Verizon
Communications
Filed 10/3/13 Verizon California v. Charter Communications CA2/5
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
SECOND
APPELLATE DISTRICT
DIVISION
FIVE
VERIZON CALIFORNIA, INC.,
Cross-Complainant and Respondent,
v.
CHARTER COMMUNICATIONS, INC.,
Cross-Defendant and Appellant.
B239204
(Los Angeles
County
Super. Ct.
No. SC089928)
APPEAL from
a judgment of the Superior Court
of
County.
Linda K. Lefkowitz, Judge.
Affirmed.
Grant,
Genovese & Baratta and Lance D. Orloff and Christopher Dunakin for
Cross-Defendant and Appellant.
Cole
Pedroza, Joshua C. Traver, Kenneth R. Pedroza; Randolph M. Even &
Associates and Scott R. Diamond for Cross-Complainant and Respondent.
_______________
>
An
installer of equipment for Charter Communications, Inc. (“Charterâ€) was injured
when the pole he was working on broke and he fell to the ground. The injured party sued Verizon California,
Inc. (“Verizonâ€) because, although Charter was leasing the pole, it was owned
by Verizon. Verizon settled the lawsuit
and sought indemnification from Charter.
The trial court ruled Verizon was
entitled to indemnification because Verizon was at most passively
negligent. Charter has appealed the
judgment. We affirm.
FACTUAL AND
PROCEDURAL BACKGROUND
The predecessors
in interest of Charter and Verizon entered into a “CATV Pole Lease Agreementâ€
in 1987 (the Lease Agreement), pursuant to which Charter was permitted to use
Verizon’s utility poles to provide cable television service to its subscribers. Charter contracted with Creative
Communications to install Charter’s equipment on utility poles subject to the
Lease Agreement. Creative
Communications’ employee, Jose Romero, was injured when the base of one such
utility pole snapped, causing Romero to fall to the ground.
Romero sued
Verizon for negligence; Verizon cross-complained against Charter for
express indemnity, declaratory relief, equitable apportionment of fault and
contribution.
title="">[1]
Romero’s
negligence action settled for a total payment to him of $699,000. Verizon paid $600,000 towards the settlement;
Charter paid $99,000. The parties
acknowledged the settlement did not waive any rights between them in connection
with their cross-complaints.
Verizon
prosecuted its cross-complaint solely on its
Lease Agreement. The matter was
submitted to the trial court on stipulated facts, a joint request for judicial
notice, and trial briefs. The court
ruled Verizon’s negligence, if any, “must be deemed as passive†and therefore,
Verizon was entitled to indemnification of the sums paid to Romero in settlement
of his lawsuit as well as its reasonable costs of litigation in defense of that
claim. The court entered judgment
against Charter in the amount of $830,717.20.
Contemporaneously
with the filing of its notice of appeal, Charter paid the outstanding judgment
in full, expressly advising Verizon that, by reason of its satisfaction of the
judgment, it did not intend to, and did not, waive its right to appeal.
VERIZON’S REQUEST TO
DISMISS APPEAL
Although it
did not file a motion to dismiss,
Verizon invites this court to dismiss the appeal because Charter voluntarily
complied with the terms of the judgment.
We decline the invitation.
Verizon
cites Reitano v. Yankwich (1951) 38
Cal.2d 1and A.L.L. Roofing & Bldg.
Materials Corp. v. Community Bank (1986) 182 Cal.App.3d 356, in support of
its contention that Charter’s payment of the judgment constituted a waiver of
its appellate rights and that no exception “to the waiver rule, such as when
the judgment was paid under ‘execution or other coercion,’†are applicable to the circumstances of this
case. In so doing, Verizon misstates the
waiver rule.
“In the
case of voluntary satisfaction of a judgment, deprivation of the right to
appeal ensues only when it is shown that the payment of the judgment was by way
of compromise or with an agreement not to take or prosecute an appeal.†(Estate
of Merrill (1946) 29 Cal.2d 520, 524; accord, Reitano v. Yankwich, supra, 38 Cal.2d at p. 4 [“though
execution has not issued, the payment of a judgment must be regarded as
compulsory, and therefore as not releasing errors, nor depriving the payor of
his right to appeal, unless payment be by way of compromise and settlement or
under an agreement not to appeal or under circumstances leaving only a moot
question for determinationâ€].)
The burden “is on [respondents] to demonstrate that [appellants] entered
into some type of compromise agreement with [respondents] which was intended to
terminate this litigation pending the appeal.â€
(Coldwell Banker & Co. v.
Department of Insurance (1980) 102 Cal.App.3d 381, 401.) Verizon makes no showing the parties entered
into a compromise agreement intended to terminate the litigation without an
appeal. To the contrary, Verizon
acknowledges Charter paid the full amount of the judgment while expressly
reserving its appellate rights.
STANDARD OF REVIEW
The trial
court interpreted the legal effect of the parties’ contractual indemnity
provision on stipulated facts. Our
review is de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799;
(1965) 62 Cal.2d 861, 865.)
DISCUSSION
The sole
issue on appeal is whether, under the indemnity clause of the Lease Agreement,
Charter was required to indemnify Verizon for the $600,000 Verizon paid Romero
in settlement of his negligence suit against Verizon.
indemnity.
“Indemnity
may be defined as the obligation resting on one party to
good a loss or damage another party has incurred. [Citation.]
This obligation 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]. Where, as here, 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.
[Citation.]†(
(1975) 13 Cal.3d 622, 628 (Rossmoor).)
“[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.
[Citation.] 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.
[Citations.] 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. [Citations.]
[¶] Provisions purporting to hold
an owner harmless ‘in any suit at law’ [citation], ‘from all claims for damages
to
any cause whatsoever’ [citation], without expressly mentioning an indemnitee’s
negligence, have been deemed to be ‘general’ clauses.†(Rossmoor,
supra, 13 Cal.3d at pp. 628-629; see also McCrary Const. Co. v. Metal Deck Specialists, Inc. (2005) 133
Cal.App.4th 1528, 1536.)
“Passive
negligence is found in mere nonfeasance, such as the failure to discover a
dangerous condition or to perform a duty imposed by law. [Citations.]†(Rossmoor,
supra, 13 Cal.3d at p. 629.)
“Passive negligence has been found or assumed from the
failure to discover a defective condition created by others [citation], failure
to exercise a right to inspect certain work and specify changes [citation], and
failure to exercise a supervisory right to order removal of defective material
[citation].†(Id. at p. 630.) “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. [Citations.]
‘The crux of the inquiry is to determine whether there is participation
in some manner by the person seeking indemnity in the conduct or omission which
caused the injury beyond the mere failure to perform a duty imposed upon him by
law.’ [Citation.]†(Rossmoor,
supra, 13 Cal.3d at p. 629.) “Active
negligence has been found in digging a hole which later caused an injury
[citation], knowingly supplying a scaffold which did not meet the requirements
of a safety order [citation], creating a perilous condition that resulted in an
explosion [citation], and failing to install safety nets in violation of a
contract [citation].†(
Paragraph
35 of the Lease Agreement, titled “Indemnity and Insurance,†states in
pertinent part as follows: “Licensee
[Charter] shall indemnify and hold harmless Licensor [Verizon] and all other
joint users and their respective successors and assigns, against and from any
and all loss, claims, demands, causes of action, damages, risks or liabilities,
in law or in equity, of every kind and nature whatsoever, directly or
proximately resulting from or caused by but not limited to: [¶]
(a) the installation, maintenance
or use of said equipment on said poles, . . . [¶] and Licensee
shall, upon demand and at its own sole risk and expense, defend any and all
suits, actions or other legal proceedings which may be brought or instituted by
third persons against Licensor and/or other joint user[s] or their respective
successors or assigns, on any such claim, demand or cause of action; and shall
pay and satisfy any judgment or decree which may be rendered against Licensor
and/or other joint user or their respective successors or assigns, in any such
suit, action or other legal proceeding; and further, Licensee shall reimburse
Licensor and each other joint user for any and all legal expense incurred in
connection therewith, including attorney’s fees.â€
Because the
foregoing indemnity clause does not expressly state that Verizon’s indemnity
rights extend to its own negligence, the provision is a “general indemnityâ€
clause as the term is used in Rossmoor,
and the parties so stipulated at trial.
Thus, under the legal analysis of Rossmoor,
the Lease Agreement requires Charter to indemnify Verizon only if Verizon’s
negligence was passive as opposed to active.
Not surprisingly, the parties viewed Verizon’s alleged negligence
differently: Charter described Verizon’s
negligence as active based on Verizon’s duty to maintain its utility pole in a
reasonably safe condition, while Verizon maintained its negligence, if any, was
passive, since it was not present at the time Romero was injured and thus
played no active part in the events which led to the accident. The trial court adopted Verizon’s view: “Verizon was neither present, nor required to
be present at the time or scene of the accident, and thus cannot be deemed to
have actual and direct responsibility for insuring safety at the time of the
injury. This is a factor which has
distinguished ‘passive’ from ‘active’ negligence in the case
law . . . . The court does not find that Verizon’s
action or inaction in failing to inspect the pole defeats the broad immunity
contracted for . . . .â€
The
trial court was correct. Verizon’s
conduct vis-à -vis Romero’s accident was “passive.†Verizon’s alleged failure to properly
maintain the utility pole amounted to simple nonfeasance, similar to those acts
of nonfeasance specifically categorized as passive negligence, i.e., “the
failure to discover a defective condition created by others [citation], failure
to exercise a right to inspect certain work and specify changes [citation], and
failure to exercise a supervisory right to order removal of defective material
[citation].†(Rossmoor, supra, 13 Cal.3d at p. 630.) The “failure . . . to perform a duty
imposed by law†is passive, not active, negligence. (Rossmoor,
supra, 13 Cal.3d at p. 629.)
Charter
contends the Lease Agreement imposed an affirmative duty on Verizon “to provide
Romero with a utility pole free of unreasonably dangerous termite-ridden
decay . . . .†If,
as Charter asserts, Verizon breached an express duty to Charter to maintain the
pole in a safe condition, Rossmoor
would support Charter’s argument that Verizon’s breach of duty constituted
active negligence. (Rossmoor, supra, 13 Cal.3d at p. 629 [“Active
negligence . . . is found if an
indemnitee . . . has failed to perform a precise duty which
the indemnitee had agreed to perform.â€].) However, we do not read the agreement to
impose such a duty on Verizon.
Paragraph
20 of the Lease Agreement states:
“[Verizon] reserves to itself . . . the right to maintain
its poles and to operate its facilities thereon in such manner as will best
enable it to fulfill its public service requirements. [Verizon] . . . shall not
be liable to [Charter] for any interruption to the service of [Charter] or for
interference with the operation of the equipment of [Charter] arising in any
manner whatsoever.†Charter insists that
by this language Verizon agreed to undertake the duty, for Charter’s benefit,
to maintain the pole in a condition such that Romero would not be injured when
he ascended the pole.
“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, so far as the same
is ascertainable and lawful.†(Civ.
Code, § 1636.) “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.) “The whole of a
effect to every part, if reasonably practicable, each clause helping to
(Civ. Code, § 1641.) “The
strict legal meaning; unless used by the parties in a
technical sense, or unless a special meaning is
followed.†(Civ. Code, § 1644; see
generally AIU Ins. Co. v. Superior Court (1990)
51 Cal.3d 807, 821-822.)
The Lease Agreement reveals no intention
of the parties to impose upon Verizon any duty to maintain the utility poles in
a safe condition for the benefit of Charter.
To the contrary, the agreement makes clear that Verizon’s grant of
permission to Charter to use its utility poles is given with the express
understanding that Charter’s use of the poles will not cause Verizon to incur
any inconvenience, expense or other burden.
Charter asks us to construe the words
“reserves . . . the right†as set forth in the lease to
mean Verizon was assuming an obligation.
To do so, however, would conflict with the most basic principles of
contract interpretation.
DISPOSITION
The
judgment is affirmed. Verizon shall
recover its costs on appeal.
NOT TO BE
PUBLISHED IN THE OFFICIAL REPORTS
KUMAR,
J.
We concur:
TURNER,
P. J.
KRIEGLER,
J.
and Verizon for indemnity, apportionment and contribution, and declaratory
relief; those claims are not before us on this appeal.
Verizon’s litigation costs defending the Romero lawsuit.
