holding that insured’s recovery “should include not only the cost of defending the main claim, but also the costs of pursuing the third-party actions because the filing of the third-party actions was an essential component of the defense of the main action”
How later courts described this case
- holding that insured’s recovery “should include not only the cost of defending the main claim, but also the costs of pursuing the third-party actions because the filing of the third-party actions was an essential component of the defense of the main action”
- noting principle that a party pursuing a third-party claim is entitled to indemnification when claim is “an essential component of the defense of the main action, pursued in good faith and not contrary to the language of the contractual indemnity provision,”and holding that insured’s recovery “should include not only the costs of defending the main claim, but also the costs of pursuing the third- party actions because the filing of the third-party actions was an essential component of the defense ofthe main action, pursued in good faith and not contrary to the language of the contractual indemnity provision”
- under a contractual indemnity provision, awarding costs incurred pursuing third-party actions for indemnification or contribution “because the filing of the third-party actions was an essential component of the defense of the main action, pursued in good faith and not contrary to the language of the contractual indemnity provision”
- “Where, as here, there is a broad indemnity agreement providing for indemnification against all claims, actions, damages and costs, the indemnitee is entitled to costs, including counsel fees, incurred in the defense of the primary action even though that action was dismissed[.]”
Written by the judges who cited it.
The opinion
White, J. (concurring in part and dissenting in part).
I respectfully dissent from that portion of the majority’s determination permitting the Binghamton Lions Club to recover from defendant Granny "G” Productions, Inc. the reasonable counsel fees it incurred in the prosecution of its third-party actions for indemnification against third-party defendants. It is well established that an indemnity contract is strictly construed to avoid reading into it a duty the parties did not intend to assume; nor should a promise to indemnify be found unless it can be clearly implied from the language and purpose of the entire agreement (see, Hooper Assocs. v AGS Computers, 74 NY2d 487, 491-492 ). Here, Granny "G” agreed to indemnify the Lions Club "against all claims, actions, damages and costs” (emphasis supplied). In my view this promise does not encompass the subject third-party actions since the Lions Club was not defending itself against any claims, but rather was seeking affirmative relief from third-party defendants.
Moreover, since Granny "G” had agreed to fully indemnify the Lions Club, it had no reason to expect the Lions Club to seek indemnification from other sources. To permit this extension of the general rule would leave the indemnitor subject to potential open-ended obligations over which it has no control. Therefore, I conclude that the Lions Club is not entitled to be indemnified for the costs it incurred in prosecuting the third-party actions against third-party defendants (see, Lavorato v *41 Bethlehem Steel Corp., 91 AD2d 1184, 1185 ). This position is in accord with the general and virtually unanimous rule limiting the allowance of counsel fees to the defense of the claim indemnified against and not extending such allowance for services rendered in establishing the right to indemnification (see, Annotation, Indemnity-Liability of Subcontractor, 68 ALR3d 7, 64; 41 Am Jur 2d, Indemnity, § 48, at 383).
Cardona, P. J., Mercure and Crew III, JJ., concur with Carpinello, J.; White, J., concurs in part and dissents in part in a separate opinion.
Ordered that the order and judgment in action No. 1 is affirmed, without costs.
Ordered that the order and judgment in action No. 2 is modified, on the law, without costs, by reversing so much thereof as denied as moot the motion for summary judgment made by defendants Richard Faust, Richard Kober and Binghamton Lions Charities, Inc. on their cross claim for contractual indemnification; said motion granted to the extent that said defendants are awarded summary judgment on their cross claim regarding the costs, including reasonable counsel fees, incurred in defense of plaintiff's action and in prosecution of the third-party actions; and, as so modified, affirmed.