GREAT AMERICAN INSURANCE COMPANY VS TRANSIT AMERICA SERVICES, INC. ET AL.

May 12, 2026 Law and Motion Calendar PAGE 6 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________

Legal Standards for Summary Judgment and Summary Adjudication

A motion for summary adjudication “shall proceed in all procedural respects as a motion for summary judgment.” (Code Civ. Proc., § 437c, subd. (f)(2).) Denial of summary adjudication is appropriate on the same grounds as is the denial of summary judgment.

The California Code of Civil Procedure provides that “[a] party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c, subd. (a)(1).)

A motion for summary judgment must be granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)

A defendant has met its burden of showing that a cause of action is meritless, if:  the party has shown that one or more elements of the cause of action ... cannot be established, or  that there is a complete defense to the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2) (bullet points added).)

If the defendant meets this burden, then “the burden shifts to the plaintiff ... to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.)

“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party.” (Weiss v. People ex rel. Dep’t of Transportation (2020) 9 Cal.5th 840, 864 (Weiss) (citations omitted).)

Summary judgment “is drastic and should be used with caution in order that it may not become a substitute for existing methods in the determination of issues of fact.” (Eagle Oil & Ref. Co. v. Prentice (1942) 19 Cal.2d 553, 556.)

Indeed, issues of fact are to be found and not determined: By an unbroken line of decision in this state since the date of the original enactment of section 437c, the principle has become well established that issue finding rather than issue determination is the pivot upon which the summary judgment law turns. (Walsh v. Walsh (1941) 18 Cal.2d 439, 441 (citations omitted).)

Further: The purpose of the summary judgment procedure is not to try the issues but merely to discover, through the medium of affidavits, whether there are issues to be tried and whether the parties possess evidence which demands the analysis of trial. (Melamed v. City of Long Beach (1993) 15 Cal.App.4th 70, 76.)

Specifically, California summary judgment law differs from federal law in that the former “continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 854-55 (Aguilar).)

Further, the Supreme Court of California has stated that: Language in certain decisions purportedly allowing a defendant moving for summary judgment simply to “point[]” out “an absence of evidence to support” an

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element of the plaintiff’s cause of action does not reflect summary judgment law as it has ever stood, and is accordingly disapproved. (Aguilar, supra, 25 Cal.4th 826, 855 (citation omitted).)

The Court must consider all of the evidence and inferences reasonably drawn therefrom “in the light most favorable to” the party opposing the motion. (Aguilar, supra, 25 Cal.4th 826, 843.)

A trial court is justified in granting summary judgment “only if the declarations filed in support of it, strictly construed, contain facts sufficient to entitle the [proponents] to judgment, and those of the [opponents to the summary judgment motion], liberally construed, show that there was no issue of fact to be tried.” (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417.)

Ultimately, if the Court feels any uncertainty as to whether a grant of summary judgment is proper, “any doubts about the propriety of summary judgment must be resolved in favor of the opposing party.” (Mateel Env’t Just. Found. v. Edmund A. Gray Co. (2003) 115 Cal.App.4th 8, 17 (Mateel) (citations omitted).)

The Motion Is MOOT as to Issue No.

1.

Due to the dismissal of Defendant Herzog Transit Services, Inc., Issue No. 1, that this defendant is not a proper party, is moot.

The Motion Is DENIED as to Issue No.

2.

Defendant’s Issue No. 2 is that Plaintiff’s claim for subrogation against Defendant fails as a matter of law because “there was a waiver of subrogation.” (Motion, 2:7.)

One may expect the asserted waiver of subrogation to appear in the insurance agreement between Plaintiff and the PCJPB. However, as to the asserted waiver, Defendant quotes from the O&M Contract between the PCJPB and Defendant the requirement that some “referenced policies and any Excess or Umbrella policies shall contain a waiver of subrogation.” (MPA iSo Motion, 3:18-20 (emphasis retained), citing Defendant’s UMF 10.)

Plaintiff disputes Defendant’s UMF that the O&M Contract required the property-insurance policy (the “Property Policy”) to include this waiver. (Plaintiff’s Separate Statement in Opp., UMF 10.)

Defendant does not show that the Property Policy had the assertedly required subrogation waiver. Instead, Defendant essentially argues that the subrogation waiver should be read into the Property Policy based on many approaches to contract interpretation, including because of the language of the O&M Contract which includes the phrase, “referenced policies.”

Defendant states that in Davlar, a general contract that was incorporated by reference into a subcontract “required a waiver” (Motion, 7:15 (emphasis added))—but that contract actually provided a waiver, as Defendant’s own quote from the case reflects.

Similarly, Defendant states that in Lloyd’s Underwriters v. Craig & Rush, Inc. (1994) 26 Cal.App.4th 1194 (Lloyd’s), “the contract between the owner and the contractors required the owner to maintain property insurance, and that the owner and the contractor waive all rights against each other” (id., 8:4-5)—but again, the contract there actually provided a waiver, as Defendant’s quote from the case shows. (Lloyd’s, supra, 26 Cal.App.4th 1194, 1198.)

Defendant anticipated that Plaintiff would contend that the Property Policy is not among the referenced policies that were to contain a waiver of subrogation. Defendant argues that the O&M Contract must be construed as a whole, and since it requires the PCJPB to carry property insurance that specifically covers service equipment like that damaged in the accident, PCJPB’s

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insurance obligations should be taken to include waiver of subrogation as to any and all of the insurance policies it was required to maintain. However, such a reading has the potential to render the term “referenced” superfluous.

Throughout the papers, the parties devote significant energy to competing interpretations of the requirements of the O&M Contract between Plaintiff and the PCJPB. This energy demonstrates the ambiguity in the O&M Contract: if the O&M Contract were clear on this point, such effort would be unnecessary.

For instance, Defendant asserts that: Section 13(A) sets forth [Defendant] TASI’s responsibilities and requirements and does not include any obligation to carry property damage insurance. The insurance requirements on the part of PCJPB (Section 13(B)), on the other hand, include the obligation to maintain Property Insurance, and to specifically cover Service Equipment (i.e. locomotives and rail cars) (Section 13(B)(1)(b)) which is exactly the property that was damaged in the March 10, 2022 accident. PCJPB’s insurance obligation thus was not limited to Railroad Liability, General Liability Insurance and Business Automobile Liability, so any attempt by [Plaintiff] GAIC to argue that only those policies are subject to the Waiver of Subrogation provision (Section 13(B)(2)(b)) would be a distorted interpretation of the contract. (MPA iSo Motion, 9:2-10.)

That is, Defendant asserts that since the O&M Contract required the PCJPB to carry property insurance, the waiver of subrogation that under one reading appears to be applicable to the PCJPB’s other insurance should be construed under another reading to apply to its property insurance as well.

As Plaintiff points out, the asserted language of waiver is at best ambiguous. (Opp., 5:21-22.) Put simply, a review of the pertinent pages of the O&M Contract demonstrates that there are two subsections under the agreements regarding the Railroad Liability Insurance and Business Automobile Liability language, including subsection (1)(a)(2) which has the waiver of subrogation under endorsements, while there is no explicit waiver of subrogation or subsections under the property insurance subsection (1)(b).

Then, there is a new section (2) for endorsements which has subsection (a) for named insured which expressly states that the contractor is a named insured with respect to the Railroad General Liability and Automobile policies including Excess or Umbrella policies and a section (b) for waiver of subrogation which states: “The referenced policies and any Excess or Umbrella policies shall contain a waiver of subrogation.” (Kite Decl., Ex. 1, pages TSAI 529-531.)

The words “referenced policies” could refer only to the policies identified in section (2)(a) or could mean all policies referenced in the contract. Defendant asserts that, “Because PCJPB contractually agreed to waive subrogation as to the insurance policies it was obligated to maintain, [Plaintiff] GAIC is bound by that contractual agreement and cannot subrogate and recover the losses from [Defendant] TASI in this case.” (Motion, 9:13-15.)

This argument could persuade a fact-finder to determine that the parties to the Property Policy intended it to bear a waiver of subrogation. However, a reasonable fact-finder alternatively could find the opposite.

As a further example, Plaintiff notes that Defendant and the PCJPB subsequently amended their agreement to include a subrogation waiver for the “Property Insurance” policy in 2025, specifying that this change did not apply retroactively. (See Plaintiff’s Additional Material Facts, No. 18.)

Defendant objects that this fact is irrelevant (Defendant’s Obj. No. 12, which is overruled), though a reasonable fact-finder could construe this evidence to suggest that a waiver was not present before, since if it had been, there would have been no

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subsequent need to specify that a waiver now is not retroactive.

Defendant applies a federal case to support its argument that a subsequent contract amendment should not be taken to shed light on the meaning of the earlier version of the contract, then offers its contrary interpretation of the amendment. (Reply, 8:3-25.) It is appropriate to the role of the fact-finder to determine how to weigh such evidence, and inappropriate to summary adjudication.

It may be that a trier of fact will agree with Defendant after hearing all of the parties’ evidence. Meanwhile, on summary adjudication, it is Defendant-Movant’s burden to show the asserted contract provision of waiver of subrogation, and no such clear provision is shown. Thus, the pertinent contract terms must be found by the trier of fact.

At a minimum, the papers show triable issues of fact material to the intent of the parties to the O&M Contract regarding whether the PCJPB’s Property Policy was required to include a waiver of subrogation.

Further, even if PCJPB and Defendant agreed that the subrogation would be waived for the property coverage, Defendant has not established as an undisputed fact that the coverage was actually obtained. Defendant only introduces a document entitled “Evidence of Property Insurance,” (called Certificate of Insurance by Plaintiff) which names it as an additional interest, but the document states that it is issued “as a matter of information only and confers no rights upon additional interest named below. (Kite Decl., Ex. 2.) Accordingly, there are material facts in dispute. (UMF 1-13, Plaintiff’s Additional Facts 12-22.)

The Motion Is DENIED as to Issue No.

3.

Defendant’s Issue No. 3 is that Plaintiff’s claim for subrogation against Defendant fails because Defendant “was an implied insured under the policy at issue.” (Motion, 2:9-10.)

Defendant recounts that it was issued a Certificate of Insurance (“CoI”) naming it as an additional insured under Plaintiff’s relevant property policy. (Id., 3:23, citing Defendant’s UMF 11.) Before the accident, Defendant had not been notified that the CoI was incorrect, nor that the property insurance had changed. (Id., 3:24-26, citing Defendant’s UMF 13.) Defendant “believed it was covered under the GAIC property policy for each year thereafter and that there was a waiver of subrogation. (UMF 12.)” (Id., 3:23-24.)

Defendant asserts that California cases refuse to allow subrogation when the insurance policy is intended to provide coverage for the defendant, so that the defendant is an implied insured. Accordingly, Defendant argues that here, it would be inequitable to hold Defendant, which was performing rail-electrification work for Caltrain owned by the PCJPB, responsible for damage that it thought it had avoided by the assumption of the risk of damage by the PCJBP’s insurer.

Defendant relies in part on a case in which the entity to which it is otherwise analogous in some respects had paid insurance premiums (Liberty Mutual Ins. v. Auto Spring Supply Co. (1976) 59 Cal.App.3d 860, 865 (Liberty Mutual), but Defendant does not show that it did so here.

Plaintiff disputes Defendant’s UMF Nos. 11-13, stating that Defendant’s asserted belief that it was an implied insured is unreasonable in light of the plain terms of the O&M Contract and because the CoI is purely informational, and also because Defendant admits to having no documentary evidence that Plaintiff supported this belief. Defendant also asserts that the parties did not agree that in the event of its destruction of property, the sole remedy would be payment of damages by PCJPB and its carrier. Defendant’s discovery responses show that it had no reasonable expectation of insurance coverage, so that the inequity of subrogation is defeated.

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Defendant admits that it has no documentary evidence of communications with Plaintiff that would make it think that it was an implied insured. (PAF 23.)

Defendant’s equitable argument is that the O&M Contract was intended to protect Defendant as well as the PCJPB, so that Plaintiff should not be able to use the doctrine of subrogation to receive damages for the very risk it agreed to insure. That is, the PCJPB intended the coverage to apply to Defendant, as an implied insured, for property damage, so that the PCJPB’s insurance policy with Plaintiff was to pay for property loss. Accordingly, Plaintiff should not be allowed to deprive the PCJPB of the coverage for which it bargained by circuitously suing Defendant.

However, the intent of the parties to PCJPB’s policy with Plaintiff is not so clear that it can be ruled upon as a matter of law on summary adjudication. For instance, where the parties must argue the import of the CoI in determining whether Defendant is or is not an implied insured, such determination must be made by the finder of fact.

Plaintiff further asserts that Plaintiff’s Additional Facts Nos. 29-48, which Defendant does not dispute for purposes of the Motion, in turn raise triable issues of fact as to whether Defendant was grossly negligent in causing the accident, in which case it could not expect subrogation to be waived.

As the Court of Appeal explains: It is true that summary judgment on the issue of gross negligence may be warranted where the facts fail to establish an extreme departure from the ordinary standard of care as a matter of law. However, “[g]enerally it is a triable issue of fact whether there has been such a lack of care as to constitute gross negligence.” ... We will not here catalogue every conceivable argument that the Hass Family could present in an attempt to prove grossly negligent conduct by RhodyCo in this context.

We conclude only that, viewing the evidence in the light most favorable to them, it is possible that the Hass Family could establish that, despite the potential for grave risk of harm[, the defendant’s management actions] constituted an extreme departure from the standard of care for events of its type. This is sufficient to raise a triable issue of fact with respect to gross negligence. (Hass v. RhodyCo Productions (2018) 26 Cal.App.5th 11, 33 (citation and footnotes omitted).)

Here, similarly, viewing the evidence in the light most favorable to Plaintiff, it is possible that it could establish that despite the potential for grave risk of harm, Defendant’s management actions leading to the accident reflected in PAF Nos. 29-48 constituted an extreme departure from the applicable standard of care. This suffices to raise a triable issue of fact material to whether Defendant was grossly negligent, so that subrogation might not be waived. Accordingly, there are material facts in dispute. (UMF 1-13, Plaintiff’s Additional Facts 29-48.)

The Motion for Summary Judgment Is DENIED. For the above reasons, the Motion for Summary Judgment is denied as well.

Defendant’s Objections in Reply

The Court reviewed each Objection in Defendant’s Evidentiary Objections to Plaintiff’s Evidence Submitted in Opposition (“Defendant’s Objections”), and its asserted legal bases. Defendant’s objections on grounds of relevance to changes to the O&M Contract subsequent to the version in force at the time of the accident are not a basis for excluding the evidence as

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irrelevant. Instead, this argument goes to the weight that the fact-finder will decide to accord to the evidence of subsequent changes. Similar reasoning applies to each of the objections on grounds of relevance.

The Court rules upon Defendant’s Objections as follows:

As to the Declaration of Matthew Beaver Objs. Nos. 1, 3-6: OVERRULED. Obj. No. 2: SUSTAINED as to “Caltrain requested that” and “a request”; otherwise, OVERRULED.

As to the Declaration of Jason J. Fratts Obj. Nos. 7, 9: OVERRULED. Obj. No. 8: OVERRULED. As to the rule-of-completeness ground for Defendant’s Objection No. 8, it appears actually to be directed to Exhibit F, which appears to be complete. Defendant may direct the Court to the portions which it describes as relevant and omitted.

Objs. Nos. 10-11: The Court agrees that it appears that Plaintiff’s counsel intended to refer to Exhibit I in paragraph 11 of his Declaration, and to Exhibit H in paragraph 12 thereof.

As to the Declaration of Marshall Rush Objs. Nos. 12-13: OVERRULED.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Plaintiff shall prepare for the Court’s signature a written order consistent with the Court’s ruling, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and by the California Rules of Court.