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Horvitz & Levy consulted on a successful summary judgment motion in the trial court, then successfully defended the judgment on appeal.

Client ThyssenKrupp Elevator Corporation (TKE) and Catalina Media Development, LLC (Catalina) were parties to a service agreement, under which TKE maintained the elevators in a building owned by Catalina and managed by The Worthe Real Estate Group, Inc. (Worthe). The agreement contained an indemnification provision requiring TKE to defend and indemnify Catalina and Worthe in any action arising from TKE’s work. Importantly, the provision also included the following “apportionment clause”:  “Notwithstanding anything to the contrary herein, . . .  any claim involving more than one party shall be handled so each party is responsible and liable for its share of the damages (and defense costs associated therewith) in proportion to its share of acts, actions, omissions or negligence.”

A plaintiff sued TKE, Catalina, and Worthe claiming an injury caused by the building’s elevator. Catalina and Worthe filed a cross-complaint against TKE alleging TKE had breached the service agreement by failing to fund Catalina and Worthe’s defense against the plaintiff’s lawsuit. The trial court summarily adjudicated that TKE had an immediate duty to defend Catalina and Worthe. Nevertheless, TKE did not immediately assume their defense.  The personal injury action later settled with no admission of liability by any party.  

Horvitz & Levy was retained to consult with TKE on its motion for summary judgment on the cross-complaint. TKE relied on the apportionment clause and presented evidence showing that it was not negligent and could not have been liable in the personal injury action. In response, Catalina and Worthe did not raise a triable issue of fact on the point. The court granted summary judgment, ruling that under the apportionment clause, since TKE could not be liable to the underlying plaintiff, it was not liable for any of Catalina and Worthe’s defense costs.

Catalina and Worthe filed a combined motion for new trial and motion to vacate the judgment, arguing among other things that the disentitlement doctrine should have barred TKE from seeking summary judgment because it never complied with the court’s interim order finding an immediate duty to defend. The trial court denied the motion, ruling that Catalina and Worthe waived the disentitlement argument by not raising it in opposition to summary judgment and that, in any event, the argument lacked merit because the interim order did not direct TKE to take any action.

Catalina and Worthe appealed from the judgment and order denying their postjudgment motion. Horvitz & Levy represented TKE on appeal. The Court of Appeal affirmed, agreeing with our interpretation of the apportionment clause and agreeing that because it was undisputed TKE could not be liable to the underlying plaintiff, TKE was not responsible for Catalina and Worthe’s defense costs.