Filed 6/26/15; pub. order 7/2/15 (see end of opn.)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

VALLEY CREST LANDSCAPE

DEVELOPMENT, INC.,

 Cross-complainant and Respondent,

v.

MISSION POOLS OF ESCONDIDO, 

INC.,

 Cross-defendant and Appellant;

NATIONAL UNION FIRE INSURANCE 

COMPANY OF PITTSBURGH, PA,

 Intervener and Respondent.

 G049060

 (Super. Ct. No. 30-2008-00104227)

 O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, 

Andrew P. Banks, Judge. Affirmed in part, reversed in part, and remanded.

Murchison & Cumming and Edmund G. Farrell III for Cross-defendant and 

Appellant.
2

Wood, Smith, Henning & Berman, Kevin D. Smith, Yvette M. Dumas and 

Nicholas M. Gedo for Cross-complainant and Respondent and for Intervener and 

Respondent.

* * *

INTRODUCTION

Jeffrey Epp suffered severe injuries after diving into a swimming pool at 

the St. Regis Resort, Monarch Beach (the St. Regis). Litigation followed, with Epp and 

his wife (together, the Epps) suing the owner of the St. Regis and the entities involved in 

the design and construction of the swimming pool. The defendants included Valley Crest 

Landscape Development, Inc. (Valley Crest), which was the general contractor for 

exterior improvements at the St. Regis, and Mission Pools of Escondido, Inc. (Mission 

Pools), the subcontractor that built the swimming pool. 

Summary judgment motions and settlements reduced the litigation to a 

cross-complaint by Valley Crest and its insurer, National Union Fire Insurance Company 

of Pittsburgh, PA (National Union), against Mission Pools. Valley Crest sought to 

recover the amount it spent in the litigation based on a claim of express indemnity under 

the terms of the subcontract with Mission Pools. National Union sought to recover 

attorney fees and costs it had spent for Valley Crest’s defense and settlement of the Epps’

claims pursuant to the policy of general liability insurance that National Union had issued 

to Valley Crest. National Union proceeded on a claim it was equitably subrogated to 

Valley Crest’s claims against Mission Pools.

The trial court conducted a two-part bench trial on the cross-complaint,

found in favor of both Valley Crest and National Union on their respective claims, and 

awarded them the full amount of recovery sought. In this appeal from the judgment, 

Mission Pools makes three contentions: (1) the cross-complaint was time-barred under 

Code of Civil Procedure, section 337.1, subdivision (a) (section 337.1(a)) (all code 

references are to the Code of Civil Procedure); (2) the trial court erred by finding 
3

National Union could recover on its claim for equitable subrogation because, under the 

element of balancing the equities, National Union should bear the loss; and (3) the trial 

court erred by denying Mission Pools a jury trial on Valley Crest’s claim for express 

indemnity.

As to the first contention, we conclude section 337.1(a) does not apply to 

claims for express indemnity, and, therefore, the first amended cross-complaint was 

timely. As to the second contention, we conclude the trial court did not abuse its

discretion by finding that National Union was entitled to recover based on equitable 

subrogation. The trial court erred, however, by denying Mission Pools a jury trial on 

Valley Crest’s claim for express indemnity. We therefore reverse the judgment on that 

claim and remand for further proceedings, but in all other respects affirm. 

FACTS AND PROCEDURAL HISTORY

I.

Background: The Parties, Contracts, and Construction

of the Swimming Pool

The St. Regis is a resort facility located in Dana Point and is owned by 

CPH Monarch Hotel, LLC (CPH). STO Design Group (STO) designed all of the 

swimming pools and improvements at the St. Regis. Lifescapes, International 

(Lifescapes) was a design consultant to the St. Regis and was responsible for its overall 

“design concept,” including the swimming pools. Valley Crest served as general 

contractor for all exterior improvements at the St. Regis, and, in November 2000, entered 

into a construction agreement with CPH (the Construction Agreement). Paragraph 12 of 

the Construction Agreement contained an indemnity provision requiring Valley Crest to 

defend and indemnify CPH for any claims arising out of Valley Crest’s work. 

Valley Crest entered into a construction subcontract with Mission Pools 

(the Subcontract) to build four separate pools and associated plumbing and mechanical 
4

equipment. Although the Subcontract initially required Mission Pools to install signage 

and decktop depth markers, those requirements later were removed from its scope of 

work, and Valley Crest installed the markers. 

The indemnity provision in the Subcontract stated: “Subcontractor 

[(Mission Pools)] indemnifies and holds Contractor [(Valley Crest)] harmless from and 

against any and all claims, demands or actions made by any person or entity, whether 

valid or not, arising out of the performance by Subcontractor, including, without 

limitation, its employees, agents, and sub-subcontractors of this subcontract. 

Subcontractor agrees to reimburse Contractor upon demand for any expenses, including 

attorney’s fees, incurred by Contractor in defending against or dealing with any such 

claims, demands, or actions. [¶] Subcontractor specifically obligates itself to Contractor 

in the following respects . . . [¶] . . . [¶] . . . Subcontractor shall protect, hold free and 

harmless, defend and indemnify Contractor and Owner . . . from all liability, penalties, 

costs, losses, damages, expenses, causes of action, judgments or other claims resulting 

from injury to or death sustained by any person . . . , which injury [or] death . . . arises out 

of Subcontractor’s performance of work under this Subcontract. Subcontractor’s 

aforesaid indemnity and hold harmless obligation shall apply to any act or omission, 

willful misconduct or negligent conduct, whether active or passive, on the part of 

Subcontractor or its agents, sub-contractors or employees.”

Construction of the swimming pool in which Epp was injured was 

completed in July 2001. The Orange County Health Care Agency, the Environmental 

Health Department, and CPH approved the pool and determined it could be open for use 

in August 2001. Valley Crest accepted completion of the pool from Mission Pools. 

Since November 2001, neither Valley Crest nor Mission Pools has had any involvement 

with any of the swimming pools at the St. Regis. 

In April 2007, National Union issued a policy of commercial general 

liability insurance (the National Union Policy) with Valley Crest as the named insured. 
5

The National Union Policy provided: “[National Union] will pay those sums that the 

insured becomes legally obligated to pay as damages because of ‘bodily injury’ or 

‘property damage’ to which this insurance applies. We will have the right and duty to 

defend the insured against any ‘suit’ seeking those damages.” 

II.

The Epps’ Litigation, Theories of Liability, and Valley 

Crest’s Tender of Defense to Mission Pools

On September 15, 2007, Epp dived into the shallow end of one the 

swimming pools at the St. Regis. Epp, who was intoxicated at the time, seriously injured 

his spine and was rendered a quadriplegic. 

In March 2008, the Epps filed a complaint against the St. Regis, Starwood 

Hotels & Resorts Worldwide, Inc., and Starwood Hotels & Resorts Management 

Company, Inc., for negligence and loss of consortium. The complaint was answered by 

CPH.

1

 The Epps later amended their complaint to add Valley Crest, Mission Pools, STO, 

and Lifescapes, as defendants. 

In May 2008, Valley Crest tendered its defense to Mission Pools and 

requested that it defend and indemnify Valley Crest pursuant to the indemnity provision 

of the Subcontract. Mission Pools never responded to the tender. In July 2008, Valley 

Crest filed a cross-complaint against Mission Pools for express indemnity based on its 

alleged breach of the indemnity provision of the Subcontract. 

The Epps filed a first amended complaint in May 2009. As relevant here, 

the first amended complaint alleged, “[the] pool facility failed to provide any visible and 

effective and legible and conspicuous warnings/signage/depth markings on the pool deck 

and pool vertical walls nor in the pool area itself that complied with reasonable standards 

 

 

1

 Starwood Hotels & Resorts Worldwide, Inc., and Starwood Hotels & Resorts 

Management Company, Inc., were sued erroneously. The parties to this appeal stipulated 

that CPH owned the St. Regis.
6

of care.” Through discovery, the Epps refined their claims, and they identified the 

following defects as allegedly contributing to their injuries: (1) “[t]he vertical tile depth 

markers were partially submerged, making them illegible”; (2) “faded deck top depth 

markers”; (3) “[p]oor contrast on the signs containing ‘No Diving’ warning”; (4) “[p]oor 

location of signs”; (5) “[l]ack of fence between pools so users were not directed to 

entrance near ‘No Diving’ sign”; (6) “[f]ailure of hotel to enforce its rule directing users 

to not use pool after alcohol intake”; and (7) use of colored (French gray) plaster for the 

swimming pool. 

Only points (1) and (7) applied specifically to work performed by Mission 

Pools. The final point, use of colored plaster, was based on a document in the files of 

Mission Pools entitled, “Plaster Fact Sheet,” which listed an advantage of colored plaster 

as giving the appearance of greater depth. This fact sheet referred to a plaster color as 

“French Gray” and was signed by a representative of Lifescapes. 

French gray plaster was used to coat the bottoms of several large fountains 

at the St. Regis. The Epps’ expert opined that French gray plaster was also used for the 

swimming pool in which Jeffrey Epp was injured. The expert testified in her deposition 

that the swimming pool had been surfaced with a white Portland cement that had a 

grayish tint to it. The grayish tint made the pool appear deeper than it was. Other 

testimony and evidence established that white plaster was used for the swimming pool. 

III.

Summary Judgment Motions and Settlement

of the Epps’ Claims

STO, Lifescapes, Valley Crest, and Mission Pools brought motions for 

summary judgment based on the statute of limitations of section 337.1(a). Mission Pools 

also asserted it did not use French gray plaster to surface the pools and the vertical tile 

depth markers it installed did not contribute to the Epps’ injuries. Mission Pools 

submitted portions of the deposition transcript of Epp, who testified he “really didn’t see” 
7

the depth markers and “didn’t stop and stare at [them] to try and see exactly what [they] 

said.”

The trial court granted the motions brought by STO and Lifescapes. The 

court granted the motion brought by Mission Pools but only as to the Epps’ first amended 

complaint. The trial court denied Valley Crest’s motion on the ground Valley Crest had 

failed to properly object to evidence that French gray plaster was used for the pool. STO, 

Lifescapes, and Mission Pools had properly objected to the evidence, and their objections 

were sustained, leading to summary adjudication in their favor on the issue of use of 

French gray plaster. Nevertheless, the court denied Mission Pools’s motion for summary 

judgment as against Valley Crest’s cross-complaint. The court stated: “Since Valley 

Crest’s Motion was denied, this also must be denied.”

The Epps settled their claims with all defendants. The Epps settled with 

CPH for $4.5 million, with Lifescapes for $15,000, and with STO for a waiver of costs. 

In March 2012, the Epps’ claims against Valley Crest and Mission Pools, and CPH’s 

express indemnity claim against Valley Crest, were resolved by an agreement pursuant to 

which Valley Crest and Mission Pools together paid $250,000 to the Epps and CPH.

Valley Crest’s contribution to this settlement was $10,000 to each of the Epps and 

$30,000 to CPH for a total of $50,000. Mission Pools’s contribution to this settlement

was $65,000 to each of the Epps and $70,000 to CPH for a total of $200,000. 

IV.

Valley Crest’s Cross-complaint and

National Union’s Subrogation Claim

In July 2012, National Union intervened in, and was added as a 

cross-complainant to, Valley Crest’s cross-complaint against Mission Pools. The first 

amended cross-complaint of Valley Crest and National Union (the first amended 

cross-complaint) asserted a cause of action for express indemnity by Valley Crest, a 

cause of action for equitable subrogation by National Union, a cause of action for 
8

declaratory relief by both Valley Crest and National Union, and a cause of action for 

contribution by both Valley Crest and National Union.

The first amended cross-complaint alleged Valley Crest was obligated 

under the Construction Agreement to defend and indemnify CPH in the action brought by 

the Epps and that Valley Crest incurred $202,096.61 in attorney fees and costs defending 

CPH in that action. The first amended cross-complaint also alleged that pursuant to the 

indemnity provision in the Subcontract, Valley Crest had incurred $419,064.93 in 

attorney fees and costs that Valley Crest spent defending itself in the action brought by 

the Epps and had spent $50,000 in settling that action. Pursuant to the terms of the 

National Union Policy, Valley Crest paid the first $250,000 in losses as a self-insured 

retention. In total, the first amended cross-complaint sought to recover $671,161.54 from 

Mission Pools.

V.

Trial, Findings, and Judgment

Trial on the first amended cross-complaint was undertaken in two phases. 

In the first phase, National Union’s claim for equitable subrogation was tried. In that 

claim, National Union sought to recover (1) attorney fees and settlement costs it had paid 

in the defense of Valley Crest pursuant to the National Union Policy and (2) the fees 

incurred by CPH in its defense pursuant to the additional insured endorsement. In a 

tentative decision, the trial court found that, by failing to accept the tender of defense 

when first made, Mission Pools had forfeited its right to seek allocation of the claimed 

attorney fees and settlement costs between the claims related to the work of Mission 

Pools and unrelated claims. The court awarded National Union the full amount it paid in 

the defense of Valley Crest, the full amount National Union paid in defense of CPH, and 

the full amount National Union paid in settlement, for a total recovery of $421,161.54.

In the second phase, Valley Crest’s claim for express indemnity under the 

terms of the Subcontract was tried. The express indemnity claim initially was set for a 
9

jury trial. Before empanelling the jury, the trial court decided the express indemnity 

claim was, in effect, for specific performance of the indemnity provision (rather than for 

damages) and, therefore, was an action in equity for which there was no right to a jury 

trial. After receiving additional evidence, the trial court found that under the terms of the 

indemnity provision of the Subcontract, Valley Crest was entitled to recover the entire 

$250,000 self-insured retention.

The trial court issued a statement of decision making these findings:

1. Pursuant to “express indemnity principles,” Valley Crest is entitled to 

recover out-of-pocket attorney fees and costs incurred in its defense of the Epps’

complaint.

2. Pursuant to equitable subrogation principles, National Union is entitled 

to recover attorney fees and costs above Valley Crest’s self-insured retention, which

National Union paid for Valley Crest’s defense of the Epps’ complaint.

3. No apportionment would be made between attorney fees and costs 

related and unrelated to Mission Pools’s work.

4. National Union is entitled to recover $202,096.91 in attorney fees and 

costs it paid in connection with its defense of CPH.

5. National Union is entitled to recover the $50,000 amount it paid toward 

settlement.

6. There would be no apportionment of the $50,000 paid in settlement 

between amounts related and amounts unrelated to Mission Pools’s work.

7. The amount of attorney fees and costs incurred in Valley Crest’s defense 

was reasonable.

8. The statute of limitations of section 337.1 did not bar Valley Crest’s 

claims or National Union’s claims.
10

Judgment was entered against Mission Pools and in favor of Valley Crest 

for $282,496 and in favor of National Union for $494,002.37. Mission Pools timely 

appealed from the judgment.

DISCUSSION

I.

Statute of Limitations

Mission Pools contends Valley Crest’s claim for express indemnity is 

time-barred under section 337.1(a), which states: “(a) Except as otherwise provided in 

this section, no action shall be brought to recover damages from any person performing 

or furnishing the design, specifications, surveying, planning, supervision or observation 

of construction or construction of an improvement to real property more than four years 

after the substantial completion of such improvement for any of the following: [¶] 

(1) Any patent deficiency in the design, specifications, surveying, planning, supervision 

or observation of construction or construction of an improvement to, or survey of, real 

property; [¶] (2) Injury to property, real or personal, arising out of any such patent 

deficiency; or [¶] (3) Injury to the person or for wrongful death arising out of any such 

patent deficiency.”

Section 337.1(a) is inapplicable. Valley Crest sought recovery from 

Mission Pools based on the indemnity provision in the Subcontract.

2

 Thus, Valley Crest 

brought an action on a contract, not an action to recover damages on any of the grounds 

 

 

2

 “The obligation of indemnity, which we have defined as ‘the obligation resting on one 

party to make good a loss or damage another has incurred’ [citations] may arise under the 

law of this state from either of two general sources. First, it may arise by virtue of 

express contractual language establishing a duty in one party to save another harmless 

upon the occurrence of specified circumstances. Second, it may find its source in 

equitable considerations brought into play either by contractual language not specifically 

dealing with indemnification or by the equities of the particular case. [Citations.]” (E. L. 

White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506-507.)
11

listed in section 337.1(a). When, as here, the parties have expressly contracted with 

respect to the duty to indemnify, the extent of that duty is determined from the contract. 

(Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 633.) 

An action for indemnity—express or implied—is not included within 

section 337.1(a)’s definition of the word “action.” In contrast, section 337.15, which sets 

forth a 10-year statute of limitations for latent deficiencies, expressly defines the word 

“‘action’” to include “an action for indemnity.” (§ 337.15, subd. (c).) Subdivision (c) of 

section 337.15 reads: “As used in this section, ‘action’ includes an action for indemnity 

brought against a person arising out of that person’s performance or furnishing of 

services or materials referred to in this section, except that a cross-complaint for 

indemnity may be filed pursuant to subdivision (b) of Section 428.10 in an action which 

has been brought within the time period set forth in subdivision (a) of this section.” This 

covers both contractual (express) and implied indemnity. (FNB Mortgage Corp. v. 

Pacific General Group (1999) 76 Cal.App.4th 1116, 1127.) Section 337.1 does not 

include the same or a similar provision. “When terms are used in some statutes but not in 

other related statutes, we should not imply the terms into the statute from which they 

were excluded.” (Crouse v. Brobeck, Phleger & Harrison (1998) 67 Cal.App.4th 1509, 

1542, citing Pasadena Police Officers Assn. v. City of Pasadena (1990) 51 Cal.3d 564, 

576.)

Section 337.1 was enacted in 1967. (See 13B West’s Ann. Code Civ. Proc. 

(2006 ed.) amend. history foll. § 337.1, p. 354.) Section 337.15 was enacted in 1971. 

(FNB Mortgage Corp. v. Pacific General Group, supra, 76 Cal.App.4th at p. 1126.) If 

the Legislature believed the word “action” was broad enough to include an action for 

indemnity, then it would have had no need to expressly define “action” to include 

indemnity in section 337.15, subdivision (c). 

Mission Pools relies on Wagner v. State of California (1978) 86 Cal.App.3d 

922 (Wagner) to support its argument that section 337.1(a) applies to express indemnity 
12

claims. In Wagner, supra, 86 Cal.App.3d at page 928, the Court of Appeal concluded, 

with respect to equitable indemnity: “The argument that the limitations period of 

section 337.1 is inapplicable because defendant seeks indemnity is unacceptable. Since 

the limitations period set forth in section 337.1 would preclude any action other than one 

excepted by that section, it follows that an action for indemnity based on the same events 

should also be precluded.” 

We decline to follow Wagner for several reasons. First, Wagner did not 

consider section 337.15, which, unlike section 337.1, defines the word “action” to include 

an action for indemnity. Second, Wagner dealt with equitable indemnity, and, here, we 

deal with a claim for express indemnity. Because the claim for express indemnity was 

based on a written contract, it was subject to the statute of limitations of section 337, 

subdivision 1. Third, Wagner is contrary to the principle that “[a] tort defendant retains 

the right to seek equitable indemnity from another tortfeasor even if the plaintiff’s action 

against the cross-defendant is barred by the statute of limitations.” (Valley Circle Estates 

v. VTN Consolidated, Inc. (1983) 33 Cal.3d 604, 611.) For that reason, the court that 

issued Wagner declined to extend it beyond section 337.1. (Mangini v. Aerojet-General 

Corp. (1991) 230 Cal.App.3d 1125, 1154-1155.) Finally, in Crouse v. Brobeck, Phleger 

& Harrison, supra, 67 Cal.App.4th at page 1542, the Court of Appeal criticized Wagner

on the ground “[it] reached its conclusion without citing, accommodating or 

distinguishing the existing Supreme Court authority holding that claims for implied 

indemnity do not accrue until the indemnitee has suffered actual loss through payment.”

We therefore conclude the statute of limitations of section 337.1 is 

inapplicable to Valley Crest’s claim for express indemnity and National Union’s claim 

for equitable subrogation, which arose out of the indemnity claim. Valley Crest was, in 

effect, suing Mission Pools for breach of contract for its alleged failure to fulfill its 

obligations under the Subcontract. The statute of limitations for breach of a written 

contract is four years. (§ 337, subd. 1.) A cause of action for breach of an express 
13

indemnity agreement (contractual indemnity) accrues when the indemnitor sustains the 

loss by paying the money sought to be indemnified from the indemnitee. (Fidelity & 

Deposit Co. v. Whitson (1960) 187 Cal.App.2d 751, 758; see Valley Circle Estates v. 

VTN Consolidated, Inc., supra, 33 Cal.3d at p. 611 [“‘The indemnity action, unlike the 

plaintiff’s claim, does not accrue for statute of limitations purposes when the original 

accident occurs, but instead accrues at the time the tort defendant pays a judgment or 

settlement as to which he is entitled to indemnity.’”].) 

Under those accrual rules, Valley Crest’s cause of action for express 

indemnity accrued at the earliest in May 2008, when Valley Crest tendered its defense to 

Mission Pools. Valley Crest filed its cross-complaint just two months later, and therefore 

the express indemnity claim was timely. (§ 337, subd. 1.)

II.

Balancing the Equities

A. Introduction

The trial court found that National Union was entitled to recover on its 

claim against Mission Pools for equitable subrogation. “In the insurance context, 

subrogation takes the form of an insurer’s right to be put in the position of the insured for 

a loss that the insurer has both insured and paid. [Citations.] When an insurance 

company pays out a claim on a property insurance policy, the insurance company is 

subrogated to the rights of its insured against any wrongdoer who is liable to the insured 

for the insured’s damages.” (State Farm General Ins. Co. v. Wells Fargo Bank, N.A.

(2006) 143 Cal.App.4th 1098, 1106 (State Farm).)

Here, National Union is the insurer, Valley Crest is the insured, and 

Mission Pools is the defendant/indemnitor. National Union provided Valley Crest a 

defense and paid to settle with the Epps based on Valley Crest’s claim under the National 

Union Policy. The trial court found that National Union stood in the place of Valley 
14

Crest to the extent of those payments and therefore could recover from Mission Pools 

under the express indemnity provision of the Subcontract. Mission Pools argues National 

Union was not entitled to be equitably subrogated because its equitable position was, on 

balance, inferior to that of Mission Pools.

B. Standard of Review

Equitable subrogation is, as the name suggests, based on equity. (State 

Farm, supra, 143 Cal.App.4th at p. 1106.) After a trial court has exercised its equitable 

powers, the appellate court reviews the judgment under the abuse of discretion standard. 

(City of Barstow v. Mojave Water Agency (2000) 23 Cal.4th 1224, 1256.)

“‘The appropriate test for abuse of discretion is whether the trial court 

exceeded the bounds of reason. When two or more inferences can reasonably be deduced 

from the facts, the reviewing court has no authority to substitute its decision for that of 

the trial court.’ [Citation.] [¶] ‘The abuse of discretion standard . . . measures whether, 

given the established evidence, the act of the lower tribunal falls within the permissible 

range of options set by the legal criteria.’” (Bank of America, N.A. v. Superior Court

(2013) 212 Cal.App.4th 1076, 1089.) The scope of the trial court’s discretion is limited 

by law governing the subject of the action taken. (Ibid.) An action that transgresses the 

bounds of the applicable legal principles is outside the scope of the trial court’s discretion 

and, therefore, is deemed an abuse of discretion. (Ibid.)

In applying the abuse of discretion standard, we determine whether the trial 

court’s factual findings are supported by substantial evidence and independently review 

its legal conclusions. (County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 

1230.) 

As this appeal follows a bench trial, we also apply the doctrine of implied 

findings. The trial court found that National Union was entitled to recover under 

equitable subrogation principles, but made no specific findings on balancing or weighing 
15

the equities. No objections were made to the statement of decision, and no party brought 

omissions or ambiguities in it to the trial court’s attention, so we will infer the trial court 

made findings favorable to the prevailing party on all issues necessary to support the

judgment. (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 59-60.)

C. Elements of Equitable Subrogation

“Generally, an insurer on paying a loss is subrogated in a corresponding 

amount to the insured’s right of action against any person responsible for the loss. 

[Citation.] California law is in accord that insurance companies may be subrogated to the 

rights of their insureds. [Citation.]” (Rossmoor Sanitation, Inc. v. Pylon, Inc., supra, 13 

Cal.3d at pp. 633-634.) “[A] general liability insurer that has paid a claim to a third party 

on behalf of its insured may have an equitable right of subrogation against (1) other 

parties who contributed to the harm suffered by the third party (joint tortfeasors) under an 

equitable indemnity theory, and (2) other parties who are legally liable to the insured for 

the harm suffered by the third party (such as by an indemnification agreement) under a 

contractual indemnity theory.” (Interstate Fire & Casualty Ins. Co. v. Cleveland 

Wrecking Co. (2010) 182 Cal.App.4th 23, 32 (Interstate Fire).) This case falls under the 

second category: National Union’s subrogation claim was based on allegations that

Mission Pools was legally liable to Valley Crest under the terms of the indemnity 

provision of the Subcontract.

Case law has identified eight elements of an insurer’s cause of action for 

equitable subrogation.

3

The only element in issue here is No. 7—balancing the equities; 

 

 

3

 The eight elements are: “‘[1] the insured suffered a loss for which the defendant is 

liable, either as the wrongdoer whose act or omission caused the loss or because the 

defendant is legally responsible to the insured for the loss caused by the wrongdoer; 

[2] the claimed loss was one for which the insurer was not primarily liable; [3] the insurer 

has compensated the insured in whole or in part for the same loss for which the defendant 

is primarily liable; [4] the insurer has paid the claim of its insured to protect its own 

interest and not as a volunteer; [5] the insured has an existing, assignable cause of action 
16

that is, “justice requires that the loss be entirely shifted from the insurer to the defendant, 

whose equitable position is inferior to that of the insurer.” (Interstate Fire, supra, 182 

Cal.App.4th at pp. 33-34.) “[T]he aim of equitable subrogation is to shift a loss for which 

the insurer has compensated its insured to one who caused the loss, or who is legally 

responsible for the loss caused by another and whose equitable position is inferior to the 

insurer’s. [Citations.]” (State Farm, supra, 143 Cal.App.4th at p. 1112.)

D. Balancing the Equities: The Interstate Fire Opinion

Though easily stated in general terms, the element of balancing the equities 

lacks specificity in details. “‘[T]here is no facile formula for determining superiority of 

equities, for there is no formula by which to determine the existence or nonexistence of 

an equity except to the extent that certain familiar fact combinations have been repeatedly 

adjudged to create an equity in the surety or the third party. . . . ’” (State Farm, supra, 

143 Cal.App.4th at p. 1112.)

Nonetheless, Interstate Fire, supra, 182 Cal.App.4th 23, provides a 

valuable guideline for how to balance the equities in an equitable subrogation claim by an 

insurer based on the insured’s express indemnity claim against the defendant—i.e., the 

situation presented here. In Interstate Fire, Webcor Construction, Inc. (Webcor), was the 

general contractor for a construction project. (Id. at p. 28.) Cleveland Wrecking 

Company (Cleveland) and Delta Steel Erectors (Delta) were subcontractors on the 

project. (Ibid.) Cleveland and Delta entered into similar subcontracts with Webcor, 

 

against the defendant which the insured could have asserted for its own benefit had it not 

been compensated for its loss by the insurer; [6] the insurer has suffered damages caused 

by the act or omission upon which the liability of the defendant depends; [7] justice 

requires that the loss be entirely shifted from the insurer to the defendant, whose 

equitable position is inferior to that of the insurer; and [8] the insurer’s damages are in a 

liquidated sum, generally the amount paid to the insured.’” (Interstate Fire, supra, 182 

Cal.App.4th at pp. 33-34, quoting Fireman’s Fund Ins. Co. v. Maryland Casualty Co.

(1998) 65 Cal.App.4th 1279, 1292.)
17

which had express indemnity provisions. (Ibid.) Cleveland agreed to indemnify Webcor 

from “‘claims, demands, causes of action, damages, costs, expenses, actual attorney’s 

fees, losses or liability, in law or in equity, of every kind and nature whatsoever 

(“Claims”) arising out of or in connection with Subcontractor’s operations to be 

performed under this Agreement for, but not limited to . . . Personal injury . . . caused or 

alleged to be caused in whole or in part by any negligent act or omission of Subcontractor 

[Cleveland].’” (Ibid.) Cleveland was required to, at its “‘own cost, expense and risk, 

defend all Claims . . .’ by third parties, pay any judgment, and reimburse Webcor and 

certain others for legal expenses they incurred.” (Ibid.) Both Cleveland and Delta had 

agreed to procure liability insurance with Webcor as an additional insured, but only Delta 

complied. (Id. at pp. 28-29.)

While working on the project, a Delta employee (Thelbert Allen Frisby) 

suffered serious injuries caused, at least in part, by Cleveland. (Interstate Fire, supra, 

182 Cal.App.4th at p. 29.) Frisby sued Cleveland for negligence and sued Webcor for 

negligence, premises liability, and negligent provision of unsafe equipment. (Ibid.) 

Webcor tendered its defense and indemnification to Cleveland pursuant to the express 

indemnity terms of its subcontract. Cleveland rejected the tender. (Ibid.) Webcor also 

tendered its defense and indemnification to Delta, which accepted the tender. (Ibid.) 

Webcor filed a cross-complaint against Cleveland for express indemnification, equitable 

indemnification, and breach of contract. (Ibid.) Webcor dismissed the cross-complaint 

and the parties expressly reserved the insurer’s right to bring a subrogation claim in a 

separate action. (Id. at pp. 29-30.)

Webcor and Frisby entered into a settlement agreement by which Webcor 

would pay him $575,000. (Interstate Fire, supra, 182 Cal.App.4th at p. 30.) The trial 

court approved the agreement as a good faith settlement. (Ibid.) The insurer funded the 

full amount of the settlement payment and paid over $152,000 in attorney fees and costs 

to defend Webcor against Frisby’s claims. (Ibid.) Cleveland also entered into a 
18

settlement agreement with Frisby, which the trial court approved as a good faith 

settlement. (Ibid.)

The insurer filed a complaint for subrogation against Cleveland. (Interstate 

Fire, supra, 182 Cal.App.4th at p. 30.) The complaint alleged that Cleveland breached its 

contract with Webcor by failing to defend and indemnify Webcor. (Ibid.) Cleveland 

demurred to the subrogation complaint on the ground the insurer was not in a superior 

position because there were no allegations that Cleveland’s breach of contract had caused 

the loss. (Ibid.) After the trial court sustained the demurrer with leave to amend, the 

insurer filed an amended complaint adding allegations that Cleveland’s negligence was a 

proximate cause of Frisby’s injuries and that Cleveland had violated its subcontract by 

failing to obtain insurance covering Webcor. (Ibid.) The insurer sought judgment for all 

amounts it had spent to defend against and settle the claims against Webcor in the action 

brought by Frisby. (Ibid.) The insurer contended it was subrogated to Webcor’s claims 

against Cleveland for breach of its express indemnity obligation. (Ibid.)

Cleveland demurred to the amended complaint, again arguing the insurer 

did not have superior equities and Webcor did not incur damages by Cleveland’s alleged 

breach of the indemnification provision of the subcontract. (Interstate Fire, supra, 182 

Cal.App.4th at p. 31.) The trial court sustained the demurrer without leave to amend on 

the grounds the determination of good faith settlement cut off Webcor’s ability to sue 

Cleveland for indemnity and the insurer’s equitable position was not superior to 

Cleveland’s because Webcor had sustained no damages resulting from Cleveland’s 

breach of the indemnity provision. (Ibid.)

The Court of Appeal reversed. (Interstate Fire, supra, 182 Cal.App.4th at 

p. 28.) On the issue of balancing the equities, the court concluded, “it can reasonably be 

inferred that [the insurer]’s equitable position is superior to that of Cleveland.” (Id. at 

p. 37.) The court reached its conclusion based on several factors. 
19

The first factor was that Cleveland was alleged to have caused the loss in 

addition to its alleged liability for the loss under a contractual indemnity provision, and

“Cleveland’s alleged negligence toward Frisby is relevant to the respective equities of 

[the insurer] and Cleveland.” (Interstate Fire, supra, 182 Cal.App.4th at p. 39.) “[T]he 

first amended complaint alleges that Cleveland’s negligence caused Frisby’s lawsuit, and 

precipitated the lawsuit against Webcor and Cleveland, which made it necessary for 

Webcor to incur the costs of defense and settlement. Since it is not alleged that [the 

insurer] (or even Webcor) was at fault, the allegations of the first amended complaint 

give rise to the inference that Cleveland should cover Webcor’s defense and settlement 

costs.” (Id. at pp. 40-41.)

The second factor was the nature of the insurer’s and Cleveland’s 

agreements to indemnify Webcor. (Interstate Fire, supra, 182 Cal.App.4th at p. 42.) 

“While Cleveland agreed to indemnify Webcor in the subcontractor agreement pertaining 

to the project from which the underlying injury arose, [the insurer] was a third party 

insurer uninvolved in the project.” (Ibid.) Cleveland and the insurer did not agree to 

indemnify the same loss. (Id. at p. 44.) Cleveland agreed to indemnify and hold 

harmless Webcor from all claims, including personal injury claims, arising out of 

Cleveland’s work on the construction project. (Ibid.) By contrast, the insurer provided 

coverage to Webcor for amounts it became legally obligated to pay as damages because 

of bodily injury to which the insurance applied, without limitation to liability arising out 

of Cleveland’s work on the construction project. (Ibid.) 

Put another way, the equities tipped in favor of the insurer because 

Cleveland agreed to indemnify Webcor specifically against the loss incurred. “An entity 

which, like Cleveland, agrees to indemnify the other party to the underlying transaction

has a liability of greater primacy than an independent insurer that insures against loss. 

[Citations.] The parties directly involved in the transaction are better able to evaluate and 

control the risk. Therefore, for purposes of weighing the equities in an equitable 
20

subrogation case, and absent language in the insurance policy or indemnification 

agreement leading to a contrary conclusion (which the parties here do not contend exists), 

the Agreement between the parties who were connected to the incident giving rise to the 

loss (Webcor and Cleveland as workers at Frisby’s job site) creates the greater equitable 

responsibility for indemnification, as compared to that of the general liability insurer

. . . .” (Interstate Fire, supra, 182 Cal.App.4th at p. 44.)

The Court of Appeal also considered the fact the insurer had accepted 

premiums, but concluded that factor was not dispositive. (Interstate Fire, supra, 182 

Cal.App.4th at p. 45.) “In our view, the fact that [the insurer] accepted premiums is not 

particularly significant, since every insurer that pays a loss on behalf of its insured will 

have accepted premiums for the risk. Furthermore, while [the insurer] was compensated 

for undertaking the risk of loss, so was Cleveland, which accepted consideration for the 

performance of its obligations under the Webcor-Cleveland subcontract. [Citation.] 

Finally, while it may be that [the insurer] merely did what it was obligated to do under 

the insurance policy, that does not change the fact that Cleveland did not do what it was 

allegedly obligated to do under the indemnification provision, after it allegedly caused 

the loss.” (Ibid.)

Finally, the Court of Appeal considered public policy: “In our view, it is 

not a good idea to reward parties who refuse to fulfill their alleged indemnification 

obligations, particularly under the rubric that they are in as good or better an equitable

position as the insurer that did fulfill its alleged indemnification obligation. We believe it 

is more prudent to permit subrogation, so that a party with an alleged contractual 

indemnification obligation will be encouraged to step up in the underlying case and either 

fulfill the obligation (and implicitly help settle the case) or resolve any dispute over the 

application of the indemnification obligation. If permitting subrogation to the insurer in 

any way results in a windfall (because the insurer that accepted premiums to insure 

against the loss may now shift the loss to the other indemnitor), it would be better for the 
21

windfall to go to the one that undisputedly fulfilled its contractual obligations, rather than 

to the one that allegedly breached them.” (Interstate Fire, supra, 182 Cal.App.4th at

p. 47.) Cleveland, which allegedly contributed to the loss, did not fulfill its contractual 

obligations to Webcor, while the insurer, which had nothing to do with the incident 

leading to the loss, abided by its contractual obligation to pay for it. (Ibid.) “The 

comparison, therefore, is between one party who had nothing to do with causing the loss 

but abided by its contractual obligation to pay for it, and another party who caused the 

loss and then shunned its contractual obligation to pay it.” (Ibid.)

E. Balancing the Equities Between National Union and Mission Pools

At least in outline form, this case resembles Interstate Fire. National 

Union was subrogated to Valley Crest’s right under the express indemnity provision of 

the Subcontract, just as the insurer in Interstate Fire was subrogated to Webcor’s rights 

under the subcontract with Cleveland. Valley Crest in effect obtained insurance for the 

loss from two sources: the National Union Policy and the indemnity provision of the 

Subcontract. Who should bear the loss, Mission Pools or National Union? We turn to 

the factors addressed in Interstate Fire.

1. Cause of the Loss. National Union did not cause the loss or have 

anything to do with causing Epp’s injuries. Mission Pools was alleged to have 

contributed to causing Epp’s injuries; however, the factual basis for Mission Pools’s

liability was slim. Of the seven theories of liability asserted by the Epps, only two 

concerned work performed by Mission Pools: (1) “[t]he vertical tile depth markers were 

partially submerged, making them illegible” and (2) use of French gray plaster for the 

pool surface. In granting Mission Pools’s motion for summary judgment, the trial court 

ruled, “there is no evidence that French gray plaster was actually used as opposed to 

merely approved.” In moving for summary judgment, Mission Pools presented evidence 

that placement of the vertical tile depth markers was not a cause of Epp’s injuries. 
22

The statement of decision is silent on the issue whether Mission Pools 

contributed in some fashion to Jeffrey Epp’s injuries. National Union argues we should 

invoke the doctrine of implied findings and infer the trial court made a factual finding 

that Mission Pools contributed to Epp’s injuries by placing the swimming pool’s depth 

markers below the water line. Implied findings, like express ones, are reviewed under the 

substantial evidence standard. (Fladeboe v. American Isuzu Motors Inc., supra, 150 

Cal.App.4th at p. 60.) Here, the parties stipulated as fact: “[R]egarding Mission Pools’ 

work, plaintiffs alleged that the vertical wall markings that state pool depth are halfway 

submerged, making them illegible, such that pool patrons are unable to correctly read 

these depth markings. These allegations were defeated when the Court granted Mission 

Pools’ motion for summary judgment.” (Italics added.)

2. Nature of Indemnity Agreements. Mission Pools agreed to indemnify 

Valley Crest specifically against the type of loss incurred, while National Union provided 

general liability insurance. “An entity which, like [Mission Pools], agrees to indemnify 

the other party to the underlying transaction has a liability of greater primacy than an 

independent insurer that insures against loss.” (Interstate Fire, supra, 182 Cal.App.4th at 

p. 44.) National Union was a third party insurer that was not involved in the construction 

project. (See id. at p. 42.) 

CPH was named as an additional insured under the National Union Policy. 

National Union’s decision to accept CPH’s tender of defense was based not only on the 

National Union Policy, but also on the indemnity provision of the Construction 

Agreement and the obligation imposed by Crawford v. Weather Shield Mfg., Inc. (2008) 

44 Cal.4th 541. In Crawford, the California Supreme Court held a contractual duty to 

defend under a construction subcontract is triggered merely by allegations that damage or 

loss was caused by construction defects arising from the subcontractor’s negligence, even 

if a trier of fact later finds the subcontractor was not negligent. (Id. at pp. 547, 568.)
23

3. Receipt of Premiums. National Union’s receipt of premiums from 

Valley Crest is a neutral factor. Indeed, “while [National Union] was compensated for 

undertaking the risk of loss, so was [Mission Pools], which accepted consideration for the 

performance of its obligations under the . . . [S]ubcontract.” (Interstate Fire, supra, 182 

Cal.App.4th at p. 45.)

4. Compliance with Contractual Obligations. So far, the equities line up 

fairly evenly between National Union and Mission Pools. In our opinion, what tips the 

balance against Mission Pools, and leads us to conclude the trial court did not abuse its 

discretion, is that Mission Pools did not comply with its obligations under the 

Subcontract. Mission Pools did not even respond to Valley Crest’s tender of defense. In 

contrast, National Union did everything it was supposed to do to fulfill its obligations 

under the terms of the National Union Policy. Mission Pools’s contractual duty to defend 

and indemnify under the Subcontract was triggered by the allegations that Missions 

Pools’s negligence contributed to the damage or loss suffered by the Epps. (Crawford v. 

Weather Shield Mfg., Inc., supra, 44 Cal.4th at pp. 547, 568.) Thus, Mission Pools had 

an obligation to accept Valley Crest’s tender of defense when it was made and to provide 

Valley Crest a defense at least up to the point at which the trial court granted Mission 

Pools’s motion for summary judgment against the Epps. 

In addition, the Subcontract required Mission Pools to obtain and maintain 

in force a policy of commercial general liability insurance with Valley Crest as an 

additional insured. In April 2001, Mission Pools obtained a commercial general liability 

policy issued by The Insurance Corporation of New York (ICNY). In May 2008, Valley 

Crest made a tender of defense to ICNY under the ICNY policy. ICNY declined the 

tender on the ground that the policy was cancelled as of April 1, 2004, and an injury 

caused by an occurrence during the policy period was needed to trigger coverage. 

The failure by Mission Pools to maintain the insurance required by the 

Subcontract did not cause the loss; that is, the damages incurred as a result of Epp’s 
24

injuries. (See Patent Scaffolding Co. v. William Simpson Constr. Co. (1967) 256 

Cal.App.2d 506, 512 (Patent Scaffolding) [insurer’s loss was not caused by the 

contractor’s failure to obtain insurance or to indemnify].) But Mission Pools’s failure to 

fulfill its obligation to maintain insurance supports a finding that National Union was in 

the superior equitable position. (Interstate Fire, supra, 182 Cal.App.4th at p. 47.) 

Mission Pools argues that we should consider the fact that Valley Crest’s 

motion for summary judgment was denied only because Valley Crest had failed to object 

properly to evidence that French gray plaster had been used to surface the pool. Mission 

Pools properly objected to that evidence and its objections were sustained, leading to 

summary adjudication in its favor. The trial court denied Mission Pools’s motion for 

summary judgment as against Valley Crest’s cross-complaint only because Valley Crest’s 

motion for summary judgment was denied. Mission Pools raises a valid point: why 

should it pay for Valley Crest’s litigation mistakes? Though valid, the point is not 

persuasive because the problem with objections would not have arisen if Mission Pools 

had fulfilled its contractual obligation and accepted Valley Crest’s tender of defense in 

the first place.

F. The Patent Scaffolding Opinion

Finally, we address Patent Scaffolding, supra, 256 Cal.App.2d 506, on 

which Mission Pools heavily relies. In Patent Scaffolding, a subcontractor was hired by a 

general contractor to perform certain work on a building. (Id. at p. 508.) Their contract 

required the general contractor to obtain fire insurance on the subcontractor’s property at 

the job site, but the general contractor failed to do so. (Ibid.) A fire of unknown origin 

destroyed some of the subcontractor’s property. (Ibid.) The subcontractor’s fire insurers 

paid the subcontractor for the loss and sought to subrogate to the subcontractor’s rights 

against the general contractor for its failure to obtain insurance. (Ibid.) The trial court 

permitted subrogation on the ground that the general contractor had agreed not only to 
25

obtain fire insurance but also to indemnify the subcontractor against fire loss (despite the 

absence of an express indemnification provision in the contract). (Id. at pp. 508-509.)

The Court of Appeal reversed, holding that the insurers were not entitled to 

subrogation because the general contractor did not cause the fire and the insurers were 

merely paying a loss that they had agreed to insure. (Patent Scaffolding, supra, 256 

Cal.App.2d at p. 512.) The Court of Appeal explained: “The insurers’ loss was not 

caused by [the general contractor]’s failure to get insurance or to indemnify [the 

subcontractor]. The insurers’ loss was caused by the fire, the very risk which each 

assumed, and [the general contractor]’s failure to perform its contractual duty had 

nothing to do with the fire.” (Ibid.) The court held that when “two parties are 

contractually bound by independent contracts to indemnify the same person for the same 

loss, the payment by one of them to his indemnitee does not create in him equities 

superior to the nonpaying indemnitor, justifying subrogation, if the latter did not cause or 

participate in causing the loss.” (Id. at p. 514.) The court added that “[i]f subrogation 

were permitted, the insurers who have accepted premiums to cover the very loss which 

occurred receive a windfall.” (Id. at p. 516.) 

Mission Pools argues Patent Scaffolding is analogous to this case because 

Mission Pools (the indemnitor) did not cause the loss while the National Union (the 

insurer) accepted premiums to cover the loss. But, as explained in Interstate Fire, supra, 

182 Cal.App.4th at page 39: “(1) Patent Scaffolding did not involve a situation where, as 

here, the defendant was alleged to have caused the loss; (2) even where the defendant has 

not caused the loss, the equities may support the insurer where, as here, the defendant 

expressly promised to indemnify (not just to obtain insurance) in a contract related to the 

project from which the underlying loss occurred; and (3) the insurer’s receipt of 

premiums to cover the type of loss that occurred, although a factor to be considered, does 

not preclude it from being in an equitably superior position to another party that 

contractually agreed to indemnify.” The same distinctions pertain to this case. Here, 
26

Mission Pools was alleged to have contributed to the loss, and, although ultimately 

exonerated, failed to fulfill its obligation under the indemnity provision of the 

Subcontract to accept Valley Crest’s tender of defense and its obligation to maintain 

additional insurance. 

Age and subsequent appellate court opinions have not been kind to Patent 

Scaffolding. In Pylon, Inc. v. Olympic Ins. Co. (1969) 271 Cal.App.2d 643, 651, decided 

just two years after Patent Scaffolding, the Court of Appeal cautioned that “[t]he holding 

in the Patent Scaffolding case does not constitute a rule applicable to every situation in 

which an insurer of an indemnitee seeks to hold the contractor-indemnitor on an 

indemnity contract.” The Court of Appeal in Fireman’s Fund Ins. Co. v. Wilshire Film 

Ventures, Inc. (1997) 52 Cal.App.4th 553, 557, criticized Patent Scaffolding as 

precluding subrogation in any case in which the defendant/indemnitor’s negligence is not 

the cause of the insured’s loss, “a result inconsistent with the rule articulated in Patent 

Scaffolding itself and the cases on which it relies.” The Court of Appeal in Interstate 

Fire criticized Patent Scaffolding on the ground its holding rewarded the party that 

refused to fulfill its indemnification obligations. (Interstate Fire, supra, 182 Cal.App.4th 

at p. 47.) The better policy, the Interstate Fire court explained, is to permit subrogation 

for an insurer that fulfilled its contractual obligations, even if the result was a windfall for 

the insurer. (Ibid.) To whatever extent Patent Scaffolding might be relevant here, we 

decline to follow it.

III.

Jury Trial on Valley Crest’s Express Indemnity Claim

Mission Pools argues the trial court erred by denying it a jury trial on 

Valley Crest’s express indemnity claim. The trial court concluded Mission Pools was not 

entitled to a jury trial on the express indemnity claim because Valley Crest was seeking 

the equitable remedy of specific performance. The trial court erred. The effect of our 
27

reversal of this portion of the judgment is a remand for a jury trial on the issue of 

damages on Valley Crest’s claim for express indemnity.

A. Legal Remedy Sought in the First Amended Cross-complaint

The form of relief sought in the complaint is a reliable indicator whether 

the action is legal or equitable. (Martin v. County of Los Angeles (1996) 51 Cal.App.4th 

688, 694.) “‘Actions at law usually seek a money judgment for damages, while equitable 

actions seek some form of specific relief and equity decrees are usually in personam.’” 

(Id. at pp. 695-696.) 

In the express indemnity claim, Valley Crest alleged Mission Pools 

breached the terms of the indemnity provision of the Subcontract. As a remedy for 

breach, Valley Crest did not seek a decree of specific performance of the Subcontract. 

Instead, Valley Crest sought money damages in the form of “reimbursement” of the 

amounts of $419,064.93 in attorney fees and costs, $50,000 contributed to the settlement 

with the Epps, and $202,096.61 in attorney fees and costs paid to CPH. By seeking, in 

effect, money damages, Valley Crest’s express indemnity claim was decidedly legal. No 

decree of specific performance appears in the judgment, which is a judgment for money 

damages. 

In addition, the first amended cross-complaint did not allege inadequacy of 

legal remedy, which is necessary for specific performance. (5 Witkin, Cal. Procedure

(5th ed. 2008) Pleading, § 803, p. 219.) “The basic rule is that governing equitable relief 

generally, i.e., specific performance will be granted only when the legal remedy, such as 

an action for damages, is inadequate.” (13 Witkin, Summary of Cal. Law (10th ed. 2005) 

Equity, § 24, p. 312.) By alleging, down to the penny, the precise amount of money 

sought to be recovered from Mission Pools, the first amended cross-complaint disclosed 

the legal remedy of damages was adequate. Because Valley Crest had an adequate legal 
28

remedy, it was not entitled to specific performance. (Canova v. Trustees of Imperial 

Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497.) 

B. No Waiver or Forfeiture of Jury Trial

Valley Crest argues that Mission Pools waived any right it might have had 

to a jury trial by failing to object, or by making an ambiguous objection, when the trial 

court announced its tentative decision to hold a bench trial on the express indemnity 

claim. Valley Crest misconstrues the law and the record. Section 631, subdivision (f) 

lists the six ways by which a party can waive a jury trial.

4

 Of these, only No. (3)—oral 

consent in open court—is arguably relevant. Mission Pools did not consent to a bench 

trial, and, in any case, such consent does not appear in the minutes. 

On April 24, 2013, after the first phase of trial had been completed, the trial 

court asked counsel to address whether the express indemnity claim should be tried to a 

jury or to the court. After a lengthy discussion covering 30 pages of the reporter’s 

transcript, the trial court decided to conduct a bench trial. During the course of the 

discussion, counsel for Mission Pools argued that Valley Crest failed to seek specific 

performance in its cross-complaint and “whether the fees are reasonable and necessary 

would be and . . . were of necessity would be a question for the jury.” Counsel for 

Mission Pools argued the relief sought by Valley Crest was “not something that would 

typically be envisioned under specific performance” and Valley Crest had an adequate 

 

 

4

 Section 631, subdivision (f) reads: “A party waives trial by jury in any of the 

following ways: [¶] (1) By failing to appear at the trial. [¶] (2) By written consent filed 

with the clerk or judge. [¶] (3) By oral consent, in open court, entered in the minutes. 

[¶] (4) By failing to announce that a jury is required, at the time the cause is first set for 

trial, if it is set upon notice or stipulation, or within five days after notice of setting if it is 

set without notice or stipulation. [¶] (5) By failing to timely pay the fee described in 

subdivision (b), unless another party on the same side of the case has paid that fee. [¶] 

(6) By failing to deposit with the clerk or judge, at the beginning of the second and each 

succeeding day’s session, the sum provided in subdivision (e).”
29

remedy at law. On this record, Mission Pools did not consent to waiver of a jury trial; 

moreover, the court minutes of April 24, 2013 do not include any such consent. 

Denial of the right to a jury trial is reversible error per se, and no showing 

of prejudice is required of a party who lost at trial. (Martin v. County of Los Angeles, 

supra, 51 Cal.App.4th at p. 698; see Villano v. Waterman Convalescent Hospital, Inc.

(2010) 181 Cal.App.4th 1189, 1205.) The judgment as to Valley Crest’s express 

indemnity claim is therefore reversed and the matter remanded for further proceedings. 

DISPOSITION

The judgment is reversed and the matter is remanded with respect to Valley 

Crest’s claim for express indemnity. In all other respects, the judgment is affirmed. In 

the interest of justice, no party shall recover costs on appeal.

FYBEL, J.

WE CONCUR:

ARONSON, ACTING P. J.

IKOLA, J.
Filed 7/2/15

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

VALLEY CREST LANDSCAPE

DEVELOPMENT, INC.,

 Cross-complainant and Respondent,

v.

MISSION POOLS OF ESCONDIDO, 

INC.,

 Cross-defendant and Appellant;

NATIONAL UNION FIRE INSURANCE 

COMPANY OF PITTSBURGH, PA,

 Intervener and Respondent.

 G049060

 (Super. Ct. No. 30-2008-00104227)

 ORDER CERTIFYING OPINION

 FOR PUBLICATION

On the court’s own motion, the above entitled unpublished opinion, filed 

June 26, 2015, is certified for publication in the Official Reports. The opinion meets the 

standards for publication set forth in California Rules of Court, rule 8.1105(c)(2), (3), and 

(7). 

FYBEL, J.

WE CONCUR:

ARONSON, ACTING P. J.

IKOLA, J.