Filed 12/28/17 County of Sacramento v. Valley Healthcare Systems, Inc. CA3
NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.



IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----




COUNTY OF SACRAMENTO,

Plaintiff and Appellant,

v.

VALLEY HEALTHCARE SYSTEMS, INC.,

Defendant and Respondent.


C079693

(Super. Ct. No. 34201300145388CUBCGDS)


Under a contract containing an indemnification clause, Valley Healthcare Systems, Inc. (Valley Healthcare) provided nursing services to inmates at the main jail operated by the County of Sacramento (County). One of the inmates died after two doctors employed by the County were actively negligent in their medical treatment of the inmate. The County settled a wrongful death claim with the mother of the deceased inmate for approximately $2 million. The County then sought indemnification of its own active negligence by bringing this action against Valley Healthcare. The contract’s indemnification clause states in paragraph XVI:

INDEMNIFICATION [¶] CONTRACTOR shall indemnify, defend, and hold harmless COUNTY, its Board of Supervisors, officers, directors, agents, employees, and volunteers from and against any and all claims, demands, actions, losses, liabilities, damages and costs, including reasonable attorney’s fees, arising out of or resulting from the performance of this Agreement, regardless of whether caused in part by a party indemnified hereunder.

The trial court dismissed the County’s action because the indemnification clause does not clearly and explicitly encompass active negligence claims.
On appeal, the County argues the trial court erred because the indemnification language is sufficiently broad to cover any active negligence claims. In support of the argument, the County focuses on the language that it should be indemnified for losses “regardless of whether caused in part by a party indemnified hereunder.”
We conclude the trial court properly dismissed the County’s action. Under analysis set forth by the California Supreme Court in Rossmoor Sanitation, Inc. v. Plyon, Inc. (1975) 13 Cal.3d 622 (Rossmoor) and the language of the contract in this case, the County is not entitled to indemnification for its own active negligence when the indemnification clause does not mention negligence. Accordingly, we affirm.
FACTUAL AND PROCEDURAL HISTORY
The Contract Between the County and Valley Healthcare
The underlying facts of this case are not disputed. In 2005, the County and Valley Healthcare entered into a contract under which Valley Healthcare provided temporary medical personnel on an as-needed basis when County employees are not available. The contract includes the indemnification clause in paragraph XVI, as set forth above. The contract also incorporates “Exhibit B,” which sets forth the “insurance requirements for contractors.” Paragraph VII.B of Exhibit B to the agreement provides:

Civil Code Provision: Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code.

Although the contract does not set forth the requirements of Civil Code section 2782, subdivisions (b)(1) and (2) of that section provide that “any construction contract with a public agency entered into before January 1, 2013, that purport[s] to impose on the contractor, or relieve the public agency from, liability for the active negligence of the public agency are void and unenforceable.” (Italics added.)
The Inmate’s Mother’s Action and Settlement
On June 15, 2006, an inmate at the Sacramento County Main Jail died due to a perforated duodenal peptic ulcer. Shortly before he died, the inmate was treated by County employees Dr. R., and Dr. D. The inmate also received care from Valley Healthcare’s registered nurse, D., who communicated with Drs. R. and D. about the inmate’s condition before he died. After the inmate’s death, a board-certified internist engaged in a peer review that concluded the County’s doctors provided treatment falling below the standard of care. The peer reviewer noted Dr. D. self-reported he “was remiss in not asking [Valley Healthcare’s registered nurse] what his recommended course of action might be . . . .” The County does not dispute its employees were actively negligent in their treatment of the inmate.
The inmate’s mother filed a wrongful death action (the mother’s action) against the County in federal district court. The mother did not name D. or Valley Healthcare as defendants even though she alleged D. “contacted Dr. [D.] multiple times on the night of June 14, 2006 and the early morning hours of June 15, 2006, regarding [the inmate’s] medical problems.” The mother further alleged that “Dr. [D.] did not come to evaluate [the inmate], and failed to instruct [D.] to send [the inmate] to the hospital.”
In August 2009, the County settled the mother’s action for $1,450,000 and incurred $497,000 in attorney fees and costs while defending against the action.
The County’s Action Against Valley Healthcare
In May 2013, the County filed this action against Valley Healthcare for indemnification of the approximately $2 million it incurred in defending and settling the mother’s action. The County moved for summary adjudication and Valley Healthcare moved for summary judgment.
The trial court denied the County’s motion for summary adjudication and granted Valley Healthcare’s motion for summary judgment. The trial court noted the County did not deny it was actively negligent in the medical treatment of the inmate and found paragraph XVI constitutes a general indemnity provision. The trial court entered a judgment in favor of Valley Healthcare, from which the County filed a timely notice of appeal.
DISCUSSION
I
Indemnification
The County argues the indemnification clause in its contract with Valley Healthcare was drafted in a manner that encompasses the County’s own active negligence. We disagree.
A.
Interpretation of Indemnification Clauses
“Indemnity may be defined as the obligation resting on one party to make good a loss or damage another party has incurred.” (Rossmoor, supra, 13 Cal.3d at p. 628.) Subject to considerations of public policy, parties to a contract have “great freedom of action” in allocating risk through indemnification clauses. (E.L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 507.) “Where . . . the parties have expressly contracted with respect to the duty to indemnify, the extent of that duty must be determined from the contract and not by reliance on the independent doctrine of equitable indemnity.” (Rossmoor, supra, at p. 628, citing Markley v. Beagle (1967) 66 Cal.2d 951, 961.)
In construing agreements containing indemnification clauses, we apply the same rules that govern the interpretation of other contracts. (Crawford v. Weather Shield Mfg. Inc. (2008) 44 Cal.4th 541, 552 (Crawford).) Accordingly, we heed the maxims of contract interpretation that “[e]ffect is to be given to the parties’ mutual intent ([Civ. Code,] § 1636), as ascertained from the contract’s language if it is clear and explicit ([Civ. Code,] § 1638). Unless the parties have indicated a special meaning, the contract’s words are to be understood in their ordinary and popular sense. ([Civ. Code,] § 1644 . . . .)” (Crawford, supra, at p. 552.) And “where . . . the trial court construed the indemnity provision at issue without the aid of extrinsic evidence the interpretation of this provision is a question of law subject to our de novo review.” (Continental Heller Corp. v. Amtech Mechanical Services, Inc. (1997) 53 Cal.App.4th 500, 504.)
The Rossmoor court explained the obligation to indemnify “may be expressly provided for by contract (e.g., Markley v. Beagle (1967) 66 Cal.2d 951, 961), it may be implied from a contract not specifically mentioning indemnity (see Cahill Bros., Inc. v. Clementina (1962) 208 Cal.App.2d 367, 375-379), or it may arise from the equities of particular circumstances (S.F. Examiner Division v. Sweat (1967) 248 Cal.App.2d 493, 497; see Note, Contribution and Indemnity in California (1969) 57 Cal. L. Rev. 490, 492-493). Where . . . the parties have expressly contracted with respect to the duty to indemnify, the extent of that duty must be determined from the contract and not by reliance on the independent doctrine of equitable indemnity. (Markley v. Beagle, supra, 66 Cal.2d at p. 961.)
“Past cases have held that an indemnity agreement may provide for indemnification against an indemnitee’s own negligence, but such an agreement must be clear and explicit and is strictly construed against the indemnitee. (Goldman v. Ecco-Phoenix Elec. Corp. (1964) 62 Cal.2d 40, 44.) If an indemnity clause does not address itself to the issue of an indemnitee’s negligence, it is referred to as a ‘general’ indemnity clause. (See Markley v. Beagle, supra, 66 Cal.2d at p. 962; Morgan v. Stubblefield (1972) 6 Cal.3d 606, 624.) While such clauses may be construed to provide indemnity for a loss resulting in part from an indemnitee’s passive negligence, they will not be interpreted to provide indemnity if an indemnitee has been actively negligent. (Markley v. Beagle, supra, 66 Cal.2d at p. 962; Morgan v. Stubblefield, supra, 6 Cal.3d at p. 624; see also Burlingame Motor Co. v. Peninsula Activities, Inc. (1971) 15 Cal.App.3d 656, 661.) [¶] Provisions purporting to hold an owner harmless ‘in any suit at law’ (Markley v. Beagle, supra, 66 Cal.2d at p. 961), ‘from all claims for damages to persons’ (Morgan v. Stubblefield, supra, 6 Cal.3d at p. 626), and ‘from any cause whatsoever’ (MacDonald & Kruse, Inc. v. San Jose Steel Co. (1972) 29 Cal.App.3d 413, 422-423), without expressly mentioning an indemnitee’s negligence, have been deemed to be ‘general’ clauses.” (Rossmoor, supra, 13 Cal.3d at pp. 628-629.)
A key point in the analysis provided by Rossmoor is the distinction between active and passive negligence. The Supreme Court defined passive negligence as “mere nonfeasance, such as the failure to discover a dangerous condition or to perform a duty imposed by law.” (Rossmoor, supra, 13 Cal.3d at p. 629.) “Active negligence, on the other hand, is found if an indemnitee has personally participated in an affirmative act of negligence, was connected with negligent acts or omissions by knowledge or acquiescence, or has failed to perform a precise duty which the indemnitee had agreed to perform.” (Ibid.) Even so, Rossmoor cautioned that “the active-passive dichotomy” is not “wholly dispositive.” (Id. at p. 632.) Instead, “the 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. When the parties knowingly bargain for the protection at issue, the protection should be afforded. This requires an inquiry into the circumstances of the damage or injury and the language of the contract; of necessity, each case will turn on its own facts.” (Id. at p. 633.)
Rossmoor and its progeny have generally concluded “that an actively negligent tortfeasor cannot recover under a general indemnity provision . . . silent on the issue of the indemnitee’s negligence.” (Maryland Casualty Co. v. Bailey & Sons, Inc. (1995) 35 Cal.App.4th 856, 869, citing Rossmoor, supra, 13 Cal.3d at pp. 631-633; see also, e.g., Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791, 1822-1823 & Morton Thiokol, Inc. v. Metal Building Alteration Co. (1987) 193 Cal.App.3d 1025, 1028.)
B.
The County’s General Indemnity Clause
The County seeks indemnification for the active negligence of its own employees. However, the language of the indemnification clause in the County’s contract with Valley Healthcare does not mention active negligence. Instead, the language of the indemnification clause closely resembles that addressed in Rossmoor where the agreement required Pylon to indemnify Rossmoor “against ‘all claims for damages’ arising out of Pylon’s work; Rossmoor is not to be held accountable ‘for any loss . . . or for injury to any person . . . .’ ” (Rossmoor, supra, 13 Cal.3d at p. 629.) Here, the indemnification clause required Valley Healthcare to indemnify the County “against any and all claims, demands, actions, losses, liabilities, damages and costs . . . arising out of or resulting from the performance of this Agreement, regardless of whether caused in part by a party indemnified hereunder.” The lack of any reference to active negligence renders the indemnification clause in this case a general indemnity provision. Consistent with Rossmoor, we conclude the general indemnity provision does not include an obligation to indemnify for active negligence of the indemnitee. (Id. at pp. 628-629, 633.)
Our conclusion is bolstered by the County’s indication elsewhere in the contract that it understood the need to expressly reference active negligence. In paragraph VII.B of exhibit B to the contract with Valley Healthcare, the County declared insurance “[c]overage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code.” (Italics added.) The County could have added a reference to active negligence in the indemnification clause if it had intended to obligate Valley Healthcare to cover the active negligence of the County. The omission of any reference to active negligence excludes this type of claim from the scope of indemnification. As noted by the California Supreme Court in Crawford, “if one seeks, in a noninsurance agreement, to be indemnified for his or her own active negligence or regardless of the indemnitor’s fault—protections beyond those afforded by the doctrines of implied or equitable indemnity—language on this point must be particularly clear and explicit . . . .” (44 Cal.4th at p. 552.)
The County argues the indemnification clause necessarily encompasses its active negligence because the clause applies to any claim “regardless of whether caused in part by a party indemnified hereunder.” We disagree. Causation is an essential element of every tort. (Ulloa v. McMillin Real Estate and Mortg., Inc. (2007) 149 Cal.App.4th 333, 338.) Indeed, a reference to causation does not even differentiate between tort and breach of contract claims because “[d]etermining whether a defendant’s misconduct was the cause in fact of a plaintiff’s injury involves essentially the same inquiry in both contract and tort cases.” (Tribeca Companies, LLC v. First American Title Insurance Company (2015) 239 Cal.App.4th 1088, 1103.) Reference to an element of every tort and breach of contract cause of action cannot substitute for the kind of specific reference to an active negligence tort necessary to obligate Valley Healthcare to cover the active negligence of the County.
We reject as inapposite the County’s reliance on C. I. Engineers & Constructors, Inc. v. Johnson & Turner Painting Co. (1983) 140 Cal.App.3d 1011.) C. I. Engineers involved an indemnity clause that did “address itself to the issue of indemnitee’s negligence” and was “not therefore a ‘general’ indemnity clause.” (Id. at p. 1015.) In contrast to C. I. Engineers where the indemnity clause expressly encompassed the “sole negligence” of the indemnitee, the indemnity clause in this case does not mention negligence. (Id. at p. 1014.)
Also inapposite is the County’s reliance on Hohe v. San Diego Unified Sch. Dist. (1990) 224 Cal.App.3d 1559. As the Hohe court noted, that case involved an indemnification clause for which there was “no language which specifically [spoke] to a release from liability for negligence.” (Id. at p. 1567.) The Hohe court determined the scope of the release of liability (containing the indemnification clause) was ambiguous as to whether it barred any recovery for physical injuries sustained by a student subject to the release. (Id. at p. 1568.) Hohe represents a decision on the scope of a liability release that does not provide authority for the County’s position that its failure to mention negligence in the indemnity clause nonetheless indicated an intention to include active negligence.
The County’s cited case of Rooz v. Kimmel (1997) 55 Cal.App.4th 573 (Rooz) reiterates the well-settled rule that “[a]n indemnity agreement may provide for indemnification against an indemnitee’s own negligence, but such an agreement must be clear and explicit and is strictly construed against the indemnitee.” (Id. at p. 583.) Rooz involved an “indemnity and hold harmless agreement” that had the purpose of indemnifying a title company, North American, for its services. (Ibid.) Rooz held the title company was not liable for negligence when the title company failed to record a deed of trust in a timely fashion. (Id. at p. 577.) The Rooz court explained that, “[g]iven the commercial reality of the accommodation recording in this case, . . . the parties intended by this agreement to release North American from liability for its own negligence in recording the documents, and this release applied whether that negligence is deemed ‘active’ or ‘passive.’ ” (Id. at p. 586.) In support of this conclusion, Rooz noted the company did the recording as a favor only after it “made it clear that it was generally unwilling to carry out accommodation recordings and would do so only if Rooz agreed to fully indemnify the company . . . .” (Ibid.)
This case stands in contrast to Rooz where the evidence showed the title company was willing to extend a favor only if it received the broadest indemnification. Here, the best evidence offered by the County consists only of a phrase in an indemnification clause that does not mention negligence at all.
We are also not persuaded by the County’s citation of SCM Corp. v. Berkel, Inc. (1977) 73 Cal.App.3d 49. SCM Corp. presented the question of whether an agreement for sale in which the purchaser would “assume any and all such liabilities and obligations as are involved in the claims and causes of action asserted” encompassed the indemnification obligations of the acquired corporation. (Id. at p. 55.) Because the case involved the sale of a business, the SCM Corp. court stated that “although principles of contract law should apply and the intention of the parties should be determinative, it should not be necessary to look for unusually clear, express language in order to find a provision transferring tort liability in the sale of a business or line of business.” (Id. at p. 58, italics added.) The expressly pragmatic approach to the acquisition of a business by purchase in SCM Corp. does not compel us from departing from the Rossmoor court’s guidance that a general indemnification clause usually does not encompass active negligence. (Rossmoor, supra, 13 Cal.3d at pp. 631-633.)
Finally, we reject the approach of the majority in the County’s cited out-of-state decision in Washington Elementary Sch. Dist. No. 6 v. Baglino Corp. (1991) 169 Ariz. 58, 59 (Washington Elementary). That case involved the question of whether “the indemnity provision in the standard American Institute of Architects (AIA) construction contract obligates the [indemnitor] to indemnify the owner/indemnitee (School District) for losses caused in part by the indemnitee’s active negligence.” (Id. at p. 59.) Over a dissent, the majority held the indemnity clause encompassed the school district’s active negligence even though the contract did not mention negligence. (Id. at p. 60.) The majority reasoned the indemnification clause’s “words ‘caused in part’ are broad enough to encompass behavior that includes the indemnitee’s active negligence.” (Id. at p. 61.)
In Washington Elementary, Justice Corcoran dissented and pointed out that “[t]he words ‘caused in part,’ which address causation, are not coextensive with negligence. That is, ‘[w]hile causation may encompass negligent acts or omissions, it also covers matters which do not fall within the concept of negligence.’ ” (Washington Elementary, supra, 169 Ariz. at p. 62 [Corcoran J., dissenting and quoting Sweetman v. Strescon Indus., Inc. (Del. Super. Ct. 1978) 389 A.2d 1319, 1321].) Justice Corcoran’s reasoning comports with ours. As we have explained, a reference to causation in an indemnification clause does not distinguish between active and passive negligence – or even between tort claims and causes of action for breach of contract. Consequently, we reject the holding in Washington Elementary.
We conclude the trial court properly granted summary judgment in favor of Valley Healthcare.
DISPOSITION
The judgment is affirmed. Valley Healthcare Systems, Inc., shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)



/s/
HOCH, J.


We concur:


/s/
NICHOLSON, Acting P. J.


/s/
MAURO, J.