Summary Adjudication Granted in Breach of Contract Case
October 10, 2011
On September 27, 2011, Lisa D. Angelo and German A. Marcucci secured a favorable ruling on a motion for summary adjudication in connection with a cross-defendant's "duty to defend" pursuant to Crawford v. Weathershield, a California Supreme Court opinion that interprets California Civil Code section 2778 as imposing upon an indemnitee an immediate "duty to defend" the indemnitor in all claims arising from the indemnity provision in a contract, whether or not it is expressly stated.
In 1998, Vivitar Security Systems, Inc. was hired by the landlord of commercial property, RRW, to provide fire and water flow system monitoring. The Service Agreement Vivitar entered into with RRW was for a five-year period. The Agreement contained an express indemnity provision requiring RRW to indemnify and defend Vivitar from any future claims or lawsuits arising from the work Vivitar was hired to perform. More than ten years after entering into the Service Agreement with RRW, an electrical fire occurred in the building which triggered the sprinkler system and allegedly caused water damage. As a result, a commercial tenant in the building filed suit against Vivitar for property damage.
Vivitar tendered its defense of the lawsuit to RRW who refused to defend Vivitar because the Service Agreement was only for a five-year term and was not renewed. Vivitar filed a motion for summary adjudication against RRW for failing to accept its tender and defend Vivitar from the underlying lawsuit. While the contract was indeed for a five-year period, Vivitar argued that the parties continued to act like the contract was still in effect. Judge William Barry of the Los Angeles Superior Court, South Central District, granted Vivitar's motion for summary adjudication holding that the contract between RRW and Vivitar, including its indemnity clause, remained in effect after the initial term expired. As such, RRW owed, and continues to owe, Vivitar a defense against the underlying suit.
Lisa D. Angelo