Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC282606, consol. w/ No. BC346942 Teresa Sanchez-Gordon, Judge.
Cozen O’Connor and Huey P. Cotton for Cross-Complainant and Appellant and Plaintiffs and Appellants.
Bonne, Bridges, Mueller, O’Keefe & Nichols, Joel Bruce Douglas; Prindle, Decker & Amaro and Michael L. Amaro, for Cross-Defendants and Respondents and Defendants and Respondents.
COOPER, P. J.
After a court trial, cross-defendants White Consolidated Industries, Inc., and Electrolux Home Products, Inc., doing business as Frigidaire Home Products (collectively Frigidaire or respondents), recovered a favorable judgment on a cross-complaint for express indemnity, brought by appellant Adir Export International, Ltd. (Adir or La Curacao), in a tort action in which all three parties were defendants and had settled with the plaintiffs. Adir appeals, together with its insurers, Atlantic Mutual Insurance Company and General Security Insurance Company, which had sued Frigidaire and its insurer in a consolidated action for subrogation and other causes of action. Appellants contend that the trial court’s findings are not supported by substantial evidence, and that the court erroneously refused to admit into evidence an insurance policy from respondents’ insurer. Respondents request sanctions for a frivolous appeal.
Throughout the proceedings, including the pleadings, Adir was referred to as La Curacao, its trade name.
We affirm the judgment, on Adir’s appeal. We dismiss the appeal with respect to Adir’s insurers, because the record does not reflect a final judgment as to them, resolving all causes of action in their complaint. We deny respondents’ request for sanctions.
FACTS
In 2002, Dinora Campos and her young son and two nephews sued Frigidaire and Adir for negligence and product liability, for injuries suffered when a Frigidaire stove that Campos had acquired from Adir, and which was delivered to her without an anti-tip bracket, tipped over, spilling boiling water onto the three children, who apparently had been playing on the oven door. Adir settled with the plaintiffs for $5 million, and filed a cross-complaint against Frigidaire. Frigidaire’s settlement of the main action, for $15 million, was confirmed as in good faith under Code of Civil Procedure section 877.6 (undesignated section references are to that code). Ultimately Adir amended its cross-complaint to claim only express indemnity, under an alleged oral agreement with Frigidaire. The present trial involved that claim, and also resolved a cause of action for subrogation based on express indemnity, which was asserted in a consolidated action by Adir and its insurers against Frigidaire and its insurer Equinox.
Adir’s first witness at trial was Frigidaire’s district sales representative, Mona Castillo. She identified herself as a sales manager who dealt with Adir. Castillo could not remember specific conversations with Byron Lopez, who had been Adir’s sales supervisor, but she had been involved in Frigidaire’s paying “spiffs,” or sales bonuses, to Adir’s sales staff. Castillo testified that Frigidaire would not cover the obligations of an extended warranty that Adir sold. Before 2003, she never discussed with any vendor Frigidaire’s insuring it for liability, and she had not been trained with respect to indemnification. If a vendor asked Castillo for an insurance or indemnification agreement, she would refer it to her headquarters.
Around 2003, Calvin May of Adir’s purchasing department asked Castillo for a copy of Adir’s dealer agreement. She inquired and found there was none. When she informed May, he asked for an insurance certificate, which she also inquired about, and obtained. Castillo never intended to offer Adir any coverage beyond Frigidaire’s product warranty, and she never said Frigidaire would indemnify Adir, or cover it for anything that happened in connection with a product.
Lopez testified that in the late 1990’s he had been Adir’s sales supervisor for appliances. Before then, General Electric had paid spiffs and had delivered their products speedily, in exchange for which Adir’s salespersons promoted those products above others. As sales supervisor, Lopez acquired the authority to enter into agreements, although not in writing. He testified that he agreed with Castillo “To promote [Frigidaire’s] product more than the product of General Electric and we would have a hundred percent coverage and . . . spiffs.” This was the agreement for indemnification.
According to Lopez, both parties thereafter performed the agreement consistently. If a part were missing from a Frigidaire product sold, Castillo would have it replaced. This would occur both before and after Frigidaire’s warranty expired. Castillo never told Lopez she lacked authority or had to obtain approval for the agreement, which had been reached on the sales floor. Asked what “covered 100 percent” meant, Lopez stated, “That it covered everything.” Lopez testified that a La Curacao extended warranty had been sold for $100 along with the stove in question; it was there in case Castillo’s promise was not kept. The extended warranty also covered the appliance “100 percent.” La Curacao’s salespersons had quotas of these warranties to sell.
Lopez admitted he had never spoken with Castillo about insurance, tort liability, product liability, or injury from a product, as opposed to the product’s missing a part. When they made the agreement, Castillo spoke English, which was Lopez’s second language (although at trial he used an interpreter). He did not ask her to explain what she meant by her terms. Nonetheless, the “100 percent” meant more than a warranty; for example, he testified, if a product malfunctioned and caused damage to property, Frigidaire would repair both. But again, he and Castillo never discussed what the agreement included or excluded.
The final witness, called by Adir, was Juan Ferran Cruz (Ferran), Adir’s senior vice president of operations, in charge of product distribution, home deliveries, and service operations. He was also the person at Adir principally responsible for the Campos and related cases. Ferran joined Adir in 2000, when Lopez was no longer sales supervisor. In January 2003, after the Campos lawsuit had been filed, Ferran and a sales supervisor phoned Castillo and asked for copies of documents like vendor agreements and insurance, which they couldn’t find. Castillo said she would have to get them. Ferran later received an insurance certificate, covering April 2001 to April 2004. When he called Castillo, Ferran was unaware of Lopez’s agreement with Frigidaire. But in 2003 Ferran demanded defense and indemnity from Frigidaire, which provided Adir neither.
On cross-examination, Ferran admitted that before the Campos lawsuit he had been unaware of any insurance, hold harmless, or vendor agreement by Frigidaire for Adir. Moreover, Adir had no agreement with any appliance company covering Adir for its own negligence. He had no expectation of such coverage. The same was true with respect to indemnity by Frigidaire. To Ferran, the insurance certificate was the basis for Adir’s present cause of action. Although in charge of service for Adir, he hadn’t known of Lopez’s agreement until Lopez asserted it, in the midst of the litigation in 2005. When Adir answered interrrogatories requesting witness identification in late 2004, Lopez was the only person at Adir with personal knowledge of the agreement.
During closing argument, Adir’s counsel asked leave to reopen his case, to enter in evidence a passage from the deposition of one Heskett, and Frigidaire’s insurance policy with Equinox, which Heskett had identified. Counsel stated the policy would show coverage of oral agreements by Frigidaire. Frigidaire opposed reopening, on grounds the proposed evidence did not serve to establish the alleged agreement. The court ruled the evidence would not be admitted.
Counsel described Heskett as a risk management specialist for Frigidaire, and as president of Equinox.
In its findings of fact and conclusions of law, the court found that before the accident there existed no agreement by Frigidaire to indemnify or hold harmless Adir, or to provide it a vendor’s endorsement to Frigidaire’s liability policy. In particular, no such agreement arose from communications between Castillo and Lopez. Neither had authority to enter into any insurance or indemnification agreement on behalf of their principals. Those matters were handled by others at each party.
The court also found that there was no mutual assent between Lopez and Castillo regarding Frigidaire covering Adir 100 percent concerning any problem with a Frigidaire appliance. The terms were uncertain and ambiguous, and Lopez’s account of Castillo’s comments suggested discussion of product warranty, not tort liability or indemnification, particularly with respect to cases of Adir’s neglect or culpability. Also inconsistent with the claimed agreement was Adir’s selling its own extended warranty agreements to purchasers of Frigidaire products, including plaintiff Campos’s stove. The court also found that Adir had failed to identify Lopez in discovery as a person knowledgeable of the alleged agreement.
Additionally, the court found, Adir’s litigation representative Ferran admitted he was unaware of any indemnity agreement, vendor’s endorsement, or the like, existing before January 2003. From this finding, the court concluded that Adir had judicially admitted unawareness of an agreement at the time of the accident, and also that Adir would not have expected Frigidaire to indemnify it for its own neglect or wrongdoing. Moreover, in light of the findings and of Castillo’s lack of promissory intent, there was no assent to indemnification, beyond Frigidaire’s product warranty, and there was no breach of any other agreement.
DISCUSSION
Appellants’ primary contention is that the trial court’s findings that there was no agreement by Frigidaire to indemnify Adir for the Campos case are not supported by substantial evidence. Our inquiry, grounded in part in the trial court’s superior ability to determine the credibility of witnesses, is “whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support” the findings. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874; Eisenberg et al., Cal. Practice Guide: Civil Appeals & Writs (Rutter 2007) ¶¶ 8.40-8.41, p. 8-19.)
Appellant relies almost entirely on the testimony of Lopez, the sole witness to the alleged agreement. But the circumstances, setting, and terms of the agreement he described – for Frigidaire to cover Adir “100 percent” for Frigidaire appliances – support the trial court’s determination that this was not, and there was not, an agreement to indemnify Adir for personal injury damages. The promise that Lopez propounded naturally evinced a product warranty, which is what Lopez testified it functionally superseded. Lopez and Castillo agreed at trial that there was no discussion between them of indemnity or product liability. Castillo’s testimony that she was not empowered to enter such an agreement was both credible and uncontradicted.
These facts and factors constitute substantial evidence for the finding that there was no agreement as claimed. That finding is also supported by the tardiness and solitariness of Lopez’s claim that such an agreement had been made. Moreover, the foregoing evidence, coupled with the uncontradicted testimony that the meaning of the 100 percent term was not discussed, also supports the trial court’s finding that there was no meeting of the minds on an indemnity agreement, as opposed to either a warranty-type agreement or none at all.
That Frigidaire paid spiffs to Adir, and Adir promoted Frigidaire’s products, thus does not reflect existence of promise to indemnify.
Appellants claim that the trial court disregarded the existence of ostensible authority of Castillo to enter into an indemnity agreement. The court’s finding that Castillo lacked authority to do so embraces ostensible as well as actual authority. Indeed, Adir did not advance a claim of ostensible authority at trial. Appellants here attempt to imply it from Castillo’s alleged offer and Frigidaire’s payment of spiffs and performance of warranty functions. Besides begging the question of what Castillo offered, this claim clashes with appellant’s own case authority, that negligent action by the principal is required to create and prove ostensible authority. (Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 747.)
Appellants contend that the court should have given the term “cover 100 percent” a broad meaning, and that it thereby would mean “indemnify.” In support of this contention, appellants cite a statute (Civ. Code, § 2778) and several cases that concern the interpretation of established indemnity agreements. These authorities provide no support for appellants’ contention. The court evaluated the “100 percent” term appropriately.
Appellants’ remaining contention is that the court erred in refusing to receive in evidence Frigidaire’s Equinox insurance policy, which allegedly included a vendor’s endorsement that would afford coverage to Adir. The court declined to admit the policy, and the deposition testimony identifying it, after Frigidaire argued that they were not relevant to the point at issue, namely whether there had existed an indemnity agreement between Frigidaire and Adir.
Appellants argue that the existence of insurance coverage of Adir would have been probative of Frigidaire’s intent to “indemnify” Adir. But Frigidaire’s distinction between an oral indemnity agreement and an insurance policy endorsement is sound. Moreover, even if the entirely separate obligations of the insurance policy had some circumstantial bearing on the existence of the oral agreement that Adir alleged, in view of the other evidence there is no reasonable probability that admission of the policy would have affected the court’s determination.
DISPOSITION
The appeal is dismissed with respect to appellants Atlantic Mutual Insurance Company and General Security Insurance Company. The judgment is affirmed. Respondents’ motion for sanctions is denied. Respondents shall recover costs on appeal.
We concur: RUBIN, J. FLIER, J.