CACI 3801 Implied Contractual Indemnity

California Civil Jury Instructions CACI

3801 Implied Contractual Indemnity

[Name of indemnitee] claims that [he/she/nonbinary pronoun] [is/was/may be] required to pay [describe liability, e.g., “a court judgment in favor of plaintiff John Jones”] because [name of indemnitor] [failed to use reasonable care in performing work under an agreement with [name of indemnitee]/[specify other basis of responsibility]]. In order for [name of indemnitee] to recover from [name of indemnitor], [name of indemnitee] must prove both of the following:

1.That [name of indemnitor] [failed to use reasonable care in [performing the work/[describe work or services, e.g., testing the soil]] under an agreement with [name of indemnitee]/[specify other basis of responsibility]]; and

2.That [name of indemnitor]’s conduct was a substantial factor in causing [name of plaintiff]’s harm.

[[Name of indemnitor] claims that [[name of indemnitee] [and] [insert identification of others]] contributed as [a] substantial factor[s] in causing [name of plaintiff]’s harm. To succeed, [name of indemnitor] must prove both of the following:

1.That [[name of indemnitee] [and] [insert identification of others]] [was/were] [negligent/[specify other basis of responsibility]]; and

2.That [[name of indemnitee] [and] [insert identification of others]] contributed as [a] substantial factor[s] in causing [name of plaintiff]’s harm.

You will be asked to determine the percentages of responsibility of [name of indemnitor][,/ and] [[name of indemnitee][, and] all other persons responsible] for [name of plaintiff]’s harm.]

Directions for Use

The party identifications in this instruction assume a cross-complaint between indemnitor and indemnitee defendants. In a direct action by the indemnitee against the indemnitor, “name of plaintiff” will refer to the person to whom the indemnitee has incurred liability.

Implied contractual indemnity may arise for reasons other than the indemnitor’s negligent performance under the contract. If the basis of the claim is other than negligence, specify the conduct involved. (See Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937, 974 [56 Cal.Rptr.3d 177] [breach of warranty].)

Read the last bracketed portion if the indemnitor claims that the indemnitor was not the sole cause of the indemnitee’s liability or loss. Select options depending on whether the indemnitor alleges contributory conduct of the indemnitee, of others, or of both. Element 1 will have to be modified if there are different contributing acts alleged against the indemnitee and others; for example, if the indemnitee is alleged to have been negligent and another party is alleged to be strictly liable.

A special finding that an agreement existed may create a need for instructions, but it is a question of law whether an agreement implies a duty to indemnify. This instruction should be given only in cases in which the court has determined that the alleged indemnitor and the indemnitee have “a joint legal obligation to the injured party.” (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1160 [90 Cal.Rptr.3d 732, 202 P.3d 1115].)

Sources and Authority

“In general, indemnity refers to ‘the obligation resting on one party to make good a loss or damage another party has incurred.’ Historically, the obligation of indemnity took three forms: (1) indemnity expressly provided for by contract (express indemnity); (2) indemnity implied from a contract not specifically mentioning indemnity (implied contractual indemnity); and (3) indemnity arising from the equities of particular circumstances (traditional equitable indemnity). [¶] Although the foregoing categories of indemnity were once regarded as distinct, we now recognize there are only two basic types of indemnity: express indemnity and equitable indemnity. Though not extinguished, implied contractual indemnity is now viewed simply as ‘a form of equitable indemnity.’ ” (Prince, supra, 45 Cal.4th at p. 1157, internal citations omitted.)

“The right to implied contractual indemnity is predicated upon the indemnitor’s breach of contract, ‘the rationale … being that a contract under which the indemnitor undertook to do work or perform services necessarily implied an obligation to do the work involved in a proper manner and to discharge foreseeable damages resulting from improper performance absent any participation by the indemnitee in the wrongful act precluding recovery.’ … ‘An action for implied contractual indemnity is not a claim for contribution from a joint tortfeasor; it is not founded upon a tort or upon any duty which the indemnitor owes to the injured third party. It is grounded upon the indemnitor’s breach of duty owing to the indemnitee to properly perform its contractual duties.’ ” (West v. Superior Court (1994) 27 Cal.App.4th 1625, 1633 [34 Cal.Rptr.2d 409], internal citations omitted, original italics.)

“[A]n implied contractual indemnity claim, like a traditional equitable indemnity claim, is subject to the American Motorcycle rule that a party’s liability for equitable indemnity is based on its proportional share of responsibility for the damages to the injured party.” (Prince, supra, 45 Cal.4th at p. 1165, original italics.)

“[O]ur recognition that ‘a claim for implied contractual indemnity is a form of equitable indemnity subject to the rules governing equitable indemnity claims’ corrects any misimpression that joint liability is not a component.” (Prince, supra, 45 Cal.4th at p. 1166, internal citation omitted.)

“[U]nder [Code of Civil Procedure] section 877.6, subsection (c), … an [implied contractual] indemnity claim, like other equitable indemnity claims, may not be pursued against a party who has entered into a good faith settlement.” (Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1031 [269 Cal.Rptr. 720, 791 P.2d 290].)

“We conclude the trial court erred in denying [the indemnitee’s] implied contractual indemnity based on [indemnitee’s] failure to prove [the indemnitor’s] breach of warranty was the product of [indemnitor’s] failure to use reasonable care in performing its contractual duties. [Indemnitee] does not need to prove a negligent breach of contract to be entitled to implied contractual indemnity.” (Garlock Sealing Technologies, supra, 148 Cal.App.4th at p. 974, internal citations omitted.)

Secondary Sources

5 Witkin, Summary of California Law (11th ed. 2017) Torts, §§ 224, 229
Haning et al., California Practice Guide: Personal Injury, Ch. 4-D, Techniques Where Settlement Not Forthcoming, ¶ 4:784 (The Rutter Group)
5 Levy et al., California Torts, Ch. 74, Resolving Multiparty Tort Litigation, § 74.03[6] (Matthew Bender)
25 California Forms of Pleading and Practice, Ch. 300, Contribution and Indemnity, § 300.61[5] (Matthew Bender)
11 California Points and Authorities, Ch. 115, Indemnity and Contribution, § 115.91[3][a] (Matthew Bender)
California Civil Practice: Torts § 4:14 (Thomson Reuters)