Scalf v. D. B. Log Homes, Inc.

27 Cal. Rptr. 3d 826, 128 Cal. App. 4th 1510, 2005 Daily Journal DAR 5107, 2005 Cal. Daily Op. Serv. 3772, 2005 Cal. App. LEXIS 707
CourtCalifornia Court of Appeal
DecidedMay 5, 2005
DocketC047339
StatusPublished
Cited by62 cases

This text of 27 Cal. Rptr. 3d 826 (Scalf v. D. B. Log Homes, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Scalf v. D. B. Log Homes, Inc., 27 Cal. Rptr. 3d 826, 128 Cal. App. 4th 1510, 2005 Daily Journal DAR 5107, 2005 Cal. Daily Op. Serv. 3772, 2005 Cal. App. LEXIS 707 (Cal. Ct. App. 2005).

Opinion

*1514 Opinion

BUTZ, J.

In D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1 [112 Cal.Rptr. 786, 520 P.2d 10] (D’Amico), the California Supreme Court noted that admissions of a party obtained through discovery receive an unusual deference in summary judgment proceedings, and, absent a credible explanation, prevail over that party’s later inconsistent declarations. {Id. at p. 22.) However, later cases have cautioned that D’Amico should not be read “as saying that admissions should be shielded from careful examination in light of the entire record.” (Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, 482 [261 Cal.Rptr. 735] (Price); accord, Scheiding v. Dinwiddie Construction Co. (1999) 69 Cal.App.4th 64, 77-78 [81 Cal.Rptr.2d 360] (Scheiding).)

In this case, the trial court granted summary judgment based upon certain inculpatory statements by the moving party’s opponent in deposition, while refusing to consider other evidence disclosing triable issues of material fact. Because the trial court took an overly expansive view of D’Amico and an unduly myopic view of the entire record before it, we shall reverse.

FACTUAL AND PROCEDURAL BACKGROUND

The Yarbrough Litigation

This action arises from the construction of a log cabin home on property owned by Dale and Diana Yarbrough (the Yarbroughs), using a log home kit sold to them by Walter W. Scalf, doing business as Hatchet Mountain Homes (Scalf), and manufactured by respondent D. B. Log Homes, Inc,, doing business as Lodge Log Homes, Inc. (Lodge Log). Lodge Log supplied the precut logs, hardware, microfoam gasket material, layout plan and stacking plan for the home.

Litigation commenced when the builder of the home, Hughes Construction Company (Hughes Construction), filed a complaint against the Yarbroughs to foreclose a mechanic’s lien on the property. In response, the Yarbroughs filed a cross-complaint naming Hughes Construction, Scalf, Lodge Log and project engineer Kenneth Reed alleging, inter alia, strict liability, breach of warranty, breach of contract, negligent misrepresentation and professional negligence. The Yarbroughs complained that the home suffers from numerous defects in *1515 both materials and workmanship. These defects included: logs not properly sized according to the plans, logs with defectively drilled notches and bolt-through penetrations, omission of weather-blocking microfoam insulators, inadequate bolting of the log walls to the foundation causing failure of the tensioning rod systems, deviations from the plans, deletion of rim joists, improper load-bearing log splicing, and “structurally unsound and through-split logs.”

After being brought in as cross-defendants in the Yarbrough suit, Scalf and Lodge Log each filed cross-complaints against the other. Scalf sought implied equitable indemnity and comparative contribution, and also alleged that Lodge Log was guilty of breach of warranty, breach of contract and negligence. Lodge Log not only sought implied equitable indemnity based on apportionment of fault, but set forth an independent cause of action for express indemnity based upon a “Lodge Logs Dealer Agreement” executed by Scalf and in force at the time of the subject events (dealer agreement). Paragraph 14 of the dealer agreement contains a “Dealer’s Indemnity” clause, whereby Scalf agreed to hold harmless and indemnify Lodge Log against “any loss, claim of loss, lawsuit, cause of action, or claim asserted against Lodge Log[] by any third party . . . .”

Summary Judgment Motion and Ruling

During the course of discovery, Lodge Log took the deposition of Walter Scalf. In response to counsel’s questions, Scalf stated that the dealer agreement was in force at the time of the subject transaction; that Lodge Log supplied the precut logs and the stacking plan for the Yarbroughs’ home; that no one from Hughes Construction ever told him that the kit delivered to the Yarbroughs was “somehow incomplete”; and that he had no reason to believe Lodge Log “did anything wrong in this case.” In addition, Lodge Log’s counsel engaged the then 79-year-old Scalf in the following exchange:

“Q. Okay. Now as I understand it, the Lodge Log home kit that was sold to the Yarbroughs was off-loaded at your place on Hatchet Mountain?
“A. Bumey Transportation in Bumey.
“Q. Okay. Did you have a chance to look at the kit?
“A. Oh yeah.
*1516 “Q. Was there anything wrong with that Lodge Log home kit that was ultimately delivered to the Yarbroughs?
“A. Absolutely not.
“Q. Were the logs cured?
“A. Yes, sir.
“Q. Were the hardware components included?
“A. Yes sir, box Ml.
“Q. Was the microfoam gasket included?
“A. Yes, sir. ffl . . . fi[]
“Q. Okay. With respect to the items that were criticized about the home that were related to [¿7c] by Mr. Richmond, do you attribute any of those problems to Lodge Log homes?
“A. Absolutely not.
“Q. Do you have any criticisms of the conduct of Lodge Log homes in this case?
“A. No.”

During the course of litigation, the Yarbroughs filed for bankruptcy and were replaced as plaintiffs by a trustee in bankruptcy. Both Scalf and Lodge Log settled the Yarbrough cross-complaint with the bankruptcy trustee. The court then issued an order that the settlement was in good faith, thus discharging Lodge Log from all claims by codefendants for comparative equitable indemnity or contribution. (See Code Civ. Proc., § 877.6; Turcon Construction, Inc. v. Norton-Villiers, Ltd. (1983) 139 Cal.App.3d 280, 282-284 [188 Cal.Rptr. 580].)

Lodge Log moved for summary judgment against Scalf on his cross-complaint and in favor of Lodge Log on the express indemnity and declaratory relief causes of action of its cross-complaint, based on the “Dealer’s Indemnity” clause of the dealer agreement. 1

*1517 In its moving papers, Lodge Log conceded that, in order to enforce the “Dealer’s Indemnity” clause, it had to show that it was neither actively nor passively negligent. (See MacDonald & Kruse, Inc. v. San Jose Steel Co. (1972) 29 Cal.App.3d 413, 425 [105 Cal.Rptr.

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27 Cal. Rptr. 3d 826, 128 Cal. App. 4th 1510, 2005 Daily Journal DAR 5107, 2005 Cal. Daily Op. Serv. 3772, 2005 Cal. App. LEXIS 707, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scalf-v-d-b-log-homes-inc-calctapp-2005.