2005 California Civil Code Sections 2772-2784.5 TITLE 12. INDEMNITY

CIVIL CODE
SECTION 2772-2784.5

2772.  Indemnity is a contract by which one engages to save another
from a legal consequence of the conduct of one of the parties, or of
some other person.
(2773.) Section Twenty-seven Hundred and Seventy-three.  An
agreement to indemnify a person against an act thereafter to be done,
is void, if the act be known by such person at the time of doing it
to be unlawful.
2774.  An agreement to indemnify a person against an act already
done, is valid, even though the act was known to be wrongful, unless
it was a felony.
2775.  An agreement to indemnify against the acts of a certain
person, applies not only to his acts and their consequences, but also
to those of his agents.
2776.  An agreement to indemnify several persons applies to each,
unless a contrary intention appears.
2777.  One who indemnifies another against an act to be done by the
latter, is liable jointly with the person indemnified, and
separately, to every person injured by such act.
2778.  In the interpretation of a contract of indemnity, the
following rules are to be applied, unless a contrary intention
appears:
   1. Upon an indemnity against liability, expressly, or in other
equivalent terms, the person indemnified is entitled to recover upon
becoming liable;
   2. Upon an indemnity against claims, or demands, or damages, or
costs, expressly, or in other equivalent terms, the person
indemnified is not entitled to recover without payment thereof;
   3. An indemnity against claims, or demands, or liability,
expressly, or in other equivalent terms, embraces the costs of
defense against such claims, demands, or liability incurred in good
faith, and in the exercise of a reasonable discretion;
   4. 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, but the
person indemnified has the right to conduct such defenses, if he
chooses to do so;
   5. If, after request, the person indemnifying neglects to defend
the person indemnified, a recovery against the latter suffered by him
in good faith, is conclusive in his favor against the former;
   6. If the person indemnifying, whether he is a principal or a
surety in the agreement, has not reasonable notice of the action or
proceeding against the person indemnified, or is not allowed to
control its defense, judgment against the latter is only presumptive
evidence against the former;
   7. A stipulation that a judgment against the person indemnified
shall be conclusive upon the person indemnifying, is inapplicable if
he had a good defense upon the merits, which by want of ordinary care
he failed to establish in the action.
2779.  Where one, at the request of another, engages to answer in
damages, whether liquidated or unliquidated, for any violation of
duty on the part of the latter, he is entitled to be reimbursed in
the same manner as a surety, for whatever he may pay.
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 such 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.
2782.1.  Nothing contained in Section 2782 shall prevent a
contractor responsible for the performance of a construction
contract, as defined in Section 2783, from indemnifying fully a
person, firm, corporation, state or other agency for whose account
the construction contract is not being performed but who, as an
accommodation, enters into an agreement with the contractor
permitting such contractor to enter upon or adjacent to its property
for the purpose of performing such construction contract for others.
2782.2.  (a) Nothing contained in subdivision (a) of Section 2782
prevents an agreement to indemnify a professional engineer against
liability for the negligence of the engineer, or the engineer's
agents or employees, in providing inspection services to plants or
other facilities if all the following criteria are satisfied:
   (1) The promisor is the owner of the plants or facilities
inspected.
   (2) The promisor is audited annually by an independent certified
public accountant, public accountant, or accounting licentiate of
another state authorized by the laws of that state to perform the
audit.
   (3) The net worth of the promisor exceeds ten million dollars
($10,000,000), as determined by the promisor's most recent annual
independent audit.  The requirement of this paragraph shall be
satisfied at the time the contract for indemnification is entered,
and a subsequent reduction of the promisor's net worth shall not void
the obligation to indemnify.
   (4) The promisor is self-insured with respect to liability arising
from ownership of the plant or facility.
   (5) The indemnification shall not be applicable to the first two
hundred fifty thousand dollars ($250,000) of liability.
   (b) Subdivision (a) does not authorize contracts for
indemnification of liability arising from willful misconduct.
2782.5.  Nothing contained in Section 2782 shall prevent a party to
a construction contract and the owner or other party for whose
account the construction contract is being performed from negotiating
and expressly agreeing with respect to the allocation, release,
liquidation, exclusion, or limitation as between the parties of any
liability (a) for design defects, or (b) of the promisee to the
promisor arising out of or relating to the construction contract.
2782.6.  (a) Nothing in subdivision (a) of Section 2782 prevents an
agreement to indemnify a professional engineer or geologist or the
agents, servants, independent contractors, subsidiaries, or employees
of that engineer or geologist from liability as described in Section
2782 in providing hazardous materials identification, evaluation,
preliminary assessment, design, remediation services, or other
services of the types described in Sections 25322 and 25323 of the
Health and Safety Code or the federal National Oil and Hazardous
Substances Pollution Contingency Plan (40 C.F.R. Sec. 300.1 et seq.),
if all of the following criteria are satisfied:
   (1) The services in whole or in part address subterranean
contamination or other concealed conditions caused by the hazardous
materials.
   (2) The promisor is responsible, or potentially responsible, for
all or part of the contamination.
   (b) The indemnification described in this section is valid only
for damages arising from, or related to, subterranean contamination
or concealed conditions, and is not applicable to the first two
hundred fifty thousand dollars ($250,000) of liability or such
greater amount as is agreed by the parties.
   (c) This section does not authorize contracts for
indemnification, by promisors specified in paragraph (2) of
subdivision (a), of any liability of a promisee arising from the
gross negligence or willful misconduct of the promisee.
   (d) "Hazardous materials," as used in this section, means any
hazardous or toxic substance, material, or waste which is or becomes
subject to regulation as such by any agency of the state, any
municipality or political subdivision of the state, or the United
States.  "Hazardous materials" includes, but is not limited to, any
material or substance that is any of the following:
   (1) A hazardous substance, as defined in Section 25316 of the
Health and Safety Code.
   (2) Hazardous material, as defined in subdivision (j) of Section
25501 of the Health and Safety Code.
   (3) Acutely hazardous material, as defined in subdivision (a) of
Section 25532 of the Health and Safety Code.
   (4) Hazardous waste, as defined in Section 25117 of the Health and
Safety Code.
   (5) Extremely hazardous waste, as defined in Section 25115 of the
Health and Safety Code.
   (6) Petroleum.
   (7) Asbestos.
   (8) Designated as a hazardous substance for purposes of Section
311 of the Federal Water Pollution Control Act, as amended (33 U.S.C.
Sec. 1321).
   (9) Hazardous waste, as defined by subsection (5) of Section 1004
of the federal Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C.  Sec. 6903).
   (10) A hazardous substance, as defined by subsection (14) of
Section 101 of the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sec.
9601).
   (11) A regulated substance, as defined by subsection (2) of
Section 9001 of the federal Solid Waste Disposal Act, as amended (42
U.S.C. Sec. 6991).
   (e) Nothing in this section shall be construed to alter, modify,
or otherwise affect the liability of the promisor or promisee, under
an indemnity agreement meeting the criteria of this section, to third
parties for damages for death or bodily injury to persons, injury to
property, or any other loss, damage, or expense.
   (f) This section does not apply to public entities, as defined by
Section 811.2 of the Government Code.
2783.  As used in Sections 2782 and 2782.5, "construction contract"
is defined as any agreement or understanding, written or oral,
respecting the construction, surveying, design, specifications,
alteration, repair, improvement, maintenance, removal of or
demolition of any building, highway, road, parking facility, bridge,
railroad, airport, pier or dock, excavation or other structure,
development or other improvement to real or personal property, or an
agreement to perform any portion thereof or any act collateral
thereto, or to perform any service reasonably related thereto,
including, but not limited to, the erection of all structures or
performance of work in connection therewith, the rental of all
equipment, all incidental transportation, crane and rigging service
and other goods and services furnished in connection therewith.
2784.  As used in Sections 2782 and 2782.5, a "design defect" is
defined as a condition arising out of its design which renders a
structure, item of equipment or machinery or any other similar
object, movable or immovable, when constructed substantially in
accordance with its design, inherently unfit, either wholly or in
part, for its intended use or which impairs or renders the use of
such structure, equipment, machinery or property dangerous.
2784.5.  Any provision, promise, agreement, clause, or covenant
contained in, collateral to, or affecting any hauling, trucking, or
cartage contract or agreement is against public policy, void and
unenforceable if it purports to indemnify the promisee against
liability for any of the following damages which are caused by the
sole negligence or willful misconduct of the promisee, agents,
servants, or the independent contractors directly responsible to the
promisee, except when such agents, servants, or independent
contractors are under the direct supervision and control of the
promisor:
   (a) Damages arising out of bodily injury or death to persons.
   (b) Damage to property.
   (c) Any other damage or expense arising under either (a) or (b).
   This section shall not affect the validity of any insurance
contract, workmen's compensation insurance contract, or agreement
issued by an admitted insurer as defined by Sections 23 and 24 of the
Insurance Code or insurance effected by surplus line brokers under
Sections 1760 through 1780 of the Insurance Code.


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