Second District, Division Seven Affirms Denial of Motions for Attorney’s Fees and Sanctions
We have written from time to time about tort of another and section 1021.6 as bases for attorney’s fees. Justice Perluss, author of a 3-0 opinion, has written a conveniently concise primer on the subjects. State Farm Mutual Automobile Ins. Co. v. Martinez, Case No. B205248 (2nd Dist. Div. 7, July 27, 2009) (unpublished).
Mr. Martinez, dba Manny’s Transmissions, rebuilt a transmission for a truck used by Prime Building to haul construction materials. The truck caught fire and was a total loss. State Farm stepped into the shoes of Prime Building, its insured, and filed a subrogation claim against Mr. Martinez.
Mr. Martinez did not believe he was responsible for the fire, and asked State Farm to preserve the evidence. Eventually, State Farm did not wish to pay the storage costs, and the the truck was dismantled and the parts sold for salvage value. Additionally, records relating to the claim were lost. At this point, it did not look so good for State Farm, but be patient, dear reader, and read on.
Mr. Martinez asked the trial court for terminating sanctions based on State Farm’s alleged destruction of evidence, but that court denied his request, believing there was insufficient evidence that the misconduct had been so deliberate or egregious as to warrant a terminating sanction.
Mr. Martinez also asked for attorney’s fees, based on tort of another and section 1021.6 implied indemnity (now subsumed as a form of equitable indemnity) theories. The trial court denied both requests. The Court of Appeal affirmed.
The problem with the tort of another claim was that State Farm had acted as a subrogee, not as a tortfeasor.
“As the Court of Appeal explained in David v. Hermann (2005) 129 Cal.App.4th 672, 688-689, “Decisions applying Prentice recognize that it represents an application of the usual measure of tort damages in circumstances where the defendant’s tortious conduct has made it necessary for a plaintiff to incur legal expenses to protect his interests. . . . [¶] . . . ‘[N]early all of the cases which have applied the [Prentice] doctrine involve a clear violation of a traditional tort duty between the tortfeasor who is required to pay the attorney fees and the person seeking compensation for those fees.’””
The problem with applying section 1021.6 was much the same. The Court explained that section 1021.6 does not create a right of indemnity — it merely provides a basis for an indemnitee to recover attorney’s fees under specific circumstances. However, Mr. Martinez did not stand in the relationship of an indemnitee as to Prime Building, for whom Mr. Martinez had provided a service — and as a subrogee, State Farm merely stood in the shoes of Prime Building. Had Prime Building been sued, it might have had a claim against Mr. Martinez, who had performed a service for Prime Building. “Prime Building, on the other hand, had no obligation to perform services on behalf of Martinez from which a duty to indemnify could be implied.” Hence, section 1021.6 also flopped as a basis for attorney’s fees.