BILL NUMBER: SB 138	CHAPTERED
	BILL TEXT

	CHAPTER  32
	FILED WITH SECRETARY OF STATE  JULY 6, 2007
	APPROVED BY GOVERNOR  JULY 6, 2007
	PASSED THE SENATE  MARCH 19, 2007
	PASSED THE ASSEMBLY  JUNE 25, 2007

INTRODUCED BY   Senator Calderon

                        JANUARY 25, 2007

   An act to amend Section 2782 of the Civil Code, relating to
construction contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 138, Calderon. Construction contracts: indemnity.
   Existing law provides that, except as specified, all agreements
affecting any residential construction contract and amendment to such
a contract entered into after January 1, 2006, that purport to
indemnify the builder by a subcontractor against liability for claims
of construction defects or other injury to property arising from,
pertaining to, or relating to the negligence of the builder or the
builder's other agents, servants, or independent contractors who are
directly responsible to the builder, or for defects in design
furnished by those persons, or for claims that are unrelated to the
scope of the work in the agreement, are unenforceable.
   This bill would provide that, except as specified, all agreements
affecting any residential construction contract and amendments to
such a contract entered into after January 1, 2008, that purport to
indemnify the general contractor or contractor not affiliated with
the builder by a subcontractor against liability for claims of
construction defects or other injury to property arising from,
pertaining to, or relating to the negligence of the nonaffiliated
general contractor or nonaffiliated contractor or their other agents,
servants, or independent contractors who are directly responsible to
the nonaffiliated general contractor or nonaffiliated contractor, or
for defects in design furnished by those persons, or for claims that
are unrelated to the scope of the work in the agreement, are
unenforceable.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2782 of the Civil Code is amended to read:
   2782.  (a) Except as provided in Sections 2782.1, 2782.2, 2782.5,
and 2782.6, provisions, clauses, covenants, or agreements contained
in, collateral to, or affecting any construction contract and that
purport to indemnify the promisee against liability for damages for
death or bodily injury to persons, injury to property, or any other
loss, damage or expense arising from the sole negligence or willful
misconduct of the promisee or the promisee's agents, servants, or
independent contractors who are directly responsible to the promisee,
or for defects in design furnished by those persons, are against
public policy and are void and unenforceable; provided, however, that
this section shall not affect the validity of any insurance
contract, workers' compensation, or agreement issued by an admitted
insurer as defined by the Insurance Code.
   (b) Except as provided in Sections 2782.1, 2782.2, and 2782.5,
provisions, clauses, covenants, or agreements contained in,
collateral to, or affecting any construction contract with a public
agency that purport to impose on the contractor, or relieve the
public agency from, liability for the active negligence of the public
agency are void and unenforceable.
   (c) For all construction contracts, and amendments thereto,
entered into after January 1, 2006, for residential construction, as
used in Title 7 (commencing with Section 895) of Part 2 of Division
2, all provisions, clauses, covenants, and agreements contained in,
collateral to, or affecting any construction contract, and amendments
thereto, that purport to indemnify, including the cost to defend,
the builder, as defined in Section 911, by a subcontractor against
liability for claims of construction defects are unenforceable to the
extent the claims arise out of, pertain to, or relate to the
negligence of the builder or the builder's other agents, other
servants, or other independent contractors who are directly
responsible to the builder, or for defects in design furnished by
those persons, or to the extent the claims do not arise out of,
pertain to, or relate to the scope of work in the written agreement
between the parties. This section shall not be waived or modified by
contractual agreement, act, or omission of the parties. Contractual
provisions, clauses, covenants, or agreements not expressly
prohibited herein are reserved to the agreement of the parties.
   (d)  Subdivision (c) does not prohibit a subcontractor and builder
from mutually agreeing to the timing or immediacy of the defense and
provisions for reimbursement of defense fees and costs, so long as
that agreement, upon final resolution of the claims, does not waive
or modify the provisions of subdivision (c). Subdivision (c) shall
not affect the obligations of an insurance carrier under the holding
of Presley Homes, Inc. v. American States Insurance Company (2001) 90
Cal.App.4th 571. Subdivision (c) shall not affect the builder's or
subcontractor's obligations pursuant to Chapter 4 (commencing with
Section 910) of Title 7 of Part 2 of Division 2.
   (e) (1) For all construction contracts, and amendments thereto,
entered into after January 1, 2008, for residential construction, as
used in Title 7 (commencing with Section 895) of Part 2 of Division
2, all provisions, clauses, covenants, and agreements contained in,
collateral to, or affecting any construction contract, and amendments
thereto, that purport to indemnify, including the cost to defend,
the general contractor or contractor that is not affiliated with the
builder, as described in subdivision (b) of Section 911, by a
subcontractor against liability for claims of construction defects
are unenforceable to the extent the claims arise out of, pertain to,
or relate to the negligence of the nonaffiliated general contractor
or nonaffiliated contractor or their other agents, other servants, or
other independent contractors who are directly responsible to the
nonaffiliated general contractor or nonaffiliated contractor, or for
defects in design furnished by those persons, or to the extent the
claims do not arise out of, pertain to, or relate to the scope of
work in the written agreement between the parties. This section shall
not be waived or modified by contractual agreement, act, or omission
of the parties. Contractual provisions, clauses, covenants, or
agreements not expressly prohibited herein are reserved to the
agreement of the parties.
   (2) Paragraph (1) does not prohibit a subcontractor and the
nonaffiliated general contractor or nonaffiliated contractor from
mutually agreeing to the timing or immediacy of the defense and
provisions for reimbursement of defense fees and costs, so long as
that agreement, upon final resolution of the claims, does not waive
or modify the provisions of paragraph (1). Paragraph (1) shall not
affect the obligations of an insurance carrier under the holding of
Presley Homes, Inc. v. American States Insurance Company (2001) 90
Cal.App.4th 571. Paragraph (1) shall not affect the builder's,
nonaffiliated general contractor's, nonaffiliated contractor's, or
subcontractor's obligations pursuant to Chapter 4 (commencing with
Section 910) of Title 7 of Part 2 of Division 2.