On January 26, 2023, the First Department issued a decision in Needham & Co., LLC v. UPHealth Holdings, Inc., 2023 NY Slip Op. 00376, holding that an agreement did not include the duty to indemnify the plaintiff’s attorneys’ fees because that duty was not set forth in unmistakably clear language, explaining:
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. 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. Thus, the intention to indemnify must be “unmistakably clear from the language of the promise.
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. 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.
The cases that plaintiff cites do not compel reversal of Supreme Court’s order. Those cases either predate Hooper Associates, or are distinguishable because of the specific language of the contracts at issue.
(Internal quotations and citations omitted).