Opinion
17189 Index No. 655331/21 Case No. 2022–01422
01-26-2023
NEEDHAM & COMPANY, LLC, Plaintiff–Appellant, v. UPHEALTH HOLDINGS, INC., et al., Defendants–Respondents.
Pillsbury Winthrop Shaw Pittman LLP, New York (Edward Flanders of counsel), for appellant. Simon Lesser PC, New York (Leonard F. Lesser of counsel), and Husch Blackwell LLP, Chicago, IL (Scott J. Helfand of the bar of the State of Wisconsin, admitted pro hac vice, of counsel), for respondents.
Pillsbury Winthrop Shaw Pittman LLP, New York (Edward Flanders of counsel), for appellant.
Simon Lesser PC, New York (Leonard F. Lesser of counsel), and Husch Blackwell LLP, Chicago, IL (Scott J. Helfand of the bar of the State of Wisconsin, admitted pro hac vice, of counsel), for respondents.
Kapnick, J.P., Moulton, Kennedy, Pitt–Burke, JJ.
Order, Supreme Court, New York County (Margaret Chan, J.), entered February 28, 2020, which granted defendants’ motion to dismiss the second cause of action, unanimously affirmed, without costs.
Plaintiff failed to state a claim for breach of an agreement to indemnify and reimburse attorney's fees, as the documentary evidence — that is, the agreement itself—conclusively establishes a defense to that claim ( CPLR 3211[a][1] ). When a party is not under any legal duty to indemnify, a contract imposing an obligation to indemnify "must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed" ( Hooper Assoc. v. AGS Computers, Inc., 74 N.Y.2d 487, 491, 549 N.Y.S.2d 365, 548 N.E.2d 903 [1989] ). Thus, the intention to indemnify must be "unmistakably clear from the language of the promise" ( id. at 492, 549 N.Y.S.2d 365, 548 N.E.2d 903 ).
Here, the indemnification clause in the contract between plaintiff and defendant UpHealth Services, Inc. does not explicitly require UpHealth Services to indemnify plaintiff for expenses arising out of UpHealth Services's breach. Rather, the contract requires the indemnitee (plaintiff) to give the indemnitor (UpHealth Services) notice of any action for which it seeks indemnification, and permits the indemnitor to assume the indemnitee's defense. In light of this language in the indemnification clause, the contract does not meet the requirements of Hooper Associates , as it does not make "unmistakably clear" that the parties intended UpHealth Services to indemnify plaintiff for attorney's fees incurred in litigation between them ( id. ). This conclusion holds particularly true because the language providing for notice and assumption of the defense would make little sense in an intraparty claim, which is the type of claim at issue here (see id. at 492–493, 549 N.Y.S.2d 365, 548 N.E.2d 903 ).
The cases that plaintiff cites do not compel reversal of Supreme Court's order. Those cases either predate Hooper Associates (see Breed, Abbott & Morgan v. Hulko, 139 A.D.2d 71, 531 N.Y.S.2d 240 [1st Dept. 1988], affd 74 N.Y.2d 686, 543 N.Y.S.2d 373, 541 N.E.2d 402 [1989] ), or are distinguishable because of the specific language of the contracts at issue (see e.g. Shah v. 20 E. 64th St., LLC, 198 A.D.3d 23, 41–42, 154 N.Y.S.3d 6 [1st Dept. 2021] ; Crossroads ABL, LLC v. Canaras Capital Mgt., LLC, 35 Misc. 3d 1238[A], 2012 N.Y. Slip Op. 51042[U], 2012 WL 2125991, *1 [Sup. Ct., N.Y. County 2012], affd 105 A.D.3d 645, 963 N.Y.S.2d 645 [1st Dept. 2013] ).