Although Fees Incurred In Defending Against Third Party Claim Were Recoverable, The Enforcement Fees Were Not.
Language, language, language.
Free neighborhood classes (including language). 1937. Library of Congress.
The language of an indemnity clause, including fee entitlement, is critical in determining what types of fees are recoverable by an indemnitee. The indemnitee in the next case won some fees but lost others in its bid to recoup indemnity enforcement fees.
The trial court in GAP, Inc. v. Apex Xpress, Inc., Case No. A146176 (1st Dist., Div. 5 June 14, 2017) (unpublished) awarded a contractual indemnitee both fees for defending against a third-party action brought against indemnitee under an indemnity clause and for suing an insurer for insurance coverage for purposes of enforcing the indemnity agreement. The appellate court agreed the indemnity clause allowed indemintee to recover the third-party action fee expenses but did not allow for fees in suing the insurer to enforce the indemnity agreement. Simply put, the enforcement dispute was not covered by the language of the indemnity clause only allowing for fee recovery in a more limited third-party action context. (See Otis Elevator Co. v. Toda Construction, 27 Cal.App.4th 559, 564, 566 (1994); Hillman v. Leland E. Burns, Inc., 209 Cal.App.3d 860, 865, 869-870 (1989).) As such, the $25,914.76 award in enforcement fees was reversed on appeal.