Building Maintenance Service Co. v. AIL Systems, Inc

In Building Maintenance Service Co. v. AIL Systems, Inc. (1997) 55 Cal.App.4th 1014, an employee slipped and fell on the job, and the employer, having paid out workers' compensation benefits, sued its janitorial service for reimbursement based on an indemnity provision in the contract. In that contract the janitorial service promised to "indemnify" the employer "against all loss whatsoever . . . which may result in any way from any act of omission or commission on the part of" the janitorial service. However, the clause didn't stop there. It added these words: "except to the extent that any such damage is due solely and directly to the negligence" of the employer. (Id. at p. 1022.) BMS provided janitorial services to AIL. When an AIL employee slipped and fell on AIL premises, she sued BMS for negligence. BMS brought AIL into the action by filing a cross-complaint for indemnity against AIL. AIL cross-complained against BMS for reimbursement of the workers' compensation benefits it had paid to the plaintiff/employee and for indemnity and declaratory relief; AIL's indemnity claim was based on an indemnity provision in its contract with BMS. After AIL was granted summary judgment against BMS on BMS's indemnity claims, AIL filed a complaint in intervention against BMS seeking reimbursement for the compensation benefits paid to the plaintiff/employee. (55 Cal.App.4th at pp. 1018-1019.) After a jury trial, BMS prevailed against the plaintiff; after a court trial, BMS prevailed against AIL on the intervention complaint. (Id. at p. 1019.) BMS sought costs and attorneys fees from AIL on the grounds that it was the prevailing party. AIL opposed the motion on numerous grounds, including that it was the prevailing party. (Ibid.) The trial court found BMS to be the prevailing party under section 1032(a)(4) and awarded it attorneys fees and costs. (Id. at p. 1020.) The appellate court affirmed, reasoning that, although BMS would not be entitled to costs by virtue of the disposition of the parties' cross-complaints, BMS was the prevailing party because it successfully defeated the complaint in intervention. (Ibid.) "In the absence of the complaint in intervention, we agree with AIL that BMS would not meet the definition of one of the four categories of parties who are entitled to costs as a matter of right. However, since BMS clearly prevailed on the complaint in intervention filed against it by AIL, BMS is the prevailing party entitled to costs under section 1032." (Id. at p. 1027.) The appellate court distinguished Slavin on the grounds that Slavin addressed the issue of the trial court's discretionary allocation of costs where actions were consolidated. (Id. at p. 1028.)