Stonegate Homeowners Ass'n v. Staben

50 Cal.Rptr.3d 709

144 Cal.App.4th 740

The STONEGATE HOMEOWNERS ASSOCIATION, Plaintiff and Appellant, v. T.A. STABEN, Defendant and Respondent;

R & R Palacios Construction, Inc., Movant and Appellant.

R & R Palacios Construction, Inc., Cross-complainant and Appellant, v. T.A. Staben, Cross-defendant and Respondent.

No. B178286.

No. B179492.

No. B182069.

Court of Appeal, Second District, Division 2.

November 7, 2006.

Robertson & Vick, Jonathan S. Vick and Robert Nation, Calabasas, for Plaintiff and Appellant.

Horvitz & Levy, Curt Cutting and Daniel J. Gonzalez, Encino; Bremer Whyte Brown & O'Meara, Matthew J. Eschenburg, Keith G. Bremer and Raymond Meyer, Jr., Newport Beach, for Movant and Appellant and for Cross-complainant and Appellant.

Sabaitis O'Callaghan, Frank T. Sabaitis, Los Angeles, and Louis R. Chao for Defendant and Respondent and for Cross-defendant and Respondent.

DOI TODD, J.

In this construction defect case, the general contractor hired a subcontractor to waterproof retaining walls and install back drains in a large residential development. After discovering seepage and drainage problems, the homeowners association sued the general contractor and the subcontractor for negligence. During a jury trial, the subcontractor's motion for nonsuit was granted and judgment was entered in its favor. On appeal, the homeowners association and the general contractor contend that the trial court erroneously precluded expert testimony on the subcontractor's standard of care and erred in granting nonsuit. We agree and reverse the judgment in favor of the subcontractor. We also reverse the summary judgment granted in favor of the subcontractor on the general contractor's cross-complaint for indemnity because we find there are triable issues of material fact as to whether the subcontractor was negligent. In light of our rulings, the costs awarded to the subcontractor must also be set aside.

FACTUAL AND PROCEDURAL BACKGROUND

This action arises out of the construction of a 238-home residential development in the West Hills section of Los Angeles (the Stonegate project). The developer entered into a written contract with appellant R & R Palacios Construction, Inc. (Palacios) for construction of retaining walls. Palacios, by oral agreement, subcontracted the waterproofing and drainage work on the retaining walls to respondent T.A. Staben (Staben), a company with which Palacios had previously worked.

At trial, Ron Palacios testified that he told Tom Staben to "waterproof [the walls] with Thoroseal," install four-inch subsurface drain lines, backfill the walls with sand and lay "v-ditches." Mr. Palacios testified that he did not know how to apply Thoroseal and that he told Mr. Staben to apply it according to the manufacturer's specifications. He later testified that he never had a conversation with Mr. Staben about how the Thoroseal should be applied. He also testified that he did not tell Mr. Staben how to install the drains. Mr. Palacios further testified: "I don't tell him [Mr. Staben] how to do his job," explaining that Mr. Staben was a "professional."

Mr. Staben testified that he was not given any specifications as to how to apply the Thoroseal to the walls at the Stonegate project and that he was only told to apply it "the same way" he had at the "Moorpark project," which involved the same developer. But Mr. Palacios testified he had not worked on the Moorpark project and that he was unaware of how Staben did the work on the Moorpark project.

In late 1989, Staben completed the waterproofing and drainage installation on the walls Palacios built at the Stonegate project. Palacios paid Staben for its work and did not have any problems with the work. After the work was completed, homeowners in the development began to notice wet soil or boggy conditions in their yards together with dampness on the downhill side of the retaining walls and a white powdery substance on the walls called "efflorescence." In 1999, appellant The Stonegate Homeowners Association (Stonegate) filed suit against the developer and others for negligence, strict liability and implied warranty, alleging that the retaining walls had been defectively waterproofed and drained. Stonegate later substituted Palacios and Staben in place of fictitiously-named defendants. The trial court dismissed the strict liability and warranty claims, leaving only the negligence cause of action to be tried. Palacios cross-complained against Staben for indemnity, contribution and declaratory relief.

Stonegate eventually settled or disposed of its claims against all defendants except Staben. Palacios entered into a sliding scale or "Mary Carter" settlement agreement with Stonegate, whereby Palacios guaranteed a global payment of $3.3 million that would be reduced by the amount recovered by Stonegate from nonsettling parties through settlement or judgment. Prior to trial, Stonegate dismissed Palacios as a defendant, and the court severed Palacios's indemnity cross-complaint. Trial proceeded only against Staben on Stonegate's claim for negligence.

During trial, Stonegate attempted to present expert witness testimony on the standard of care in applying Thoroseal and in installing a subsurface back drain and that Staben's work fell below those standards. The trial court precluded the testimony, ruling that the relevant issue was not the standard of care, but the oral contract between Palacios and Staben and what Staben was told to do under that agreement. The court deemed Palacios to be the "gatekeeper" and stated that Palacios should be responsible for any defects.

At the close of Stonegate's evidence, Staben orally moved for nonsuit on the grounds that "there is no conflict in the evidence that Mr. Staben's duty was to do what Mr. Palacios asked him to do pursuant to what he had done for the same ... developer in the project called Moorpark" and that Staben did not owe a duty to Stonegate. The trial court granted the motion for nonsuit, stating: "The court's basis for the nonsuit is that there was a lack of any testimony by the plaintiff as to the specific duties the defendant had regarding his oral contract with Palacios." The court further stated: "The bottom line of the situation is that the plaintiff just did not present any evidence of facts with regard to the contract between Palacios and Staben to raise any duty or obligation for Staben to perform other than he did." The court then entered judgment in favor of Staben. Both Stonegate and Palacios filed motions for a new trial, which the court denied. Stonegate and Palacios have separately appealed from the judgment in favor of Staben. Stonegate also appeals from the trial court's award of costs to Staben.

Following entry of judgment in its favor, Staben moved for summary judgment on Palacios's severed cross-complaint for indemnity, arguing that because Staben fulfilled its obligations under the oral agreement with Palacios, the requisite predicate tort to maintain an action for equitable indemnity was absent. The trial court agreed, granting the motion and entering summary judgment in favor of Staben. The court then awarded costs to Staben in the amount of $78,937.52-the same amount the court had awarded against Stonegate. Palacios appeals from both the summary judgment on its cross-complaint and the award of costs. Stonegate's and Palacios's appeals have been consolidated.

DISCUSSION

I. THE NONSUIT MOTION

Stonegate and Palacios contend the trial court erred in granting the nonsuit because expert testimony on Staben's standard of care should have been admitted.¹

A. Standard of Review

"A motion for nonsuit allows a defendant to test the sufficiency of the plaintiffs evidence before presenting his or her case. Because a successful nonsuit motion precludes submission of plaintiffs case to the jury, courts grant motions for nonsuit only under very limited circumstances." (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830, 838, 206 Cal.Rptr. 136, 686 P.2d 656.) "A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his favor. [Citation.] `In determining whether plaintiffs evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give "to the plaintiff[`s] evidence all the value to which it is legally entitled, ... indulging every legitimate inference which may be drawn from the evidence in plaintiff['s] favor.'" [Citation.] A mere `scintilla of evidence' does not create a conflict for the jury's resolution; `there must be substantial evidence to create the necessary conflict.' [Citation.]" (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291, 253 Cal.Rptr. 97, 763 P.2d 948.)

In reviewing a grant of nonsuit, we are "guided by the same rule requiring evaluation of the evidence in the light most favorable to the plaintiff." (Carson v. Facilities Development Co., supra, 36 Cal.3d at p. 839, 206 Cal.Rptr. 136, 686 P.2d 656; Pinero v. Specialty Restaurants Corp. (2005) 130 Cal.App.4th 635, 639, 30 Cal. Rptr.3d 348.) "We will not sustain the judgment `"unless interpreting the evidence most favorably to plaintiffs case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law."' [Citations.]" (Nally v. Grace Community Church, supra, 47 Cal.3d at p. 291, 253 Cal.Rptr. 97, 763 P.2d 948.) "Although a judgment of nonsuit must not be reversed if plaintiffs proof raises nothing more than speculation, suspicion, or conjecture, reversal is warranted if there is `some substance to plaintiffs evidence upon which reasonable minds could differ....'" (Carson v. Facilities Development Co., ...