BILL ANALYSIS
SB 972
Page 1
SENATE THIRD READING
SB 972 (Wolk)
As Amended August 2, 2010
Majority vote
SENATE VOTE :30-3
JUDICIARY 9-1
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|Ayes:|Feuer, Tran, Brownley, | |
| |Evans, Hagman, Huffman, | |
| |Jones, Monning, Saldana | |
| | | |
|-----+--------------------------+-----|
|Nays:|Knight | |
| | | |
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SUMMARY : Makes a technical nonsubstantive change to the design
professional indemnity statute. Specifically, this bill
cross-references the duty to defend, in addition to the cost of
defense, as an element of contractual indemnity under existing
law.
EXISTING LAW :
1)Provides, for all contracts, and amendments to contracts,
entered into on or after January 1, 2007, with a public agency
for design professional services, all provisions, clauses,
covenants, and agreements contained in, collateral to, or
affecting these contracts, that purport to indemnify,
including the cost to defend, the public agency by a design
professional against liability for claims against the public
agency, are unenforceable, except for claims that arise out
of, pertain to, or relate to the negligence, recklessness, or
willful misconduct of the design professional.
2)Provides that specified rules are to be applied in the
interpretation of a contract of indemnity, unless a contrary
intention appears. Pursuant to these rules, the person
indemnifying is bound, on request of the person indemnified,
to defend actions or proceedings brought against the latter in
respect to the matters embraced by the indemnity. However,
the person indemnified has the right to conduct those
SB 972
Page 2
defenses, if he or she chooses to do so.
3)Interprets, under existing case law, the above-described
provisions to provide that, unless otherwise provided, a duty
to defend arises out of an indemnity obligation as soon as the
litigation commences, and regardless of whether the indemnitor
(the person indemnifying) is ultimately found negligent.
(Crawford v. Weather Shield (2008) 44 Cal.4th 541; see also
UDC-Universal Development, L.P. v. CH2M Hill (2010) 181
Cal.App.4th 10.)
FISCAL EFFECT : None
COMMENTS : This bill proposes a non-substantive change to the
statute regulating contractual indemnity provisions between
public agencies and design professionals.
In describing contractual indemnity provisions, the statute
indicates that these provisions include terms relating to the
cost of defense. The inclusion of defense costs is clarifying
but technically unnecessary in this statute because another
provision of law specifies that the indemnity includes the costs
of defense. This bill would add to that phrase the further
clarification that not only the cost of defense but the duty to
defend is likewise included. Of course, there could be no cost
of defense unless there was an existing duty to defend, so the
added language is merely technical and explicatory.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0005352