Uniroyal Chemical Co. v. American Vanguard Corp.

Appellant Helena filed a cross-complaint against appellant Leffingwell and respondent Amvac, also seeking indemnity, comparative indemnity, and declaratory relief. Helena had filed its answer to plaintiffs’ original complaint on September 27, 1984.

The matter proceeded to a jury trial, and on June 6, 1986, the jury returned its verdict, finding in favor of the plaintiffs and against respondent Amvac and appellant Leffingwell. The jury determined the total amount of damages to be $14,400, but found the plaintiffs were contributorily negligent, and that of the total fault proximately contributing to plaintiffs’ damage, plaintiffs were responsible for 45 percent of such fault. As against appellant Helena, the jury decided plaintiffs were not entitled to judgment.

With respect to the various cross-complaints, the jury determined appellant Leffingwell was entitled to total indemnification from Amvac because respondent Amvac was 100 percent at fault. This finding had other ramifications as well, for it obviously meant that with respect to Amvac’s cross-complaint for indemnification, the jury could not (and did not) determine Amvac was so entitled. With respect to Helena’s cross-complaint for indemnification, the jury did not determine whether or not Helena was due indemnification from Amvac. No finding was made because the jury was instructed that this resolution would be irrelevant if it found the plaintiffs were not entitled to judgment against Helena. As noted earlier, the jury determined plaintiff was not entitled to judgment against Helena.

Judgment reflecting the above verdicts was entered on June 10, 1986.

On June 23, 1986, Leffingwell filed a motion pursuant to section 1021.6 to obtain a reasonable attorney’s fee from Amvac. By minute order dated October 20, 1986, this motion was denied by the trial court. This same minute order also denied a section 1021.6 motion for attorney’s fees which Helena had filed on July 10, 1986.

Both appellants contend the trial judge misinterpreted section 1021.6 in ruling on their respective motions. Appellants also urge that in making its decisions the trial court ruled on questions of law. Respondent insists the trial court resolved questions of fact.

We will determine these matters in favor of appellants, and also discuss the adequacy of the record on appeal.

Section 1021.6 provides: “Upon motion, a court after reviewing the evidence in the principal case may award attorney’s fees to a person who prevails on a claim for implied indemnity if the court finds (a) that the indemnitee through the tort of the indemnitor has been required to act in the protection of the indemnitee’s interest by bringing an action against or defending an action by a third person and (b) if that indemnitor was properly notified of the demand to bring the action or provide the defense and did not avail itself of the opportunity to do so, and (c) that the trier of fact determined that the indemnitee was without fault in the principal case which is the basis for the action in indemnity or that the indemnitee had a final judgment entered in his or her favor granting a summary judgment, a nonsuit, or a directed verdict.” In denying Helena’s motion, the trial court ruled: “Helena Chemical Company’s Motion for Attorney’s Fees from AM-VAC under C.C.P. section 1021.6 is hereby denied. Helena Chemical Co. did not prevail on an implied indemnity claim as required by C.C.P. 1021.6.”

Appellant Helena takes exception to this ruling and proffers various reasons why it did “prevail on a claim for implied indemnity” and why the trial court’s contrary conclusion was erroneous. After a review of the language and intent of section 1021.6, and applicable authorities, the conclusion reached is that appellant Helena’s assignment of error has merit.

A. The Applicable Standard of Review.

Before examining the specific arguments Helena offers in support of its general contention that the trial court erred on the issue of attorney’s fees, it must first be determined what weight this court must give to the lower court’s decision that Helena did not prevail on an implied indemnity claim.

Helena contends the lower court’s conclusion it (Helena) did not prevail on a claim for implied indemnity was the resolution of a question of law, and therefore that resolution is due a de novo review by this court. Amvac counters with the assertion the trial court’s decision was the resolution of a question of fact. Presumably Amvac makes this argument because, if correct, this court would then only have to find some substantial evidence to support the decision.

Appellant Helena is correct. The trial court’s determination Helena did not prevail on a claim for implied indemnity was the resolution of a

It should be noted that when respondent Amvac argues it is a question of fact whether a party prevailed on a claim for implied indemnity, it appears Amvac is misunderstanding what the trial court must determine pursuant to section 1021.6. Simply stated, when the trial court, for section 1021.6 purposes, rules a party did or did not prevail on a claim for implied indemnity (and therefore rules whether the statute is or is not applicable), the trial court is not making the factual determination that the party is or is not entitled to indemnity. It is the trier of fact, here the jury, which determines the factual question of whether the party is entitled to indemnity. The trial court is answering a different question—the legal question of whether the statute is or is not applicable on the ground the party prevailed on a claim for implied indemnity.

Perhaps it is easier to examine this issue in the following manner. A question of law cannot be one where the question is answered by considering conflicting evidence. (Board of Education v. Jack M. (1977) 19 Cal.3d 691 , 698-699, fn. 3 [ 139 Cal.Rptr. 700 , 566 P.2d 602 ].) In the present case, when the trial court ruled appellant Helena did not prevail on a claim for implied indemnity, it was not considering conflicting evidence. It was determining, as a matter of law and based on the jury verdict, the resulting status of Helena under section 1021.6 with respect to indemnification.

B. Helena Prevailed on a Claim For Implied Indemnity Within the Meaning of Section 1021.6.

The sole basis for the trial court’s denial of Helena’s motion was that Helena had not prevailed on a claim for implied indemnity.

Similarly, there was no contention by Amvac in the trial court that Helena did not meet the second prong of the test, that is, that Amvac was properly notified of a demand to provide a defense and declined to avail itself of the opportunity to do so.

Thirdly, there was no contention in the trial court that Helena did not meet the third prong of the test, that is, that the trier of fact determined that Helena was without fault in the principal case which formed the basis for the action in indemnity. In that regard, the jury verdict, insofar as it did not find in favor of the plaintiff and against Helena on the complaint, and insofar as it determined that Amvac was not entitled to indemnification from Helena on Amvac’s indemnity cross-complaint, speaks for itself. Helena could not have been found more “without fault” in the principal action, and there is no doubt that the third prong of the test set forth in section 1021.6 was satisfied.

Respondent Amvac seems to take the position the trial judge examined the entire record and made a factual determination that Helena was simply not entitled to equitable indemnification in any event. The trial judge did not get that far because it only determined Helena had not actually prevailed on an implied indemnity claim. At the hearing on the section 1021.6 motion for attorneys’ fees, the trial court stated: “You did not prevail on a

The court did not go beyond that foundational conclusion on a matter of law. Amvac is in error when it asserts the trial court actually examined the whole factual record and decided as a matter of fact that Helena was not entitled to equitable indemnity. Respondent Amvac does not point to anything in the record which would so indicate.

The only issue remaining is whether it can be said Helena prevailed on a claim for implied indemnity within the meaning of section 1021.6, thus entitling it, at the court’s discretion, to its attorneys’ fees as against Amvac. In its cross-complaint Helena alleged that if it were liable to plaintiff, it would be because of its “secondary, passive or vicarious liability . . . and because of the active or primary liability” of Amvac and/or Leffingwell. Indemnity from both of those cross-defendants on that basis was sought by Helena as well as upon the additional ground of comparable fault principles. Helena did not contend it was entitled to indemnity from either of said cross-defendants on the basis of a contractual relationship. Similarly, Am-vac’s cross-complaint for indemnity against Helena makes no contention of right to indemnity based on contractual relationship.

Where the right to indemnity exists in favor of a retailer of a defective product against the manufacturer who created it, or where the right to indemnity results from the retailer’s being held constructively or vicariously liable for the tort of another, such indemnity is implied. (Angelus Associates Corp. v. Neonex Leisure Products, Inc. (1985) 167 Cal.App.3d 532 , 542 [ 213 Cal.Rptr. 403 ]; E. L. White, Inc. v. City of Huntington Beach (1982) 138 Cal.App.3d 366 , 375-376 [ 187 Cal.Rptr. 879 ].)

In the instant case there is no doubt that Helena and Amvac each sought relief against the other on a claim for implied indemnity.

The real question is whether Helena prevailed on its claim for implied indemnity. The trial court held it did not because the plaintiff did not get a judgment against Helena; consequently, there was no need to prevail or rely on implied indemnity against Amvac.

If this reasoning is correct, then the obvious purpose of section 1021.6 is thwarted if a retailer is so successful before a jury as to get a verdict in its favor on plaintiff’s cause of action. If, on the other hand, plaintiff did get a verdict against the retailer, which in turn prevailed on its cross-complaint

Section 1021.6 sets out the three conditions, as discussed above, which must be met before a prevailing indemnitee may recover attorney’s fees. The last one is that the trier of fact must determine “that the indemnitee was without fault in the principal case which is the basis for the action in indemnity or that the indemnitee had a final judgment entered in his or her favor granting a summary judgment, a nonsuit, or a directed verdict. ” (Italics added.) The emphasized portion was added to the section by amendment in 1982.

Thus we see that the statute itself contemplates one may recover attorney’s fees even though he or she did not actually recover on a cross-complaint for implied indemnity after a favorable judgment in the principal case. The so-called “indemnitee” would not actually prevail on a cross-complaint for implied indemnity, but it would effectively prevail in a case where it had claimed a right to indemnity and was successful on a motion for a directed verdict, for instance. It would be unfair and incongruous to allow attorney’s fees to one who prevailed on a motion for nonsuit or a directed verdict during trial but deny the same relief to one who prevailed to the same extent by reason of a verdict in the usual course of events. In both cases, the defendant is without fault and made a claim for indemnity. We do not believe the Legislature intended such an anomalous result, and courts will not interpret a statute in such a way that the interpretation will frustrate the manifest purposes of the legislation or lead to absurd results. (County of San Diego v. Muniz (1978) 22 Cal.3d 29 , 36 [ 148 Cal.Rptr. 584 , 583 P.2d 109 ].)

By the 1982 amendment to section 1021.6, the Legislature apparently wanted to make it clear that where a faultless defendant did not actually have occasion to prevail on a cross-complaint for indemnity because he prevailed in the underlying action, he was still entitled to ask for attorney’s fees under section 1021.6. In making his claim for attorney’s fees he is claiming as an indemnitee for costs incurred in the principal case where he was found to be without fault. When Helena made its claim for attorney’s fees it was doing so as an indemnitee in an action where it had made such claim from the beginning. It would not have incurred such fees but for the tort of Am vac, which was 100 percent at fault. After a jury verdict in its favor it should be treated no differently than a defendant who has a judgment entered in its favor after motion for summary judgment, nonsuit or directed verdict. In all those events the indemnitee is found to be

It is the duty of the courts, within the framework of the statute at issue, to interpret it so as to make it workable and reasonable. (Kusior v. Silver (1960) 54 Cal.2d 603 , 620 [ 7 Cal.Rptr. 129 , 354 P.2d 657 ]; Clean Air Constituency v. California State Air Resource Bd. (1974) 11 Cal.3d 801 , 813-814 [ 114 Cal.Rptr. 577 , 523 P.2d 617 ].)

Helena claims it should prevail for an additional reason. The term “prevailing party” is typically used by the Legislature in enacting statutes wherein it intends that the successful side shall recover its attorney’s fees regardless of who instituted the legal proceeding. (Stirling v. Agricultural Labor Relations Bd. (1987) 189 Cal.App.3d 1305 , 1311 [ 235 Cal.Rptr. 56 ].) But this is not always true. (Ibid.) However, in Stirling, the court specifically included section 1021.6 within the category of such typical statutes. (Ibid.)

Emphasizing the fact the jury actually returned a special verdict in favor of Helena on Amvac’s cross-complaint for indemnity, Helena contends it prevailed on two indemnity claims. Its position is that although the jury was not asked to return a verdict on Helena’s indemnity claim because of the verdict for Helena on plaintiffs’ complaint in the underlying action, it did actually receive a jury verdict in its favor on a claim for implied indemnity, that is, the claim of Amvac against it. Helena then states, “Thus, there are two ways in which Helena’s motion for attorney’s fees should have been tested for the purpose of determining whether it had prevailed on a claim for implied indemnity.” Helena states it is “noteworthy that Section 1021.6 does not refer to a person who prevails on ‘its’ claim, but rather on ‘a’ claim, further cementing the notion that it is of no consequence which party brought the action.”

This argument is rejected. First, it is a contention which was not presented to the court below. Normally, a theory of the case not asserted in the trial court may not be raised for the first time on appeal. (See Corcoran v. S.F. etc. Retirement System (1952) 114 Cal.App.2d 738 , 745-746 [ 251 P.2d 59 ].) Second, the contention fails on the merits as well. It is an argument which ignores the fact “section 1021.6 read as a whole, clearly applies only to an indemnitee who prevails on a claim against an indemnitor.” (Bear Creek Planning Com. v. Title Ins. & Trust Co. (1985) 164 Cal.App.3d 1227 , 1249 [ 211 Cal.Rptr. 172 ].) Although appellant Helena did expressly prevail on respondent Amvac’s claim for indemnity against it, clearly that was a claim in which respondent Amvac was the alleged ”in

Amvac makes a number of contentions which, if valid, would leave Helena unreimbursed for its attorney’s fees in spite of the fact this case would then end with the precise result section 1021.6 sought to correct after the decision in Davis v. Air Technical Industries, Inc. (1978) 22 Cal.3d 1 [ 148 Cal.Rptr. 419 , 582 P.2d 1010 ]. The Davis decision limited the more equitable result enunciated in Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618 [ 30 Cal.Rptr. 821 , 381 P.2d 645 ]. Chief Justice Bird in Davis held that a retailer in an ordinary products liability case could not recover attorney’s fees where he defended solely against alleged wrongdoing on his own part. (Davis v. Air Technical Industries, Inc., supra, 22 Cal.3d at pp. 4-6.) The legislative history of section 1021.6 shows the only reason for its enactment was to correct the injustice created by the Davis decision. Am-vac’s effort to revive Davis and nullify section 1021.6 on the ground Helena defended only against its own alleged wrongdoing must fail.

Amvac also questions whether total implied equitable indemnity still exists following the Supreme Court’s decision in American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578 [ 146 Cal.Rptr. 182 , 578 P.2d 899 ]. Other cases are cited to show that allegedly only a minority of courts permit it, and then only in special situations not applicable here. Respondent cites Angelus Associates Corp. v. Neonex Leisure Products, Inc., supra, 167 Cal.App.3d 532 , as a special situation wherein the appellate court upheld the right to total implied indemnity against a defendant manufacturer who had settled in good faith. The court then stated in a footnote that it did not reach the nonsettling indemnitee’s contentions concerning section 1021.6 at that time. (Id. at p. 543, fn. 5.) We know of no California case which limits the application of section 1021.6 because of a concern regarding whether total implied indemnity still exists.

II. The Trial Court Erred in Denying Appellant Leffingwell’s Section 1021.6 Motion for Attorney’s Fees.

Like appellant Helena, appellant Leffingwell argues that the lower court erred in denying its section 1021.6 motion for attorney’s fees. Appellant Leffingwell’s assignment of error also has merit but for different reasons.

A. The Applicable Standard of Review.

Our discussion here is much the same as that above with regard to the contentions of Helena. We again reiterate the trial court decided a question

However, as noted previously, section 1021.6 permits a court, upon motion and after reviewing the evidence in the principal case, to award attorney’s fees to a party who prevails on a claim for implied indemnity.

With respect to this appellant’s request for attorney’s fees under section 1021.6, the trial judge ruled: “Leffingwell Chemical Company’s Motion for Attorney’s Fees pursuant to C.C.P. section 1021.6 is hereby denied. The Jury having rendered a verdict against Defendant Leffingwell in favor of Plaintiff Carter in the principal case it is clear that the trier of fact did not determine that Leffingwell was without fault as required by C.C.P. section 1021.6. ”

Appellant Leffingwell argues it is “indisputable” that the propriety of the above ruling is purely a question of law: “The sole question presented for review is whether the trial court incorrectly interpreted California Code of Civil Procedure § 1021.6 as it applies to Leffingwell/Uniroyal’s right to recover its reasonable attorneys’ fees from Amvac. The facts upon which the trial court made its determination with respect to Leffingwell/Uniroyal’s motion for reasonable attorney’s fees, that is, the jury verdict and judgment entered, are undisputed.” On the other hand, respondent Amvac again argues that what is before this court is the review of an answer to a question of fact.

For reasons we have stated with respect to Helena, Leffingwell is correct in arguing the trial court’s resolution was one of a question of law and therefore is due a de novo review by this court.

Again, pursuant to section 1021.6, if the trial court finds that a party who prevailed on a claim for implied indemnity meets the three requirements of that statute, the trial court may exercise its discretion and determine whether or not to award the indemnitee attorney’s fees. In our case, when the lower court found that the trier of fact did not determine appellant Leffingwell to be without fault in the principal action, the lower court was denying the motion for attorney’s fees because it felt one of the prerequisites necessary for exercise of its discretion to award attorney’s fees was simply not present. The court therefore was determining the statute not applicable,

“If the respondent desires to have the clerk copy any portions of the prior record which the appellant has designated for incorporation by reference, respondent shall serve and file a notice designating the portions to be copied. Within 10 days after notification by the clerk of the estimate of the costs of copying, the respondent shall deposit with the clerk the estimated cost; otherwise the portions designated by the respondent shall not be copied.

“The clerk of the court in which the appeal is pending shall, upon request of either party, make arrangements to obtain the record incorporated by reference which may be lodged in another clerk’s office or offices.”

This rule would not seem to provide Amvac with the authority it needs to validate its citations to part of the proceedings below, of which a transcript was not provided the reviewing court by appellants. First, the rule states “appellant’s notice shall designate, by appropriate references, the portions of the prior record to be incorporated by reference . . . .” (Italics added.) Second, even if the rule does extend to a respondent, the rule clearly calls for involvement by the clerk’s office. In the present case, respondent Am-vac’s asserted reliance on this rule is in a footnote in its opening brief. However, it did not notify the clerk so that the clerk could “insert in the subsequent record a list and description of the transcript, papers or records, or parts thereof, to be used, together with specific references to the places in the prior record . . . .” Further, ordinarily if a respondent desires to bring up evidence to justify a finding on appeal, or for some other proper purpose, he may move to augment the record. (Cal. Rules of Court, rule 12(a).)

However, the inquiry is not complete for it is a well-established principle of appellate review that the appellant must affirmatively show error by an adequate record. (See Erikson v. Sullivan (1947) 81 Cal.App.2d 790 , 791 [ 185 P.2d 31 ].) A necessary corollary to this rule would seem to be that a record is inadequate, and appellant defaults, if the appellant predicates error only on the part of the record he provides the trial court, but ignores or does not present to the appellate court portions of the proceedings below which may provide grounds upon which the decision of the trial court could be affirmed. Perhaps the purpose behind Amvac’s citation to the absent trial transcript is to illustrate there are grounds present upon which the order of the superior court could be affirmed.

In any event, the conclusion reached is that the record before the court is adequate and appellant does not default. Although it appears all the citations made by Amvac to the trial transcript are to support the claim the jury determined Leffingwell was not “without fault” in the principal case, those references focus on that finding of the jury in its capacity as the trier of fact in the principal action, not in its capacity as the trier of fact in the indemnity action, which, as learned from Bear Creek, supra, 164 Cal.App.3d 1227 , is what must be focused upon for purposes of the section 1021.6, subdivision (c) requirement.

As discussed previously, the jury determined appellant Leffingwell was without fault in the principal case because it not only ruled Leffingwell was due total indemnity from Amvac, but specifically found Amvac to be 100 percent at fault. Since none of respondent’s extra record citations provides possible support for the trial court’s contrary conclusion as to what the jury determined in the indemnity action, the record before this court would appear to be adequate.

The trial court’s orders denying the section 1021.6 motion of each appellant for attorney’s fees are reversed. The matters are remanded to the trial court with directions to exercise its discretion as to whether either or both appellants are entitled to attorneys’ fees incurred.

Martin, Acting P. J., and Ballantyne, J., concurred.