Notwithstanding AB 758, Will “Builders” Continue to Obtain Type-I Indemnity Protection?
Despite the intent of AB 758, ambiguities in the statutory language may allow builders to continue demands for Type-I indemnity from subcontractors for construction defect claims. AB 758 eliminates Type-I indemnity clauses in favor of the builder “as defined in [Civil Code] Section 911.” This begs two questions: (1) What is a “builder,” and (2) Can a “builder” require a Type-I indemnity obligation from its general contractor, which in turn can require Type-I indemnity obligations from subcontractors? Civil Code § 911(a) defines “builder” as “any entity or individual, including, but not limited to a builder, developer, general contractor, contractor, or original seller who at the time of sale was also in the business of selling residential units to the public…” (emphasis added). Civil Code § 911(b) goes on to state: “‘builder’ does not include any entity or individual whose involvement…is limited to his or her capacity as general contractor or contractor and who is not a partner, member
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