Halpern v. Edge Group, Llc ( 2013 )

 partners agreed to fully indemnify Edge against any and all future claims
brought by Roche or his company.
Less than a year later, Roche filed suit in California state
court against Edge claiming that it intentionally and negligently
interfered with Roche's business dealings and prospective profits, with
alleged damages in the billion-dollar range. Following several years of
litigation, Edge and Roche reached a $550,000 settlement.
A year later, Edge brought an indemnification suit in Nevada
against Halpern to recover the amount of the settlement paid to Roche
Group, as well as the attorney fees and costs incurred in litigating the
matter. Throughout the course of litigation in the district court, Halpern
contended that the indemnity clause in the settlement agreement was not
meant to indemnify against Edge's negligence. Following protracted
discovery and litigation, the district court granted summary judgment in
favor of Edge on the issues of Halpern's duty to indemnify Edge and its
liability to Edge for the full amount of the settlement. At the subsequent
trial solely on the issue of attorney fees, the district court found Halpern
jointly and severally liable to Edge for almost $1.9 million that it had
expended in defending itself in the Roche action. Following entry of the
district court's judgment, Edge successfully moved for, and was awarded,
attorney fees, costs, and interest accrued following the rejection of its offer
of judgment. Halpern now appeals from the district court's orders.
The primary issue on appeal is whether the district court
erred in determining that the indemnity provision in the settlement
agreement required Halpern to indemnify Edge against the Roche action
and therefore entitled Edge to summary judgment on the issue of liability.
As the parties are familiar with the facts, we do not recount them further
except as necessary to our disposition.
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The district court erred in granting Edge summary judgment
The district court granted summary judgment as to the issue
of Halpern's liability under the indemnity provision in the parties'
settlement agreement. It determined that, under the terms of the
provision, Halpern owed Edge indemnification for sums it expended in
defending the Roche action.
Halpern argues that the district court erred when it
determined that Halpern owed Edge indemnity for the amount paid in
litigating and settling the Roche action. Specifically, Halpern argues that
because the provision did not expressly indemnify Edge for its own
negligence, the indemnification provision is inapplicable in this case
because Edge was sued for its own wrongdoing. Edge maintains that the
indemnification provision and the intent of the parties in entering into
this agreement specifically contemplated the type of claims that Roche
brought.
Standard of review
We review de novo an order granting summary judgment.
Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005).
"Summary judgment is appropriate under NRCP 56 when the pleadings,
depositions, answers to interrogatories, admissions, and affidavits, if any,
that are properly before the court demonstrate that no genuine issue of
material fact exists, and the moving party is entitled to judgment as a
matter of law." Id. at 731, 121 P.3d at 1031. Thus, summary judgment in
a contract action "is appropriate when a contract is clear and
unambiguous, meaning that the contract is not reasonably susceptible to
more than one interpretation." University of Nevada, Reno v. Stacey, 116
Nev. 428, 431, 997 P.2d 812, 814 (2000). Because the interpretation of an
unambiguous contract is a question of law, Anvui, LLC v. G.L. Dragon,
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LLC, 123 Nev. 212, 215, 163 P.3d 405, 407 (2007), it may appropriately be
determined on summary judgment.
Generally, "when a contract is clear on its face, it will be
construed from the written language and enforced as written." Canfora v.
Coast Hotels & Casinos, Inc., 121 Nev. 771, 776, 121 P.3d 599, 603 (2005)
(internal quotations omitted). We have stated that "indemnification
'provisions are strictly construed and will not be held to provide
indemnification unless it is so stated in clear and unequivocal terms."
George L. Brown Ins. v. Star Ins. Co., 126 Nev. „ 237 P.3d 92, 97
(2010) (quoting GKN Co. v. Starnes Trucking, Inc., 798 N.E.2d 548, 552
(Ind. Ct. App. 2003)).
Contractual indemnity
Generally, "an indemnitor's duty to defend an
indemnitee . . . does not include defending against claims arising
from. . . the indemnitee's own negligence." Reyburn Lawn v. Plaster
Development Co., 127 Nev. 255 P.3d 268, 278 (2011). However,
courts have begun to allow for this type of indemnification only if it is
expressly stated in the indemnification agreement. United States v.
Seckinger, 397 U.S. 203, 211-12 (1970); accord Reyburn Lawn, 127 Nev. at
,255 P.3d at 275; Brown, 126 Nev. at , 237 P.3d at 97.
In our most recent decisions dealing with indemnity
provisions, we concluded that "indemnification for any form of the
indemnitee's own negligence must be explicitly and unequivocally
expressed in the contract." Reyburn, 127 Nev. at , 255 P.3d at 275; see
'Edge contends that if this court determines that Brown and
Reyburn apply, Reyburn should not be retroactively applied to this case.
Although the district court was able to consider the merits of Brown before
granting Edge its motion for summary judgment, Reyburn was decided
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also Brown, 126 Nev. at , 237 P.3d at 97. In Brown, George L. Brown
Insurance agreed to indemnify Star against "any and all damages." 126
Nev. at , 237 P.3d at 94. In Reyburn, the parties had a similar
provision in their contract, except that the provision specifically stated
that Reyburn, the subcontractor, would indemnify Plaster, the contractor,
against any and all claims except those which arose from Plaster's "sole
negligence or sole willful misconduct." 127 Nev. at , 255 P.3d at 272.
Revburn extended the rule provided in Brown that parties
may indemnify one another for a party's negligence, but such intent must
be expressly stated and clear from the face of the document. 127 Nev. at
, 255 P.3d at 275. Reyburn stated that "indemnification for any form of
the indemnitee's own negligence must be explicitly and unequivocally
expressed in the contract." Id. Further, pursuant to Reyburn, even the
intent to indemnify against negligence must be expressly stated in the
indemnity provision, and a general statement to indemnify against "any
and all" claims is not enough. Id. Our positions in Reyburn and Brown
are similarly applicable to the indemnity provision in this case.
...continued
while the instant appeal was pending before this court. We may apply a
case retroactively but we must "weigh the merits and demerits in each
case by looking to the prior history of the rule in question, its purpose and
effect, and whether retrospective operation will further or retard its
operation." Breithaupt v. USAA Property and Casualty, 110 Nev. 31, 35,
867 P.2d 402, 405 (1994) (quoting Chevron Oil Co. v. Huson, 404 U.S. 97,
106-07 (1971)). Reyburn simply extended the holding in Brown and acts
as a clarification and an extension of a previous decision. Therefore, its
application would further the application of the rule originally set forth in
Brown and would not inequitably affect Edge's claims. Additionally,
because the instant matter was pending in this court when Reyburn was
decided, Reyburn applies. 21 C.J.S. Courts § 204 (2006) ("A court decision
generally applies retrospectively to cases pending on direct review.").
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,
Here, the indemnity provision requires Halpern to indemnify
Edge "against any and all claims, . . . arising from any claims made by
Jeffers Mangels Butler & Marmarro LLP, Alec Glasser, Brian Roche, [and]
Roche Group LLC." Halpern relies on Brown and Reyburn to argue that
this indemnity provision is not sufficiently explicit to provide
indemnification for Edge's negligence. Halpern contends that the
indemnity provision in its settlement agreement with Edge is of the same
broad and general nature as the provisions that this court concluded, in
Brown and Revburn, were insufficient without an explicit statement of
intent to indemnify an indemnitee against its own negligence. We agree
and conclude that the indemnity provision here does not explicitly state
Halpern's intent to indemnify Edge for its own wrongdoing.
The language of the indemnity provision fails to explicitly and
unequivocally state that Halpern would indemnify Edge for its intentional
or negligent wrongdoing. Because we are required to interpret
unambiguous indemnity provisions strictly, Brown, 126 Nev. at , 237
P.3d at 97, and by giving them their plain meaning, Canfora, 121 Nev. at
776, 121 P.3d at 603, we conclude that the indemnity provision in this case
fails to satisfy our pronouncements in Reyburn and Brown. Although, as
Edge notes, the provision in this case listed the specific parties that could
foreseeably bring claims, no mention was made of the types of claims that
would be subject to indemnification. Furthermore, we are required to
ascertain the intent to indemnify from the four corners of the document,
and no such intent is clear. See Reyburn, 127 Nev. at , 255 P.3d at 274.
We therefore
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ORDER the judgment of the district court REVERSED AND
REMAND this matter to the district court for proceedings consistent with
this order. 2, 3
, C.J.
J.
J.
J.
J.
J.
Saitta
2 Becausewe reverse the district court's order granting summary
judgment, we must necessarily reverse the district court's award of
attorney fees paid in litigating and settling the Roche action, as well as
the attorney fees, costs, and interest awarded pursuant to the offer of
judgment rule. See Western Tech. v. All-Am. Golf Ctr., 122 Nev. 869, 876,
139 P.3d 858, 862 (2006) (vacating attorney fees award where damages
award was reversed and remanded for recalculation). Furthermore, as a
result of our reversal of the district court's order granting summary
judgment, we need not address Halpern's remaining issues on appeal.
3 The
Honorable Ron D. Parraguirre, Justice, voluntarily recused
himself from participation in the decision of this matter.
7
cc: Hon. Elissa F. Cadish, District Judge
Nathaniel J. Reed, Settlement Judge
Kemp, Jones & Coulthard, LLP
The Law Offices of Paras B. Barnett, PLLC
William R. Fried
Gordon & Rees, LLP
Tim Bates, Esq.
Eighth District Court Clerk
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