Procedural Posture

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Appellant, an engineering consulting firm, challenged orders of the Superior Court of Los Angeles County, California, which dismissed its cross-complaint for indemnity and declaratory relief against respondent general contractor, and which granted the general contractor’s motion for attorney fees, in an action brought against the firm by a city that arose from a roadway construction project.

Nakase Law Firm explains unjust enrichment California

Overview

The firm argued that a settlement agreement between the general contractor, on the one hand, and the city and the firm, on the other hand, expressly excluded claims related to latent defects, pursuant to Code Civ. Proc., §§ 877 and 877.6. The settlement agreement specifically provided that it would not affect claims that might exist between the city and the firm. The court held that the firm’s claims against the general contractor were based on a theory of latent defects expressly excepted from the settlement agreement. The firm’s liability to the city was also not solely based on breach of contract. The city alleged and tried both breach of contract and professional negligence theories against the firm. The jury returned a general verdict, which had to be construed as a finding in the city’s favor on all theories supported by substantial evidence. The firm sought indemnity from the general contractor, not for breach of contract, but because the general contractor allegedly performed below the applicable standard of care by providing defective materials and performing its work in a defective manner. That theory was sufficient to support a claim for comparative equitable indemnity.

Outcome

The court reversed the trial court’s orders as to the dismissal of the firm’s cross-complaint against the general contractor and the award of attorney fees to the general contractor.