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Patch v. Hanley11/22/2002
etrial order granting Patch's motion for summary adjudication of issues ruling in their favor on this count but only against Hanley in his corporate capacity. However, the final judgment declared Hanley, both individually and in his corporate capacity, "must protect, hold harmless and indemnify" Patch "for any and all claims, costs, expenses, demands, actions or liabilities that may rise out of . . . Opfell's claim . . . except to the extent such expenses and costs are awarded herein above."
Hanley contends the trial court erred by declaring Patch entitled to indemnification for the $405,000 settlement because the cross-complaint did not seek that relief. We disagree. The fourth cause of action alleged Patch were "entitled to indemnification [from Hanley] for any costs or damages associated with [Opfell's] claims." This allegation, combined with the prayer "for all expenses incurred by" Patch, comprehended the settlement payment subsequently made by American Equity. In light of our conclusion the trial court properly found Hanley individually liable under the equitable indemnity count, we affirm the judgment's application of declaratory relief against him in his individual as well as his corporate capacity.
The amendment terminating Hanley's partnership interest required Patch to make monthly payments to Hanley for twelve months. After Opfell filed her lawsuit, Patch withheld payments amounting to $37,083.30. Hanley contends the trial court "refused to issue an order under the declaratory relief claim . . . that Hanley Corp. was owed money by the Partnership." This argument misstates the record.
First, the fourth cause of action sought a declaration Patch was "entitled to and may use the funds withheld from Hanley to pay for costs and necessary legal counsel to defend against [Opfell's lawsuit] and may use the remainder of such funds, if any, to indemnify [Patch] for any amount they may be required to pay [Opfell]." Second, during trial, the court denied Hanley's "unnoticed motion seeking amounts allegedly owed" by Patch because Hanley "fail to allege any affirmative claim . . . in their pleadings . . . ." (See Code Civ. Proc., ยง 426.30, subd. (a).) Thus, the trial court did rule, albeit adversely, on Hanley's right to recover the unpaid installments for the withdrawal of Hanley's professional corporation from the Patch firm.
DISPOSITION
The request for judicial notice is granted. The judgment's award of damages is reversed with directions to enter a judgment awarding Ryan M. Patch, a professional corporation, and Patch & Wolff, as the successor-in-interest to Patch & Hanley, damages of $42,678.43, plus interest against William B. Hanley, a professional corporation. The judgment's declaratory relief provision is modified to declare Hanley, both individually and in his corporate capacity, shall indemnify Ryan M. Patch, an individual, Ryan M. Patch, a professional corporation, the partnership of Patch & Wolff, as successor-in-interest to Hanley & Patch, for any amount they are required to pay American Equity for its indemnification of the parties either by judgment or because of a settlement reached in good faith. The judgment is further modified to declare Patch & Wolff is entitled to use the funds withheld from Hanley to pay the legal expenses incurred to defend against the Opfell action and to indemnify them for the amounts they are obligated to pay her. As so modified, the judgment is affirmed. Each party shall bear its own costs on appeal.
WE CONCUR:
BEDSWORTH, J.
FYBEL, J.
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