Published in the March/April 2010 issue of the Construction Management Association of America's CMAdvisor.
On January 15, 2010, the California Court of Appeal held that a design professional owed a duty to defend its developer/client pursuant to a contract of indemnity even though the jury found that the design professional had not been negligent in performing its services. In UDC-Universal Development, L.P. v. CH2M Hill, a residential condominium homeowners association sued UDC, the developer of the project, and UDC cross-complained against its design professional, CH2M Hill, seeking to enforce indemnity provisions in their contracts. Five days before the end of the trial on UDC's indemnity claim, the Supreme Court issued its decision in Crawford v. Weather Shield, which held that a contractual indemnitor incurs a duty to defend the indemnitee as soon as the indemnitee tenders its defense to a claim asserting that the indemnitee was at fault. At the conclusion of the trial, the jury returned a verdict finding CH2M Hill was not negligent and that it did not breach its contract with UDC. Regardless, the trial court found that, under Crawford, the indemnity provision in the contract obligated CH2M Hill to pay UDC’s defense costs.