Indemnity: LLC Operating Agreement Provision Was An Indemnity, Not A Fees Clause, Requiring Reversal Of A $71,032.50 Fee Award To Prevailing Plaintiffs.

Section 1717 Does Not Change The Result If The Indemnification Provision Does Not Apply.

            In JFK Investment Group, LLC v. Kobi, Case No. B287455 (2d Dist., Div. 3 May 31, 2019) (unpublished), plaintiffs won a LLC dispute and then obtained $71,032.50 in fees under an LLC indemnity provision.  The relevant clause contained critical “indemnify” language only applicable to third parties, not specifically referring to actions relating to LLC operating agreement signatories involving fee disputes.  Civil Code section 1717 did not dictate a different result because indemnification provisions are specific and cannot be translated into general fee provisions.  (Alki Partners, LP v. DB Fund Services, LLC, 4 Cal.App.5^th 574, 605-606 (2016).)  So, the indemnity fee provision was not a fee clause—fee award reversed as a matter of law.