Prince v. Pacific Gas & Electric Company
Filed 3/19/09
IN THE SUPREME COURT OF CALIFORNIA
)
Cross-complainant and Appellant, )
v. )
Pacific Gas & Electric Company, )
Cross-defendant and Respondent. ) Super. Ct. No. 1-02-CV-810390
__________________________________ )
Joshua Jackson suffered serious injuries when he attempted to dislodge a kite from a power line maintained by Pacific Gas & Electric Company (PG&E) on the property of Eve Prince. The parties do not dispute that PG&E is immune from direct liability to Jackson under Civil Code[1]section 846, which provides with certain exceptions that a property owner owes no duty of care to keep the premises safe for entry or use by others for any recreational purpose. The question here is whether Prince, who might be liable to Jackson under one of the statutory exceptions, may recover on her cross-complaint alleging PG&E is liable for implied contractual indemnity based on its breach of a contractual duty owed to her to maintain its power line easement in repair.
We conclude that, even assuming a claim for implied contractual indemnity may be predicated on an alleged breach of an easement duty, PG&Es immunity from liability to Jackson under section 846 nonetheless bars Prince from recovering indemnification as a matter of law. We therefore reverse the judgment of the Court of Appeal and remand the matter to that court with directions to enter judgment in favor of PG&E.
Factual and Procedural background
The underlying facts are undisputed. Ten-year-old Joshua Jackson was flying a kite in his friends backyard and suffered serious injuries when he used an aluminum pole to try to dislodge the kite from an electrical power line that traversed the neighboring property owned by the friends grandmother, Eve Prince. (See Jackson v. Pacific Gas & Electric Co. (2001) 94 Cal.App.4th 1110, 1113 (Jackson).)
A guardian ad litem filed an action on Jacksons behalf against PG&E, which owned an easement to erect and maintain electrical power lines across the Prince property. In that action, the Court of Appeal upheld the trial courts determination that PG&E was immune from liability to Jackson under section 846, the so-called recreational use immunity statute. (Jackson, supra, 94 Cal.App.4th at p. 1113.) The court concluded that (1) based on the undisputed facts, Jacksons attempted retrieval of the kite was, as a matter of law, a recreational use of property within the contemplation of section 846; and (2) there were no facts supporting application of section 846s enumerated exceptions to immunity. (Jackson, at pp. 1114-1119.) The decision in that action became final in 2002. (Id. at p. 1121.)
Jacksons guardian ad litem subsequently filed a premises liability action against Prince. The complaint alleges that Jackson was expressly invited to use Princes property, and that Prince knew or should have known that the lines hanging low over her property were high voltage power lines that posed a hazard to her guests. It further alleges that Prince used a 19 foot 8 inch aluminum pole to shake nut trees, that she left it under or near the low hanging power lines, and that she created a foreseeable risk of injury or death should the metal pole be raised near the lines for any purpose.
Prince, in turn, filed a cross-complaint against PG&E. As relevant here, she alleges that, based on the easement granted to PG&E and on a statute that requires owners of easements to maintain them in repair ( 845), PG&E breached a contractual duty owed to her to maintain its power lines in repair and thereby proximately caused Jacksons injury. Prince seeks indemnity on the ground that PG&Es alleged breach of duty has forced her to defend against Jacksons action and to be potentially liable for his damages.
PG&E filed a motion for summary judgment, contending Prince is barred from recovery because the gravamen of her cross-complaint is equitable indemnity, as opposed to express contractual indemnity. Relying on the undisputed evidence that Jackson was injured while engaged in a recreational use of its easement, PG&E argued its immunity under section 846 affords a complete defense to equitable indemnity. The trial court granted the motion, concluding that equitable indemnity is at issue and that PG&Es showing negating joint and several liability to Jackson entitled it to judgment as a matter of law.
The Court of Appeal reversed, finding that the indemnity Prince seeks is implied from PG&Es contractual obligations under the recorded easement documents, and is not based on any alleged breach of duty owed to Jackson. In the Court of Appeals words, PG&E has contractual duties to Prince that are separate and distinct from the general duty of care to Jackson that is the subject of section 846. Princes claim for implied contractual indemnification does not rely on, or seek to enforce, the duty that is limited by section 846, but instead relies on duties arising from the easement. The court concluded that, because joint and several liability to the injured plaintiff is not a requirement of implied contractual indemnity, PGEs statutory immunity from suit by Jackson does not preclude Princes indemnity claim.
We granted PG&Es petition for review.
Discussion
This case presents two issues: (1) whether a claim for implied contractual indemnity may rest on the documents granting PG&E a power line easement and on section 845, which generally requires an easement holder to maintain its easement in repair; and (2) if so, whether PG&Es immunity from liability to Jackson under section 846 nonetheless bars Prince from recovering on an implied contractual indemnity theory.
A. The Obligation of Indemnity
In general, indemnity refers to the obligation resting on one party to make good a loss or damage another party has incurred. (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.) Historically, the obligation of indemnity took three forms: (1) indemnity expressly provided for by contract (express indemnity); (2) indemnity implied from a contract not specifically mentioning indemnity (implied contractual indemnity); and (3) indemnity arising from the equities of particular circumstances (traditional equitable indemnity).[2] (Ibid.; see PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal.4th 310, 318.)
Although the foregoing categories of indemnity were once regarded as distinct, we now recognize there are only two basic types of indemnity: express indemnity and equitable indemnity. (See Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1029-1030 & fn. 10 (Bay Development).) Though not extinguished, implied contractual indemnity is now viewed simply as a form of equitable indemnity. (Id. at p. 1029; see E. L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506-507 (E. L. White).)
We briefly review all three historic forms of indemnity, so as to provide context to Princes claim of a right to implied contractual indemnity.
Express indemnity refers to an obligation that arises by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances. (Bay Development, supra, 50 Cal.3d at p. 1029.) Express indemnity generally is not subject to equitable considerations or a joint legal obligation to the injured party; rather, it is enforced in accordance with the terms of the contracting parties agreement. (Markley v. Beagle (1967) 66 Cal.2d 951, 961.) In the context of noninsurance indemnity agreements, if a party seeks to be indemnified for its own active negligence, or regardless of the indemnitors fault, the contractual language on the point must be particularly clear and explicit, and will be construed strictly against the indemnitee. (Crawford v. Weather Shield Mfg. Inc. (2008) 44 Cal.4th 541, 552; see also E. L. White, supra, 21 Cal.3d at p. 507.) In this sense, express indemnity allows contracting parties great freedom to allocate [indemnification] responsibilities as they see fit, and to agree to protections beyond those afforded by the doctrines of implied or equitable indemnity. (Crawford v. Weather Shield Mfg. Inc., supra, 44 Cal.4th at pp. 551, 552.) Prince makes no claim that PG&E expressly contracted to indemnify her for the type of damages alleged here.
Unlike express indemnity, traditional equitable indemnity requires no contractual relationship between an indemnitor and an indemnitee. Such indemnity is premised on a joint legal obligation to another for damages, but it does not invariably follow fault. (Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994) 8 Cal.4th 100, 114 (Western Steamship).)[3] Although traditional equitable indemnity once operated to shift the entire loss upon the one bound to indemnify, the doctrine is now subject to allocation of fault principles and comparative equitable apportionment of loss. (Bay Development, supra, 50 Cal.3d at pp. 1029-1030, fn. 10; American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 591-598 (American Motorcycle).)
A key restrictive feature of traditional equitable indemnity is that, on matters of substantive law, the doctrine is wholly derivative and subject to whatever immunities or other limitations on liability would otherwise be available against the injured party. (Western Steamship, supra, 8 Cal.4th atp. 115; Childrens Hospital v. Sedgwick (1996) 45 Cal.App.4th 1780, 1787 (Childrens Hospital) [As against the indemnitee, the indemnitor may invoke any substantive defense to liability that is available against the injured party.].)[4] This rule is often expressed in the shorthand phrase . . . there can be no indemnity without liability. (Childrens Hospital, supra, 45 Cal.App.4th at p. 1787.) Prince acknowledges she cannot recover traditional equitable indemnity because, under section 846, PG&E owed no duty of care to Jackson to keep its easement safe for his recreational entry or use.
That leaves implied contractual indemnity as Princes sole potential basis for seeking indemnity from PG&E. Historically, this type of indemnity was available when two parties in a contractual relationship were both responsible for injuring a third party; recovery rested on the theory that a contract under which the indemnitor undertook to do work or perform services necessarily implied an obligation to do the work involved in a proper manner and to discharge foreseeable damages resulting from improper performance absent any participation by the indemnitee in the wrongful act precluding recovery. (Great Western Furniture Co. v. Porter Corp. (1965) 238 Cal.App.2d 502, 517, italics added (Great Western); e.g., S.F. Unified Sch. Dist. v. Cal. Bldg. etc. Co. (1958) 162 Cal.App.2d 434 (S.F. Unified).) Now, however, implied contractual indemnity, like traditional equitable indemnity, is subject to comparative equitable apportionment of loss. (Bay Development, supra, 50 Cal.3d at pp. 1029-1030, fn. 10.)
PG&E argues its immunity under section 846 shields it from liability for implied contractual indemnity. PG&E additionally contends there is no basis here for implying a right of contractual indemnity because Prince and PG&E were not in a contractual relationship with each other and because PG&E owed no contractual duty to Prince under the easement grant.
We need not resolve PG&Es latter contentions because, even assuming the existence of a sufficient contractual relationship and duty, PG&Es immunity from liability to Jackson bars Prince from recovering implied contractual indemnity in any event.
B. The Effect of PG&Es Recreational Use Immunity
Section 846 provides in pertinent part: An owner of any estate or any other interest in real property, whether possessory or nonpossessory, owes no duty of care to keep the premises safe for entry or use by others for any recreational purpose or to give any warning of hazardous conditions, uses of, structures, or activities on such premises to persons entering for such purpose, except as provided in this section. ( 846, 1st par.) By its own terms, however, section 846 does not limit the liability which otherwise exists when: (1) there has been a willful or malicious failure to guard or warn against a dangerous condition, use, use, structure, or activity; (2) permission to enter the premises was granted in exchange for consideration; or (3) the injured person was expressly invited rather than merely permitted to enter the premises. ( 846, 4th par., subds. (a)-(c).) Section 846 was enacted to constrain the growing tendency of private landowners to bar public access to their land for recreational uses out of fear of incurring tort liability. (Hubbard v. Brown (1990) 50 Cal.3d 189, 193.) The immunity clearly extends to easement owners, given the statutes exceptionally broad and singularly unambiguous definition of protected property interests. (Miller v. Weitzen (2005) 133 Cal.App.4th 732, 736 [finding section 846 protected holders of an encroachment permit]; see also Hubbard v. Brown, supra, 50 Cal.3d at pp. 196-197 [holder of a permit to graze livestock on federal lands].)
For purposes of our analysis, we emphasize the parties do not dispute that PG&E owed no duty of care to Jackson, who was injured while engaging in a recreational use of PG&Es easement. Nor do they dispute that PG&E is therefore immune from liability to Jackson under section 846. However, Jacksons premises liability action against Prince remains pending due to triable issues of material fact regarding the applicability of section 846s express invitation exception to immunity and the existence of a duty of care.[5]
As indicated above, traditional equitable indemnity differs significantly from express contractual indemnity, in that the former is not available in the absence of a joint legal obligation to the injured party. (Childrens Hospital, supra, 45 Cal.App.4th at p. 1787; see ante, fn. 3.) Consequently, as to matters of substantive law one may defend against a traditional equitable indemnity action by relying on whatever immunities or other limitations on liability would otherwise be available against the injured party (Western Steamship, supra, 8 Cal.4th atp. 115.) The principal question for us is whether or not a requirement of a joint legal obligation also applies when implied contractual indemnity is at issue. We conclude the answer is yes, based on the underlying rationale of this common law doctrine and the case law that has developed over the years.
S.F. Unified, supra, 162 Cal.App.2d 434, the seminal case validating the implied contractual indemnity doctrine in California, makes it abundantly clear the doctrine originated as a means to equitably shift the risk of loss from one joint tortfeasor to another when both were deemed liable to the injured party. In S.F. Unified, the plaintiff school district had entered a contract with the defendant maintenance company for window washing in certain city schools. The contract required the defendants use of stepladders in washing the windows [i]n all schools that have Hauser window sashes and provided the [defendant] is held responsible for payment of any and all damages resulting from his operations. (Id. at p. 437.) The defendants employee was injured while washing a Hauser window at a school, and it was shown that, at the time of the accident, the defendant was not following the contractually mandated stepladder procedure for cleaning a Hauser window. (Ibid.) The injured employee successfully sued the school district on the ground it had not provided him with a safe place to work. After satisfying the judgment, the school district sued the defendant for indemnity. The trial court granted a nonsuit, and the Court of Appeal reversed. (Id. at pp. 435-436.)
In determining whether the trial court correctly held, as a matter of law, that the defendant maintenance company was not liable for the damages the plaintiff school district paid to the injured party, the Court of Appeal started by commenting there was no doubt that the school district and the defendant were joint tortfeasors with respect to the injuries of the defendants employee. (S.F. Unified, supra, 162 Cal.App.2d at p. 444.)[6] The court next observed that the common law rule governing at the time of the accident generally barred any right of contribution between joint tortfeasors. (Id. at pp. 434-444.) In assessing whether the case presented any basis for an exception to the rule of noncontribution, the Court of Appeal sought guidance from 140 American Law Reports 1306, which contained an annotation on the subject Contribution or indemnity between joint tort-feasors where injury to third person results from violation of a duty which one tort-feasor owes to other. (S.F. Unified, at p. 444.)[7]
According to that annotation, the courts in a few cases have added another exception [to the general rule of noncontribution] to the effect that where the injury which resulted to a third person, as to whom both of the parties were negligent or guilty of a wrongful act, arose from a violation by the defendant of a duty owing by him to the plaintiff, or that where the defendant was a wrongdoer to the plaintiff but the plaintiff was not a wrongdoer to the defendant, although both were liable to the person injured, the plaintiff may recover contribution or indemnity, as the case may be, from the defendant notwithstanding the fact that his negligence also contributed to the third persons injury. [Citations.] (S.F. Unified, supra, 162 Cal.App.2d at p. 444, italics added.) The Court of Appeal in S.F. Unified reviewed the cases cited in support of the exception, and quoted one of the decisions reasoning that, even when joint tortfeasors were equally culpable and equally liable to the injured party, as between themselves, the plaintiff [seeking indemnity] was entitled to rely upon the defendants to discharge the duty because of their contractual relations, and the former could only be deprived of the right of indemnity by proof that it did in fact participate in some manner in the omission, beyond its mere failure to perform the duty imposed on both by the law. (Id. at p. 445, quoting Phoenix Bridge Co. v. Creem (1905) 92 N.Y.S. 855, 856-857.) The other decisions supporting the exception were to the same effect. (E.g., Otis Elevator Co. v. Maryland Casualty Co. (Colo. 1934) 33 P.2d 974, 977-978; Seaboard Air Line Ry. Co. v. American District Electric Protective Co. (Fla. 1932) 143 So. 316; Busch & Latta Paint Co. v. Woermann Const. Co. (Mo. 1925) 276 S.W. 614, 619 [In all cases where one party creates the condition which causes the injury, and the other does not join therein, but is exposed to liability, and suffers damages on account of it, the rule that one of two joint tort-feasors cannot maintain an action against the other for indemnity does not apply.]; accord, Weyerhaeuser S.S. Co. v. Nacirema Co. (1958) 355 U.S. 563; Ryan Co. v. Pan-Atlantic Corp. (1956) 350 U.S. 124.)[8] Finding the reasoning of the foregoing cases quite convincing, the Court of Appeal found it appropriate to adopt an implied contractual indemnity exception to the common law rule of noncontribution between joint tortfeasors. (S.F. Unified, supra, 162 Cal.App.2d at p. 448.)
Decisions subsequent to S.F. Unified, supra, 162 Cal.App.2d 434, emphasized that implied contractual indemnity and traditional equitable indemnity developed as related exceptions to the rule of noncontribution. In Cahill Bros., Inc. v. Clementina Co. (1962) 208 Cal.App.2d 367, the Court of Appeal summarized the basic principles of implied indemnity, now commonly referred to as equitable indemnity, as follows. The right to implied indemnity, while relatively recent in the law of California, is now well established. [Citations.] The distilled essence of these cases is that where each of two persons is made responsible by law to an injured party the one to whom the right of indemnity inures is entitled to shift the entire liability for the loss to the other party. Accordingly, a right of implied indemnification may arise as a result of contract or equitable considerations. (Id. at pp. 375-376, italics added; Great Western, supra, 238 Cal.App.2d at p. 516 [citing same].) As Cahill Bros., Inc. v. Clementina Co. indicated, however, where the right of implied or equitable indemnity was based on a contractual relationship, it was not necessary to evaluate the primary or secondary liability of those made responsible by the law to the injured party. (Id. at p. 376, italics omitted; cf. American Motorcycle, supra, 20 Cal.3d at p. 583 [where no contractual relationship existed, a passively or secondarily negligent tortfeasor could shift its liability completely to a more directly culpable tortfeasor].)
Significantly, while early decisions appeared to recognize the sometimes vague and imprecise standard of recovery governing equitable indemnity, the restitutionary nature of indemnification clearly emerged as a common thread. (Western Steamship, supra, 8 Cal.4th at p. 108.) That is, [t]he basis for indemnity is restitution, and the concept that one person is unjustly enriched at the expense of another when the other discharges liability that it should be his responsibility to pay. (Ibid.)
As originally conceived, equitable indemnity was a doctrine that sought to prevent a more culpable tortfeasor from escaping liability altogether when a less culpable tortfeasor was involved. As an all-or-nothing rule, however, at times it operated to shift the entire loss to a party who was simply slightly more culpable than another. (American Motorcycle, supra, 20 Cal.3d at pp. 583, 594.) Recognizing this inequity, American Motorcycle modified the equitable indemnity rule to permit a concurrent tortfeasor to obtain partial indemnity from other cotortfeasors on a comparative fault basis. (Id. at pp. 607-608.)
TO BE CONTINUED AS PART II.
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[1] All statutory references are to this code unless otherwise indicated.
[2] As will be explained, implied contractual indemnity is but a form of equitable indemnity. Accordingly, this opinion uses the term traditional equitable indemnity to refer to the other form of equitable indemnity, which is not based on the existence of a contractual relationship between the indemnitor and the indemnitee.
[3] [J]oint and several liability in the context of equitable indemnity is fairly expansive. (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 852.) It extends beyond the term joint tortfeasor and may apply to acts that are concurrent or successive, joint or several, as long as they create a detriment caused by several actors. (Ibid.)
[4] In Western Steamship, supra, 8 Cal.4th 100, we held that section 3333.2s limit on noneconomic damages in actions against health care providers limited a hospitals indemnification obligation to a ship owner. (See also Childrens Hospital, supra, 45 Cal.App.4th 1780 [anesthesiologists exoneration from liability in patients prior malpractice action barred hospitals equitable indemnity action against anesthesiologist]; Colich & Sons v. Pacific Bell (1988) 198 Cal.App.3d 1225 [consistent with a tariff limiting telephone companys negligence liability to its customers, contractor could not recover equitable indemnity against Pacific Bell for ordinary negligence but could seek indemnification for gross negligence].)
[5] In Jackson, supra, 94 Cal.App.4th 1110, the Court of Appeal held that, if Jackson received an express invitation from his friends mother to enter the Prince property, under authority given to the mother by Prince, such invitation did not abrogate PG&Es immunity under section 846. (Jackson, supra, at p. 1119.) That holding is not at issue here.
[6] The Court of Appeal elsewhere observed that the defendant maintenance company was not liable to its employee in tort (i.e., for the full measure of tort damages) because of the Workmens Compensation Act then in effect. (S.F. Unified, supra, 162 Cal.App.2d at p. 440.)
[7] Contribution and indemnity are related doctrines, but contribution presupposes a common liability which is shared by the joint tortfeasors on a pro rata basis. (Western Steamship, supra, 8 Cal.4th at p. 108, fn. 6, italics added.)
[8] In Ryan Co. v. Pan-Atlantic Corp., supra, 350 U.S. 124, a shipowner contracted with a stevedoring company for performance of stevedoring operations, but the companys failure to perform the work safely contributed to the injury of one of its own employees. The United States Supreme Court held that, under these circumstances, the shipowner had an action for breach of contract to recover indemnity from the stevedoring company for the compensation the shipowner paid to the companys injured employee. In Weyerhaeuser S.S. Co. v. Nacirema Co., supra, 355 U.S. 563, the high court followed Ryan and held that the right to indemnity did not depend on tort concepts of active/passive or primary/secondary negligence. (Weyerhaeuser, supra, 355 U.S. at p. 569.)
