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Prince v. Pacific Gas & Electric Co.

March 19, 2009

EVE PRINCE, CROSS-COMPLAINANT AND APPELLANT,
v.
PACIFIC GAS & ELECTRIC COMPANY, CROSS-DEFENDANT AND RESPONDENT.



Ct.App. 6 H028957 Santa Clara County Super. Ct. No. 1-02-CV-810390. Judge: John F. Herlihy.

The opinion of the court was delivered by: Baxter, J.

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*fn1 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&E's 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 friend's 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 friend's 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 Jackson's 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 court's 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, Jackson's 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 846's enumerated exceptions to immunity. (Jackson, at pp. 1114-1119.) The decision in that action became final in 2002. (Id. at p. 1121.)

Jackson's guardian ad litem subsequently filed a premises liability action against Prince. The complaint alleges that Jackson was "expressly invited" to use Prince's 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 Jackson's injury. Prince seeks indemnity on the ground that PG&E's alleged breach of duty has forced her to defend against Jackson's 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&E's 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&E's contractual obligations under the recorded easement documents, and is not based on any alleged breach of duty owed to Jackson. In the Court of Appeal's 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. Prince's 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, PGE's statutory immunity from suit by Jackson does not preclude Prince's indemnity claim.

We granted PG&E's 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&E's 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).*fn2 (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 Prince's 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 indemnitor's 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 ...


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