Opinion
In this сase we must determine whether a hold harmless agreement absolved North American Title Company (North American) of liability for negligence when North American failed to record a deed of trust in a timely fashion. We conclude the trial court correctly found the hold harmless agreement protected North American. Consequently, we affirm the defense judgment as to North American. However, we also conclude the trial court erred in calculating the amount of damages plaintiff is entitled to recover from another defendant. Consequently, we modify the judgment to permit plaintiff to recover the correct amount of damages ($515,000).
I
Facts
This case arises out of a series of real estate transactions between appellant William B. Rooz and David Kimmel. In late 1989, Rooz exchanged an office building he owned at 1841 Berkeley Way in Berkeley (the Berkeley property) for an office building Kimmel owned at 390 South El Camino Real in San Mateo (the San Mateo property). In this tax deferred exchange, Rooz also received a no intеrest $445,000 note from Kimmel secured by a deed of trust on the Berkeley property. The note was due in 10 years, or upon the sale of the San Mateo property, whichever occurred first. The exchange agreement provided that should Kimmel sell the Berkeley property, Kimmel could transfer the $445,000 deed of trust to any other property he owned, provided the total value of the loans secured by the other property (including the $445,000 loan) did not exceed 80 percent of that property’s value. At the time the parties entered this exchange agreement, Kimmel also agreed to “master lease” the San Mateo property from Rooz for a period of 10 years, paying Rooz a net amount of $10,500 per month. 1 North American handled the escrow for the exchange through its escrow officer, Marie Weckerle (Weckerle).
Shortly after the exchange closed on February 6,1990, Kimmel contracted to sell the Berkeley property to a third party. At about the same time, Rooz
Rooz and Kimmel asked North American’s Weckerle, who was handling the escrow for Kimmel’s purchase оf the Redstone Building, to record the reconveyance of the $445,000 deed of trust and to record the new $515,000 deed of trust against the Redstone Building. Weckerle agreed to do so as an “accommodation.” Weckerle explained that an “accommodation recording” means the title company is recording the document without liability since no title insurance will be issued to cover the transaction. Weckerle testified North American will not record a document as an accommodation unless the principals sign accommodation instructions and an indemnity agreement absolving North American of liability in connection with the recording.
In this particular case, Rooz instructed North American that it was authorized to record a deed of reconveyance with respect to the $445,000 deed of trust “with no demand to the undersigned.” The instruction further stated: “You are instructed to re-draw said note and deed of trust against: 2916-2940 16th Street, San Francisco [the Redstone Building].” The new note and deed of trust were to be redrawn on the same terms as the original nоte and deed of trust except the principal amount was increased to $515,000. The instruction concluded: “Said deed of trust is to record as an accommodation with no title or escrow liability . . . and as per attached Indemnity and Recording Instructions.” The attached recording instructions provided: “[R]ecord against 2916-2940 16th Street, San Francisco as an accommodation, and after Kimmel takes title.” (Italics added.)
Rooz also signed a “Master Agreement of Indemnification” (hereinafter indemnity and hold harmless agreement) which provided in part that he would “hold harmless, protect and indemnify [North American] from and against any and all liabilities, losses, damages, expenses, and charges . . .
Kimmel’s sale of the Berkeley property closed on February 20, 1990, and Weckerle recorded the deed reconveying the $445,000 deed of trust against that property on that date, thus extinguishing the security.
Two days later, on February 22, 1990, Kimmel’s purchase of the Redstone Building closed and he took title to that property. Although Kimmel had previously signed the $515,000 note and deed of trust and they were in Weckerle’s possession, Weckerle nevertheless called Kimmel to obtain his authorization to record the new deed of trust against the Redstone Building. Kimmel refused to authorize the recording, explaining he had not yet completed his financing of the property. Consequently, Weckerle did not immediately record the $515,000 deed of trust. Because Rooz had left the country to return to Hungary, Weckerle informed Rooz’s agent and attorney-in-fact, Albert Kapkin, that she could not record the $515,000 deed of trust because of Kimmel’s instructions. Kapkin communicated this information to Rooz in Hungary.
Weckerle refrained from recording the $515,000 deed of trust for nearly four months—until July 10, 1990—when Kimmel finally authorized her to do so. In the meantime, Kimmel added additional encumbrances to the Redstone Building, which he had purchased fоr $1.5 million subject only to a $975,000 first deed of trust. Between the time he took title to the Redstone Building on February 22, 1990, and the time Weckerle finally recorded Rooz’s $515,000 deed of trust on July 10, 1990, Kimmel encumbered the Redstone Building with two additional deeds of trust totaling $1,050,000. Consequently, by the time Weckerle recorded the $515,000 deed of trust in fourth position, the Redstone Building was subject to approximately $2,025,000 in preexisting encumbrances. Although Weckerle was aware Kimmel was recording these additional deeds of trust, she did not inform Rooz or his agent Kapkin that Kimmel was placing additional encumbrances on the property. 2
Because Rooz believed Kimmel and North American had wrongly impaired his security on the $515,000 note, he sued them for breach of oral agreement, negligence, breach of fiduciary duty, fraud and civil conspiracy.
At the bench trial, Rooz’s escrow expert testified that a reasonable escrow customеr would construe the term “after Kimmel takes title” as used in the recording instructions to mean the new deed of trust would be recorded immediately after Kimmel took title to the Redstone Building. Moreover, the expert testified that once Weckerle recorded the deed of reconveyance she had “fulfilled the obligation that she had to Mr. Kimmel.” At that point she became Rooz’s agent and her sole remaining duty was to record the deed of trust against the Redstone Building. According to the expert, there was “no necessity to obtain [Kimmel’s] permission to record the deed of trust. As soon as the Deed of Reconveyance [was] recorded, [Weckerle’s] dut[y] to Mr. Kimmel. . . [had] been completed and then her duty [was] to Mr. Rooz to record the deed of trust against the Redstone property.” The expert testified that, at that point, Kimmel had no power to prevent Weckerle from recording the new deed of trust. Even in the face of his objections, a “reasonably prudent escrow officer” would have immediately recorded the new deed of trust. Finally, the еxpert noted that, in the absence of an indemnity agreement, the pertinent standard of care would not change even if this were an “accommodation recording.” Finally, Kimmel’s own escrow expert testified a “reasonable title officer” would have recorded the new deed of trust “within a féw days” of Kimmel taking title to the Redstone Building.
At the end of the bench trial, the trial court issued an informal written decision, a formal statement of decision upon Rooz’s request, and a “modification/clarification” to the statement of decision at North American’s request. The court found in favor of Rooz and against defendant Kimmel on the causes of action for breach of oral agreement and negligence only. The court ordered Kimmel to pay Rooz $114,834.99 in damages.
With respect to the causes of action against respondent North American, the court impliedly found North American would have been liable for negligence and breach of oral contract for failing to timely file the $515,000
Rooz thereafter filed a motion to vacate the judgment or, alternatively, for new trial. On July 14,1995, the trial court struck one sentence of its informal statement of decision, but otherwise denied Rooz’s motion to vacate the judgment or for new trial. Rooz then filed this timely appeal. (Cal. Rules of Court, rule 3(a).)
II
Discussion
A. The Indemnity and Hold Harmless Agreement Absolved North American of Liability for Its Own Negligence.
Rooz contends the trial court erred when it found the indemnity and hold harmless agreement absolved North American of liability for its own negligence. In a nutshell, Rooz contends: (1) the indemnity and hold harmless agreement does not specifically absolve North American of liability resulting from its own negligence; (2) such specific language is absolutely
We reject Rooz’s argument. As we explain below, California courts no longer adhere to the mechanical rules Rooz relies on. Instead, the issue before us is whether, based on the circumstances of the case, the parties “knowingly bargained] for the protection at issue.”
(Rossmoor Sanitation, Inc.
v.
Pylon, Inc.
(1975)
1) The Law.
Both parties cite to cases that construe contractual indemnification provisions. We note that, strictly speaking, this case does not involve interpretation of an indemnification provision. Indemnity involves “ ‘the obligation resting on one party to make good
a loss or damage
another party has incurred.’ ”
(Maryland Casualty Co.
v.
Bailey & Sons, Inc.
(1995)
Although it has been the general rule that a party will not bе indemnified for his or her own active negligence under a general indemnity agreement,
6
our Supreme Court, while acknowledging this general rule, has held that “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.”
(Rossmoor, supra,
Recent cases have embraced the rule that the intent of the parties controls and have found indemnity agreements apply to the indemnitee’s active negligence even where the indеmnity agreement does not expressly address the issue of the indemnitee’s negligence. For example, in
Morton Thiokol, supra,
2) Analysis.
Because the trial court construed the indemnity and hold harmless provision without the aid of conflicting extrinsic evidence, the interpretation of that agreement is a question of law for this court.
(Maryland Casualty, supra,
The indemnity and hold harmless agreement Rooz signed provided in pertinent part:
“Whereas, The Company [North American] is being requested and will in the future be requested by Indemnitor [Rooz] to record for the benefit of Indemnitor various documents (hereinafter ‘Documents’), with legal effects) on real property, without benefit of examination of conformity of documents or real property title, such documents to be recorded with various county[] Recorder’s office(s) (hereinafter the act(s) of so recording said Documents . . . referred to as ‘Recordings’); and
“Whereas, no benefit, business or otherwise, is derived by and for The Company by the Recordings, and Indemnitor acknowledges that The Company does not now nor will derive a benefit therefrom and Indemnitor further acknowledges that Indemnitor does and/or will derive a benefit from said Recordings; and
“Whereas, The Company is unwilling to carry out and perform the Recordings; and
“Whereas, the Indemnitor recognizes that The Company, in the normal course of its business, would not so carry out and perform the Recordings of Documents unless the Indemnitor indemnifies The Company as hereafter agreed.
“Now, Therefore, the Indemnitor Agrees that in consideration of The Company’s Recordings of Documents at the present and future requests of
“And the Indemnitor Further Agrees that The Company is hereby granted the right to rely upon this Agreement in Recordings of Documents, both now and in the future . . . .”
Given the commercial reality of the accommodation recording in this case, we conclude 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.” First, North American made it clear to Rooz that it was not deriving any commercial benefit from the accommodation recording; North American was recording the documents as a “favor” to Rooz and Kimmel. Second, North American 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 and hold it harmless “from and against any and all
liabilities
. . . which may be sustained or incurred by The Company under, or arising directly or indirectly out of the Recordings . . . .” This language was broad enough to encompass liability arising from North American’s own active negligence. In short, the document clearly informed Rooz that North American would record the documents as an “accommodation,” without commercial benefit, only if Rooz promised to release and indemnify North American from all potential liability. In our view, denying North American the benefit of its release in these circumstances would deprive it “of the benefit of its bargain and read out of the contract essential provisions intended by the parties to govern their relationship, in violаtion of the principle that contracts should be read in a manner which renders them reasonable and capable of being put into effect.”
(Morton Thiokol, supra,
Thus, we agree with the trial court that the indemnity and hold harmless agreement “clearly, explicitly and comprehensively sets forth the intent and
We also reject Rooz’s argument that, even if the indemnity and hold harmless agreement does apply to active negligence, it is “limited in its scope." Here, North American’s liability for negligence clearly arose “directly or indirectly out of the Recordings at requests of Indemnitor and resulting directly or indirectly from any claim, action, proceeding, judgment, order or process arising from or based upon or growing out of said Recordings of Documents.” (Italics added.) The fact the negligence preceded the actual recording did not render the hold harmless clause inapplicable.
B. The Trial Court Did Not Find North American Had Committed Fraud.
Rooz next contends the indemnity and hold harmless agreement did not shield North American frоm its own fraud, and North American committed fraud when it failed to record the deed of trust in second position. (See
Maxon
v.
Security Ins. Co.
(1963)
C. The Indemnity and Hold Harmless Agreement Is Not Against the Public Interest.
Rooz next contends that, even if the indemnity and hold harmless agreement purported to absolve North American of liability for its own active negligence, such an agreement is unenforceable because it is against the public interest. We disagree.
Rooz cites
Tunkl
v.
Regents of University of California
(1963)
In Tunkl, the Supreme Court held a release from liability for future negligence may violate the public interest in certain circumstances. In particular, the court stated: “In placing particular contracts within or without the category of those affected with a public interest, the courts have revealed a rough outline of that type of transaction in which exculpatory provisions will be held invalid. Thus the attempted but invalid exemption involves a transaction which exhibits some or all of the following characteristics. It concerns a business of a type generally thought suitable for public regulation. The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advаntage of bargaining strength against any member of the public who seeks his services. In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents.” (60 Cal.2d at pp. 98-101, fns. omitted.)
The
Tunkl
court continued: “While obviously no public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party, the above circumstances pose a different situation. In this situation the releasing party does not really acquiesce voluntarily in the contractual shifting of the risk, nor can we be reasonably certain that he receives an adequate consideration for the transfer. Since the service is one which each member of the public, presently or potentially, may find essential to him, he faces, despite his economic inability to do so, the prospect of a compulsory assumption of the risk of another’s negligence.” (
In
Akin, supra,
The
Akin
court stated: “In comparing the[] six criteria set forth in
Tunkl
to the case at bench we find that
the transaction before us
is also one that ‘affects the public interest.’ ”
(Akin, supra,
Whether a particular transaction or contract affects the public interest depends upon the circumstances of the particular transaction or contract. (See, e.g.,
Randas
v.
YMCA of Metropolitan Los Angeles
(1993)
We concede the first factor—that the title and escrow business is of a type generally thought suitable for public regulation—applies in this case. However, the remaining factors must be viewed in light of the specific transaction at issue here—an accommodation recording for which North American received no consideration and no commercial benefit. Moreover, the transaction did not require North American to set up a formal escrow, or provide title insurance or a title report. Thus, this case is distinguishable from
Akin
Viewed in this light, it is clear the second factor—“[t]he party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public”—does not apply. (Tunkl, supra, 60 Cal.2d at pp. 98-99, fn. omitted.) Although this may be true with respect to North American’s other services (e.g., title insurance and title reports), it is not true with respect to a simple accommodation recording, which essentially anyone can perform.
Nor does the third factor apply to this case. North American does not hold itself out as willing to perform accommodation recordings for any member of the public or even for any member coming within certain established standards. Instead, the indemnity and hold harmless agreement specifically states North American is generally “unwilling to carry out and perform” accommodation recordings and [^] “in the normal course of its business, would not so carry out” accоmmodation recordings, and will do so only if the party requesting the recording agrees to sign the indemnity and hold harmless agreement. In fact, this appears to be standard practice throughout the industry.
The fourth factor is likewise inapplicable. This is not a case where, “[a]s a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services.” (Tunkl, supra, 60 Cal.2d at pp. 99-100.) Here, the accommodation recording at issue is not essential, and the title company does not possess a decisive advantage of bargaining strength, because any member of the public may simply choose to record the document personally.
Nor did North American confront the public with a standardized adhesion contract of exculpation without making provision by which a customer could pay additional reasonable fees and obtain protection against negligence. Here, Wеckerle testified that, if he had elected to do so, Rooz could have opened a formal escrow, purchased title insurance, and thus insured the second position of his $515,000 deed of trust. Had he done so, Rooz would not have been required to sign the indemnity and hold harmless agreement.
In sum, this was a “voluntary transaction[] in which one party, for a consideration, agree[d] to shoulder a risk which the law would otherwise have placed upon the other party.” That consideration was North American’s agreement to record the pertinent documents without charge. In our view, Rooz “really [did] acquiesce voluntarily in the contractual shifting of the risk” and received consideration for the transfer—namely, free recording services. (Tunkl,
supra,
D. The Findings in the Summary Adjudication Proceeding.
Prior to trial, North American moved for summary judgment, or in the alternative, summary adjudication of issues. North American claimed primarily that it did not owe a duty of due care (or any other duty) to Rooz as a matter of law. Rooz did not move for summary judgment or summary adjudication of issues on his own behalf. The only papers he filed were in opposition to North American’s motions. Nowhere did Rooz ask the trial court to summarily adjudicate any issues on his behalf.
Nevertheless, the law and motion judge’s memorandum decision stated: “Both Summary Adjudication Motion and Summary Judgment Motion are denied. No triable issues of fact remain as to Plaintiffs [Rooz’s] additional facts 18 through 24, inclusive, supported by Plaintiffs declaration and cited references to page 162 of Kapkin[’s] deposition.” (Italics added.) The trial court did not explain why it was ruling in favor of Rooz on these issues when Rooz had not filed his own motion for summary adjudication. 8
The “additional facts” to which the law and motion judge referred are found in Rooz’s separate statement of disputed and undisputed facts in
Rooz contends the trial court prejudicially erred when it “ignored” the earlier summary adjudication of issues. We reject this contention for several reasons.
First, Rooz has not cited to a single instance in which he raised this issue at trial. He correctly points out that, under the former version of Code of Civil Procedure section 437c, the courts held that where “summary adjudication of issues is granted by one judge and the remaining issues are tried by a different judge, the second judge is bound by the first judge’s determination, and the losing party may not seek relitigation of the decided issues before the second judge. (See
Conway
v.
Bughouse, Inc.
(1980)
Second, although we have concluded Rooz may not raise this issue in any event, we note in passing that even if the trial court had faithfully adhered to the law and motion judge’s alleged summary adjudication of issues, it would not have made аny difference to the ultimate result, as the decision in favor of North American was based on the validity of the hold harmless agreement, not on any lack of negligence or duty on North American’s part.
Finally, the law and motion judge had no authority under the new statute to find that “[n]o triable issues of fact remain” with respect to the delineated issues of fact. The new statute states “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).) Here, the law and motion judge did not purport to “completely dispose of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” Instead, he at most found there was no triable issue with respect to certain issues of fact. The court did not purport to draw a legal conclusion from those facts which conclusively disposed of a cause of action or an issue of duty. Thus, his findings were not authorized
In sum, for the reasons discussed abovе, we reject Rooz’s contention the trial court improperly ignored factual findings that had been summarily adjudicated before trial.
E. Damages.
Finally, Rooz contends the trial court erred when it calculated his damages as $114,834.99. He contends the trial court should have awarded damages for the full value of the new deed of trust: $515,000. Since we have concluded respondent North American is not liable to Rooz, this issue is moot as to that respondent. Consequently, we address the damages issue only as it pertains to respondent Kimmel. 12
The trial court calculated damages using the formula from
Stephans
v.
Herman
(1964)
1) The Trial Court Erred by Basing Damages on the Value of the Security in the Berkeley Property.
The trial court calculated damages as follows. It found the fair market value of the Berkeley property at the time of the loss was $1.9 million. The property was subject to a first and second deed of trust totaling $1,521,000, and to Rooz’s third deed of trust for $445,000. Thus, the actual value of Rooz’s security in his third deed of trust on the Berkeley property was only $379,000 ($1,900,000 - $1,521,000 = $379,000). Consequently, the trial court calculated Rooz’s damages for the loss of his security in the Berkeley property at $379,000. Because the $445,000 note paid no interest and was due in 10 years, the trial court discounted the $379,000 in damages to a present value of $114,834.99, using a 12 percent rate of return.
Rooz contends the court should have based his damages on the value of the new $515,000 note and deed of trust and the amount of security he would have had in the Redstone Building if the deed of trust had been recorded in second position. The evidence showed that, at the time Kimmel acquired title to the Redstone Building, it had a fair market value of $2,975,000 and was subject to a $975,000 first deed of trust. Thus, if Kimmel had permitted North American to record the $515,000 deed of trust in second position, the “fair market value of the property securing the [$515,000] promissory note as of the date of the loss of security, less prior liens and taxes” would have been $2 million. Consequently, since the note was over-secured, Rooz’s damages would have been the full amount of the secured promissory note, or $515,000.
We conclude Rooz is correct on this point. Rooz agreed Kimmel could remove the $445,000 deed of trust against the Berkeley property
before
Kimmel acquired title to the Redstone Building. Thus, neither Kimmel nor North American breached a contract or tort duty to Rooz when they recorded the reconveyance of the $445,000 deed of trust against the Berkeley property. The breach came later, when Kimmel refused to permit North American to record the new $515,000 deed of trust in second position on the Redstone Building. It was that breach that led to the impairment of Rooz’s security by moving it from second to fourth position. Presumably, had Rooz been in second position, his $515,000 note would have been fully secured
Consequently, we agree with Rooz that the basis of his damages should have been the full value of the replacement note, or $515,000, since it was the security for that obligation which Kimmel’s breach of contract and negligence impaired.
2) The Trial Court Erred by Reducing the Damages to Present Value.
Finally, Rooz contends the court erred when it reduced the damages to their present value. This claim has merit as well.
As indicated, the court apparently reduced the damages awarded to their present value because the note paid no interest and was not due until the year 2000. The court utilized a 12 percent annual rate of return to calculate present value. 14
The $515,000 note, like the $445,000 note, was due February 6, 2000, and was at 0 percent interest. However, the note and deed of trust were subject to a “due on sale clause” which provided: “If the trustor shall convey or alienate said property or any part thereof or any interest therein or shall be divested of his title in any manner or way, whether voluntary or involuntary any indebtedness . . . irrespective of the maturity date expressed in any note evidencing the same, at the option of the holder hereof and without demand or notice shall become due and payable immediately.” Thus, the $515,000 note became due when the second deed of trust holder foreclosed on the Redstone Building in 1992.
We have not discovered any authority where a court has reduced damages to present value in circumstances similar to those before us. The cases that have awarded damages under the
Stephans
v.
Herman
formula have not reduced damages to present value. (See
Stephans
v.
Herman, supra,
225 Cal.App.2d at pp. 674-675;
Howe
v.
City Title Ins. Co., supra,
255 Cal.App.2d at pp. 87-88.) To the contrary, the court in
Howe
rejected an attempt to reduce the amount of damages below the actual amount due on the note. There, the appellant argued: “
‘The court erred in finding that
Thus, the pertinent authorities indicate the damages should have been for the full amount “due on the note” (here $515,000) without discounting to present value. This is particularly logical in the present case because, by virtue of the “due on sale” clause, the full face amount of the note ($515,000) was due and owing at the time judgment was entered. Thus, this is not a case involving an award of future damages which should be discounted to present value.
(American Bank & Trust Co.
v.
Community Hospital
(1984)
Ill
The amount Rooz is entitled to recover from Kimmel is increased to $515,000. In all other respects, the judgment is affirmed. The parties shall each bear their own costs on appeal.
Phelan, P. J., and Walker, J., concurred.
Appellant’s petition for review by the Supreme Court was denied August 20, 1997.
Notes
The transaction was actually somewhat more complex than wе have presented it, since the parties also agreed to act as partners for the purpose of acquiring the San Mateo property. They agreed to sell the San Mateo property after 10 years, or sooner upon mutual agreement, at which time they would share “50/50” in all profits after Rooz received the first $1,270,000 of the net proceeds of sale.
In fairness to Kimmel, although he had purchased the Redstone Building for only $1.5 million in February 1990, a formal appraisal of the Redstone Building in December 1989 had put its value at $2,975,000. Thus, assuming this appraisal was accurate, there would have been $435,000 in equity in the property even after Weckerle recorded Rooz’s $515,000 deed of trust. We note, however, that this still would not have met the requirement in the exchange agreement that the new property have no more than an 80 percent loan to value ratio after
North American suggests the trial court actually found that it recorded the $515,000 deed of trust in a timely fashion, and thus North American would not have been liable even in the absence of the indemnity agreement. We cannot agree.
In its original informal statement of decision the trial court did not specifically address whether North American had breached an oral agreement with Rooz or had been negligent in handling the recording of the $515,000 deed of trust. Instead, the court went directly to the issue of the indemnity agreement and concluded the agreement “absolves [North American] of liability in this case.” In his request for a formal statement of decision, Rooz specifically asked whether “North American failed to timely record the $515,000 Deed of Trust?” The trial court answered in finding No. 20, “Yes, per the testimony of all involved.” In its request for “Modification/Clarification” of the statement of decision, North American asked that the following language be added to finding No. 20: “[North American] recorded the $515,000 deed of trust against the Redstone property in a timely fashion after the сonflicting instructions from Rooz and Kimmel had been resolved, and [North American] was authorized to record the $515,000 deed of trust.” (Italics added.) North American suggests that when the trial court adopted this modification it in effect overruled its earlier finding North American had failed to timely record the deed of trust for all purposes.
It is difficult to believe this argument is made sincerely. The two findings were not inconsistent. Moreover, taken as a whole, the trial court’s informal statement of decision, formal statement of decision, and modified statement of decision indicate the trial court believed North American would have been liable in negligence but for the indemnity agreement. (See, e.g., finding No. 22 [“The finding regarding North American’s lack of liability to Plaintiff is based on the Indemnity Agreement, not on Mr. Kimmel’s instructions ----”].)
Again, the indemnity and hold harmless agreement provides Rooz will “hold harmless, protect and indemnify [North American] from and against any and all liabilities, losses, damages, expenses and charges . . . .”
“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.] 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.” (Rossmoor,
supra,
The trial court did not make a specific finding whether North American’s negligence was passive or active. However, given the definition quoted above, we believe North American’s negligence is best classified as “active” and will assume so for the purpose of argument.
It has been said that the original rationale for this rule was that an agreement of indemnification against one’s own negligence is not favored and, consequently, courts will not imply an agreement to indemnify an actively negligent indemnitee in the absence of express and implicit language.
(Maryland Casualty, supra,
We do not mean to suggest the indemnity and hold harmless agreement in this case should be used as a model for the title industry. To the contrary, the agreement could be improved by language specifically stating it applies to the title company’s own negligent acts (whether active or passive). (See, e.g.,
Westlye
v.
Look Sports, Inc., supra,
Indeed, the favorable ruling on these issues apparently came as a surprise to Rooz’s counsel. He had prepared a proposed order denying the motion for summary judgment in which he listed 12 issues as to which “a triable controversy exists.” The proposed order did not list any issues in Rooz’s favor as to which counsel claimed there was no triable issue of fact. However, it appears the law and motion judge did not sign the proposed order. Instead, he issued his own memorandum decision in which he gratuitously found “No triable issues of fact remain as to Plaintiff’s [Rooz’s] additional facts 18 through 24, inclusive, supported by Plaintiff’s declaration and cited references to page 162 of Kapkin[’s] deposition.”
The cases we have cited relied on the former version of Code of Civil Procedure section 437c before it was amended in 1990. The 1990 amendments replaced summary adjudication of “issues” with summary adjudication of causes of action, defenses, affirmative defenses, unmeritorious claims for damages as defined in Civil Code section 3294 and lack of an owed duty.
(Pacific Std. Life Ins. Co.
v.
Tower Industries, Inc., supra, 9
Cal.App.4th at p. 1887, fn. 1.) The current statute provides: “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an
In fact, in his request for statement of decision, Rooz asked for specific findings on several of the factual issues that he now claims were conclusively determined by the prior “summary adjudication” of issues.
In light of our multiple reasons for rejecting Rooz’s claim, we will not address the notice and due process issues raised by the law and motion judge’s sua sponte decision to in effect grant a motion for summary adjudication when Rooz had not requested that relief.
Kimmel, who appeared in propria persona at trial, has not filed a brief on appeal. Although we have the discretion to automatically order reversal, treating appellant’s point as well taken
{Berry
v.
Ryan
(1950)
The parties have not cited to any evidence in the record showing what the Redstone Building sold for at foreclosure. However, we note the creditor that actually ended up in second position on the Redstone Building had a $350,000 deed of trust and foreclosed even though there was a $975,000 first against the property. Consequently, it appears there was considerable equity in the property above the first deed of trust.
Rooz’s own expert testified the return on an “80%” loan on the Redstone Building would have been between 12 and 16 percent.