Style and Substance of Indemnity Provision Supported the Denial Result, With Judicial Estoppel Argument Based on International Billing Services Not Prevailing.
Ni v. Yuan, Case No. B2347744 (2d Dist., Div. 1 Aug. 31, 2012) (unpublished) is yet another decision where defendants appealed a fee denial order, only to be affirmed because the defense entitlement was based on a true indemnity provision which was to be starkly contrasted with a true attorney’s fees clause. In sustaining the trial court’s denial, the appellate court focused on these factors: (1) the title of the provision (“Indemnification”); (2) the substance of the provision giving the indemnifying party the exclusive right to retain counsel, investigate, and defend a claim (usually not the case where a party in a fees clause situation has an absolute right to retain counsel of the party’s own choice); and (3) the provision was clearly targeted at third party claims, although the provision did not have to expressly reference third parties to be interpreted as a true indemnity provision.
However, there was more. The defense argued that fees were something they were entitled to because the other side sought fees in their pleading prayers, banking upon reasoning in International Billing Services, Inc. v. Emigh, 84 Cal.App.4th 1175, 1190 (2000). The appellate court dismissed this argument by observing that International Billing Services had been overruled on this point by M. Perez Co., Inc. v. Base Camp Condominium Assn. No. One, 111 Cal.App.4th 456, 465-467 (2003).