DAVIS v. AIR TECHNICAL INDUSTRIES INC

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Court of Appeal, Second District, Division 4, California.

Bruce G. DAVIS, dba Davis Material Handling Company, Cross-Complainant and Respondent, v. AIR TECHNICAL INDUSTRIES, INC., Cross-Defendant and Appellant.

Civ. 49445.

Decided: March 02, 1977

Parker, Standbury, McGee & Babcock and Craig Combs, Los Angeles, for cross-defendant and appellant. Keltner & Schreiber, Inc., Donald H. Keltner and Edwin C. Schreiber, Beverly Hills, for cross-complainant and respondent.

Cross-defendant, Air Technical Industries, Inc. (hereinafter ‘Technical’) appeals from a judgment against it on a cross-complaint.

The plaintiff, Akira Nagatsuka, filed an action for personal injuries sustained in June 1973, when said plaintiff was hurt by a portable elevator he was using. The elevator was manufactured by Technical and was sold to plaintiff by Davis Material Handling Company (hereinafter ‘Davis Material’). There was undisputed evidence that Davis' attorneys telephoned Technical's attorneys and learned that they would not defend Davis in the lawsuit filed by Nagatsuka. Davis Material cross-complained against Technical for indemnity and it is that judgment from which Technical appeals, complaining only that the trial court erred in awarding attorneys' fees to cross-complainant Davis Material. The amount of the award of attorneys' fees is not here argued. Plaintiff received a judgment of $7,516 from the jury against both Davis Material and Technical. There was evidence that $20,507.77 was charged to Davis Material for costs incurred by the attorneys and for attorneys' fees.

Generally, in the absence of a statute or agreement, each party is obliged to pay its own attorney. (Code Civ.Proc. § 1021.) Here, cross-complainant's claim for indemnity was based upon equitable considerations and not upon a contract.

The cross-complaint was tried without a jury. The trial court was not asked to make findings, but stated: ‘THE COURT: The Court finds that there's no negligence1 on the part of the vendor. ¶ The Court is further of the opinion, and so rules, that the cross-complainant is entitled to indemnification from the cross-defendant. ¶ The Court finds further that attorneys' fees are appropriate in this matter.’

Both litigants cite Prentice v. North Amer. Title Guar. Corp., 59 Cal.2d 618, 620, 30 Cal.Rptr. 821, 823, 381 P.2d 645, 647 (1963). Respondent quotes to us from that case as follows: ‘General rule: In the absence of some special agreement, statutory provision, or exceptional circumstances, attorney's fees are to be paid by the party employing the attorney. [Citations.] ¶ Exception: A person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney's fees, and other expenditures thereby suffered or incurred. [Citations.]’ Appellant distinguishes that case on the same basis as it was distinguished in Trails Trucking, Inc. v. Bendix-Westinghouse etc. Air Brake Co., 32 Cal.App.3d 519, 108 Cal.Rptr. 30 (1973). There, the Court of Appeal, quoting the term ‘exceptional circumstances,’ stated that (p. 523, 108 Cal.Rptr. p. 33): ‘There is a superficial similarity between the case at bench and Prentice. This court is unconvinced that it reaches the extent of ‘an exceptional circumstance’ adequate to take our case out of the general rule and constitute an ‘exception.” The Trails court pointed out that, at first, the basic plaintiff (Crews) had not sued Bendix-Westinghouse but had sued Trails, only, and determined that there were no ‘exceptional circumstances.’

The parties also mention Raynolds v. Volkswagenwerk Aktiengesellschaft, 275 Cal.App.2d 997, 80 Cal.Rptr. 610 (1969). However, in that case, as the parties have indicated, a jury verdict was in favor of all defendants for which reason there was no right of implied indemnity between two of the defendants.

We rely upon the authorities stated hereunder and Isthmian Lines, Inc. v. Schirmer Stevedoring Co., 255 Cal.App.2d 607, 63 Cal.Rptr. 458 (1967).

The ‘exception’ above quoted from Prentice, supra, 59 Cal.2d 618, 30 Cal.Rptr. 821, 381 P.2d 645, is bolstered by 15 Am.Jur., p. 552 wherein it is said (‘Damages' § 144): ‘In actions of indemnity, brought where the duty to indemnify is either implied by law or arises under a contract, reasonable attorneys' fees incurred in resisting the claim indemnified against may be recovered as part of the damages and expenses.’ The same source also states (41 Am.Jur.2d 726, ‘Indemnity’ § 36): ‘As a general rule, and unless the indemnity contract provides otherwise, an indemnitee is entitled to recover, as part of the damages, reasonable attorneys' fees, although there is some authority to the contrary.’ The ‘authority to the contrary’ cited is a single North Carolina case. However, that case (Queen City Coach Co. v. Lumberton Coach Co., 1948, 229 N.C. 534, 50 S.E.2d 288) had to do with interpretation of the indemnity clause of a contract and not, as here, with an implied agreement.

The judgment is affirmed.

FOOTNOTES

1.  Nagatsuka's complaint initially stated causes of action for (1) negligence, (2) breach of warranty and (3) strict liability. However, after the evidence was in Nagatsuka's attorney dismissed the causes of action for negligence and breach of warranty, leaving only the issue of strict liability for the jury to determine.

DUNN, Associate Justice.

FILES, P. J., and JEFFERSON, J., concur.