In Rossmoor Sanitation, Inc. v. Pylon, Inc (1975) 13 Cal. 3d 622, the California Supreme Court addressed the rights and obligations of parties to an indemnity agreement. A sewage facility contractor had entered into an agreement with the owner of real property, wherein the contractor agreed to indemnify and hold the owner harmless for all claims for property damage or personal injury. ( Id. at pp. 625-626.) The owner was held liable for the personal injuries and death of employees from a cave-in of an unshored trench. The owner and its insurer sought indemnity from the contractor and its liability insurer. ( Id. at p. 627.) The contractor's insurer cross-complained against the owner's insurer seeking apportionment of sums paid under the "other insurance" clauses of the policies. (Ibid.) In a court trial, the trial court found the general contractor (indemnitor) was negligent and the owner (indemnitee) was not actively negligent and therefore required the contractor to indemnify the owner under the terms of the parties' indemnification agreement. The Supreme Court affirmed. ( Id. at p. 633.) The Supreme Court also held that the owner's insurance coverage, provided by a direct insurer, was excess over coverage provided by an additional-insured provision in the contractor's policy. ( Rossmoor, supra, 13 Cal. 3d at pp. 633-635.) The "other insurance" clauses of each policy were identical, each stating that if the insured had other insurance against a covered loss, an apportionment would be made. ( Id. at p. 626.) In denying apportionment between the insurers, the Supreme Court reasoned that the owner's insurance company was subrogated to its insured's right to indemnity from the contractor and its insurer. These subrogation rights extended to sums paid in satisfaction of the tort judgment against the owner. The Supreme Court viewed "one factor as compelling": "To apportion the loss in this case pursuant to the other insurance clauses would effectively negate the indemnity agreement and impose liability on the owner's insurer when the owner bargained with the contractor to avoid that very result as part of the consideration for the construction agreement. We therefore conclude that the rights of indemnity and subrogation must control, and are persuaded the trial court was correct in finding that because the contractor's insurance policy naming the owner as an additional insured was part of the consideration for the construction job, it must be viewed as primary insurance under the facts of this case and that the owner's direct insurer was subrogated to the rights of the owner." ( Id. at pp. 634-635.) In Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) the court explained that "passive negligence is found in mere nonfeasance, such as the failure to discover a dangerous condition or to perform a duty imposed by law." ( Rossmoor, supra, 13 Cal.3d at p. 629.) For example, "passive negligence has been found or assumed from the failure to discover a defective condition created by others citation, failure to exercise a right to inspect certain work and specify changes citation, and failure to exercise a supervisory right to order removal of defective material. Active negligence has been found in digging a hole which later caused an injury, knowingly supplying a scaffold which did not meet the requirements of a safety order, creating a perilous condition that resulted in an explosion, and failing to install safety nets in violation of a contract citation." ( Id. at p. 630.) In Rossmoor, a property owner hired a construction contractor to build a sewage pump station on its property. In the agreement, the contractor agreed to indemnify the owner against all claims for damages arising out of the work and to obtain liability insurance coverage for itself, naming the owner as an additional insured. (Rossmoor, at p. 626.) The contractor obtained such insurance from U.S. Fire Insurance Company (U.S. Fire) and the owner obtained its own insurance from Insurance Company of North America (INA). Both policies included "other insurance" clauses, providing for apportionment if other insurance for the loss existed. (Ibid.) During construction, one of the contractor's employees was killed and another injured. The employees (or heirs) filed an action against the owner and obtained a judgment against it. INA satisfied the judgment, legal expenses and costs on behalf of its insured and brought an action against the contractor and U.S. Fire, seeking indemnity for the sums paid. ( Id. at p. 627.) On appeal from a judgment in favor of the owner and INA, the contractor and U.S. Fire argued the terms of the insurance contracts requiring proration in case of other insurance should control rather than the right to indemnification under the contract. ( Rossmoor, supra, 13 Cal.3d at p. 634.) The court disagreed. It held that, based on the trial court's finding that the owner was only passively negligent in connection with the accident, the indemnity provision applied, thus entitling the owner to recover its losses from the contractor. ( Id. at p. 633.) Further, because INA had paid the judgment on the owner's behalf, it became subrogated to the owner's rights to recover those losses from the contractor or the contractor's insurer, notwithstanding that the insurance policies, on their faces, appeared to provide primary coverage. ( Id. at pp. 633-635.) The court concluded that to hold otherwise would effectively negate the indemnity agreement. ( Id. at p. 634.) It stated: "It appears that both INA and U.S. Fire calculated and accepted premiums with knowledge that they might be called upon to satisfy a full judgment. There is no evidence that either company knew there was or would be other insurance when they issued the policies. The fact that there is other insurance is a mere fortuitous circumstance. We view one factor as compelling, however: to apportion the loss in this case pursuant to the other insurance clauses would effectively negate the indemnity agreement and impose liability on INA when the owner bargained with the contractor to avoid that very result as part of the consideration for the construction agreement. We therefore conclude that the rights of indemnity and subrogation must control, and are persuaded the trial court was correct in finding that because the U.S. Fire policy was part of the consideration for the construction job, it must be viewed as primary insurance under the facts of this case and that INA was subrogated to the rights of Rossmoor. " ( Id. at pp. 634-635.)