea as a -- in wrap insurance. This could have been our second wrap, but it was for sure one of our early wrap insurance programs.
"And so I wanted to meet with somebody from Brehm, and I ended up meeting with Woody, and we just kind of went through some things. And he basically told me that the -- the Brehm wrap insurance program [i.e., BWIP] would cover Sun . . . for any -- you know, indemnify us for anything we did on the job, anything that was done wrong.
"Q. Now, did Mr. Brehm tell you that it was Brehm Homes that was going to indemnify Sun or that an insurance company that everybody was paying for would indemnify Sun . . . .
"A. He never really said. He always just said the Brehm wrap insurance program [i.e., BWIP] would defend and indemnify us."
Sun also cited a document Brehm gave to Sun explaining BWIP, in which Brehm stated: "Brehm . . . [and enrolled] Subcontractors . . . will be covered by Brehm's Wrap Insurance Program [BWIP] for work done at [the Project]."
In reply to Sun's opposition, Brehm argued Sun knew Brehm would purchase an insurance policy from an insurance company. Brehm cited to an excerpt from the deposition transcript of Tobin Whitt, Sun's vice-president at that time, as follows:
"Q. . . . My question is you understood that the wrap program that Brehm was offering to you meant that they were going out into the marketplace, paying policy premiums to an insurance company to provide an insurance policy for themselves and for you, correct?
"A. Yes."
In granting Brehm's motion for summary adjudication on Sun's cause of action for intentional misrepresentation, the trial court stated:
"[T]he court finds that [Brehm] has met its burden of introducing admissible evidence that shows that [Sun] cannot establish one or more elements of the cause of action. Specifically, [Brehm] has introduced competent evidence that such representation was meant only to refer to the policy of insurance that [Brehm] had for the project at the time. [Citation to the Agreement.] [Sun] has failed to meet its burden of introducing evidence that the representation referenced any other duty to defend and indemnify outside the Legion insurance policy and as otherwise set forth in [the Agreement]. The court has already determined that no duty to defend or indemnify exists based on [the Agreement]. [¶] [Brehm] has introduced competent evidence that such representation was not false and that there was no intent to defraud, in that [Brehm] did in fact procure the required insurance [citations] and that through no fault of [Brehm's], Legion thereafter was declared insolvent. [Citation.] [Sun] has failed to introduce evidence to the contrary. . . . [¶] [Brehm] has introduced competent evidence that there was no justifiable reliance by [Sun] on any representation of [Brehm] . . . ."
In granting Brehm's motion for summary adjudication of Sun's cause of action for negligent misrepresentation, the trial court stated: "[A]s above on the cause of action for Intentional Misrepresentation, [Brehm] has introduced competent evidence that there was no misrepresentation, that there was no justifiable reliance on any representation made, and that there were no proximately caused damages. [Sun] has failed in its burden to introduce evidence to the contrary."
On appeal, Sun argues Magellan's deposition testimony is sufficient evidence to show there is a triable issue of fact on the element of misrepresentation (i.e., Woody Brehm represented to Sun that Brehm/BWIP would defend and indemnify Sun on the Project). However, considering Sun's evidence liberally in its favor, we conclude a trier of fact could not reasonably construe Magellan's deposition testimony as showing that Woody Brehm stated Brehm (or BWIP), rather than an insurance company, would defend and indemnify Sun for its work on the Project. Rather, Magellan's testimony, when considered together with the Agreement and the other evidence, shows Brehm represented that Sun, as a subcontractor enrolled in BWIP, would be covered under the Project's general liability insurance policy relative to Sun's work on the Project. The statement purportedly made by Woody Brehm to Magellan that BWIP would defend and indemnify Sun can be reasonably construed only as a general statement that the insurance policy obtained under BWIP would cover Sun for its work on the Project. That statement cannot be reasonably construed as a representation that Brehm, and not an insurance company, would defend and indemnify Sun. Furthermore, Magellan testified that Woody Brehm did not state whether under BWIP it would be Brehm or an insurance company that would defend and indemnify Sun. Based on the express language of the Agreement, it is clear that under BWIP an insurance company, and not Brehm, would defend and indemnify Sun for its work on the Project.
Finally, Sun also cites the document that Brehm gave to Sun explaining BWIP as showing Brehm misrepresented to Sun that Brehm would defend and indemnify Sun. However, that document appears to merely paraphrase or describe the Agreement's provisions regarding BWIP. Although that document generally stated Sun would be "covered" by BWIP, BWIP was not an entity and the Agreement clearly provided that under BWIP an insurance company, and not Brehm, would provide general liability coverage to Sun and would defend and indemnify Sun for its work on the Project. Section 14.1.2 of the Agreement provided in part: "BWIP shall include general liability insurance coverage only. Subcontractor shall be covered under the Project's general liability insurance policy relative to Subcontractor's work on the Project. . . ." The evidence is undisputed that under BWIP Brehm procured a general liability insurance policy from Legion covering Sun for its work on the Project. That policy was in effect during its initial three-year period (and at the time the Bishops' home was constructed) and only thereafter did Legion become insolvent and unable to defend and indemnify Sun regarding its work on the Bishops' home. There is no evidence showing Brehm made any misrepresentation to Sun that Brehm would defend and indemnify Sun regarding its work on the Project.
Because Brehm submitted evidence showing it did not make any misrepresentation that it would defend and indemnify Sun, Brehm carried its burden to make a prima facie showing that there is no triable issue of material fact on the element of misrepresentation and is entitled to summary adjudication. (CACI No. 1900; CACI No. 1903; Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239 [misrepresentation of a material fact is an element of fraud/intentional misrepresentation]; Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 159 [misrepresentation of a material fact is an element of negligent misrepresentation].) Sun did not satisfy its burden to present evidence showing there is a triable issue of fact on the element of misrepresentation. Accordingly, the trial court properly granted Brehm's motion for summary adjudication on Sun's causes of action for intentional and negligent misrepresentation. (§ 437c, subds. (f)(1) & (p)(2); Aguilar, supra, 25 Cal.4th at pp. 843, 850-851, fns. omitted.)
D
Because Sun has not carried its burden on appeal to show the trial court erred in granting Brehm's motion for summary adjudication of Sun's causes of action for express indemnity, breach of contract, breach of fiduciary duty, implied indemnity, equitable indemnity, intentional misrepresentation and negligent misrepresentation, and does not substantively argue on appeal that the trial court erred in granting Brehm's motion for summary adjudication of Sun's remaining causes of action in its cross-complaint against Brehm, we conclude the trial court properly granted Brehm's motion for summary adjudication on all of the causes of action alleged in Sun's cross-complaint (thereby effectively granting Brehm's motion for summary judgment on Sun's cross-complaint).
III
Sun's Attorney Fees
Sun contends the trial court erred by denying its request for an award of its attorney fees as the prevailing party under the Agreement's attorney fees provision.
A
Section 19 of the Agreement sets forth the following attorney fees provision:
"Subcontractor and its surety, if any, agree to pay Brehm in any action brought to interpret or enforce the performance of this Agreement or any of the terms, covenants or conditions thereof, and in any action brought against Subcontractor by third parties in which Brehm . . . [is] joined as a party, whether the same proceeds to judgment or not, an additional reasonable amount as attorney's fees, costs of investigation by Brehm . . . and court costs. This provision shall also apply to any suit on any bond furnished hereunder."
Civil Code section 1717, subdivision (a) provides for the mutuality of contractual attorney fee provisions:
"In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs."
Civil Code section 1717 "reflects legislative intent that equitable considerations must prevail over both the bargaining power of the parties and the technical rules of contractual construction." (International Industries, Inc. v. Olen (1978) 21 Cal.3d 218, 224, superseded by statutory amendment on another ground as noted in Santisas v. Goodin (1998) 17 Cal.4th 599, 622.) An "award of contractual attorney fees is governed by equitable principles." (International Industries, at p. 224.)
"[I]n deciding whether there is a 'party prevailing on the contract,' the trial court is to compare the relief awarded on the contract claim or claims with the parties' demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims and only by 'a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.' [Citation.]" (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.) Furthermore, "in determining litigation success, courts should respect substance rather than form, and to this extent should be guided by 'equitable considerations.' For example, a party who is denied direct relief on a claim may nonetheless be found to be a prevailing party if it is clear that the party has otherwise achieved its main litigation objective. [Citations.]" (Id. at p. 877.)
B
After the trial court entered the judgment in this case, Sun filed a motion for an award of attorney fees as the prevailing party under the Agreement's attorney fee provision. In previously granting Brehm's motion for summary adjudication on all causes of action alleged in Sun's cross-complaint and partially granting Sun's motion for summary adjudication on Brehm's cross-complaint, the trial court concluded (albeit in denying without prejudice Brehm's motion for attorney fees) it was "unable to determine whether Brehm or Sun has recovered the greater relief on the contract under [Civil Code section] 1717 without a judgment. The disposition of the remaining causes of action in Brehm's cross-complaint, particularly the cause of action for Breach of Contract [Count One], would be determinative on this issue." Therefore, in moving for an award of attorney fees after the trial court entered judgment in this case (disposing of all causes of action in the parties' respective cross-complaints), Sun requested an award of only those attorney fees and costs it incurred after the court's determination of the parties' motions for summary adjudication. Sun argued there was no question it prevailed at trial in defending against the remaining causes of action alleged in Brehm's cross-complaint when the trial court dismissed those causes of action on its own motion, and therefore it should be awarded the attorney fees and costs it incurred in defending those remaining causes of action.
The trial court denied Sun's motion for an award of attorney fees, stating:
"1. [Sun] is not the prevailing party on its cross-complaint against [Brehm]. Summary Adjudication was entered against [Sun] on all causes of action.
"2. [Sun] was not the prevailing party on [Brehm's] cross-complaint against [Sun]. This was a more complicated case. It is true that Summary Adjudication was entered in [Sun's] favor on the 2nd and 6th causes of action. However, those causes of action sounded in indemnity. The court found, in essence, that because of Legion's bankruptcy, neither party was entitled to indemnity from the other. Thus, this was not an 'unqualified' win for [Sun]. [Sun] 'won' on the 2nd and 6th causes of action by [Brehm] against [it], but 'lost' on the very same causes of action in their own cross-complaint against [Brehm].
"Further, although it is also true that the court dismissed the remaining causes of action by [Brehm] against [Sun] on [Brehm's] cross-complaint at trial, this was not an unqualified win for [Sun] either. The basis of the procedural decision by the court to dismiss was a) that damages had been eliminated by [Sun's] settlement with the [Bishops] and b) that any entitlement to attorney's fees by [Brehm] would be just another form of indemnity. As the court had already found, [Brehm] was not entitled to indemnity by [Sun] due to the bankruptcy of [Legion].
3. The evidence available to the court up to the time of trial indicated that [Sun] was the party responsible for damages in this case due to the 'bad solder joint.' Absent the [Agreement], the 'wrap insurance,' [Legion's] bankruptcy, and the complex contractual arrangements between the parties, [Sun] would have been responsible for its own negligence. Under no circumstances would [Sun] then have been entitled to attorney's fees from [Brehm]."
Accordingly, the trial court exercised its discretion in finding there was no prevailing party on the contract and denied Sun's motion for an award of attorney fees.
C
We conclude the trial court did not abuse its discretion by concluding Sun was not the prevailing party under the Agreement's attorney fees provision. The trial court compared the relief awarded on the contract claims in the parties' respective cross-complaints with their demands on those same claims and their litigation objectives. (Hsu v. Abbara, supra, 9 Cal.4th at p. 876.) In concluding that neither Sun nor Brehm was the prevailing party on those contract claims, the court reasonably exercised its discretion. It reasonably considered the entire proceedings from the filing of the Bishops' complaint and the parties' cross-complaints until a judgment was entered. The court reasonably concluded Sun did not achieve its litigation objectives. As Brehm argues, it is unlikely Sun's litigation objectives in this case were to lose its cross-complaint against Brehm and then pay a substantial settlement amount to the Bishops. The trial court was not required to limit its review to only those proceedings occurring (and attorney fees incurred) after the court granted Brehm's motion for summary adjudication during which Sun attained a certain measure of litigation success. Rather, had the trial court done so, it likely would have been an abuse of discretion under the guidelines set forth in Hsu.
Linsley v. Twentieth Century Fox Film Corp. (1999) 75 Cal.App.4th 762, cited by Sun, is inapposite and does not persuade us to conclude otherwise.
IV
BREHM'S CROSS-APPEAL
Order Dismissing Brehm's Cross-Complaint on Trial Court's Own Motion
In its cross-appeal, Brehm contends the trial court erred by dismissing its cross-complaint based on the finding that Brehm was unable to prove the element of damages for each of its remaining causes of action.
A
The trial court granted Brehm's motion for summary adjudication of all causes of action alleged in Sun's cross-complaint. At the same time, the court granted Sun's motion for summary adjudication of the second and sixth causes of action alleged in Brehm's cross-complaint. In so doing, the court found Brehm did not have a contractual right of indemnity against Sun under the provisions of the Agreement, stating:
"[T]here is no contractual duty of indemnification found in Sections 13.1, 13.2 or 13.3 of the [Agreement] under the facts of this case. There is no evidence that the conduct of Sun rose to the level required by Section 13.1 . . . . As to Section 13.2, the court finds that there is competent evidence that Sun was in fact covered by the [BWIP]. [Citations.] The fact that the insurer may have later entered into receivership does not alter that fact. Further, there is no showing that [Brehm] actually discontinued the [BWIP] under the terms of the [Agreement]."
Brehm then filed a motion for an award of attorney fees and costs as the prevailing party under the Agreement's attorney fee provision. The trial court denied without prejudice Brehm's motion, stating it was "unable to determine whether Brehm or Sun has recovered the greater relief on the contract under [Civil Code section] 1717 without a judgment. The disposition of the remaining causes of action in Brehm's cross-complaint, particularly the cause of action for Breach of Contract [Count One], would be determinative on this issue."
Before trial, the Bishops and Brehm entered into a settlement agreement pursuant to which the Bishops dismissed their action against Brehm in exchange for Brehm's waiver of fees and costs. The Bishops and Sun entered into a separate settlement agreement pursuant to which the Bishops dismissed their action against Sun apparently in exchange for Sun's payment of a substantial settlement amount.
Thereafter, the remaining causes of action alleged in Brehm's cross-complaint proceeded to trial. Sun filed a motion in limine to exclude evidence of Brehm's attorney fees and costs to prove the element of damages. Brehm opposed that motion. After considering the parties' in limine motions and oral arguments, the trial court concluded Brehm was unable to prove it sustained any damages (e.g., attorney fees) in support of its causes of action and therefore dismissed on the court's own motion each of the remaining causes of action alleged in Brehm's cross-complaint. The court noted Brehm's indemnification claim against Sun was essentially for damages consisting of attorney fees because Brehm did not pay any amount to the Bishops in settling their action against it. The court then concluded Brehm could not prove the element of damages for each of its remaining causes of action because Brehm's attorney fees could not be recovered as damages under any of Brehm's alternative theories (i.e., "tort of another" doctrine, § 1021.6, or contractual attorney fees provision). The court then dismissed on its own motion the remaining causes of action alleged in Brehm's cross-complaint against Sun.
On May 27, 2005, the trial court entered judgment for Brehm on Sun's cross-complaint and for Sun on Brehm's cross-complaint.
B
Brehm contends that because it is entitled to recover from Sun the attorney fees it incurred in defending the Bishops' action under the "tort of another" doctrine, there is a triable issue of fact regarding the element of damages.
However, assuming arguendo Brehm may otherwise have a claim to recover its attorney fees under the "tort of another" doctrine, we nevertheless conclude that equitable doctrine is unavailable to an indemnitee (e.g., Brehm) when the indemnitee and indemnitor have expressly agreed on the circumstances in which the indemnitee may recover his or her damages, including attorney fees, from the indemnitor for the indemnitor's actions. The remaining causes of action in Brehm's cross-complaint all effectively seek recovery of Brehm's attorney fees as damages incurred as a result of Sun's alleged negligent or other wrongful action arising out of Sun's work on the Project. Pursuant to those causes of action, as the trial court noted, Brehm effectively seeks indemnification from Sun for the attorney fees Brehm incurred in defending against the Bishops' action. The California Supreme Court stated in Markley v. Beagle (1967) 66 Cal.2d 951, at page 961:
"Since the parties expressly contracted with respect to the contractors' duty to indemnify the owners, the extent of that duty must be determined from the contract and not from the independent doctrine of equitable indemnity. [Citations.]" (Italics added.)
Implied indemnity (whether contractual or noncontractual) is a form of equitable indemnity. (Bay Development, Ltd. v. Superior Court, supra, 50 Cal.3d at pp. 1029-1033; E. L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506-507; Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.) Therefore, if parties to a contract have expressly agreed on the circumstances in which the indemnitee may recover damages, including attorney fees, from the indemnitor, that contractual provision supersedes and effectively displaces any equitable or implied common law right to recover those damages from the indemnitor.
In this case, Section 13 of the Agreement expressly sets forth those circumstances in which Sun is obligated to indemnify Brehm for its (Sun's) actions. As the trial court noted, Section 13.1 of the Agreement applies only to intentional and other conduct by Sun or circumstances not applicable in this case. However, Section 13.2 of the Agreement expressly provides for indemnification of Brehm, in certain circumstances, by a subcontractor for damages, including attorney fees, incurred by Brehm arising out of the subcontractor's negligence or other action relating to its work on the Project: "[T]he [Subcontractor's obligations] under Section 13.1 shall extend to any injury, death or damage [arising out of], or in any way connected with[,] [its] work on the Project." If Section 13.2's provisions apply, a subcontractor has the obligation to indemnify Brehm for all damages, including attorney fees and costs, arising out that subcontractor's work on the Project (e.g., for damages arising out of its negligence). But, under Section 13.2, that express indemnification provision applies only if the subcontractor is not enrolled in BWIP or if Brehm elects to discontinue BWIP. Because Sun enrolled in BWIP and Brehm never discontinued BWIP (i.e., Legion's subsequent insolvency did not constitute discontinuance), Section 13.2 of the Agreement and its broader indemnification obligations did not apply to Sun. Nevertheless, the more limited indemnification obligations set forth in Section 13.1 did apply to Sun. Accordingly, because the Agreement expressly set forth those circumstances in which Sun, as an indemnitor, is obligated to indemnify Brehm, as the indemnitee, the "tort of another" doctrine is inapplicable to allow Brehm to effectively recover in an implied (or equitable) indemnity claim against Sun the attorney fees and costs it (Brehm) incurred in defending against the Bishops' action. Brehm cannot seek attorney fees under that doctrine in an attempt to avoid its express agreement with Sun setting forth those circumstances in which it (Brehm) is entitled to indemnification from Sun. (Markley v. Beagle, supra, 66 Cal.2d p. 961; Regional Steel Corp. v. Superior Court (1994) 25 Cal.App.4th 525, 529 [pursuant to subcontract containing an express indemnity clause, general contractor "bargained away its right to pursue [subcontractor] on equitable indemnity grounds"]; C.L. Peck Contractors v. Superior Court (1984) 159 Cal.App.3d 828, 834 ["[A]n express indemnity clause is accorded a certain preemptive effect, displacing any implied rights which might otherwise arise within the scope of its operation."].)
A subcontractor's obligation under Section 13.1 of the Agreement to indemnify Brehm for its actions includes the duty to defend and indemnify Brehm "from all claims, liabilities, damages, losses, costs or expenses, including attorney's and experts' fees and costs, resulting from the injury or death of any person . . . or damage to property of any kind" in certain circumstances. (Italics added.) Under Section 13.2, those circumstances are expanded to include damages arising out of the subcontractor's work on the Project in the event the subcontractor has not enrolled in BWIP or Brehm has elected to discontinue BWIP.
In any event, were Brehm's right to recover damages (e.g., attorney fees) from Sun for its actions not restricted to those circumstances expressly stated in the Agreement, we nevertheless would conclude Brehm is not entitled to recover its damages (e.g., attorney fees) under the common law "tort of another" doctrine. In general, each party to a lawsuit must bear his or her own attorney fees unless otherwise provided by contract or statute. (§ 1021.) One common law "exception" to the "American rule" that a litigant must bear his or her own attorney fees is the "tort of another" doctrine, described in Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618 (Prentice), at page 620:
Section 1021 provides: "Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . ."
"A person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney's fees, and other expenditures thereby suffered or incurred. [Citations.]"
Because the indemnitee under the "tort of another" doctrine seeks recovery of his or her attorney fees and costs as an element of damages in an indemnity claim against the indemnitor/tortfeasor, recovery of attorney fees and costs under that doctrine technically is not an "exception" to the American rule that a party must bear his or her own attorney fees and costs. (Saunders v. Cariss (1990) 224 Cal.App.3d 905, 910.)
However, the California Supreme Court in Davis v. Air Technical Industries, Inc. (1978) 22 Cal.3d 1 (Davis) appeared to greatly restrict the application of the "tort of another" doctrine described in Prentice. (Davis, supra, at pp. 7-8.) Davis stated: "[T]he Prentice exception was not meant to apply in every case in which one party's wrongdoing causes another to be involved in litigation with a third party. If applied so broadly, the judicial exception would eventually swallow the legislative rule that each party must pay for its own attorney." (Davis, supra, at p. 7, fn. omitted.) Furthermore, Davis noted Prentice "could be read to entitle exonerated defendants in commonplace, multiparty tort actions to recover their attorney's fees from unrelated codefendants who were held liable. Such a rule was not intended by this court." (Davis, supra, at p. 7, fn. 9.) Accordingly, in the products liability action before it, Davis concluded the retailer of an elevator was not entitled to recover from the elevator's manufacturer the attorney fees the "innocent" retailer incurred in defending against a lawsuit brought against the manufacturer and retailer by a person injured by the elevator. (Davis, supra, 22 Cal.3d at pp. 3, 6-8.)
In Davis, there was no express indemnity contract between the manufacturer and retailer. Accordingly, the retailer's claim against the manufacturer for attorney fees incurred in defending against the plaintiff's products liability action "was based upon the equitable concept of implied noncontractual indemnity. [Citation.]" (Davis, supra, 22 Cal.3d at p. 3, fn. 1.) Furthermore, we refer to the retailer as "innocent" because the plaintiff dismissed during trial his claim that the retailer was negligent in inspecting the manufacturer's defectively designed elevator. (Id. at pp. 3-4.) The jury found both the manufacturer and retailer strictly liable for the plaintiff's damages. (Id. at p. 4.)
However, in 1979 (one year after Davis was issued) the Legislature enacted section 1021.6, which provides:
"Upon motion, a court after reviewing the evidence in the principal case may award attorney's fees to a person who prevails on a claim for implied indemnity if the court finds (a) that the indemnitee through the tort of the indemnitor has been required to act in the protection of the indemnitee's interest by bringing an action against or defending an action by a third person and (b) if that indemnitor was properly notified of the demand to bring the action or provide the defense and did not avail itself of the opportunity to do so, and (c) that the trier of fact determined that the indemnitee was without fault in the principal case which is the basis for the action in indemnity or that the indemnitee had a final judgment entered in his or her favor granting a summary judgment, a nonsuit, or a directed verdict." (Italics added.)
Apparently all of the courts that have specifically addressed the issue have concluded the Legislature intended section 1021.6 to supersede the majority opinion in Davis and to adopt (more or less) the dissenting opinion of Justice Mosk in Davis. (John Hancock Mutual Life Ins. Co. v. Setser (1996) 42 Cal.App.4th 1524, 1532-1533; Fidelity Mortgage Trustee Service, Inc. v. Ridgegate East Homeowners Assn. (1994) 27 Cal.App.4th 503, 513-514; Uniroyal Chemical Co. v. American Vanguard Corp. (1988) 203 Cal.App.3d 285, 297; Bear Creek Planning Com. v. Title Ins. & Trust Co. (1985) 164 Cal.App.3d 1227, 1244, disapproved on another ground in Bay Development, Ltd. v. Superior Court, supra, 50 Cal.3d at p. 1032.) Bear Creek essentially concluded the "tort of another" doctrine had been superseded by statute in implied indemnity situations: "We need not determine the applicability of Prentice and Davis in the case before us as the question of attorney fees in implied indemnity actions is now governed by section 1021.6 of the Code of Civil Procedure." (Bear Creek, at p. 1244, fn. omitted & italics added.) Fidelity Mortgage stated: "Section 1021.6 was enacted in 1979 to overrule the Supreme Court's decision in [Davis]. [Citations.]" (Fidelity Mortgage, at p. 513.) John Hancock noted that, in overruling Davis, the Legislature also expanded the ability of an indemnitee to obtain attorney fees beyond the common law "tort of another" doctrine. That court stated:
"Apparently, the Legislature agreed with Justice Mosk, adopting some--but not all--of the language he quoted from Prentice, supra, as the basis of section 1021.6. [Citations.] But the Legislature also appears to have adopted Justice Mosk's characterization of the 'tort of another' doctrine as just another form of 'implied indemnity.' (§ 1021.6.) Indeed, section 1021.6 is arguably broader than the 'tort of another' doctrine, in that [it] provides attorney fees to any 'innocent indemnitee' who has incurred attorney fees to defend itself and has otherwise satisfied the requirements of section 1021.6 [citation], including one who has been found to be a joint tortfeasor but has been relieved of all responsibility in the fault allocation [citation], or one who claims implied contractual indemnity [citation]." (John Hancock Mutual Life Ins. Co., supra, 42 Cal.App.4th at p. 1533.)
We agree with the reasoning of those cases and conclude section 1021.6 effectively overruled Davis and, in so doing, superseded the common law "tort of another" doctrine to the extent a party seeks to recover its attorney fees and costs in a claim that is essentially one for implied indemnity. By its terms, that statute applies to cases in which the indemnitee seeks implied (in contrast to express) indemnity for attorney fees it has incurred in defending an action brought by a third party because of a tort of the indemnitor. (§ 1021.6.)
Indemnity "may be expressly provided for by contract [citation], it may be implied from a contract not specifically mentioning indemnity [citation], or it may arise from the equities of particular circumstances [citations] . . . ." (Rossmoor Sanitation, Inc. v. Pylon, Inc., supra, 13 Cal.3d at p. 628.) Therefore, implied indemnity includes both implied contractual indemnity and implied noncontractual indemnity. (Ibid.) Because the Legislature in enacting section 1021.6 apparently intended to overrule Davis and essentially codify the circumstances in which it believed an "innocent" indemnitee should be able to recover its attorney fees from the "responsible" indemnitor on an implied indemnity claim, we conclude the Legislature presumably intended to preempt or supersede the common law as to such implied indemnity claims by enacting section 1021.6, which in certain circumstances allows an alleged indemnitee to recover on an implied indemnity claim its attorney fees incurred in bringing an action against, or defending an action by, a third party because of the alleged indemnitor's action. Accordingly, the common law "tort of another" doctrine does not appear to have any significant continuing validity in implied indemnity situations other than as codified in section 1021.6. Therefore, because the remaining causes of action alleged in Brehm's cross-complaint against Sun for recovery of the attorney fees and costs it (Brehm) incurred in defending against the Bishops' action are essentially ones for implied indemnity (despite the labels attached to them by Brehm), we conclude Brehm has not carried its appellate burden to show there is a triable issue of material fact regarding the element of damages to the extent it contends those attorney fees and costs are purportedly recoverable under the common law "tort of another" doctrine and not pursuant to section 1021.6.
Had the Legislature intended to simply overrule only the specific holding in Davis, it presumably would have limited the language of Code of Civil Procedure section 1021.6 to implied indemnity recovery of attorney fees in products liability cases, which was the type of case involved in Davis.
Assuming arguendo the "tort of another" doctrine may still apply to certain rare implied indemnity situations not intended to be preempted by the Legislature's enactment of section 1021.6, Brehm nevertheless does not persuade us it would be entitled to indemnity for its attorney fees and costs from Sun in the circumstances of this case. The relationships between the indemnitors and indemnitees in Davis and in this case are not sufficiently dissimilar to preclude the application of section 1021.6 and instead require the application of the "tort of another" doctrine to the extent it has not been preempted by that statute. In Davis, the alleged indemnitor was the manufacturer of the defective product and the alleged indemnitee was the retailer of that product. (Davis, supra, 22 Cal.3d at pp. 3-4.) In this case, the alleged indemnitor is the subcontractor that negligently installed the plumbing and the alleged indemnitee is the general contractor (and seller) of the home in which that plumbing was installed. Brehm does not persuade us that the subcontractor-general contractor relationship in this case is sufficiently dissimilar to the manufacturer-retailer relationship in Davis so that it (Brehm) should be entitled to recover its attorney fees under the common law "tort of another" doctrine other than pursuant to the provisions of section 1021.6. Furthermore, the fact that Brehm and Sun expressly agreed regarding indemnification and attorney fees in Section 13 of the Agreement, unlike the parties in Davis, does not weigh in favor of application of the "tort of another" doctrine. Rather, as discussed above, that fact weighs in favor of a conclusion that the parties expressly bargained away their rights in equity to recover attorney fees under the "tort of another" doctrine. Finally, Burger v. Kuimelis (N.D.Cal. 2004) 325 F.Supp.2d 1026, cited by Brehm, is factually inapposite and, in any event, is not binding on us.
To the extent Brehm's cross-complaint seeks express indemnity for the attorney fees and costs it incurred in defending against the Bishops' action, we concluded above that pursuant to Section 13 of the Agreement Sun, as a BWIP-enrolled subcontractor, does not have an express indemnification obligation in the circumstances of this case.
C
Brehm alternatively contends it is entitled to recover from Sun the attorney fees and costs it (Brehm) incurred in defending against the Bishops' action pursuant to section 1021.6. As quoted above, that statute requires: "(c) that the trier of fact determined that the indemnitee was without fault in the principal case which is the basis for the action in indemnity or that the indemnitee had a final judgment entered in his or her favor granting a summary judgment, a nonsuit, or a directed verdict." (Italics added.) Because the Bishops' action was settled by the parties without a trial, there was no finding by a trier of fact that Brehm was without fault in the principal case (i.e., the Bishops' action). Nevertheless, Brehm argues it satisfied the alternative requirement quoted above because the trial court, in granting Brehm's motion for summary adjudication on Sun's cross-complaint, found Sun was negligent in installing the plumbing in the Bishops' home. Brehm argues it therefore "had a final judgment entered in [its] favor granting a summary judgment . . . ." (§ 1021.6.)
However, as Sun asserts, Brehm misconstrues the language of section 1021.6, which we independently interpret as a question of law. The "summary judgment" required in that statute necessarily refers to "the principal case which is the basis for the action in indemnity." (§ 1021.6, italics added.) That "principal case" here is the Bishops' action against Brehm and Sun. (Cf. Wilson, McCall & Daoro v. American Qualified Plans, Inc. (1999) 70 Cal.App.4th 1030, 1036 [" 'principal' [case] refers to the action which caused the innocent indemnitee to defend itself and thereby incur attorney fees."].) However, because both Brehm and Sun settled the Bishops' action against them before there was an opportunity for the trial court to grant a summary judgment in Brehm's favor against the Bishops' claims, there was no "summary judgment" (or nonsuit or directed verdict) entered in Brehm's favor (or, alternatively, a finding by a trier of fact that Brehm was without fault) in that principal case as required for the application of section 1021.6. (Cf. Reliance Electric Co. v. Superior Court (1986) 190 Cal.App.3d 369, 375 [A section 1021.6 "fee award may follow the case's adjudication, not its settlement . . . . Because of the settlement, none of these conditions [of section 1021.6] can be satisfied . . . ."].) The trial court's effective grant of Brehm's motion for summary judgment on Sun's cross-complaint against Brehm does not satisfy that requirement even though the court, in granting that motion, found Sun was negligent. Accordingly, Brehm does not show there is a triable issue of material fact on the element of damages to the extent it contends those attorney fees and costs are purportedly recoverable under section 1021.6.
Brehm's settlement of the Bishops' action without paying any amount to the Bishops did not satisfy the express requirements of section 1021.6. Uniroyal Chemical Company, Inc. v. American Vanguard Corp., supra, 203 Cal.App.3d 285, cited by Brehm, is factually inapposite and does not persuade us to conclude otherwise.
D
Brehm alternatively contends it is entitled to recover from Sun the attorney fees and costs it (Brehm) incurred in defending against the Bishops' action pursuant to Section 19 of the Agreement. As quoted above, Section 19 provides:
ontractor and its surety, if any, agree to pay Brehm in any action brought to interpret or enforce the performance of this Agreement or any of the terms, covenants or conditions thereof, and in any action brought against Subcontractor by third parties in which Brehm or Project Owner are joined as a party, whether the same proceeds to judgment or not, an additional amount as attorney's fees, costs of investigation by Brehm or Project Owner or their agents, and court costs. . . ." (Italics added.)
Brehm argues that because it was joined as a party in the action the Bishops brought against Sun, Section 19 of the Agreement requires Sun to pay it (Brehm) the attorney fees it incurred in defending against the Bishops' action.
However, as Sun notes, Section 13 of the Agreement contains a similar provision requiring a subcontractor, in certain circumstances, to indemnify Brehm for damages, including attorney fees, incurred by Brehm arising out of the subcontractor's actions. Section 13.1 provides that a subcontractor shall indemnify Brehm for attorney fees incurred by Brehm resulting from injury or death of a person or damage to property arising out of the subcontractor's intentional acts (and other acts not relevant in this case). Section 13.2 expands the subcontractor's indemnification obligation under Section 13.1 to any include any injury, death or damages arising out of the subcontractor's work on the Project (e.g., caused by the subcontractor's negligence), except that expanded indemnification obligation does not apply if the subcontractor is enrolled in BWIP. Sun asserts that because it enrolled in BWIP, the expanded indemnification obligations of a subcontractor set forth in Section 13.2 of the Agreement are inapplicable and therefore it is not required to indemnify Brehm for the attorney fees Brehm incurred in defending against the Bishops' action.
As quoted above, Section 13.1 of the Agreement provides: "In connection with the performance of this Agreement, to the extent permitted by law, Subcontractor shall indemnify, defend and hold harmless Brehm . . . from all claims, liabilities, damages, losses, costs or expenses, including attorney's and experts' fees and costs, resulting from the injury or death of any person . . . or damage to property of any kind, including loss of use, arising out of or in any way connected with any of the following acts or omissions by Subcontractor, its subcontractors or others for whom Subcontractor is responsible: (i) any willful misconduct or other intentional acts; (ii) any acts or omission[s] giving rise to punitive damages; (iii) any acts or omissions off the Project Site; (iv) any acts or omissions in connection with ownership, maintenance, use . . . or loan to others of aircraft, automobiles or watercraft owned or operated by or rented or loaned to Subcontractor . . .; or (v) any acts or omissions giving rise to employers['] liability and/or injury or death subject to state workers' compensation laws and regulations." (Italics added.)
As quoted above, Section 13.2 of the Agreement provides: "If [Subcontractor] . . . is [not covered by] Brehm's Subcontractor Insurance Program [i.e., BWIP], or if Brehm elects to [discontinue the] Brehm Subcontractor Insurance Program under Section 14.1, the [Subcontractor's obligations] under Section 13.1 shall extend to any injury, death or damage [arising out of], or in any way connected with[,] [the Subcontractor's] work on the Project." (Italics added.)
We begin our analysis by reviewing the applicable standard of review on appeal and relevant rules of contract interpretation. "[W]here, as here, the trial court construed the indemnity provision at issue [and other provisions of the Agreement] without the aid of extrinsic evidence[,] the interpretation of [those] provision[s] is a question of law subject to our de novo review. [Citation.]" (Continental Heller Corp. v. Amtech Mechanical Services, Inc. (1997) 53 Cal.App.4th 500, 504.) "A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting . . . ." (Civ. Code, § 1636.) "[T]he question whether an indemnity agreement covers a given case turns primarily on contractual interpretation, and it is the intent of the parties as expressed in the agreement that should control." (Rossmoor Sanitation, Inc. v. Pylon, Inc., supra, 13 Cal.3d at p. 633.) "The intention of the parties is to be ascertained from the 'clear and explicit' language of the contract. [Citations.] . . . [¶] 'In interpreting an express indemnity agreement, the courts look first to the words of the contract to determine the intended scope of the indemnity agreement.' [Citation.]" (Continental Heller Corp., supra, at p. 504.) Furthermore, "[t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." (Civ. Code, § 1641.) "A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates." (Civ. Code, § 1647.) "Particular clauses of a contract are subordinate to its general intent." (Civ. Code, § 1650.) Finally, "[i]n cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist." (Civ. Code, § 1654.)
Independently construing the Agreement and applying the rules discussed above, we conclude the obligation of Sun to indemnify Brehm for attorney fees incurred in defending actions against it (Brehm) arising out of Sun's work on the Project is governed by the expressed intent of the parties as provided in Section 13, rather than Section 19, of the Agreement. Based on the explicit language of the Agreement in the circumstances of this case, BWIP was a special program that Brehm offered to (and presumably encouraged) its major subcontractors to enroll in. By enrolling in BWIP, a subcontractor would avoid the more expansive indemnification obligations that would otherwise apply under Section 13.2 of the Agreement. The more expansive indemnification obligations of a "non-enrolled" subcontractor would include the obligation to indemnify Brehm for attorney fees it (Brehm) incurred as a result of the subcontractor's work on the Project (e.g., attorney fees incurred in defending against an action brought by a third party for damages caused by a subcontractor's negligent work). Therefore, by enrolling in BWIP, a subcontractor would avoid that Section 13.2 obligation to indemnify Brehm for those attorney fees and would, instead, have only those more limited indemnification obligations set forth in Section 13.1 of the Agreement (not applicable in the circumstances of this case).
The parties agree there was no extrinsic evidence submitted on this issue.
Brehm argues that because Section 19 states a subcontractor must pay (i.e., indemnify) Brehm for attorney fees it (Brehm) incurs "in any action brought against Subcontractor by third parties in which Brehm . . . [is] joined as a party," that provision requires Sun to indemnify it regardless of any other provision (e.g., Section 13) of the Agreement. Although we agree that Section 19, absent a contrary provision in the Agreement, would otherwise require Sun to indemnify Brehm for attorney fees it incurred in defending against the Bishops' action, we disagree with Brehm's assertion that Section 19 is the determinative provision of the Agreement on this issue and conclude Brehm's suggested interpretation of the Agreement does not constitute the expressed intent of the parties. Were Section 19 of the Agreement to be interpreted as Brehm suggests, the expressed intent of the parties as set forth in Section 13 would be defeated and the protections from the expanded indemnification obligations that Section 13.2 expressly provides to a subcontractor enrolled in BWIP would be, in effect, surreptitiously retracted. Based on our consideration of the whole Agreement, we conclude the intent of the parties, as expressed in the Agreement, was that a subcontractor (e.g., Sun) enrolled in BWIP would not have an obligation to indemnify Brehm for attorney fees it incurred in defending against an action by a home purchaser like the Bishops. Although Sections 13 and 19, on their face, conflict on this question, we interpret the intent of the parties, as expressed in the Agreement, to be that a subcontractor enrolled in BWIP would not have the obligation to indemnify Brehm for attorney fees it incurred in defending against an action by a home purchaser like the Bishops. In effect, the intent of the parties on this issue is clearly expressed in Section 13, and not Section 19, of the Agreement. Because Sun enrolled in BWIP, Sun is not required to indemnify Brehm for attorney fees it incurred in defending against the Bishops' action. Finally, assuming arguendo the Agreement is uncertain regarding Sun's obligation to indemnify Brehm for attorney fees it incurred in defending against the Bishops' action, we interpret the Agreement against Brehm as the party that caused the uncertainty to exist. (Civ. Code, § 1654; International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175, 1184.)
In so concluding, we do not decide whether Section 13 or Section 19 is the more general or more specific provision on this issue. Rather, we decide the issue based on our interpretation of the parties' expressed intent on consideration of the whole Agreement and the circumstances in this case. In any event, we are not persuaded by Brehm's argument that Section 19, and not Section 13, of the Agreement is the more specific provision on the question of whether Sun has the obligation to indemnify Brehm for attorney fees it incurred in defending against the Bishops' action.
E
Because Brehm could not show it was entitled to recover its attorney fees as damages under the "tort of another" doctrine, section 1021.6, or Section 19 of the Agreement, the trial court correctly concluded Brehm could not prove the damages element of each of the remaining causes of action alleged in Brehm's cross-complaint against Sun. Accordingly, the court did not err in dismissing on its own motion those causes of action.
DISPOSITION
The judgment is affirmed. Each party shall bear its own costs on appeal.
WE CONCUR: HUFFMAN, Acting P. J., HALLER, J.