Mel Clayton Ford v. Ford Motor Co

In Mel Clayton Ford v. Ford Motor Co. (2002) 104 Cal.App.4th 46, an automobile manufacturer had contracted to defend and indemnify one of its dealers for lawsuits, complaints or claims "arising out of an occurrence caused solely by" production defects. An F250 truck erupted in flames on the road. The dealer, as well as Ford, were sued for products liability. The dealer requested a defense from Ford. Ford refused, and the dealer eventually settled with its own money, and then filed a complaint against Ford for breach of an "express indemnity contract" while Ford itself cross-complained against the dealer for (non-contractual) equitable indemnity. (See Mel Clayton Ford v. Ford Motor Co., supra, 104 Cal.App.4th at p. 51.) The trial court later granted three seriatim summary adjudication motions: (1) Ford had a duty to defend the dealer in the underlying action; (2) the dealer had incurred a certain amount of fees and settlement costs in the underlying action; and, shades of the Peter Culley & Associates v. Superior Court (1992) 10 Cal.App.4th 1484 case, (3) the dealers' settlement with the underlying plaintiffs was in good faith under section 877.6 of the Code of Civil Procedure. In the wake of its good faith settlement finding, the trial court then granted the dealer's summary judgment motion directed against Ford's cross-complaint on the theory that the good faith determination indeed barred any action for equitable indemnity, and there was no contract right on Ford's part to seek indemnification either. In the wake of that determination, the trial court concluded that all issues were resolved and it then granted judgment to the dealer in an amount that included the amounts the dealer had incurred to defend and settle the underlying action.