Mass. Electric maintains that, in noninsurance contracts, the obligation to indemnify includes the obligation to defend and that, because the defense obligation is thereby integral to the indemnity obligation, ยง 29C applies. It has been held that when a right to indemnify is conferred, but no provision has been made as to defense costs, the indemnitee may also recover reasonable and necessary defense costs incurred in resisting a claim within the compass of the indemnity, see, e.g., Amoco Oil Co. v. Buckley Heating, Inc., 22 Mass. App. Ct. 973, 973 (1986) (citations omitted). However, this has no application to circumstances where, as here, the indemnity clause expressly imposes a separate obligation to defend the indemnitee.
Ferreira v. Chrysler Group LLC, 13 N.E.3d 561, 567 (Mass. 2014) (quoting Elias v. Unisys Corp., 573 N.E.2d 946, 948 (Mass. 1991)); see also Amoco Oil Co., Inc. v. Buckley Heating, Inc., 495 N.E.2d 875, 876 (Mass. App. Ct. 1986) (rescript) ("when a right to indemnity is conferred, by written contract or otherwise, the indemnitee may recover reasonable legal fees and costs incurred in resisting a claim within the compass of the indemnity"). The Agreement, moreover, protects a manager from personal liability for any action taken or omitted in his capacity as manager, except for "willful acts in bad faith" (Agreement 3.12 at 6; Dkt. No. 59, ยถยถ 3-4).
Under Marine Travelift's reading, Bollinger should never defend an action because it would recover indemnity only by being cast in judgment. See White v. Dietrich Metal Framing, Civil Action No. 1:06-CV-554, 2007 WL 7050943, at *4 (E.D. Tex. Nov. 29, 2007) (holding that a similar interpretation "would unfairly penalize [the indemnitee] for successfully defending itself against [] claims--an outcome that is contrary to public policy"); Amoco Oil Co. v. Buckley Heating, Inc., 495 N.E.2d 875, 876 (Mass. App. Ct. 1986) (rejecting this interpretation because "[a]dopting [it] would lead to the aberrant consequence that an indemnitee would be better off supinely surrendering to a claim, than intelligently resisting it."). Marine Travelift also contends that indemnity is barred in this case because the indemnity provision limits indemnity based on claims, demands, actions, or proceedings to losses incurred as a result of certain intellectual property theories.
Boyce, 776 N.Y.S.2d 411, 413 (N.Y.A.D. 4 Dept. 2004) ("The claim of Keating for contractual indemnification is viable, notwithstanding the dismissal of the amended complaint against it, insofar as Javen may be contractually obligated to indemnify Keating for attorneys' fees and other litigation costs incurred by Keating in defending the action thus far."); Rogers v. Babler, Div. of MAPCO ALASKA, Inc. v. State, 713 P.2d 795, 800 (Alaska 1986) ("There exists no affirmative duty to defend under the language 'indemnify and save harmless', but only a duty to reimburse for costs of defense, whether successful or not.") (emphasis added); Amoco Oil Co. v Buckley Heating, Inc., 495 N.E.2d 875, 876 (Mass.App.Ct. 1986) ("There is no merit to Buckley's secondary argument that if the indemnity covers legal expenses, it does so only as a component of damages paid by the party to be indemnified; i.e., if the indemnitee defeats an action and, therefore, is not out of pocket for damages, it cannot recover legal expenses. Adopting Buckley's position would lead to the aberrant consequence that an indemnitee would be better off supinely surrendering to a claim, than intelligently resisting it."); INA Ins. Co. of North America v. Valley Forge Ins. Co., 722 P.2d 975, 982 (Ariz.App. 1986) ("when a claim is made against an indemnitee for which he is entitled to indemnification, the indemnitor is liable for any reasonable expenses incurred by the indemnitee in defending against such claim, regardless of whether the indemnitee is ultimately held not liable") (citation omitted); Chadwick-BaRoss, Inc. v. Martin Marietta Corp., 483 A.2d 711 (Me. 1984) (where indemnitee was exonerated by jury verdict in underlying sui
First, it is unclear whether implied indemnity is available where the aggrieved party has only incurred legal fees successfully defending the original action; Massachusetts authorities seem to point in opposite directions. Compare Amoco Oil Co. v. Buckley Heating, Inc., 22 Mass. App. Ct. 973, 974 (1986) ("[W]hen a right to indemnity is conferred, by written contract or otherwise, the indemnitee may recover reasonable legal fees and costs incurred in resisting a claim within the compass of the indemnity. . . . There is no merit to [the] argument that if the indemnity covers legal expenses, it does so only as a component of damages paid by the party to be indemnified; i.e., if the indemnitee defeats an action and, therefore, is not out of pocket for damages, it cannot recover legal expenses.
Gulf argues that this provision obliges Pioneer to reimburse Gulf for the cost of defending an action based on Gulf's alleged wrongdoing in 1972, months before Pioneer acquired the lease of the premises from Gulf. Whatever right of indemnification Gulf may have had included the cost of Gulf's successful defense of P W's claims. See Amoco Oil Co. v. Buckley Heating, Inc., 22 Mass. App. Ct. 973 (1986). Our task, as noted by the judge, is to construe the indemnity clause fairly and reasonably in order to ascertain the intention of the parties and to effectuate the purpose sought to be accomplished. Shea v. Bay State Gas Co., 383 Mass. 218, 222 (1981).
"It has long been held, however, that when a right to indemnity is conferred, by written contract or otherwise, the indemnitee may recover reasonable legal fees and costs incurred in resisting a claim within the compass of the indemnity." Amoco Oil Co . v. Buckley Heating, Inc ., 22 Mass. App. Ct. 973, 973 (1986). This is true even where the indemnity clause does not "speak expressly about indemnification of legal expenses."
Ordinarily, an indemnitee is entitled to recover reasonable attorney's fees and costs incurred in resisting a claim within the scope of the indemnity clause even where the written indemnity agreement makes no specific reference to attorney's fees. Amoco Oil Co. v. Buckley Heating, Inc., 22 Mass. App. Ct. 973 (1986). Beaver may well have been entitled to the same, but where it did not file a cross appeal contesting the failure to award attorney's fees and questioned only whether and to what extent Sutton would have to reimburse Welch for the amount paid in settlement of the plaintiff's claim, we decline to remand to the trial court for determination of Beaver's entitlement to attorney fees and expenses.
This would be so although perhaps the more common case is one where the indemnitee has legal expenses resisting a claim covered by the indemnity and then sues the indemnitor. See Amoco Oil Co. v. Buckley Heating, Inc., 22 Mass. App. Ct. 973 (1986), and cases cited. The Appellate Division appears to agree to reimbursement of legal fees in the indemnity situation.
As part of its indemnity claim, Vappi was entitled to recovery of reasonable counsel fees and legal costs incurred in defending the claim. Amoco Oil Co. v. Buckley Heating, Inc., 22 Mass. App. Ct. 973 (1986), and cases cited. It was open to Vappi to pursue those legal expenses as part of a separate indemnity action brought after completion of the negligence action.