United States Elevator Corp. v. Pacific Investment Co

In United States Elevator Corp. v. Pacific Investment Co. (1994) 30 Cal.App.4th 122, the owner of a building, Pacific, contracted with an elevator company to indemnify the elevator company against all claims, demands, and liability for damages to persons arising out of the use, installation, or maintenance of the elevator the company was servicing. Pacific refused the elevator company's tender of defense of a suit brought by a third party for damages arising out of the use of the elevator, but subsequently settled the entire suit, including the claim against the elevator company. Pacific claimed that because no indemnity was owed under section 2778, subdivisions (1) and (2), there was no liability to pay the elevator company's defense costs and attorney fees incurred in the suit. The Court of Appeal disagreed: "We find no merit to Pacific's argument that by settling with the plaintiff, without liability or contribution by Elevator, Pacific can avoid any duty under . . . section 2778, subdivision (4)." ( United States Elevator Corp., supra, 30 Cal.App.4th at p. 128.)