Indemnity: Because California State Precedent Does Not Allow For Recovery Of First-Party Attorney’s Fees Under A Standard Third-Party Indemnity Clause, Ninth Circuit’s Earlier Dewitt Decision Was Incorrectly Decided

Concurring Justice Explains That A More Flexible Standard Of Intra-Circuit Stare Decisis Is Applicable To State Law Questions.

               In AGK Sierra De Monteserrat, L.P. v. Comerica Bank, No. 23-15290 (9^th Cir. July 19, 2024) (published), the Ninth Circuit reversed a district judge’s grant of attorney’s fees as damages under an indemnity provision despite California state court precedents holding that first-party attorney’s fees are not recoverable under a standard, third-party indemnity provision absent clear language allowing for such fee recovery.  The Ninth Circuit held that its earlier interpretation in Dewitt v. Western Pacific Railroad Corp., 719 F.2d 1448 (9^th Cir. 1983) was incorrect, which led to the reversal.  However, it did remand to see if fees were recoverable under an indemnity provision in a different document.  The concurring circuit judge explained why a more flexible standard of intra-circuit stare decisis applies to state law questions versus federal law questions.