Englehart et al. v. St. Anton Building, LP et al.

Filing 25

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 9/8/2016 ORDERING TKEC's 21 Motion to Dismiss SAB's first, second, third, fourth, fifth, and sixth causes of action be, and the same hereby is, GRANTED; and TKEC's m otion to dismiss SAMM's second and third causes of action be, and the same hereby is, GRANTED. SAB and SAMM have 20 days from the date this Order is signed to file a second amended complaint, if they can do so consistent with this Order. (Jackson, T)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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JOHN KERR and KRYSTLE
ENGLEHART,

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Plaintiffs,
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CIV. NO. 2:16-414 WBS AC
MEMORANDUM AND ORDER RE: MOTION
FOR PARTIAL DISMISSAL OF FIRST
AMENDED THIRD-PARTY COMPLAINT

v.
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ST. ANTON BUILDING, LP, a
California limited
partnership; ST. ANTON
MULTIFAMILY MANAGEMENT, INC.;
and DOES 1 through 25,
inclusive,

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Defendants and
Third-Party
Plaintiffs,

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v.
THYSSENKRUPP ELEVATOR
CORPORATION, and ROES 1
through 25, inclusive,
Third-Party
Defendant.

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----oo0oo----

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Plaintiffs John Kerr and Krystle Englehart

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(collectively “plaintiffs”) filed this case against defendants

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St. Anton Building, LP (“SAB”) and St. Anton Multifamily

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Management, Inc. (“SAMM”), alleging physical and emotional

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injuries and civil rights violations from the frequent outage of

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the sole elevator in the apartment building they occupied.

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(Pls.’ Compl. ¶¶ 4, 16, 55, 85, 130 (Docket No. 1).)

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allege that SAB and SAMM, which own and operate the St. Anton

Plaintiffs

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Building (“the Building”), negligently maintained the Building’s

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elevator and failed to provide Kerr, who relies on an electric

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wheelchair, reasonable accommodation and access to his third-

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floor apartment when the elevator was down.

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SAB and SAMM filed a third-party complaint against ThyssenKrupp

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Elevator Corporation (“TKEC”), which furnished, installed, and

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maintained the elevator, seeking indemnification for liability

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arising from the elevator’s outages.

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52 (Docket No. 8).)

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SAMM’s third-party claims against it.

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I.

(Id. ¶¶ 63, 107.)

(Third-Party Compl. ¶¶ 15,

TKEC now moves to partially dismiss SAB and

Factual and Procedural History

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In 2004, TKEC entered into a Subcontract Agreement

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(“Subcontract”) with SAB and SAMM1 to furnish and install an

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The parties dispute whether SAMM, which was not
expressly named in either the Subcontract or Platinum Maintenance
Agreement, has standing to join SAB’s contractual claims against
TKEC. (TKEC’s Mem. of P. & A. in Supp. of Mot. for Partial
Dismissal at 2.) Because both claims are dismissible, the court
need not reach the issue of whether SAMM was an intended
beneficiary of the agreements. For ease of discussion, the court
will assume, without deciding, that SAMM is an intended
beneficiary of all agreements between TKEC and SAB in this case.
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elevator in the Building.

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Subcontract Agreement (“Subcontract”) at 1, 9 (Docket No. 21-

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3).)2

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the elevator TKEC installed was to be the only elevator available

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for tenants to use.

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completed around 2006, at which time SAB and SAMM began leasing

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units in the Building to residents.

The Building was built with no first-floor apartments, and

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(TKEC’s Mot. to Dismiss Ex. A,

(Pls.’ Compl. ¶ 16.)

The Building was

(Id. ¶ 14.)

At that time, Kerr moved into a third-floor apartment
in the Building with his wife, Englehart.

(Id. ¶ 16.)

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Plaintiffs allege that upon moving into the Building and whenever

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a new building manager was assigned, they would contact SAB and

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SAMM to make the new manager aware of Kerr’s disability.

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18.)

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elevator outages, as Kerr is unable to access or leave the third

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floor when the elevator is down.

(Id. ¶

Plaintiffs would also request notice from management of

(Id.)

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In 2012, SAB and SAMM entered into a Platinum

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Maintenance Agreement (“PMA”) with TKEC to have TKEC maintain the

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Building’s elevator.

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Maintenance Agreement (“PMA”) at 2, 5 (Docket No. 21-4).)

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PMA stated that TKEC would service the elevator on a regularly

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(TKEC’s Mot. to Dismiss Ex. B, Platinum

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The

As the exhibits TKEC submitted are either matters of
public record or relied upon in SAB and SAMM’s amended thirdparty complaint, the court takes judicial notice of the exhibits
pursuant to Federal Rule of Evidence 201(b). See Lee v. City of
Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (a court may take
judicial notice of matters of public record); Parrino v. FHP,
Inc., 146 F.3d 699, 706 (9th Cir. 1998) (“[A] district court
ruling on a motion to dismiss may consider a document the
authenticity of which is not contested, and upon which the
plaintiff’s complaint necessarily relies.”), superseded by
statute on other grounds as stated in Abrego Abrego v. The Dow
Chem. Co., 443 F.3d 676, 681–82 (9th Cir. 2006).

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scheduled basis, respond to repair requests, and provide

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replacements for certain worn parts.

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(Id. at 5.)

In 2015, the elevator allegedly experienced frequent

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outages.

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the outages, he was unable to access or leave his apartment for

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hours or days at times.

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occasion, the elevator was down for four days.

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Plaintiffs allege that SAB and SAMM would often fail to notify

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them of outages and repairs, (id. ¶ 21), and would respond to

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their requests for accommodation by telling them to pay for a

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hotel, sleep in the first-floor mailroom, or have the fire

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department carry Kerr up to his apartment, (id. ¶¶ 22, 42, 52).

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Plaintiffs claim that as a result of the elevator outages and SAB

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and SAMM’s refusal to provide Kerr reasonable accommodations,

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Kerr was forced to pay for hotel stays, denied access to his

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medication, forced to miss work, and sent to an emergency room on

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one occasion due to starvation and dehydration.

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42, 44, 57.)

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(Id. ¶¶ 57–58.)

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5, 2016, seeking damages for physical and emotional injuries and

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civil rights violations.3

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(Pls.’ Compl. ¶ 19.)

Kerr alleges that as a result of

(Id. ¶¶ 27, 39, 41–45.)

On one

(Id. ¶ 39.)

(Id. ¶¶ 26, 31,

Plaintiffs moved out of the Building in early 2016.
They filed suit against SAB and SAMM on February

(Id. at 13–26.)

On May 13, 2016, SAB and SAMM filed a third-party
complaint against TKEC, (Third-Party Compl. at 11), and amended

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Englehart seeks damages for “severe mental anguish” and
missed work time due to having to take care of Kerr while he was
shut out of his apartment. (Pls.’ Compl. ¶ 38.) She also seeks
damages for anxiety and resulting physical pain from fear that
the Building’s elevator would shut down while she was in it.
(Id. ¶ 49.)

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their third-party complaint as a matter of course on July 18,

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2016, (First Am. Third-Party Compl. at 11 (Docket No. 19)).

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third-party complaint incorporated the factual allegations set

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forth in plaintiffs’ Complaint, (id. ¶ 7), alleging that TKEC was

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completely liable for any injuries plaintiffs suffered, (id. ¶

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38).

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SAMM cite to provisions in the Subcontract and PMA that purport

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to require TKEC to indemnify them.

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TKEC’s refusal to comply, SAB and SAMM seek a declaratory

The

In support of their amended third-party complaint, SAB and

(Id. ¶¶ 27, 35.)

In light of

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judgment with respect to three claims against TKEC: (1) breach of

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the Subcontract, (2) breach of the PMA, and (3) common law

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equitable indemnity.4

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all claims, save for SAMM’s equitable indemnity claim, pursuant

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to Federal Rule of Civil Procedure 12(b)(6).

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Dismiss, Notice of Dismissal at 1–2 (Docket No. 21).)

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II.

(Id. at 4–6.)

TKEC now moves to dismiss

(TKEC’s Mot. to

Legal Standard

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On a motion to dismiss for failure to state a claim

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under Rule 12(b)(6), the court must accept the allegations in the

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pleadings as true and draw all reasonable inferences in favor of

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In its amended third-party complaint, SAB and SAMM
style their equitable indemnity claim as three separate causes of
action: “equitable indemnity,” “comparative indemnity,” and
“contribution.” (First Am. Third-Party Compl. at 4–6.) Under
California law, the three causes of action are one and the same.
See Am. Motorcycle Assn. v. Superior Court, 20 Cal. 3d 578, 584,
596, 598 (1978) (explaining that “comparative indemnity . . . is
simply an evolutionary development of the common law equitable
indemnity doctrine” wherein concurrent tortfeasors may obtain
partial indemnity from other tortfeasors; referring to
“contribution” as “partial indemnification”). SAB and SAMM do
not appear to dispute this categorization. (See SAB & SAMM’s
Opp’n at i (condensing equitable indemnity, comparative
indemnity, and contribution responses under one subheading).)
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the third-party plaintiff.

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236 (1974), overruled on other grounds by Davis v. Scherer, 468

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U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972).

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survive a motion to dismiss, a plaintiff must plead “only enough

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facts to state a claim to relief that is plausible on its face.”

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Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

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“plausibility standard,” however, “asks for more than a sheer

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possibility that a defendant has acted unlawfully,” and where a

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plaintiff pleads facts that are “merely consistent with a

See Scheuer v. Rhodes, 416 U.S. 232,

To

This

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defendant’s liability,” the facts “stop[] short of the line

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between possibility and plausibility.”

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U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).

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“[D]etermining whether a complaint states a plausible claim is

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context-specific, requiring the reviewing court to draw on its

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experience and common sense.”

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U.S. at 556).

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III. SAB and SAMM’s Indemnity Claims

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A.

Ashcroft v. Iqbal, 556

Id. at 663–64 (citing Twombly, 550

SAB and SAMM Fail to Allege Facts Sufficient to State

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a Plausible Claim for Breach of the Subcontract

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Under California law, “a cause of action for breach of

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contract requires a pleading of (1) the contract, (2) plaintiff’s

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performance or excuse for non-performance, (3) defendant’s

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breach, and (4) damage to plaintiff therefrom.”

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v. Trepte Constr. Co., 14 Cal. App. 3d 887, 913 (2d Dist. 1971).

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Whether a party breached a contract may depend on how the

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contract is interpreted.

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App. 4th 904, 913 (1st Dist. 1998) (“In order to prevail on their

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claim that Bay Cities breached the trucking agreement . . .

Acoustics, Inc.

See, e.g., Morey v. Vannucci, 64 Cal.

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appellants were required to prove by a preponderance of the

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evidence that the term ‘affiliated entities’ in the option

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provision meant only Bay Cities itself or a wholly owned or

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controlled corporate subsidiary . . . .”).

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of a contract is a judicial function.”

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Pictures & Television, 162 Cal. App. 4th 1107, 1125 (2008)

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(citing Pac. Gas & Elec. Co. v. G. W. Thomas Drayage & Rigging

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Co., 69 Cal. 2d 33, 39-40 (1968)), as modified on denial of reh'g

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(June 4, 2008).

“The interpretation

Wolf v. Walt Disney

“When a contract is reduced to writing, the

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intention of the parties is to be ascertained from the writing

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alone, if possible . . . .”

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language of a contract is to govern its interpretation, if the

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language is clear and explicit, and does not involve an

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absurdity.”

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to be construed like any other contract . . . .”

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Paving Co., 128 Cal. App. 3d at 591.

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Cal. Civ. Code § 1639.

Cal. Civ. Code § 1638.

“The

“An indemnity agreement is
Leo F. Piazza

With respect to the Subcontract, the parties have not

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disputed the existence of the agreement, SAB and SAMM’s

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performance or excused non-performance, or damages.

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their disagreement, instead, on whether TKEC breached an

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indemnity clause within the Subcontract.

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Dismiss, Mem. of P. & A. in Supp. of Mot. for Partial Dismissal

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(“TKEC’s Mem. of P. & A.”) at 9–10 (Docket No. 21-1).)

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indemnity clause states, in relevant part:

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They focus

(TKEC’s Mot. to

The

[TKEC] shall indemnify and save harmless [SAB] . . .
from any and all claims, demands, causes of action,
damages, costs, expenses, actual attorneys’ fees,
losses or liability, in law or in equity, of every
kind and nature whatsoever (“Claims”) arising out of
or in connection with [TKEC’s] operations to be
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performed under this Agreement . . . .

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(Subcontract at 5.)

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Subcontract is the furnishing and installing of an elevator in

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the Building.

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cover the complete furnishing and installation of: ONE (1)

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HOLELESS ISIS I PASSENGER ELEVATOR”).)

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indemnity clause, therefore, applies only to claims arising from

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TKEC’s furnishing and installing of the Building’s elevator.

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The “operations” required of TKEC under the

(See id. at 9 (“This Agreement is intended to

The Subcontract’s

Two other provisions narrow TKEC’s indemnity obligation

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under the Subcontract.

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to the Subcontract, states that TKEC’s obligation to indemnify

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“is limited solely to losses to the extent caused by [TKEC’s]

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acts, actions, omissions or neglects and in no way [includes] the

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acts, actions, omissions or neglects of Contractor, Owner,

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Architect, other subcontractors, or others.”

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second, contained within a 2010 class action settlement agreement

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which SAB and SAMM were parties to, (see TKEC’s Mot. to Dismiss

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Ex. D, Haigh Decl. at 2, 4 (Docket No. 21-6)), releases TKEC from

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all liability arising from the design, manufacture, and

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installation of the model of elevator that SAB and SAMM

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purchased, excluding “claims for bodily injury,” (TKEC’s Mot. to

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Dismiss Ex. C, Am. Stipulated and Settlement Agreement

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(“Settlement Agreement”) at 7 (Docket No. 21-5).)

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The first, contained within an amendment

(Id. at 16.)

The

In short, TKEC’s present indemnity obligation under the

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Subcontract extends only to claims “arising out of or in

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connection with” its negligent furnishing or installing of the

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Building’s elevator that results in bodily injury.

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The parties disagree about whether such obligation
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extends to the present situation, where plaintiffs have alleged

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bodily injury arising from the elevator’s frequent non-operation

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eleven years after it was installed.

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4 (“[Plaintiffs’] claims have nothing whatsoever to do with

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TKEC’s 2004 installation work--and everything to do with their

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alleged mistreatment at the hands of SAB/SAMM 11 years later in

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2015.”); SAB & SAMM’s Opp’n at 6 (“ThyssenKrupp’s argument, that

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Plaintiffs must have been injured during the 2004 installation of

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the elevator for the indemnity agreement to apply, unreasonably

(TKEC’s Mem. of P. & A. at

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restricts the term, ‘arising out of or in connection with’ . . .

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.”) (Docket No. 22).)

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To plead negligence under California law, a plaintiff

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must allege facts plausibly showing duty, breach, causation, and

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damages.

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1244, 1250 (2009).

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that the defendant’s act or omission was the “cause in fact” of

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the plaintiff’s injury.

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Court, 61 Cal. 4th 339, 352 (2015), reh’g denied (July 22, 2015).

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California has adopted the “substantial factor” test for cause in

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fact determinations.

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(2003).

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plaintiff’s injury if: (1) the plaintiff would not have suffered

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the injury but for the defendant’s conduct, or (2) the

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defendant’s conduct was one of multiple causes sufficient to

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cause the alleged harm.

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Cal. 4th 953, 969 (1997) (“The substantial factor standard . . .

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subsumes the ‘but for’ test while reaching beyond it to

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satisfactorily address other situations, such as those involving

See Conroy v. Regents of Univ. of Cal., 45 Cal. 4th
The element of causation requires pleading

State Dep’t of State Hosps. v. Superior

Viner v. Sweet, 30 Cal. 4th 1232, 1239

Under that test, a defendant’s conduct is a cause of a

Rutherford v. Owens-Illinois, Inc., 16

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independent or concurrent causes in fact.”), as modified on

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denial of reh’g (Oct. 22, 1997); Mitchell v. Gonzales, 54 Cal. 3d

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1041, 1049 (1991) (stating that the ‘but for’ test “should not be

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used when two causes concur to bring about an event and either

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one of them operating alone could have been sufficient to cause

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the result” (internal quotation marks and citation omitted)).

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The facts in SAB and SAMM’s third-party complaint fail

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to set forth a plausible claim that TKEC’s furnishing and

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installing of the Building’s elevator was a substantial factor in

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causing plaintiffs’ injuries.

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Complaint, SAB and SAMM merely allege that the elevator

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experienced frequent outages in 2015 and was down “approximately

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eighty to one hundred” times over the course of plaintiffs’ ten-

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year stay at the Building.5

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include any facts about how TKEC was negligent when it installed

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the elevator.

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TKEC might have been negligent, whether the elevator was misused,

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or whether the number of outages cited over a ten-year span is

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abnormally high, the court cannot see how such outages are not

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consistent with wear and tear of the elevator through tenant use

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and occasional misuse.

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one-year warranty).)

Incorporating plaintiffs’

(Pls.’ Compl. ¶ 19.)

They do not

Without any allegation of the specifics of how

(Cf. Subcontract at 11 (providing just a

In an apartment building consisting of

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In their amended third-party complaint, SAB and SAMM
state that “in the year 2015 ‘there were approximately eighty to
one hundred elevator outages.’” (First Am. Third-Party Compl. ¶
17.) The court assumes this was a mistake, as plaintiffs allege
that “[d]uring Plaintiffs [sic] time living in the Building,
there were approximately eighty to one hundred elevator outages.”
(Pls.’ Compl. ¶ 19.) SAB and SAMM correct this mistake in their
Opposition. (SAB & SAMM’s Opp’n at 1.)
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sixty-five apartments and one elevator, (First Am. Third-Party

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Compl. ¶ 8; Pls.’ Compl. ¶ 16), tenant use and occasional misuse

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of the elevator is an obvious alternative explanation for the

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elevator’s slowing down a noticeable extent over time.

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Where an obvious alternative explanation exists for the

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elevator’s outages, it cannot be said that SAB and SAMM have pled

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facts sufficient to set forth a plausible claim that TKEC’s

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performance of its Subcontract obligations was a substantial

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cause of the outages.

See Iqbal, 556 U.S. at 682 (where “obvious

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alternative explanation” exists for alleged facts, plaintiff has

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not pled plausible claim).

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state a claim for breach of the Subcontract’s indemnity provision

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via allegations of negligence.

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TKEC’s motion to dismiss SAB and SAMM’s breach of the Subcontract

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claim.

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B.

As such, SAB and SAMM have failed to

Accordingly, the court must grant

SAB and SAMM Fail to Allege Facts Sufficient to State

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a Plausible Claim for Breach of the PMA

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As discussed above, a cause of action for breach of

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contract under California law “requires a pleading of (1) the

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contract, (2) plaintiff’s performance or excuse for non-

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performance, (3) defendant’s breach, and (4) damage to plaintiff

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therefrom.”

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of the Subcontract, the parties do not dispute the existence of

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the PMA or SAB and SAMM’s performance or excused non-performance

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of it.

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breached the PMA’s service and insurance provisions and whether

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the alleged breaches caused damage to SAB and SAMM.

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Mem. of P. & A. at 8.)

Acoustics, 14 Cal. App. 3d at 913.

As in the case

They focus their disagreement, instead, on whether TKEC

(See TKEC’s

Because the issue of breach is
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dispositive, the court need not address the issue of damages.

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With respect to their breach of service claim, SAB and

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SAMM allege that the PMA required TKEC to “service and maintain

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the SAB elevator to increase elevator performance and decrease

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downtime by using a ‘team of engineers and field support experts’

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that were available ‘around the clock.’”

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Compl. ¶ 23.)

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required TKEC to actually increase elevator performance and

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decrease downtime, that claim is based on a misreading of the

(First Am. Third-Party

To the extent SAB and SAMM allege that the PMA

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PMA.

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elevator performance and decrease downtime, our technicians

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utilize the latest industry methods and technology . . . [and]

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are supported around the clock by a team of engineers and field

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support experts.”

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shows that TKEC did not guarantee to actually increase elevator

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performance or decrease downtime.

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repairs would be completed within a certain amount of time.

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Instead, all the provision requires is that TKEC use “the latest

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industry methods and technology” while supporting their

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technicians “around the clock” with experts and engineers.

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and SAMM do not allege that TKEC failed to meet these

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obligations.

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that TKEC breached its service obligations under the PMA.

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The PMA provision in question states: “To help increase

(PMA at 2.)

A plain reading of the provision

Nor did TKEC guarantee that

SAB

Accordingly, SAB and SAMM have not stated a claim

With respect to SAB and SAMM’s claim that TKEC breached

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an indemnity obligation under the PMA, the parties go to great

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lengths to dispute the scope and applicability of the PMA’s

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“Insurance” clause.

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requires SAB and SAMM to seek indemnity from TKEC’s insurer, as

One point of dispute is whether the clause

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opposed to SAB and SAMM directly.

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The clause states, in relevant part:

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5
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7

(See TKEC’s Reply at 7-8.)

ThyssenKrupp Elevator agrees to name St. Anton
Building LP as additional insured. As additional
insured, St. Anton Building LP will be defended and
indemnified for actions arising from ThyssenKrupp
Elevator’s acts, actions omissions or neglects; but
will not be defended or indemnified for St. Anton
Building
LP’s
own
acts,
actions,
omissions
or
neglects.

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(PMA at 7.)

While the clause states that SAB and SAMM “will be

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defended and indemnified for actions arising from [TKEC’s] acts,

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actions omissions or neglects,” it does not expressly state who

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is obligated to defend and indemnify.

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Under California law, “[t]he interpretation of a

13

contract is a judicial function.”

Wolf, 162 Cal. App. 4th at

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1125 (citing Pac. Gas & Elec. Co. v. G. W. Thomas Drayage &

15

Rigging Co., 69 Cal. 2d 33, 39-40 (1968)).

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reduced to writing, the intention of the parties is to be

17

ascertained from the writing alone, if possible . . . .”

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Civ. Code § 1639.

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interpretation, if the language is clear and explicit, and does

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not involve an absurdity.”

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court finds the qualifier “[a]s additional insured[s]” to be

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instructive.

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as those stemming from their status “[a]s additional insured.”

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The immediately preceding statement that “[TKEC] agrees to name

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[SAB] as additional insured” further confirms that the indemnity

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rights being discussed here are those stemming from insured

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status, not direct indemnification.

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point to any other provision of the PMA that requires direct

“When a contract is

Cal.

“The language of a contract is to govern its

Cal. Civ. Code § 1638.

Here, the

That phrase defines SAB and SAMM’s indemnity rights

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Because SAB and SAMM cannot

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indemnity from TKEC, the court must grant TKEC’s motion to

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dismiss SAB and SAMM’s claim that TKEC breached an indemnity

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obligation under the PMA.

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C.

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The PMA Preempts SAB’s Equitable Indemnity Claim
Under California law, indemnity may be either “express

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indemnity,” which refers to an express contract term providing

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for indemnification, or “equitable indemnity,” which embraces

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traditional equitable indemnity and implied contractual

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indemnity.

Prince v. Pac. Gas & Elec. Co., 45 Cal. 4th 1151,

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1157-60 (2009) (reviewing the historical forms of indemnity under

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California law).

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with respect to the duty to indemnify, the extent of that duty

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must be determined from the contract and not by reliance on the

14

independent doctrine of equitable indemnity.”

15

Sanitation, Inc. v. Pylon, Inc., 13 Cal. 3d 622, 628 (1975).

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Where “the parties have expressly contracted

Rossmoor

Here, the parties acknowledge that the PMA’s

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“Insurance” clause governs TKEC’s indemnity duty vis–à–vis SAB.

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(See First Am. Third-Party Compl. ¶ 11; TKEC’s Mem. of P. & A. at

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12.)

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where one party contracts to indemnify another through its

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insurer, that party remains additionally liable under the

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doctrine of equitable indemnity.6

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“Insurance” clause preempts SAB’s equitable indemnity claim and

The court is not aware of a California case holding that

Accordingly, the PMA’s

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6

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A contrary reading would allow SAB to obtain
indemnification twice: once from TKEC via equitable indemnity,
and a second time from TKEC’s insurer via the “Insurance” clause.
Absent express contractual language indicating that was the
intent of the parties, such a reading flies against the purpose,
if not the express terms, of Rossmoor’s holding, and the court is
not aware of any precedent that requires its adoption.
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the court must grant TKEC’s motion to dismiss that claim.

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IV.

Conclusion

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IT IS THEREFORE ORDERED that:
(1)

TKEC’s motion to dismiss SAB’s first, second, third,

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fourth, fifth, and sixth causes of action be, and the

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same hereby is, GRANTED; and

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(2)

TKEC’s motion to dismiss SAMM’s second and third causes

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of action be, and the same hereby is, GRANTED.

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SAB and SAMM have twenty days from the date this Order

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is signed to file a second amended complaint, if they can do so

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consistent with this Order.

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Dated:

September 8, 2016

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