A recent court decision has shed light on a contentious legal battle between two companies over indemnity and defense obligations stemming from an off-road racing event. On July 1, 2024, Promote Mexico, LLC filed a complaint in the Court of Appeal of the State of California, Second Appellate District, Division One, against Monster Energy Company. The case revolves around who is responsible for defending and covering costs related to a lawsuit filed by a spokesmodel injured at one of these events.
Promote Mexico contends that it should not be held liable for defending Monster Energy Company in a lawsuit initiated by Magda Angel, who claims she was injured during the 2018 Baja 1000 race. The dispute centers on whether Promote Mexico’s duty to defend Monster is superseded by other contractual provisions or waivers signed by Monster's off-road racing team members. The agreements in question include the "Television Sponsorship Agreement" and "Sponsorship Agreement," both containing indemnity clauses requiring Promote Mexico to defend Monster against claims arising from their negligence or actions.
The case began when Magda Angel filed her complaint on August 12, 2019, alleging negligence on Monster's part for failing to adopt adequate safety measures at the event. Notably, Angel did not initially name Promote Mexico as a defendant but later amended her complaint to include them. In response, Monster filed a cross-complaint seeking indemnity and defense from Promote Mexico based on their sponsorship agreements.
Monster argued that their duty to defend was triggered as early as January 15, 2019, when they notified Promote Mexico via email about the potential claim related to Angel's injuries. However, Promote Mexico disputed this timing and claimed that no such duty existed until much later when Angel formally included them in her amended complaint.
The trial court ruled partially in favor of Monster Energy Company by affirming that Promote Mexico does have a duty to defend under paragraph 6.01 of their agreements. However, it also found that there was insufficient evidence to support the claim that this duty was triggered on January 15, 2019. Consequently, the issue of when exactly this duty arose remains unresolved and will proceed to trial.
Additionally, the court found fault with its previous order directing Promote Mexico to pay past and future defense costs incurred by Monster retroactive to January 15, 2019. This aspect exceeded the scope of what was requested in Monster’s summary adjudication motion and thus was reversed.
Representing Promote Mexico were attorneys Kendra J. Hall, John D. Alessio, Sean M. Sullivan, and Zagros S. Bassirian from Procopio Cory Hargreaves & Savitch LLP. On behalf of Monster Energy Company were M. Kevin Underhill, Marc P. Miles, and Kristy A. Schlesinger from Shook Hardy & Bacon LLP. The trail court case is presided over by Judge Bruce G. Iwasaki under Case ID B328413.